Protect your business — and your estate — with a buy-sell agreement

Occupational fraud can occur at any level of an organization. But misconduct by owners and senior executives can be particularly costly because they usually have greater authority and can override internal controls. According to the Association of Certified Fraud Examiners’ (ACFE’s) Occupational Fraud 2026: A Report to the Nations, owners and executives account for 16% of all occupational fraud perpetrators. Yet they cause nine times the median loss associated with nonmanagerial fraudsters. Even if you trust your leadership team, strong safeguards can help protect your business and its reputation. Why it happens Forensic accountants commonly use the “fraud triangle” to understand occupational fraud. It focuses on three factors that generally need to be in place for people to steal from their employers: pressure, opportunity and rationalization. Pressure can be personal or professional. An executive facing financial difficulties or aggressive performance targets may be tempted to manipulate financial results. The ACFE found that perpetrators experiencing excessive organizational pressure are associated with a median fraud loss of $532,000 — the highest among the behavioral warning signs identified. Opportunity exists when someone has the access or authority to commit and conceal wrongdoing. Executives pose an elevated threat because they may approve transactions, influence employees, or override established procedures. More than half of the ACFE report’s cases involve either inadequate or overridden controls. Rationalization occurs when perpetrators can justify their dishonest behavior. Executives might, for example, believe they’re entitled to steal because their compensation is inadequate or that manipulating results is acceptable because it will eventually benefit the business. You can help reduce fraud risk by keeping this triangle in mind and promoting an antifraud culture. For instance, try to set realistic, achievable performance goals and intervene if executives seem excessively entitled or secretive. Strengthen safeguards at the top Internal controls that protect key functions — such as your accounting, and shipping and receiving departments — are also essential. But preventing executive fraud may require additional measures. For example: Establish clear rules for overriding controls, including requiring a second approval and documentation explaining why the exception is necessary, Mandate fraud awareness training for employees, including executives, Conduct management reviews, surprise audits and financial monitoring activities, and Offer tiplines or web portals that enable employees to anonymously report suspected wrongdoing. Reporting systems are especially important because tips remain the most common way to detect occupational fraud. The 2026 ACFE study found that 43% of cases are uncovered through tips, and employees provide more than half of them (other tips come primarily from vendors and customers). Because of the risks of retribution, confidentiality is critical if you want workers to blow the whistle on crooked executives. Allegations involving a senior executive or other influential individual may warrant engaging an independent fraud specialist to help ensure an objective investigation, including evidence gathering and witness interviews. If fraud is confirmed, your organization should respond based on the circumstances, applicable laws and its own policies, not the perpetrator’s position. Promote accountability Executive fraud may never be completely preventable, but you can make it harder to commit and easier to detect. To promote accountability, implement strong controls, effective employee training and confidential reporting mechanisms. Contact us for help assessing fraud risks and strengthening the safeguards that will protect your business. © 2026 

Contributing as much as possible to tax-deferred retirement accounts such as traditional 401(k)s and IRAs is a common recommendation. Contributions generally are pretax or deductible, and the power of tax-deferred compounding can help turbocharge growth. But some taxpayers can reach a point where maximizing tax deferral may become counterproductive. Potential downsides of tax-deferred saving After you’re retired, you’ll no longer be earning a salary or full-time wages. So the assumption generally is that taxpayers will be in a lower federal income tax bracket and pay tax at a lower rate when taking withdrawals during retirement than when making contributions during their working years. That’s likely the case for many, if not most, taxpayers if tax rates stay the same (or go down). But, currently, federal income tax rates may have bottomed out and could be more likely to increase in the future. If this happens, you might pay higher tax rates on withdrawals from traditional accounts during your retirement years, even if you’re in a lower tax bracket. Also, retirement plan distributions are subject to your ordinary income tax rate and don’t benefit from the lower long-term capital gains rates that normally apply to realized gains from assets held more than one year and qualified dividends. So you pay a higher tax rate on dividends and growth in a tax-deferred account than you would if the investments were held in a taxable account. Something else to remember is that with traditional retirement accounts, most