This guide aims to help dealers and their advisors understand the process of valuing automobile and heavy-truck dealerships as well as the various factors that influence dealership value. It covers such situations as buy-sell transactions; estate
and gift tax planning or reporting; ownership succession planning; owner buy-in or buy-out; tax reporting due to entity restructuring; and litigation settings including divorce and dispute. The guide discusses the importance of analyzing historical
earnings and cash flow, estimating future cash flow, and determining a reasonable return on investment. It describes the steps in the appraisal process, outlining the income, market, and asset-based approaches to valuation. It provides numerous examples,
formulas, and worksheets. It also addresses special valuation considerations such as discounts for non-controlling interests; valuation of personal versus corporate goodwill (Blue Sky); valuation for key employee ownerships; and valuation for federal
tax matters, including the relevance of IRS Revenue Ruling 59-60. It examines changes resulting from the Tax Cuts and Jobs Act of 2017. Finally, the guide suggests strategies to maximize dealership value and prepare for exit.
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