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Old 12-24-2017, 08:13 AM   #61
Spartanmack   Spartanmack is online now
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Old 12-24-2017, 10:51 AM   #62
tinselwolverine   tinselwolverine is online now
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it is incorrect to think common sense would prevail bit it's even worse than you think. the deceased's estate is valued as of the date of death and there is no earn out or payment plan. what's more, if adverse events affect the value of the estate, too bad, taxes are based on the value at time of death. if your ich aunt left you $20mm of stock when she died and by the time you were able to sell it and pay the taxes it was only worth $10mm, the IRS collects txes from he estate based on the $20mm. I believe the same is true for physical assets of a business.
Well, we know what the value of a stock was based on the bid and offer at the close of the market, or the high or low of the day, or at the time of death of the decedent, or however the valuation is arrived at.

But illiquid assets - who makes that determination?

The value of a stock in constantly known because there is a constant negotiated value in a liquid market. Illiquid assets not so much.

Again - who makes the determination of the value?
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Old 12-24-2017, 03:52 PM   #63
Spartanmack   Spartanmack is online now
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Well, we know what the value of a stock was based on the bid and offer at the close of the market, or the high or low of the day, or at the time of death of the decedent, or however the valuation is arrived at.

But illiquid assets - who makes that determination?

The value of a stock in constantly known because there is a constant negotiated value in a liquid market. Illiquid assets not so much.

Again - who makes the determination of the value?
it's not too hard - businesses that aren't publicly traded are bought and sold all the time values can be determined in a number of ways - discounted cash flows or multiple of earnings (same way a stocks value is determined). land values for farms are pretty well known, assets can be valued through replacement cost, market value for used equipment, etc. I'm not sure what method(s) the IRS employs but I imagine they are formally codified.
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Old 12-24-2017, 04:48 PM   #64
tinselwolverine   tinselwolverine is online now
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it's not too hard - businesses that aren't publicly traded are bought and sold all the time values can be determined in a number of ways - discounted cash flows or multiple of earnings (same way a stocks value is determined). land values for farms are pretty well known, assets can be valued through replacement cost, market value for used equipment, etc. I'm not sure what method(s) the IRS employs but I imagine they are formally codified.
Dude, as. my dear sweet former brother in says to his friends when they try to run some bullshit passed him - "fuck me harder."

You more than almost anybody else here knows that stock prices aren't necessarily determinent upon what you described.

Utterly and unequivocally the price of stock is what someone is willing to pay for it and let someone is willing to sell it for.

Vastly more nebulous than that is the valuation of assets that are not liquid

I am going to look into your claims though. If the IRS is confiscating properties the beneficiaries would rather on and continue to operate that wrong and it should be changed..
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Old 12-25-2017, 08:30 PM   #65
Spartanmack   Spartanmack is online now
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Dude, as. my dear sweet former brother in says to his friends when they try to run some bullshit passed him - "fuck me harder."

You more than almost anybody else here knows that stock prices aren't necessarily determinent upon what you described.

Utterly and unequivocally the price of stock is what someone is willing to pay for it and let someone is willing to sell it for.

Vastly more nebulous than that is the valuation of assets that are not liquid

I am going to look into your claims though. If the IRS is confiscating properties the beneficiaries would rather on and continue to operate that wrong and it should be changed..
yeah, stock prices can get irrational and there are externalities that effect price in the near term. and like anything, something is really only worth what someone else will pay for it. But in general, those manias tend to create arbitrage opportunitiesI. it's also possible that a dcf analysis could be wrong as there are many assumptions that go into them like discount rate, growth rates, etc, etc. that said, dcf or earnings multiples tend to be more consistently reliable valuation methods than the greater fools hypothesis.

Last edited by Spartanmack; 12-26-2017 at 12:19 PM.
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