withdrawals before age 59½ will be subject to a 10% early withdrawal penalty (though there are some exceptions for IRAs). If you need to make a withdrawal before that age, you may owe the penalty on top of any applicable income tax. Traditional accounts also come with required minimum distributions (RMDs). You could be subject to a 25% penalty for failing to take RMDs each year after you reach age 73 (or 75 if you’ll turn 73 after December 31, 2032). (Roth accounts set up in your name aren’t subject to RMD rules during your life and will never be subject to federal income taxes as long as you take out only qualified withdrawals after reaching age 59½.) You can avoid the penalty by taking your RMDs each year. But RMDs generally will be included in your taxable income and, depending on the size of the RMD and your other income, this could push you into a higher tax bracket, affect deductions or credits with income-based limits, or cause some of your Social Security payments to become taxable. For these reasons, some taxpayers may be better off moving from a strategy primarily focused on tax-deferred traditional accounts to one that puts a greater emphasis on Roth and taxable accounts — even though it may mean paying more taxes now. Shifting your retirement strategy Whether your tax-deferred retirement savings are excessive, insufficient or just about right depends on variables such as your current marginal income tax rate, your expectations about future tax rates and the type of income or gains earned in your retirement accounts. Each person’s situation is different, and there’s not always a clear-cut answer. If you conclude you have too much in tax-deferred accounts, one or more of these strategies can help address the situation: 1. Start making at least some of your annual retirement savings contributions to Roth accounts if possible. Contributions to these plans don’t reduce your current-year taxable income, but distributions are tax-free — including distributions attributable to growth in the account. And Roth accounts aren’t subject to RMDs during the original owner’s lifetime. However, the ability to contribute to a Roth IRA is phased out if a taxpayer’s income exceeds certain amounts. No such limit applies to employer-sponsored Roth accounts, such as Roth 401(k)s. 2. Put some money into taxable accounts. If Roth savings opportunities aren’t available to you or you’ve already maxed them out, think about putting some of the money you’re saving for retirement into taxable investment accounts. You’ll be eligible for the lower long-term capital gains rate on long-term gains and qualified dividends, and you won’t be subject to the various rules and restrictions that apply to IRAs, 401(k)s and other employer-sponsored retirement accounts. 3. Convert some or all of your traditional IRA balance into a Roth IRA. A conversion can let you turn tax-deferred future growth into tax-free growth and avoid being subject to RMDs. There’s no income-based limit on who can convert. But the converted amount is taxable in the year of the conversion. So consider your current tax rate and whether a conversion could push you into a higher tax bracket or trigger other negative tax consequences. 4. If you’re age 59½ or older, withdraw money from your traditional retirement accounts sooner and faster than required. You won’t owe early withdrawal penalties, and you pay tax now at a rate that might be lower than what you’d have to pay in the future. You can reinvest the after-tax proceeds in taxable accounts where future long-term gains and qualified dividends will be taxed at your lower long-term capital gains rate. But as with Roth conversions, you need to consider your current tax rate and whether the retirement plan distribution could push you into a higher tax bracket or trigger other negative tax consequences. Tax-smart wealth accumulation As you can see, there are many considerations to evaluate when assessing whether you’re investing too much in tax-deferred retirement accounts and, if so, how to address the situation. We can help you determine the best course of action for wealth accumulation using traditional tax-deferred retirement accounts, Roth accounts and taxable accounts. © 2026 

Trading items or services — without exchanging cash — has long been common among small businesses. Today, some use online barter exchanges to facilitate trades. In addition to preserving cash flow, these types of transactions may expand your purchasing power, help you move overstocked inventory and increase your business’s exposure to new markets. But bartering isn’t tax free. For tax purposes, bartering is treated the same as being paid in cash. How it works The fair market value (FMV) of goods you receive in business barter transactions must be reported as taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties. You must report barter income the same way you report comparable income from regular cash transactions. For instance, a sole proprietor generally reports barter income on Schedule C, and this income may also be subject to self-employment tax.  