What is the purpose of Revenue Ruling 59-60?

The purpose of Revenue Ruling 59-60 is to provide methods for valuing shares of closely held corporations. This ruling is significant because it establishes guidelines that practitioners can rely on when determining the fair market value of shares for tax and legal purposes. It outlines key factors to consider in the valuation process, such as earnings, dividends, and the overall financial condition of the corporation.

Understanding the context of closely held corporations is crucial; these entities often lack a public market for their shares, which makes valuation more complex compared to publicly traded companies. Revenue Ruling 59-60 helps standardize this process, ensuring that valuations are performed consistently and fairly.

While options related to tax regulations for publicly traded companies, personal property valuations, and corporate mergers and acquisitions may represent important aspects of business and tax law, they do not pertain directly to the specific methodologies for valuing shares of closely held corporations as established in Revenue Ruling 59-60. Thus, the ruling is a vital resource for professionals engaged in business valuations within this particular context.