Obtaining a 409A valuation is essential when offering stock options or other forms of deferred compensation to employees. Withum’s Valuations Services Team delivers independent and defensible valuations while providing clarity and compliance. This helps your business accurately value equity compensation and achieve optimal outcomes for financial reporting and employee incentive strategies all while remaining compliant with regulations that may potentially mitigate any unnecessary tax liabilities and penalties. The team has conducted 409A valuations for clients at all stages of growth, from startups to established enterprises, ensuring compliance and safe harbor protection.

IRC 409A / ASC 718 Services include:

• Tax Compliance: If stock options are issued below FMV, the IRS could treat them as deferred compensation, leading to immediate taxation and a penalty tax. A proper 409A valuation that shows that options were issued at-the-money can help mitigate these risks.
• Setting the Strike Price: Private companies need 409A valuations to set the strike price of stock options. The exercise price must be at or above the FMV to avoid tax issues for employees when they exercise their options.
• Safe Harbor Protection: A 409A valuation offers “safe harbor” protection, meaning it is presumed valid up to 12 months barring any material event. This protects both the company and its employees from IRS scrutiny and penalties.
• Customized Solutions: We understand that every company is different, and we tailor our valuation models to reflect your unique business dynamics, growth drivers, and financial structure.
• Comprehensive Valuation Reports: Our detailed, audit-ready reports provide clear documentation of the valuation methods used.

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Gift and estate valuations determine the fair market value (FMV) of assets transferred to beneficiaries, either during one’s life or upon death. Withum provides thorough, IRS-compliant gift and estate valuations to help clients navigate the estate planning process. These valuations provide clarity and strategic tax benefits, helping individuals and families preserve wealth and achieve optimal outcomes during asset transfers and estate planning.
Gift and Estate Valuation Services include:

• Expert Business Valuations: We specialize in thoroughly analyzing businesses, real estate, and other assets by leveraging appropriate valuation methodologies in IRS audits including defense of valuations performed.
• Discount Applications: Our team of valuation experts has considerable experience researching appropriate and applicable valuation discounts to minimize the taxable value of transferred assets.
• Comprehensive Reports: Withum delivers qualified appraisals and audit defensible reports that clearly document valuation methods and conclusions.
• IRS Audit Support: Our experts offer complete support during IRS audits, defending valuations and ensuring full compliance with tax laws. Withum’s gift and estate valuation services provide clarity and strategic tax benefits, helping individuals and families preserve wealth and achieve optimal outcomes during asset transfers and estate planning.

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By accurately distinguishing between personal and enterprise goodwill, Withum’s team can help business owners optimize tax outcomes and maximize proceeds during business sales, particularly in asset sales involving C Corporations. Withum’s personal goodwill valuation services provide clarity and significant tax advantages, helping business owners achieve the best possible outcomes during sales and ownership transitions.

Personal Goodwill Services include:

• Personal Goodwill Identification: We specialize in identifying and quantifying personal goodwill, ensuring a clear distinction from enterprise goodwill.
• Tax Optimization: By allocating part of the purchase price to personal goodwill, we help owners reduce double taxation in C corporation asset sales.
• Accurate Valuations: Withum’s experts deliver reliable, audit-ready personal goodwill valuations tailored to the unique characteristics of each business or individual.
• Transaction Support: We provide comprehensive support during business sales, working with owners, appraisers, and advisors to maximize post-sale proceeds.

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Undivided real estate interests refer to shared ownership where multiple parties hold a percentage interest in a property without physical division. These fractional interests often qualify for valuation discounts due to challenges such as lack of control, limited marketability, and partition costs. By accurately assessing fractional ownership interests and applying appropriate discounts, Withum ensures compliance with tax regulations while delivering substantial savings during property transfers.