Depending on what you receive in the exchange, you may be entitled to a business expense deduction or obtain tax basis in property. So, although bartering generates taxable income, it doesn’t necessarily increase taxable profit by the full value of the transaction. Let’s say a veterinarian agrees to exchange services with a marketing consultant. In this situation, both parties must report the FMV of the services received as income. So the veterinarian would report the FMV of the marketing services received, and the marketing consultant would report the FMV of the veterinary services received. This generally is the amount that would normally be charged for these services. If the parties agree to the value of the services in advance, that will be considered the fair market value unless there’s contrary evidence. Business expense deductions may also be available with barter transactions. For instance, if a plumber installs a new toilet at a local computer repair shop in exchange for fixing a broken laptop, the plumber would report the FMV of the computer repair services as income. But he or she may also deduct certain expenses: If the laptop is used in the plumber’s business and the repair would have been deductible had it been paid for in cash, the plumber can still claim a business expense deduction for the repair, subject to the usual deduction rules. The plumber can also deduct qualifying business expenses associated with the plumbing work, such as materials, supplies and any wages paid to employees. Income also must be reported if services are exchanged for property. For example, if an HVAC contractor does work for a retail business in exchange for unsold inventory, he or she will have to report income equal to the fair market value of the inventory. Or if an architect does work for a corporation in exchange for shares of the company’s stock, he or she must report income equal to the fair market value of those shares. Barter exchanges Some businesses join online barter exchanges (sometimes referred to as barter clubs) that facilitate these transactions. Barter exchanges generally use a system of “credit units,” which are awarded to members who provide goods and services. The credits can be redeemed for goods and services from other members. In general, bartering is taxable in the year it occurs. But if you participate in a barter exchange, you may be taxed on the value of credit units at the time they’re added to your account, even if you don’t redeem them for actual goods and services until a later year. For example, let’s say that you earn 2,500 credit units one year and that each unit is redeemable for $3 in goods and services. In that year, you’ll have $7,500 of income. If you redeem the units the next year, you won’t pay additional tax because you’ve already been taxed on that income. If you join a barter exchange, you’ll generally be asked to provide your taxpayer identification number — such as your Social Security number or Employer Identification Number — and complete Form W-9 or a similar certification. In certain circumstances, including failure to provide or properly certify a taxpayer identification number, barter income may be subject to 24% backup withholding. The IRS generally treats barter exchanges as brokers. If the reporting requirements apply, a barter exchange will send participants a Form 1099-B, “Proceeds From Broker and Barter Exchange Transactions,” by February 15 of the following calendar year. This form shows the value of cash, property, services and credits that you received through the exchange during the previous year. This information will also be reported to the IRS. No tax-free trade Bartering may be more common than you think: According to the National Association of Trade Exchanges, more than 400,000 U.S. businesses used some form of barter in 2022, the latest available statistics. Regardless of how you make a trade — directly with another business or through a barter exchange — remember your federal and state tax obligations. We can help you estimate the fair market value of items and services exchanged, identify potential deductions, and maintain the records needed to report these transactions properly. Contact us to learn more. © 2026

The death of a spouse brings significant personal and financial changes, including important tax considerations. One question surviving spouses face is how to file their federal income tax returns for the year of death. In many cases, a surviving spouse can file a joint return with the deceased spouse for that year, potentially preserving lower tax rates and other benefits. However, special rules apply, and understanding the filing requirements can help avoid complications and ensure available tax benefits aren’t overlooked. Filing a final return When a person dies, his or her executor (called a “personal representative” in some states) must file an income tax return for the year of death (as well as any unfiled returns for previous years). For purposes of the final return, the tax year generally begins on January 1 and ends on the date of death. The return is due on April 15 of the following calendar year unless the executor requests a six-month filing extension. Income that’s included on the final return is determined according to the deceased’s tax accounting method. Individuals usually use the cash method, in which case the income tax return will report only income actually or constructively received before death and deduct only expenses paid before death. Income and expenses after death are reported on an estate tax return. Filing a joint return The surviving spouse is generally treated as married for the tax year his or her spouse died, unless he or she qualifies as unmarried under special