IRS Revenue Ruling 68-609 is a guideline established by the Internal Revenue Service that outlines the method for determining the fair market value of a business using the excess earnings method. This ruling is significant because it provides a systematic approach to valuation, particularly for businesses that have intangible assets, by segregating earnings attributable to tangible assets and those attributable to intangible assets. It helps in understanding how to derive value from both operational and intangible factors in business valuations.
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