Business Valuation Services

Marital Disputes - Navigating Divorce and Taxes

A divorce between high net worth individuals with business and financial ties can significantly alter the financial positions and tax situations for everyone involved.

Cendrowski Corporate Advisors focuses on sensitive client needs by providing a comprehensive analysis of the financial aspects of each case, supporting law firms and their clients with business valuations, tax implications, and lifestyle analyses for cases that involve child support and alimony. Our divorce dispute valuation services also include:

  • Income analysis
  • Net worth determinations
  • Advice on economic and tax issues
  • Trial testimony
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Client Success: Business and Income Valuation for Divorce Dispute

During a valuation engagement for a divorce case, the opposing spouse and his brother were the majority owners of several fast food operations of a small franchise chain. We were engaged to determine the value of the businesses and the cash flow received by the opposing spouse.

Through discovery, income tax returns with depreciation schedules were obtained along with franchise agreements and depositions of the franchisor and a minority owner. The tax returns reflected a lack of proper accounting procedures spanning over two decades. The gross value of each operation’s property and equipment (depreciable) assets never changed from the original tax return on any franchise operations.

More importantly, the franchise fee per the franchise agreement was a flat 2% of sales. However, the franchise fee paid per the tax return usually exceeded 3% of sales every year. By recomputing income based on a 2% franchise fee, revenue was calculated to be understated by millions of dollars a year, exceeding eight figures over five years. The opposing spouse’s share of the unreported income was a high six figures annually and mid-seven figures over the five years of tax returns. Based on the implied income of the opposing spouse and under-reported taxable income, a substantial settlement was provided to the opposing spouse within ten days.

John Alfonsi to Speak at Sept. 28, 2022 Strafford Live Webinar on Capital Accounts

CCA’s John Alfonsi will speak at the upcoming Strafford live webinar, “Capital Accounts: 704(b) vs. GAAP vs. Tax Basis, Comparing and Contrasting Annual Allocations,” on Wednesday, September 28, 2022 from 1:00 pm-2:50 pm EDT. Properly maintaining partners’ capital accounts may be the most critical aspect of partnership taxation. Among some of the topics covered will […]

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Are gifts for clients tax deductible?

Tax specialist Catherine Raker answers the question: Are gifts for clients tax deductible? Transcript: Dave Lorenzo: And now it’s time for another Cendrowski Business Minute. With us today, we have Catherine Raker. So Catherine, are gifts for clients tax deductible? Catherine Raker: Well, like everything, there’s an exception and there’s a rule. The maximum limit […]

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John Alfonsi Moderates Pre-Sale Estate and Wealth Planning Panel

At the 2021 Smart Business Dealmaker’s Conference in Chicago, John Alfonsi moderated a discussion titled, “The Complexity of Pre-Sale Estate and Wealth Planning.” Participants on the panel include Pitcairn’s Andy Busser and Mark Petrosky of DP+. “You’ve decided to sell your company, you’ve grown this baby, you’ve nurtured it, now’s the time to sell,” said […]

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