NACVA NACVA Certifications CVA Questions & Answers

• Question 101:

  Family law courts generally recognize three basic approaches to value. Which of the following is NOT out of those approaches?

  A. Income approach (both direct capitalization and, increasingly, discounted cash flow)

  B. Market approach

  C. Asset-based approach (including the capitalized excess earnings method)

  D. Asset-based approach (excluding the capitalized excess earnings method)

  Correct Answer: D

• Question 102:

  As with many matters related to marital dissolution valuations, the consideration of goodwill varies among states. In general, the various judicial precedents follow one of three positions regarding the consideration of goodwill. Which of the following is/are out of those options?

  A. Goodwill is never a distributable marital asset

  B. Business or practice goodwill only is a distributable marital asset

  C. All intangible value in the nature of goodwill (both personal and practice goodwill) related to the business or practice is distributable

  D. Intangible value of goodwill is attributable solely to the efforts of or reputation of an owner

  Correct Answer: ABC

• Question 103:

  Bishop and Schroeder make the point that lack of marketability discounts should be recognized, just as they are in Tax Court, because one spouse usually gets liquid assets while the other spouse lacks:

  A. the mode of payment as it is the exchange of interests in the marital assets

  B. Underlying principles that are much more consistent and broadly accepted

  C. Such flexibility

  D. The flexibility and safety of being able to "cash out" readily at the owner's option

  Correct Answer: D

• Question 104:

  The marital estate comes into being upon filing for divorce. It represents the assets that must be divided according to the property laws of the state. Currently, each state adheres to either (1) ________________ or (2) _____________________.

  A. The community property standard, the investment value

  B. The community property standard, the equitable distribution standard

  C. The family property standard, the equitable standard

  D. The standard value, the equitable distribution standard

  Correct Answer: B

• Question 105:

  A major issue in many fair value cases is:

  A. Whether or not discounts and/or premiums are applicable

  B. Lack of control

  C. Lack of marketability

  D. lack of ownership control premiums under certain specific circumstances.

  Correct Answer: A

• Question 106:

  "Fair value" means the value of the corporation's shares determined:

  A. Immediately after the effectuation of the corporate actions to which the shareholder objects

  B. Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal

  C. Without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles...

  D. That the majority states use the pre-1999 definition

  Correct Answer: BC

• Question 107:

  The remainder interest is valued:

  A. By taking the security's appraised fair market value and discounting it to a present value under the IRS actuarial tables based on seller's projected remaining life.

  B. By self-canceling installment note

  C. By taking the security's appraised fair market value and discounting it to a present value under the IRS actuarial tables based on seller's projected remaining life.

  D. By sale of a private annuity

  Correct Answer: A

• Question 108:

  With respect to the contents, _____________ must include:

  1.

  The date of the appraisal

  2.

  The date of the transfer

  3.

  The purpose of the appraisal

  4.

  The description of the property

  5.

  A description of the assumption utilized

  6.

  A description of the appraisal process employed, including the valuation method utilized

  7.

  A description of any hypothetical conditions considered etc.

  A. Applicable valuation restrictions

  B. Appraisal report

  C. Three-year gift tax statute of limitations

  D. Lapse of certain rights

  Correct Answer: B

• Question 109:

  There are some factors that determine whether the buy-sell agreement is conclusively binding for estate tax purposes. Which of the following is/are out of those factors?

  A. The agreement must restrict the transfer of the securities to the buy-sell price during the owner's life as well as at death.

  B. There must be a valid business purpose for establishing the agreement

  C. The value may not reflect those typical of arm's length transactions in the subject company's industry

  D. The value established in the agreement must have been an adequate and fair price at the time the agreement was executed

  Correct Answer: ABD

• Question 110:

  There is an additional ____________ valuation rule, which requires that the appraiser determine whether any of the extraordinary payment rights, if exercised in conjunction with any qualified distribution rights, would lower the total value of the preferred security.

  A. Lower of

  B. Separate Command

  C. Mandatory redemption rights

  D. Lower in

  Correct Answer: A