Valuing C Corps and Pass-Through Entities under the New Tax Law
By: Daniel R. Van Vleet, ASA and William P. McInerney, ASA On December 22, 2017, President Donald J. Trump signed into law the Tax Cuts and Jobs Act of 2017. The Act is the most comprehensive tax reform package since the Tax Reform Act of 1986. The Act contains sweeping changes to corporate and individual tax rates, deduction limitations, foreign income taxation, and the tax treatment of pass-through entities (PTEs) such as S corporations and limited liability companies. In this article, we discuss the valuation-related characteristics of the Act and provide a series of conceptual and quantitative solutions that address these characteristics. These solutions address the tax law changes as well as the changing nature of the absolute and relative values of C corporations and PTEs. Click here to read the full article [pdf].