rules. So filing as single or head of household usually isn’t an option. The surviving spouse does have the option to file a joint return with the deceased spouse — if the executor agrees. And the surviving spouse alone can elect to file a joint return if an executor hasn’t yet been appointed by the filing due date. (However, a court-appointed executor may later revoke that election.) A joint return generally includes the deceased spouse’s income and deductions through the date of death, along with the surviving spouse’s income and deductions for the entire tax year. Filing jointly can be advantageous because joint filers typically have access to more favorable tax brackets and may qualify for deductions and credits that are reduced or unavailable to married taxpayers filing separately. When filing separately may make sense There may be disadvantages to filing jointly. For example, higher adjusted gross income (AGI) may reduce the tax benefits of expenses, such as medical bills, that are deductible only to the extent they exceed a certain percentage of AGI. In this case, filing separately may provide more tax savings. Similarly, filing separately sometimes may produce a better result because of the couple’s particular mix of income, deductions and other tax attributes. Filing a separate return may also be appropriate when the surviving spouse has concerns about the accuracy of the deceased spouse’s tax information or about previously undisclosed income, questionable deductions, unpaid taxes or other potential tax problems. In some situations, filing separately may help limit the surviving spouse’s exposure to liabilities associated with items reported (or not reported) on the deceased spouse’s return, though the extent of that protection depends on the facts and circumstances. Look beyond the final joint return The year of death may not be the end of the potential benefits of joint filing. Under certain conditions, a surviving spouse with a dependent child may qualify to use qualifying surviving spouse status for the two tax years following the year of death. This status generally provides the same tax brackets and standard deduction available to married couples filing jointly. There are many factors to consider when deciding whether to file jointly or separately after a spouse’s death. We can compare the alternatives, explain the potential risks and benefits, and help ensure that required returns are filed properly during a difficult time. © 2026 

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Disability insurance is a valuable benefit provided by many employers. It replaces a portion of the insured person’s income — typically 45% to 65% of pre-disability earnings — after a specified waiting period that starts when the person becomes disabled (as defined by the policy’s terms). Whether you’re just beginning to receive disability benefits or you’re evaluating your long-term financial security, it’s important to understand the tax implications of these benefits. Payment of premiums Taxability of disability insurance benefits usually hinges on who paid the premiums. If your employer paid the premiums, then payouts from the policy generally will be taxed to you just as if the income were paid directly to you by your employer. If you paid the premiums, the payments you receive generally won’t be taxable. Even if your employer arranges for the coverage (in other words, it’s a policy made available to you at work), as long as you pay the premiums, the benefits generally won’t be taxable. For these purposes, if the premiums are paid by your employer but the amount paid is included in your taxable income from work, the premiums will be treated as paid by you. The rules in action Let’s say your salary is $1,500 a week ($78,000 a year). Under a disability insurance arrangement made available to you by your employer, $20 a week ($1,040 annually) is paid on your behalf by your employer to an insurance company. Your Form W-2 reports $79,040 in income as your wages for the year ($78,000 paid to you plus $1,040 in disability insurance premiums). Under these circumstances, the insurance is treated as paid for by you. If you become disabled and receive benefits under the policy, the benefits won’t be taxable income to you. Now assume that only $78,000 is reported on your W-2 as your wages for the year because your employer treats the amount paid for the insurance coverage as excludable under the rules for employer-provided health and accident plans or because the coverage is paid through a cafeteria plan. In this case, the insurance is treated as paid for by your employer. If you become disabled and receive benefits under the policy, the benefits will be taxable income to you. Special rules apply if there’s a permanent loss (or loss of the use) of a part or function of the body or a permanent disfigurement. Other disability benefits If disability income is paid directly to you by your employer, rather than by an insurance company, it’s generally taxable to you just as your ordinary pay would be. Taxable benefits are also subject to federal income tax withholding. However, depending on your employer’s disability plan, these benefits might not be subject to Social Security tax. Different rules apply to the tax treatment of Social Security Disability Insurance (SSDI) benefits. SSDI benefits are taxed under the same rules that apply to Social Security benefits. Depending on your income and filing status, some of your SSDI benefits may be taxable. More considerations The tax treatment of disability benefits can have a major impact on what you’ll end up with in your pocket. So it’s important to consider taxes when determining how much disability coverage you need. Keep in mind that state tax treatment of disability benefits varies. If you’re paying the premiums, you have to replace only your “after tax” (take-home) income because your benefits won’t be taxed. But if your employer is paying the premiums, you’ll lose a percentage of your benefits to taxes and may need more coverage. We can help you assess how much disability coverage you need depending on the tax consequences and other factors. © 2026 

