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Revenue Ruling 59-60


Determining the value of a business in the course of a divorce can be a complex and contentious issue standing between you and an equitable settlement that is fair to both parties. In many cases, a large corporation with extensive and varied holdings is the target of the valuation and its complexity often prevents a swift and simple valuation. In order to guide the process of business valuation in future cases, the Internal Revenue Service established Revenue Rule 59-60 as a guideline for the definition of “fair market value.”

At Diggs & Sadler, our dedicated attorneys are sensitive to the unique challenges that divorce cases can present and have the extensive experience necessary to effectively apply past IRS rulings in a manner that better allows you reach a fair settlement in your divorce. To learn more about your rights and options in court for establishing the value of a business, call a Houston attorney today at (713) 802-1777.

Relevant Factors in Business Valuations

The primary purpose of Revenue Rule 59-60 is to provide a basis for the effective valuation of a business by listing the eight relevant factors that should be considered:

  • The full history of the business and its nature from inception to present.
  • The condition of the general economy as well as the outlook specific to the industry within which the company operates.
  • The precise current value of the company’s stock, and the current financial condition of the business.
  • The potential capacity for earnings possessed by the business.
  • The capacity of the business to pay dividends.
  • The presence of intangible values like goodwill.
  • Any sales of company stock and the size of the block which is being valued.
  • The comparative value of stocks in other companies sharing a line of business or market with the company to be valued.

These guidelines allow the appraiser to evaluate the fair market value of the company, which Rule 59-60 defines as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having knowledge of relevant facts.”

Contact Us

If you are considering divorce and holdings in a large company are a part of your marital estate, it is essential that you have a skilled legal representation that understands the intricacies of business valuation in divorce. At Diggs & Sadler, our dedicated attorneys have decades of experience in family law and will work diligently to ensure that you receive fair consideration in the division of assets. To schedule a consultation to discuss the details of your case with a Houston asset division law firm, call us today at 713-766-5355.

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