Withum’s Undivided Real Estate Interest Valuation services can include:

• Fractional Interest Valuation: We specialize in identifying and valuing undivided real estate interests, applying appropriate discounts for lack of control and marketability.
• Tax Optimization: By leveraging valuation discounts, we help property owners minimize gift and estate tax liabilities during property transfers.
• Defensible Valuations: Withum delivers detailed, IRS-compliant reports backed by legal precedents and market analysis to support valuations.
• Estate and Wealth Transfer Planning: Our experts collaborate with families, legal advisors, and tax professionals to ensure smooth and tax-efficient property transfers.

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Carried interest represents the share of profits general partners (GPs) receive after achieving a specified return threshold. Given its contingent and complex nature, Withum employs robust methodologies to ensure compliance with IRC Section 1061 (Carried Interest Taxation).

• Sophisticated Valuation Techniques: We employ methodologies such as DCF, Monte Carlo simulations, and option pricing models to deliver precise carried interest valuations.
• Comprehensive Risk Assessment: Evaluation of fund performance, industry risks, and specific agreement terms to ensure accurate valuations for reporting and tax planning.
• Regulatory Compliance: Full compliance with IRC Section 1061 and IRS safe harbor provisions, backed by audit-ready documentation.
• Audit and Tax Support: Detailed, defensible reports and support for tax filings related to carried interest, ensuring smooth audits and regulatory adherence.

Withum’s expertise in carried interest valuation ensures effective tax planning.

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Withum provides expert tax valuations to help businesses and individuals optimize outcomes and ensure compliance with IRS regulations across a range of specialized tax scenarios. Whether navigating golden parachute payments under IRC Section 280G, transfer pricing for multinational corporations, or asset allocations during restructurings, our services deliver defensible and accurate valuations.

Other key tax areas include:

• 280G Analysis: We specialize in golden parachute payments, non-compete agreements, and avoiding excise tax penalties.
• Transfer Pricing (IRC Section 482) Valuations: Our experts assess intercompany transactions to align with IRS and global tax standards.
• Asset and Equity Valuations: Comprehensive valuations during restructurings, mergers, and acquisitions for accurate asset allocation and tax treatment.
• Audit-Ready Reports: Withum provides detailed, defensible, and IRS-compliant valuation reports tailored to the unique circumstances of your business.

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An investment portfolio typically includes a mix of securities and alternative investments. Each asset class carries different levels of risk and returns, requiring valuation approaches and methodologies tailored for private equity, private debt, venture capital and hedge funds, as well as fund of funds, and family partnerships

Comprehensive Portfolio Valuations: We provide valuation services for fund principals, the funds themselves, and their portfolio companies, ensuring accurate and defensible valuations across all asset classes

• Regulatory Compliance: Ensuring valuations meet appropriate standards including ASC 820, IFRS 13, and SEC Regulations, delivering accurate, audit-ready reports for financial reporting.
• Real-Time Market Data: Using platforms like Bloomberg and Capital IQ, we provide up-to-date, market-reflective valuations.
• Detailed Reporting: Transparent reports offering insights into portfolio performance.
• Risk Management: Accurate valuations to support risk mitigation strategies. 

Withum’s expertise spans both liquid and illiquid investments, supporting strategic financial decisions with precision and reliability.

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Following a merger or acquisition, the purchase price must be allocated across tangible and intangible assets to ensure proper financial reporting, tax compliance, and transparency. This allocation determines the value of intangible assets and goodwill, which may be subject to future impairment testing. Withum ensures compliance with accounting standards like ASC 805 and IFRS 3, providing clear, audit-ready valuations that build stakeholder confidence. 

• Accurate and Defensible Valuations: Expertise in valuing both tangible assets (e.g., equipment, real estate) and intangible assets (e.g., trademarks, intellectual property, customer relationships).
• Tailored Valuation Approaches: Use of appropriate methods like relief from royalty, multi-period excess earnings, and with or without method. 
• Post-Transaction Support: Assistance with integrating acquired assets into balance sheets and managing subsequent financial reporting and compliance needs.

Withum delivers precise valuations and seamless compliance, supporting businesses through mergers and acquisitions with transparency and reliability. 

