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Leadership

Leadership Experience.

Posted by on Aug 12, 2001

The partners and principals of Hertzbach are diverse in their professional backgrounds, experience, and achievements. Each partner/principal has made a unique contribution to the growth and success of the firm. Many of our partners and principals started their careers with our firm.

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Strategy

Service Strategies.

Posted by on Aug 12, 2001

Our team of over 180 professionals is diverse in their experience and achievements, concentrating in many practice service areas, including accounting and auditing, taxation, consulting, and specialized industries. Our depth of expertise and reputation make us the choice for businesses and individuals.

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Expertise

Industry Expertise.

Posted by on Aug 12, 2001

Hertzbach & Co. provides services and consulting to a wide range of industries. We understand the unique practices of these industries. Our professional team of CPAs, working with other professionals and support staff, provide the specialized resources needed to succeed in all aspects of business.

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Beliefs

What We Believe.

Posted by on Aug 12, 2001

As a certified public accounting and consulting practice, we believe that every client, without exception, has the right to the highest level of expertise and advice, a thorough understanding of their financial position and a commitment by those engaged and entrusted to guide them to business success.

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Recent Posts

IRS Takes Aim at Valuation Discounts for Family Controlled Entities

IRS Takes Aim at Valuation Discounts for Family Controlled Entities

Sep 26, 2016

For years, the transfer of family-owned entities and the use of valuation discounts such as those for lack of control and marketability have been a staple of the estate planning process. These discounts allow value to be transferred from one individual to another with a reduction from the pro-rata value of up to 40% in some cases. Generally, these discounts are the result of strict verbiage in the family controlled entity’s organizational documents. The IRS has been lobbying to have laws implemented that reduce or abolish the usage of these discounts when family members effectively retain control of a company. Although these congressional proposals were never passed into law, there are currently proposed changes to the IRS regulations contained within IRC §2704. Historically, IRC §2704 has presented strict guidelines regarding what attributes can and cannot be considered when valuing an interest in a family-owned entity such as transfer, distribution, voting, and liquidation restrictions. However, in many cases valuation specialists were still able to consider some of the attributes of the interest as stated in the governing documents if they were not overly restrictive or onerous. Under the new proposed regulations, the ability to rely on these attributes to justify an impact on value would significantly change if the family member owners of the entity have the ability to alter these attributes. Essentially, the new regulations require a valuation specialist to ignore certain restrictions that would limit control or marketability and in some cases, require the valuator to make certain assumptions. The major changes under the proposed regulations are as follows: New 3-Year Lookback Period. Transfer within 3 years of a decedent’s date of death may be added back to the estate for purposes of determining control and marketability; Change in the Definition of Control. Control may be defined by either vote or value; Consideration of Family Control. The determination of control will no longer be based on the interest valued if the family still retains control over the entity. It will be assumed that the remaining family could adjust the attributes of a specific interest and therefore the interest’s attributes are to be ignored; Disregarded Restrictions Expansion. Any onerous restrictions beyond what would exist...