Equity transfers, crypto transactions, and corporate reorganizations can generate tax reporting requirements. The staff at Mercovus have been engaged by taxpayers and tax authorities to ensure compliance. In co-operation with your tax and accounting team, Mercovus can help your business achieve optimal tax outcomes.
While cash is most frequently the consideration in a transaction, some transactions are settled in stock, cryptocurrency, or some other asset. If no cash is involved, this is known as “bartering.” Under US tax regulations, the fair market value of goods or services received from bartering needs to be included in gross income and reported. Many taxpayers overreport their income in these situations because they don’t know how to properly calculate fair market value. For example, if a thinly traded cryptocurrency is used to settle a large debt, the fair market value would not simply be the most recent trading price of the cryptocurrency. Don’t over-report your income by failing to consider key valuation discounts on the value of property received. Hire an expert to accurately report your income and reduce your tax burden.
Mercovus has in-depth experience in valuing a wide range of assets exchanged in bartering transactions. We have a proven track record of successfully withstanding scrutiny from the US Internal Revenue Service (IRS), giving you peace of mind to move forward with your business.
A company may consider spinning off part of its business to address regulatory issues, maximize the value of an unanticipated offering, or accommodate investor risk tolerances. Spin-offs trigger tax reporting consequences dependent on the value of the assets that will be contributed to the new legal entity. While certain transactions may not require immediate tax payments, if specific criteria are met, shareholders’ basis in the new entity must be determined. Our appraisers have extensive experience in determining fair market value in spin-off transactions and delivering quality valuation reports that consistently withstand scrutiny from the IRS.
For publicly traded companies, determining the market value of their stock only requires a visit to Yahoo! Finance. However, for privately held companies, there is no publicly traded stock to reference. Without a valuation of the underlying stock, it’s impossible to grant stock-based compensation to employees. This is where obtaining a professional opinion of value becomes crucial. The experts at Mercovus are here to assist you.
According to Internal Revenue Code Section 409A (IRC 409A), new stock options must be priced at or above “fair market value” to avoid negative tax consequences for the company and the option holder. Additionally, financial reporting requirements under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718 and ASC 505-50 must be considered.
Mercovus has extensive expertise in providing valuation reports that satisfy these strict tax and financial reporting requirements. Our valuation reports have undergone Auditing Standards (SAS) 73 review and have been approved by each of the Big Four and other major accounting firms. We can help you determine the value of your company’s common stock as needed (typically, annually, or more frequently in the event of significant changes).
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For assistance with quality valuations to meet critical tax compliance requirements, contact Mercovus at email@example.com.