You can use your net asset (tangible) value as a bottom line for your company's current valuation. 'Future earnings potential' factors into the valuation only t

You can use your net asset (tangible) value as a bottom line for your company's current valuation. 'Future earnings potential' factors into the valuation only to a degree that the market believes it to be true. Since you are not public, you can seek incite from license holders with: Series 7, CPA, Series 66. If you can get a consultation with an M&A firm in your area, they can expose you to the metrics they use in forming different levels of valuation (or even research these yourself online); M&A firms often formulate different valuations for non-public companies based on unique acquisition schemes (e.g., private buyer, bidding war, IPO, etc.). These alternative valuations can provide you with justifiable options when reporting on tax returns. As for how the value of your equity in the company relates to tax reporting - I can't offer a definitive answer.