Alternately, if the owner decided not to purchase the non owner spouse's interest in the business, and instead decided to sell the business to satisfy the dissolution, wouldn't you expect any sales price to be impacted by the owner's comp issues and similarly reduce the value?
A: Personal service businesses are only as viable as the person who is providing the service. The sale value of the biz is probably negligible.
If owner's compesation issues are relevant to valutions in general, then why would this not be true in divorce cases?
A: The judge will believe that what was done during the divorce was done for a reason that benefited the parties during marriage, and that any change in valuation during divorce is being done to advantage the party asserting the change. The judge will go with the former, rather than the latter, because the evidence is more credible.
Which tax advantaged choices are you assuming?
Distributions do not incur payroll taxes, i.e., FICA, Medicare, Workers Comp, Unemployment Insurance. Those extras add up fast.