Situation

The owner of a rapidly growing start-up company operating in the booming domestic oil and gas services industry wished to gift a portion of his privately held business to charity. He would therefore be entitled to a tax deduction in the amount of the gifted stock in the year that the donation was made. Thus, the client needed a qualified appraiser to complete a business valuation for the purposes of gift planning and tax reporting to the Internal Revenue Service.

Engagement

The sole owner of the company engaged Mariner Capital Advisors to perform a comprehensive business appraisal valuing a minority interest in the company. This entailed in-depth qualitative and quantitative analysis of the business operations, economy, appropriate industries, and specific market conditions and outlook. Mariner Capital Advisors also conducted detailed financial and forecasted scenario analysis using limited historical information. The valuation process involved discussions with the owner, collaboration with legal and tax advisors, and assisting management with the development of internal financial forecasts. The overall analysis was complicated by the explosive growth trends of the company as it went from six employees and $4.5 million in annualized revenue to over 150 employees and $34.5 million in revenue in a span of just 20 months.

Result

Mariner Capital Advisors produced a final valuation report that was accurate, thorough, and defensible and that would stand up to the highest scrutiny of the IRS, which carefully monitors charitable tax deductions. The report was delivered in time for the client to make internal planning decisions and finalize an appropriate charitable gift before the end of the year.

This document is for informational use only and may be outdated and/or no longer applicable. Nothing in this publication is intended to constitute legal, tax, or investment advice. There is no guarantee that any claims made will come to pass. The information contained herein has been obtained from sources believed to be reliable, but Mariner Capital Advisors does not warrant the accuracy of the information. Consult a financial, tax or legal professional for specific information related to your own situation.