Many small businesses start out as sole proprietorships. This structure is simple and inexpensive to establish and maintain — and it gives the owner direct access to profits without having to take formal distributions. But it also makes your taxes more complicated than when you were a W-2 employee. Here are some federal tax issues to consider if your business operates as a sole proprietorship. Reporting income and expenses You’ll report income and expenses from your business activities on Schedule C of your personal return (Form 1040). The net income will be taxable to you regardless of whether you withdraw cash from the business. Your business expenses are deductible against gross income, not as itemized deductions. If you have losses, they’ll generally be deductible against your other income, subject to special rules related to hobby losses, “excess” business losses incurred by noncorporate taxpayers, passive activity losses and losses from activities in which you weren’t “at risk.” Sole proprietors may be eligible for certain deductions that generally aren’t available to other individual taxpayers. For instance, you may qualify for an above-the-line self-employed health insurance deduction for premiums paid for medical, dental and qualifying long-term care coverage, subject to certain limitations. This means your deduction for medical insurance won’t be subject to the rule that limits itemized deductions for medical expenses. In addition, you may be entitled to deduct home office expenses if: A home office is your principal place of business (including when you perform management or administrative tasks there and have no other fixed place to perform them), You use your home as a place to meet or deal with customers, clients or patients in the normal course of business, or You store inventory or product samples at home. In general, to qualify, the area must be used regularly and exclusively for business purposes. The home office deduction may include an allocable part of mortgage interest or rent, insurance, utilities, repairs, maintenance and, if you own the home, depreciation. Alternatively, you can use a simplified method based on the square footage of the qualifying space. You may also be able to deduct travel expenses from your home office to another work location. Be sure to keep complete records of your income and expenses. Proper documentation is needed to claim all the tax breaks to which you’re entitled. Certain expenses, such as automobile, travel, meals, and home office expenses, require extra attention because they’re subject to special recordkeeping rules or deductibility limits. Claiming the QBI deduction Another special tax break that you might qualify for as a sole proprietor is the Section 199A qualified business income (QBI) deduction. It generally equals 20% of QBI, not to exceed 20% of taxable income. QBI generally is defined as the net amount of qualified items of income, gain, deduction and loss that are effectively connected with the conduct of a U.S. business. QBI doesn’t include certain investment items or reasonable compensation paid to an owner for services rendered to the business. This deduction is taken “below the line,” meaning it reduces taxable income, rather than being taken “above the line” against your gross income. However, you can take the QBI deduction even if you don’t itemize deductions and instead claim the standard deduction. One word of caution: The QBI deduction is subject to additional limits at higher income levels. For 2026, these limitations generally begin to apply when taxable income (calculated before any QBI deduction) exceeds $201,750 ($403,500 for married couples filing jointly). For 2026, these limitations are fully phased in once taxable income exceeds $276,750 ($553,500 for joint filers). Contact us to learn more about the limitations that apply to your situation. The One Big Beautiful Bill Act (OBBBA) made the QBI deduction permanent. Starting in 2026, the OBBBA also expands the income ranges over which the limitations phase in, potentially allowing larger deductions for some taxpayers. And it provides a new minimum deduction of $400 for taxpayers who materially participate in an active trade or business if they have at least $1,000 of QBI from it. The minimum deduction will be annually adjusted for inflation after 2026. Paying self-employment taxes One downside of owning your own business is that you must pay self-employment taxes. These taxes are the equivalent of federal payroll taxes for employees, but self-employed people must pay both the employer’s and employee’s share of them. They’re imposed in addition to income tax, but you can deduct