MPI at Southern Federal Tax Institute 2017

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MPI Partner Todd G. Povlich, CFA, ASA, spoke at this year's Southern Federal Tax Institute event in Atlanta. Below are excerpts of his presentation with his comments on each piece.

Potential Impact of Tax Reform on Asset Values

Are your clients contemplating the impact of tax reform on their net worth and financial picture? This clip summarizes the impact on asset values at a macro level, and shows that, on paper, clients with closely held businesses and other assets could see a meaningful rise in net worth as a result of income tax rate cuts.

What Would Tax Cuts Mean for C-Corporation Values?

Does your client own or operate a closely held operating business structured as a C corporation? If so, we are on the verge of potentially significant cuts in the tax rates applicable to C corporation earnings. This clip summarizes the potential impact on the valuation of C corporations from a reduction in federal tax rates from 35% to as low as 15%.

Pass-Through Valuation

The valuation of operating businesses structured as pass-through entities will inevitably run straight into the debate about tax affecting the earnings stream. Pass-through entities are not tax-exempt entities, and therefore it is entirely appropriate for valuations to take into account the pass-through tax liability that rests with owners.

At the same time, analysts must consider how to incorporate potential benefits of the pass-through structure relative to an otherwise equivalent C corporation. This clip summarizes MPI’s general approach to the tax-affecting issue and speculates on the potentially changing dynamics of the C corporation vs. pass-through entity debate on account of tax reform.

For more insight and expertise on Tax Reform implications, please reach out to Todd directly: