Fall 2009

Valuing a Professional Practice
The need to value a professional practice--whether a law firm, medical practice or other professional entity--may arise due to any one of a number of events. Once a valuation need is triggered, know what factors and methods are most important when determining the worth of a business. Read more...

Non-Compete Agreement Payments Considered Ordinary Income
The transfer of intangible assets is commonly part of the sale of a business. However, the income-tax treatment of these intangibles--generally goodwill and a covenant on the part of the seller not to compete--can differ significantly. A recent case illustrates the need to clearly define what is being bargained for when parties engage in the sale of a business. Read more...

Court Rules Settlement Mostly Tax Free Under IRC Section 104(a)(3)
IRC Section 104(a)(2) generally excludes from gross income damages received in a lawsuit or settlement on account of personal physical injury or personal physical sickness. The Tax Court, however, recently relied on IRC Sec. 104(a)(3) in a decision holding that a settlement received by a taxpayer from an automobile insurer was excludable from income. Read more...

Corporation May Deduct Costs of Securities’ Settlement
A private IRS ruling holds that a corporation that settled class action litigation relating to various allegations involving securities improprieties may deduct the settlement payments (which included legal fees and other costs) as an IRC Sec. 162 business expense. Read more...

Somerset Litigation, Valuation & Forensic Team News

What We Do - When you are determining which independent consulting firm to select for litigation support, we ask that you consider Somerset. You can rely on our experience, competency and reputation. Over the years, we have been involved in many complex litigation matters, valuations and financial investigations involving breach of contract damage assessments, asset misappropriation, fraudulent financial reporting, business valuation claims and damages resulting from post-acquisition disputes. We regularly perform complex financial analysis, financial modeling, cost analysis and business valuation services in a wide variety of industries. Utilizing qualified and credible litigation support professionals--who can get key points across in an understandable manner--is critical to prevailing in your cases. Your clients are also looking to you to contain costs, and we can provide real value with our reasonable and cost-effective rates. Please contact us today.

Tell Us How We Are Doing and You May Win Pacers Tickets - If you are a Somerset client, please take our survey concerning the services we have provided to you by October 15, and you will be entered into our drawing for a pair of tickets to the Pacers vs. Miami on Friday, October 30. Take survey now.

In Other News - Somerset publishes a variety of newsletters in addition to Litigation Support--such as Employee Benefit Plan Commentator, Wherewithal, Real Estate Focus, Tax Times and several others. Please visit the Newsletters page of our web site to read the archives and sign up to have new issues delivered to your email inbox.
 

This newsletter is provided by Somerset CPAs for our clients and other interested persons upon request. Since technical information is presented in generalized fashion, no final conclusion on these topics should be made without further review. For additional information on the issues discussed, please contact Steve Riddle, Tom Thieme, Rex Collins, Ken Stalcup or Doug Ayres of our Litigation, Valuation & Forensic Team.

This document is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer.