Fair Market Value for Selling Trustee

[Guest jvgatty]

I understand the rules concerning the date of determining the fair market value when a disqualified person in transacting with the ESOP; however, I am uncertain of the rules when you have a disqualified person transacting with the corporation partially owned by an ESOP.

Situation: 51% owned S Corp ESOP. Over 10% other shareholder and trustee of ESOP selling shares under Stock Restriction Agreement to the corporation (not the ESOP trust). On what date should fair market value be determined for this transaction? Date of close? Or closest Valuation? Any thoughts appreciated.

Thanks

[RLL]

What does the Stock Restriction Agreement say about determining fair market value for purposes of the transaction?

[Guest jvgatty]

Stock Restriction says latest Valuation for the ESOP purposes (which would in this case would be the 12/31/2013 val).

[Guest jvgatty]

Problem is there may be an argument that the val should be 12/31/12 (closest val to triggering date as opposed to closing date). The 12/31/12 val is approximately $2000 per share higher.