half of your self-employment tax as an adjustment to income. For 2026, you must pay self-employment tax (Social Security and Medicare) at a 15.3% rate on your net earnings from self-employment up to $184,500, and Medicare tax only at a 2.9% rate on the excess. An additional 0.9% Medicare tax is imposed on self-employment income in excess of $250,000 for joint filers, $125,000 for married taxpayers filing separate returns and $200,000 in all other cases. The additional Medicare tax threshold isn’t adjusted for inflation. Establishing a tax-advantaged retirement plan You might also want to consider setting up a qualified retirement plan. The advantages are that amounts contributed to it are deductible at the time of the contributions and aren’t subject to income tax until they’re withdrawn. One option is a Simplified Employee Pension (SEP) plan, which requires minimal paperwork. You generally can set up a SEP and make deductible contributions for the tax year as late as the due date of your income tax return for the year, including extensions. The contribution amounts are discretionary, and the annual limits are high. But, if you have employees, they generally must be included in the plan, provided they work enough hours and meet other qualification requirements. If you don’t establish a qualified retirement plan, you may still be able to contribute to a traditional IRA. But your annual contribution limit will generally be significantly lower. Making quarterly estimated payments The U.S. tax system is considered “pay as you go.” So, you’ll probably have to make estimated tax payments each quarter. Estimates should include both federal income tax and self-employment taxes. Estimated payments are generally calculated using Form 1040-ES. Quarterly payments are generally due on April 15, June 15 and September 15 of the current year and January 15 of the following year. If a due date falls on a weekend or legal holiday, the deadline generally moves to the next business day. Paying enough by each deadline is critical; if you fall behind, you’ll likely owe interest and penalties. Applying for an EIN Sole proprietors don’t automatically need an employer identification number (EIN). You can generally use your Social Security number for federal tax purposes — unless you hire employees. You might also need an EIN if your business: Owes employment or excise taxes, Withholds certain taxes on payments to a nonresident alien, Establishes certain retirement plans, or Changes its legal structure, such as incorporating or forming a partnership. Additionally, you might consider obtaining an EIN voluntarily for banking or administrative purposes. An EIN is available at no cost through the IRS website. To apply, you’ll need to provide identifying information, including a valid Social Security number or other taxpayer identification number, and details about the business. Eligible U.S. applicants generally receive the EIN immediately after completing the online application. You can also submit Form SS-4 by fax or mail. We can help Even though your business may be small, tax compliance and planning are a big deal. These are just highlights of federal income tax issues sole proprietors face. State and local income, sales, payroll, and other tax requirements may also apply. Contact us if you’d like additional information regarding the tax aspects of your business, or if you have questions about the reporting or recordkeeping requirements. © 2026 

As property values continue to rise, homeowners with large estates may be looking for ways to preserve family wealth while minimizing future estate tax exposure. One strategy that may help accomplish these goals is a qualified personal residence trust (QPRT). QPRT specifics A QPRT is an irrevocable trust that allows you to transfer ownership of your primary residence or a secondary residence (such as a vacation home) to it while retaining the right to live in (or personally use) the home for a specified number of years. At the end of that term, ownership of the home typically transfers to the QPRT beneficiaries. When you transfer a home to a QPRT, it’s generally removed from your taxable estate. But the transfer of the remainder interest going to the beneficiaries is a taxable gift. The IRS Section 7520 rate, which is updated monthly, is used to calculate the value of the gift for gift tax purposes. The lower the Sec. 7520 rate, the smaller the remainder interest and the lower the gift tax liability. If the appreciation on the home during the term outperforms the Sec. 7520 rate and you survive the term, the excess value will be transferred to the beneficiaries gift- and estate-tax-free. For August 2026, the rate is 5.2%. You can apply a portion of your available lifetime gift and estate tax exemption to the transfer. For 2026, the exemption is $15 million, reduced by any exemption you already have used during your life. You must appoint a trustee to manage the QPRT. Commonly, the trust grantor (which would be you) will act as the trustee. Alternatively, you can name another family member, friend or professional advisor. While you live in the home, you must continue to pay the monthly bills, such as property taxes, maintenance and repair costs, and insurance. Because the QPRT is a grantor trust, as the grantor, you’re entitled to deduct qualified expenses on your income tax return, within the usual limits. What if you want to