• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

EVP Systems

  • Home
  • Support
    • Contact
    • FAQs
    • Tutorials
  • Software
  • Services
  • Account
    • Sign-Up
    • Payments
    • Sales Material
  • About Us
    • The Company
    • EVP Office
    • Professional Services
    • EVP Everywhere
    • EVP Upload
    • Pricing
    • Mailing Lists
    • Legal and Compliance
    • Contact Us

How does EVP Systems calculate mean prices?

For calculating inversely weighted mean prices, IRS Regulation § 20.2031-2 (b) 1 states, “The average is to be weighted inversely by the respective numbers of trading days between the selling dates and the valuation.”

The data to be collected and calculation are straightforward but very prone to error. To obtain the weighted mean price of an infrequently traded security, one counts the number of trading days between the valuation date and the nearest prior trade as well as the number of trading days between the valuation date and the next trade after it. The product of the number of prior date trading days times the latter trade mean price is added to the product of the number of the latter date trading days times the prior date mean price. This sum is divided by the sum of the total number of trading days before and after the valuation date. If no trades are found in either direction within a reasonable period of time, bid and ask prices are substituted for actual trades.

For example, if the valuation date is Friday, June 15, and the nearest before and after valuation date trades were on Wednesday, June 13 (two trading days earlier at a mean price of $10 per share) and Wednesday, June 20 (three trading days later at a mean price of $15 per share), the mean price is calculated as:

[ (2 × $15) + (3 × $10) ] ÷ 5 = $12.

EstateVal also provides the option to calculate the mean value of Common Trust Funds using an actual day count. If this option is in effect, a price of $45 on the 15th of the month and $52 on the 31st of the same month would produce a mean calculated price for the 20th as:

[ (5 × $52) + (11 × $45) ] ÷ 16 = $47.1875.

Posted on July 14, 2020 •

Primary Sidebar

Things You Should Know

  • EVP Office 8.5.2: Native Excel Export, Better Copy-and-Paste, Mailing Lists on April 8, 2021
  • A Lockdown Check-In on October 5, 2020
  • Upgrade Your Invoice on September 21, 2020
  • EVP Systems Introduces Modern, Streamlined Website on August 13, 2020
  • EVP Office 8.5.0 Released on June 17, 2020
  • EVP Systems Continues to Support Retired Versions of Windows on December 4, 2019
  • EstateVal 8.4.0 Prices Foreign Currencies, Precious Metals on October 25, 2019
  • GEMS Adds EVP Everywhere for Faster, Easier Pricing on April 15, 2019
  • EVP Office 8.3.1 Now Available; Features Easy Pricing of Puts and Calls on March 15, 2019
  • Reminder: Fee Changes Coming in 2019 on December 28, 2018
  • TEdec Adds Built-In Evaluations, with EVP Everywhere on December 3, 2018
  • Primary and Composite Exchange Pricing in EstateVal
  • A Brief Introduction to EstateVal

EVP Systems: Trusted for over 35 years!

Footer

About EVP Systems

Trusted by thousands of banks, brokerages, and law firms, Estate Valuations & Pricing Systems has been the leading provider of high-quality security evaluations for estate- and gift-tax purposes for over 35 years.

Get in Touch

1531 Chapala St., #1
Santa Barbara, CA 93101
(818) 313-6300 • FAX: (818) 313-6313
support@evpsys.com
sales@evpsys.com
Twitter
Mailing Lists

Explore the Site

Privacy Compliance Report Market Holidays Installation

All contents copyright © 1984–2021 Estate Valuations & Pricing Systems, Inc. · Do Not Sell My Personal Information