When economic activity declines, so do the value of many businesses, even strong ones that are weathering the recession well. That means that the current economic environment could provide a great opportunity to make gifts of closely held business assets to succeeding generations.

By transferring business assets when the value of the business is low, the family can realize a substantial tax break -- more than if the same assets had been transferred two years ago, or compared with what they might be worth two years from now.

In assessing the value of closely held businesses, the Internal Revenue Service considers "all relevant facts," which typically involves balancing eight factors:

1. The fair market value of the business, which the IRS defines as the price a willing buyer will pay to a willing seller

2. The nature and history of the business

3. The general and industry-specific economic climate

4. The book value

5. The business' earning capacity

6. The business' dividend paying capacity

7. Goodwill and other intangible values

8. The value of prior sales of stock

Assessing a low value to the stock that the business owner is selling to other family members could have a significant impact on estate planning. Each case is different, but there may now be a good opportunity to reduce the tax burden on the parents while lowering the sales price to the children.

The bottom line is that every closely held family business should visit or revisit the subject of family succession planning and business valuation to see how it can take advantage of the relatively low valuation of businesses in a recession.

-- Thomas Eddy, BPU Investment Management, teddy@bpuinvestments.com

A recent decision of the U.S. Supreme Court has opened the door for employees in all types of discrimination claims to bring in evidence of discrimination against others not part of the lawsuit.

Often in discrimination cases, employees attempt to introduce evidence of discriminatory acts against other employees, sometimes called "me too" evidence. In the case in question, an employee who sued Sprint for age discrimination wanted to introduce evidence of other Sprint employees who claimed that supervisors had discriminated against them because of age. A district court ruled the evidence was not admissible because none of the other employees had worked in the same group or for the same supervisor.

An appeals court disagreed with the initial ruling, but then the Supreme Court decided not to make a decision on "me too" evidence, and kicked it back down to the original district court for reconsideration. The Supreme Court said that "me too" evidence may or may not be admissible, depending on many complicated factors that relate to the plaintiff's circumstance and the theory of the case.

With its decision neither to accept nor to eliminate "me too" evidence as a matter of law, the Supreme Court strengthened the hand of employees claiming discrimination. But by making the admissibility of "me too" evidence a case-by-case decision, the Supreme Court has left much discretion to trial courts.

-- Elaina Smiley, Meyer Unkovic & Scott, es@muslaw.com