Gift, Estate, & Income Tax Compliance

January 1, 2017

Mercer Capital’s Value Matters® 2017-01

Differing Expert Witness Valuation Conclusions

Differences May Not Be the Result of Advocacy

Judges often make the assumption that business valuation experts always (or almost always) provide the opinions that their clients want and that explains the wide differences they see in valuation opinions.  This judicial attitude is fairly widespread based on my experience, and accounts for many decisions where courts “split the valuation baby.”

Reporting on a recent case is illustrative.  The writer first stated that the judge’s opinion disagreed with both experts, and that both of them had gotten it (their conclusions) wrong.  He went on:

The judge here, Ivy Bernhardson, called these experts “unquestionably qualified.” The problem she identified is just the nature of expert witness assignment in lawsuits. They had been asked to sift through facts, tweak financial assumptions and construct a spreadsheet that gave their respective clients the valuation number they had hoped for.

The Court stated as follows (Kim A. Lund, et al, v. Russel T. Lund, III, et al, County of Hennepin, MN, Court File  No. 27-CV-14-20058, Memorandum of Law and Order on Fair Value..., June 2, 2017.  Not available online):

Both experts are highly trained and experienced professionals. Both have testified and provided valuation reports in many trials and contested valuation situations. While the Court finds that both [Plaintiff’s Expert] and [Defendant’s Expert] are unquestionably qualified to testify on the issue of valuation, the obvious, zealous advocacy in which they engaged on behalf of their respective clients compromised their reliability in this instance.

Unfortunately for courts and for business valuation experts, the issue quite often is not nearly so neat and simple.  Consider these possibilities:

  • The appraiser with the lower conclusion is reasonable, and the other appraiser has a much higher conclusion.
  • The appraiser with the higher conclusion is reasonable, and the other appraiser has a much lower conclusion.

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October 2026 | When a Large Ownership Block Doesn’t Mean Control
Value Matters® October 2026

When a Large Ownership Block Doesn’t Mean Control | Valuation Lessons from Grieve v. Commissioner

A large ownership interest does not necessarily convey control, a distinction with important implications for gift and estate tax valuations. In Grieve v. Commissioner, T.C. Memo. 2020-28, the U.S. Tax Court accepted discounts for lack of control and lack of marketability on ownership interests representing 99.8% of the economic interests in two family-owned LLCs.
Thomas C. Insalaco to Speak at Tampa Bay Estate Planning Council
Thomas C. Insalaco to Speak at Tampa Bay Estate Planning Council
Thomas C. Insalaco, CFA, ASA, Senior Vice President at Mercer Capital, will speak at the Tampa Bay Estate Planning Council on Wednesday, October 21, 2026, at the Chester H. Ferguson Law Center in Tampa, Florida.His presentation, “Navigating Business Valuations: What Estate Planners Need to Know,” will examine common estate planning valuation issues that have recently received IRS scrutiny and offer practical guidance for avoiding potential problems.The Tampa Bay Estate Planning Council brings together attorneys, fiduciaries, accountants, investment advisors, charitable giving specialists, family office executives, insurance professionals, and valuation experts. The Council promotes collaboration among the disciplines involved in estate planning and provides educational opportunities for its members. As a Council Partner, Mercer Capital is proud to support the organization’s educational programming and commitment to collaborative planning.Tom Insalaco is a Senior Vice President and a member of Mercer Capital’s Gift, Estate, and Income Tax Planning and Compliance practice group. Since 2008, he has provided valuation services across a broad range of industries and matters, including gift and estate tax, business succession and exit planning, and buy-sell agreements.Mercer Capital regularly works with attorneys, fiduciaries, business owners, and other professional advisors on valuation matters involving gift and estate tax planning, business succession, ownership transitions, and buy-sell agreements.For additional information or to register, visit the Tampa Bay Estate Planning Council’s website.
Mercer Capital to Sponsor ACTEC’s 2026 Fall Meeting
Mercer Capital to Sponsor ACTEC’s 2026 Fall Meeting
Mercer Capital is pleased to sponsor the American College of Trust and Estate Counsel’s 2026 Fall Meeting, taking place October 15 through 18, 2026, at the Hyatt Regency Denver in Denver, Colorado. Bryce Erickson, ASA, MRICS, J. David Smith, CFA, ASA, and Sujan Rajbhandary, CFA, ABV, will attend on behalf of the firm.ACTEC’s national meetings bring together leading trust and estate lawyers, law professors, and other professionals for education, committee sessions, and peer discussion. This year’s professional program will address the prudent investment of unique and unusual assets; estate and business planning for farms, ranches, and oil and gas interests; publicity rights; digital assets; art collections; and assets held in regulated businesses.Bryce Erickson, ASA, MRICS, is a Managing Director and member of Mercer Capital’s board of directors. Since 1998, he has led approximately one thousand valuation engagements and has deep experience in gift, estate, and federal tax matters, litigation support, transactions, and business planning across a broad range of industries. Bryce leads Mercer Capital’s energy industry practice and is a regular contributor to Mercer Capital’s Energy Valuations Insights blog.J. David Smith, CFA, ASA, is a Senior Vice President at Mercer Capital and a senior member of the firm’s tax practice. He provides valuation services for tax planning, transactional purposes, and financial reporting, with particular experience in industries including financial services, oil and gas, and biotechnology. David is also a regular contributor to Mercer Capital’s Value Matters Newsletter.Sujan Rajbhandary, CFA, ABV, is a Senior Vice President and a member of Mercer Capital’s Gift, Estate & Income Tax Valuation Group. During his 20-year career at Mercer Capital, he has provided valuation and financial advisory services for tax planning and compliance, transactions, ownership transitions, and other corporate and shareholder matters. He is a regular contributor to Mercer Capital’s Value Matters Newsletter.Mercer Capital regularly works with attorneys, fiduciaries, business owners, and professional advisors on valuation matters involving gift and estate tax planning, trusts, ownership transitions, transactions, and disputes. The firm is proud to support ACTEC’s commitment to professional education and excellence in trust and estate law.Mercer Capital looks forward to reconnecting with friends and meeting new colleagues in Denver. For more information about the 2026 Fall Meeting, visit ACTEC’s event website.

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