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A Good Time for a Valuation of Your Business or Securities for Gift Tax Purposes

The IRS has extended the deadline for not only filing taxes but also for filing gift taxes until July 15, 2020, due to the impact of the Coronavirus.  The current market slump may offer high-net-worth investors an opportunity to make gifts to family members with lower gift taxes. Owners of private companies and of restricted shares in public companies may benefit not only from lower valuations based on market levels but also from higher discounts for lack of marketability. Boustead & Company Limited affiliate Sutter Securities, Inc.’s Chairman Emeritus and Senior Managing Director, Gil Matthews, is quoted on this topic in the BVWire article, "Thoughts and advice on valuations amid the COVID-19 crisis." "Since volatility is a factor in discounts for lack of marketability (DLOM), the extreme volatility of the market in recent weeks will materially increase DLOMs. In addition, I would argue that DLOMs should be adjusted upward because:

  • The abnormal conditions in the market will necessarily cause buyers to be reluctant to invest in illiquid securities; and

  • The restrictions being put in place to limit the spread of COVID-19 are limiting the ability of prospective buyers of restricted securities from conducting due diligence and even to meet with financial and legal advisors.

Valuators should use their professional judgment.” Another Boustead & Company Limited affiliate Sutter Securities Financial Services, Inc., offers comprehensive business valuations and fairness opinions through its Chairman, Gil Matthews, including valuing private companies and in determining discounts for lack of marketability.


Gilbert E. Matthews

Gil Matthews has more than 50 years of experience in investment banking, and an extensive background in testifying corporate valuations, and in defending opinions in litigation. He has testified in Tax Court both on behalf of the IRS and in cases defending taxpayers against the IRS. Gil has worked with a wide variety of clients in mergers, acquisitions and divestitures, friendly and unfriendly tender offers, public and private offerings of securities, recapitalizations, bankruptcy and other financial restructurings, and international transactions. He joined Sutter Securities Inc. in San Francisco as a Senior Managing Director in December 1995 and served as Chairman for more than 20 years. Previously, Mr. Matthews was a Senior Managing Director of Bear, Stearns & Co. Inc., where he chaired the its Valuation Committee and was responsible for all fairness opinions issued by the firm. For more information contact: Gilbert E. Matthews Chairman and Senior Managing Director Sutter Securities Financial Services, Inc. +1 415-352-6336 This is does not constitute tax, accounting or legal advice. Please see your own professional to discuss such matters that may be specific to your situation.


About Boustead Securities, LLC Boustead Securities, LLC (“Boustead”), a member of FINRA and SIPC, is an investment banking firm that executes and advises on IPOs, mergers and acquisitions, capital raises and restructuring assignments in a wide array of industries, geographies and transactions, for a broad client base. Boustead’s core value proposition is the ability to create opportunity through innovative solutions and tenacious execution. With experienced professionals in the United States, Boustead’s team moves quickly and provides a broad spectrum of sophisticated financial advice and services. Boustead is a majority owned subsidiary of Boustead & Company Limited, a diversified non-bank financial institution. For more information, please visit About Sutter Securities Group, Inc. Headquartered in Irvine, California, Sutter Securities Group, Inc. (“SSG”), founded in 2013, through its affiliates, is an innovator and investment banking solutions provider. SSG owns and operates Sutter Securities, Inc. and Sutter Securities Clearing, LLC, FINRA member broker-dealer; Sutter Shareholder Services, LLC, a SEC-registered transfer agent; FlashFunders Funding Portal, LLC, a FINRA member funding portal, Sutter Securities Financial Services, Inc., and Sutter Capital Management, Inc. Sutter Securities Group, through its affiliates, operates a U.S.-based online securities platform whose underlying technology and regulatory infrastructure are designed to enable issuers to engage in Regulation D, Regulation A (known as Reg A+), Regulation S, Regulation CF and fully registered S-1 and F-1 Initial Public Offerings in compliance with applicable federal, state and non-U.S. securities laws.   SSG is a majority owned subsidiary of Boustead & Company Limited, a diversified non-bank financial institution. Additional information is available at Forward Looking Statements This document contains forward-looking statements.  In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing.  We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us.  Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities.  You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms.  In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business.  These and other factors may cause our actual results to differ materially from any forward-looking statement.  Forward-looking statements are only predictions.  The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us.  We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

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