sell the home during the term? You generally can do so as long as you reinvest the proceeds in another home that will be owned by the QPRT and subject to the same trust provisions. Be aware of the risks A QPRT isn’t without drawbacks. Because the trust is irrevocable, you can’t simply change your mind and reclaim ownership of the home after the transfer. However, you can continue to live in the home after the term ends if the beneficiaries agree and you pay fair-market rent to them. In addition, the strategy works best if you survive the term. If you die before the term expires, the home is generally included in your taxable estate, largely eliminating the intended estate tax benefits. The longer the trust term, the smaller the value of the remainder interest for tax purposes. But it’s generally better to choose a term that’s shorter than your life expectancy. Doing so will reduce the chance that you’ll die before the end of the term, causing the home to be included in your taxable estate. There are also income tax considerations. Unlike property inherited at death, a home transferred through a QPRT generally doesn’t receive a step-up in basis when the trust term successfully ends. As a result, the beneficiaries could face larger (in some cases, much larger) capital gains taxes if they later sell the home than they would have had they inherited it. So it’s important to weigh potential estate tax savings against potential future income tax liability. Is a QPRT right for your estate? If you have a home that’s appreciating rapidly and a large enough estate that estate taxes are a concern, a QPRT is worth a look. However, because it involves complex tax rules, strict IRS requirements and long-term commitments, a QPRT should be executed only after a thorough review of your financial circumstances and estate planning objectives. We can help you determine if this type of trust is right for you. © 2026 

Are you selling your business, soliciting new investors, updating a buy-sell agreement, pursuing litigation or drafting an estate plan? An accurate business valuation prepared by a valuation professional is critical to the success of these and many other activities. Knowing some fundamentals about the process can help you understand your valuator’s conclusions, what drives business value and where to invest resources. Here are some basic concepts you should know. Fair market and fair value Although they sound similar, these two terms can have different meanings. Fair market value is the valuation standard used for tax, transaction and planning purposes. It represents the price at which a business or ownership interest would change hands between a hypothetical willing buyer and a hypothetical willing seller. It assumes that both parties are acting independently, have reasonable knowledge of the relevant facts and are under no pressure to complete the transaction. Fair value, on the other hand, is a legal standard that generally depends on state law and court precedent. It’s commonly used in shareholder disputes, divorce proceedings and certain litigation. Fair market value can serve as a starting point for an appraisal, but fair value generally requires adjustments to reach an equitable outcome. For example, when minority shareholders are forced out of a business through a merger, courts often rely on the fair value standard because those shareholders are neither hypothetical nor willing participants. Going concerns Another essential concept is going concern value. This refers to the value of a business that’s expected to continue operating into the foreseeable future. A going concern is typically worth more than the sum of its individual assets because it includes valuable intangible assets. These might include an experienced workforce, established customer relationships, proprietary processes, operating systems, licenses and a proven ability to generate earnings. In today’s economy, such intangible assets often account for a significant portion of a business’s value. Premiums and discounts Valuations aren’t simply based on the numbers contained in a business’s financial statements. Professional valuators also usually consider the ownership interests being appraised. For instance, a business may be more valuable because the owner can independently direct management decisions and influence the organization’s future. This additional value is known as a valuation premium (in this case, for control reasons). Conversely, a valuation professional may apply a valuation discount when circumstances reduce the appeal of an ownership interest. One of the most common examples is a discount for lack of marketability. This reflects the difficulty of quickly selling an interest in a privately held business. Depending on the facts, other discounts, such as those related to minority ownership, may also be considered when appropriate. Risks and opportunities Even if you aren’t facing litigation or don’t plan to sell your business soon, consider obtaining a valuation. Professional valuations often review historical and projected financial performance, economic conditions, key-person risk, competitive position, and other qualitative and quantitative factors. Periodic valuations may alert you to potential threats and measure progress toward long-term goals. Contact us for help determining what your business is worth and identifying practical steps to enhance its value. © 2026