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Goodwill and intangible assets can be crucial components of a company’s operations and performance, and under standards like ASC 350, ASC 360 (U.S. GAAP) and IAS 36 (IFRS), businesses must conduct impairment tests annually or when triggering events occur. Withum ensures these tests are compliant, accurate, and audit-ready under AICPA and PCAOB standards,

• Comprehensive Impairment Testing: Robust valuations for goodwill and intangible assets using methods like discounted cash flow (DCF) and market-based approaches, ensuring full compliance with ASC 350, ASC 360, and IAS 36.
• Regulatory Compliance: Audit-ready documentation compliant with U.S. GAAP and IFRS standards.
• Market-Driven Approach: Incorporation of real-time market data and financial models to ensure valuations reflect current economic conditions.
• Audit Support: Detailed explanations of methodologies and results to facilitate smooth audits and satisfy regulatory requirements.

Withum’s expertise in impairment testing ensures precise, defensible valuations that enhance financial reporting integrity, promote investor confidence, and support effective decision-making. 

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Complex financial instruments are securities that carry embedded features such as options, contingencies, or conversion rights, which make them more difficult to value. Examples include derivatives like options, warrants, swaps, structured notes, convertible bonds, and contingent consideration. Accurate valuations are essential for financial reporting, strategic planning, and risk management, ensuring transparency and compliance with standards like ASC 815 and ASC 820.

• Regulatory Compliance: Accurate valuations ensure adherence to financial reporting standards, such as ASC 820 (Fair Value Measurement), ASC 815 (Derivatives and Hedging), ASC 480 (Debt and Conversion), and IFRS 9 (Financial Instruments).
• Risk Management: Valuations help identify risks related to volatility, interest rates, and underlying assets, enabling better risk mitigation strategies.

We value Complex financial Instrument using multiple techniques including:

• Monte Carlo Simulations: Useful for instruments with path-dependent features, such as options with varying strike prices over time.
• Options Pricing Models (OPM): Black-Scholes models are applied for options and derivatives.
• Discounted Cash Flow (DCF) Models: Used to value income-generating instruments like bonds or hybrid securities by estimating future cash flows.
• Strategic Decision-Making: Reliable valuations of complex instruments aid in making informed decisions, especially in portfolio management, hedging, and capital structuring
• Scenario-Based Models (SBM): Considered when future scenarios result in different features for the underlying instrument.

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Accurate valuations are critical for financial reporting, regulatory compliance, and strategic decision-making. Withum evaluates corporate bonds, convertible debt, municipal bonds, and other debt instruments in accordance with standards like ASC 815 (Derivatives and Hedging), ASC 842 (Leases), and ASC 470 (Debt), ensuring reliable and audit-ready results. 

• Market-Based Valuation Approach: Leveraging real-time market data and advanced financial models, we evaluate factors such as credit ratings, interest rate environments, and risk premiums.
• Risk Assessment: In-depth analysis of interest rate, credit, and liquidity risks to help businesses identify vulnerabilities
• Convertible Debt Valuations: Specialized bifurcation of convertible debt derivatives for accurate financial statement reporting. 
• Audit Support: Audit-ready documentation and clear explanations of valuation methodologies ensure transparency and regulatory compliance.

Withum’s expertise in debt and fixed income valuation provides businesses and investors with precise, reliable assessments that inform strategic decisions, ensure compliance, and mitigate financial risks. 

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Fair value accounting delivers timely, market-based valuations that enhance accuracy and transparency in financial reporting. Withum helps businesses navigate the complexities of fair value measurement with expert valuations that stand up to auditor, regulatory, and stakeholder scrutiny.

• Precise Valuation Across Asset Classes: Expertise in valuing financial instruments, real estate, intellectual property, and other tangible and intangible assets.
• Market-Based Approach: Real-time market data from platforms like Bloomberg and Capital IQ ensures valuations reflect current conditions.
• Regulatory Compliance: Valuations fully compliant with ASC 820 and IFRS 13, standing up to audits and regulatory reviews.
• Audit Support: Detailed documentation and explanations of valuation methodologies to streamline the audit process.
• Customized Valuation Techniques: For illiquid or complex assets, we employ advanced methods such as discounted cash flow (DCF) models, market comparables, and option pricing models for accurate fair value determination.

