Closely Held Shares

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Closely Held Shares

Shares in a publicly-traded company in which a small group of shareholders control the majority of the shares. These majority shareholders tend to hold on to the company's stock, and, as such, only minority shares are traded, leading to light trade volume. Closely held companies are, by their nature, resistant to hostile takeovers and proxy wars. They tend to be more stable than other companies because their share prices are not determined by (sometimes irrational) investment decisions, but by the value of the company itself. However, closely held companies do not have access to as much working capital as corporations with more shareholders.

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Management/closely held shares

References in periodicals archive ?

FNC also provides a trading platform for closely held stock in ethanol and sugar beet facilities through an entity called FNC Ag Stock LLC.

Managing 2.5 million acres

Together, publicly traded stock and closely held stock accounted for 35.

Personal wealth, 2007

If you have real estate or closely held stock in a self-directed IRA, you have to have an independent third-party valuation," said Cindy Conger, a Little Rock investment adviser.

IRA rules spur new strategy: IRS crackdown prompts annual valuations

Types of Property in Estate Tax Returns, 2008 Publicly traded stock 24% Other real estate 11% State and local bonds 10% Closely held stock 9% Cash assets 9% Personal residences 8% Retirement assets 7% Other 22% Source: IRS, Statistics of Income, tinyurl.

Currency option not a contract in "major/minor" shelter

Last month, I finally connected with a wealthy prospective client who received over $30 million from the sale of his minority share of closely held stock.

Use conversation formats to set things straight

In cases involving closely held stock with built-in capital gain, the capital gain tax potential survives the transfer of the stock to an unrelated party; Congress has not granted any relief from that secondary tax.

IRA valued without discount for anticipated tax liability

His work has been concentrated in the valuation of closely held stock and intangible assets.

Avail Consulting Brings Valuation Expertise to Forefront; Specialized Independent Firm Launched

2 Question #2: My client wants to donate bonds, real estate in vestment trust (REIT) units, closely held stock, real estate, collectibles, or other assets that are not publicly traded stock to his or her private foundation or to a charitable remainder trust that will pay into that foundation.

Ten Frequently Asked Questions About Private Foundations

With an initial transfer of $100,000 in closely held stock, we have been successful in transferring multi-millions in value to future generations," Longsworth relates.

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When closely held stock is involved, dividing ownership between marital and credit shelter trusts to obtain a control premium or a minority interest discount can, in certain circumstances, maximize overall tax planning.

TRA 97 is not the only reason to review existing estate plans involving closely held stock

TABLE 1 Summary of Discounts for Illiquidity Author Security Discount Gelman (1972) Restricted stock 33% Maher (1976) Restricted stock 35% Moroney (1977) Closely held stock 75% Solberg (1979) Restricted stock 17-44% Andrews (1988) Closely held stock 10-50% Lyons and Wilczynski (1989) Closely held stock 35-40% Curtis (1991) Closely held stock 40-50%

The valuation of owner-financed residential mortgages

What is important is the IRS's formal recognition of the minority discount for transfers of closely held stock among family members.