Withum ensures precise, defensible valuations that enhance financial transparency, support compliance, and build confidence among stakeholders.

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Our project management consultants will define a strategy for establishing the PMO that is tailored to your specific needs and constraints.

We will conduct a thorough assessment of your current project management practices and provide a roadmap for PMO growth and improvement.

Our PMO consultants offer coaching and training programs to enhance the skills and capabilities of your project management teams, other functional staff and organizational leaders.

We can assist in PMO tool selection and develop robust reporting and analytics capabilities.

How? When? Why?

Are you looking to groom your successor from within the organization? Withum can help determine the best plan forward for transitioning leadership and transferring ownership to the next generation. Develop a business transition plan that includes the best time to start the transition, how much to transfer, and how to ensure the continued growth and success of the company before, during, and after the shift, while maintaining an appropriate focus on the individual goals of those involved. Our private client service professionals are well-versed in a vast array of gift and estate planning strategies, including:

• Outright gifting of your business interest, including the establishment of long-term gifting strategies
• Revocable trusts
• Irrevocable trusts
• Grantor retained annuity trusts (GRATs) and Grantor retained unitrusts (GRUTs)
• Self-cancelling installment notes
• Private annuities
• Family limited partnerships

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Are you seeking to sell all or part of your company? Withum’s transaction advisory team is here to help. Whether selling to private equity, a competitor, or a strategic buyer, our advisory professionals can assist in due diligence, transaction structuring, and offer guidance to help you make the most informed decision possible. With years of experience, Withum can provide insight on how to best navigate the important factors to consider, while also helping the current executives plan for what life looks like after the sale has closed. From the direct sale of your business interest to the establishment of buy-sell agreements that pre-arranges the sale of your business interest when a subsequent event occurs, our private client and transaction advisory professionals will work closely with you through the sale process, from pre-transition planning to defining what your financial situation may look like after the sale has occurred.

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Are you just starting to explore options to develop a succession planning strategy? Allow Withum to be your guide. Our dedicated teams can help explore every facet of your business transition plan based on your unique goals and circumstances. To assist, we offer a myriad of resources to fit your every need, including:

• Residency planning as a method of mitigating the tax impact of a significant ownership change
• Understanding the value behind the enterprise you have built to maximize the benefit derived from a potential sale transaction and/or transition within the organization
• Determining whether an ESOP is the right fit for you

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Have you begun executing your succession plan but are struggling with determining the best path forward after the transaction? Withum offers a variety of wealth planning tools to develop a blueprint for continued growth and success. Withum Wealth Management partners with Withum to bring the resource of a large investment advisory firm to Withum’s clients. With the combined expertise of Withum Wealth and our private client team, we can assist with personal financial planning, estate and trust services, charitable planning, and so much more.

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Risk Assessments identify potential weaknesses and gaps in the administrative processes and systems. They allow healthcare plan sponsors to manage risks, put effective controls in place, and protect the integrity, efficiency, and compliance of its health plan.

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A manufacturer rebate audit ensures that rebate calculations, payments, and reporting align with contractual terms, regulatory requirements, and industry standards. Key focus areas include verifying rebate data accuracy, reconciling payments with financial records, and assessing compliance with contractual obligations and regulatory guidelines.

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Involves reviewing the contracts between the healthcare plan and the service provider. We want to make sure they follow the agreed upon terms, conditions, and regulatory requirements. The goal of the audit is to check that both parties are meeting their contractual obligations. It also aims to find areas of non-compliance or differences, overall reducing risks linked to how the contract performance.

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Assesses the procedures and practices used to determine the individual’s eligibility for coverage under the plan. This review looks at the enrollment process and what documents are required. It also checks how verification is done and what criteria are used to make up decisions. This ensures that individuals are accurately assessed for eligibility based on the health plan’s eligibility rules and regulatory requirements.

Learn more about Eligibility Process Review