3
Approaches
Income, market and asset. The income approach usually drives the value of an operating company; the other two check it.
Business valuation in a Colorado divorce: the number is built from assumptions.
A company has no statement balance. Its value is an opinion built from normalized earnings, a capitalization rate and a few judgment calls, and in the worked example below two of them move one HVAC company’s value by about $1.6 million. Colorado has no statutory standard of value, divides goodwill on past results, and values the business at the decree. How it works, and how I test it.
- 01The three approaches
- 02Normalization and add-backs
- 03Cap rates and the value grid
- 04Goodwill and professional practices
- 05The valuation date and buy-sell agreements
- 06Experts, forensic work and cost
- 07How I cross-examine a valuation
- 08The double dip
- →Questions
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Every business valuation in a divorce is an opinion. The case turns on whose assumptions it is built from.
A bank account has a statement and a house has an appraisal. A closely held company has neither, so an expert builds its value from the company’s records and a set of assumptions: what the owner’s job is worth, which expenses were really personal, how risky the company is, how fast it will grow, whether a buyer would discount it. Each assumption is defensible within a range. Stack the ranges and two credentialed experts can be millions apart on the same company, and both can explain their number. Colorado leaves most of those choices to the trial court’s discretion, so the case is won on the record behind each assumption, not on a percentage.
I have cross-examined dozens of forensic accountants and valuation experts, I hold an LL.M. in Taxation from Georgetown, and I have built, run and sold companies, so I read these reports the way an owner reads a price. This page covers how a Colorado court values a business: the approaches, normalization, capitalization, goodwill, discounts, the valuation date, the experts and what they cost, and the questions I ask on cross-examination. Updated September 2026. The worked example is a hypothetical company with round numbers; the method is the point.
$1.6M
What two assumptions moved
Tax-affecting and the cap rate, in the worked example: $2.20 million to $3.84 million for the same earnings.
77%
More income than the return shows
The HVAC owner reports $420,000; after the add-backs Colorado’s support statutes require, income for support is about $741,600.
The three approaches, and when each one fits.
Colorado has no statutory standard of value for a divorce. The Supreme Court held in In re Marriage of Thornhill, 232 P.3d 782 (Colo. 2010) that the dissolution statute has nothing like the “fair value” language of the dissenters’-rights statute, so the no-discount rule of Pueblo Bancorporation v. Lindoe does not apply. Which method to rely on is a factual determination for the trial court (In re Marriage of Huff, 834 P.2d 244 (Colo. 1992); In re Marriage of Page, 70 P.3d 579 (Colo. App. 2003)).
Three approaches, one conclusion.
| Approach | Methods | Where it fits | Watch for |
|---|---|---|---|
| Income | Capitalization of earnings: value = next year’s cash flow ÷ (discount rate − growth). Discounted cash flow: projected years plus a terminal value. Excess earnings, the method the Supreme Court described in Huff. | Profitable operating companies and professional practices | Normalization; the discount-rate build-up (risk-free rate, equity premium, size premium, company-specific risk); growth; tax-affecting |
| Market | Guideline public companies; guideline transactions from private-deal databases; earlier sales of the company’s own stock; buy-sell prices, which are not dispositive (Keyser) | Industries with real comparables | Comparability of size, margins, geography and date; deal structure, including earn-outs and asset versus stock sales |
| Asset | Adjusted net asset value: each asset and liability restated to fair value | Holding companies, real-estate LLCs, capital-heavy or unprofitable companies, a realistic liquidation | Embedded gains, and whether to tax-affect them (Bayer; Finer) |
The weight a court gives an expert’s technique depends on its assessment of the reliability of the data (In re Marriage of Bookout, 833 P.2d 800 (Colo. App. 1991); In re Marriage of Antuna, 8 P.3d 589 (Colo. App. 2000)). An expert who uses one approach should say why the others were rejected.
The report itself: a conclusion, or a calculation.
A valuation engagement produces a conclusion of value; a calculation engagement produces a calculated value on a narrower scope, and is easier to impeach.
The standards. Valuation analysts work under the AICPA’s standard (VS Section 100), NACVA’s standards, or USPAP Standards 9 and 10. Under the AICPA standard a full valuation engagement ends in a conclusion of value; a calculation engagement, in which the client and analyst agree on limited procedures, ends in a calculated value. A contested case needs the first. The second is cheaper and useful in settlement, and at trial its scope limits are the first thing I read into the record.
Weight. Expert opinion comes in under C.R.E. 702, and the court decides which method to rely on and how much each deserves. In my experience the expert who sources every assumption carries more weight than the one with the better letterhead.
Normalization: from reported profit to controllable cash flow.
The tax return shows what the owner chose to report. Normalization restates the earnings a buyer would actually get: a market salary for the owner’s job, personal expenses taken out, related-party deals at market, one-time items removed, and depreciation at the level the business really needs. The example is a hypothetical Denver HVAC S corporation, 100 percent owned, reporting $420,000 of ordinary income after paying its owner a $120,000 salary.
Worked: normalizing a Denver HVAC company.
| Adjustment for the valuation | Amount | Why |
|---|---|---|
| Owner’s $120,000 salary against a $180,000 market salary for a replacement general manager | −$60,000 | A buyer must pay someone to do the owner’s job. A salary below market inflates profit; one above market hides it. |
| Personal vehicles and fuel | +$18,000 | Personal consumption run through the company |
| Family phones and streaming | +$3,600 | The same |
| A family member on payroll who performs no services (wages and payroll tax) | +$43,000 | Not a cost of producing the income |
| Personal travel booked as conferences | +$15,000 | Personal |
| Club dues | +$12,000 | Personal |
| Rent to the owner’s own LLC: $180,000 paid against $120,000 market | +$60,000 | A related-party deal restated at market |
| One-time lawsuit settlement | +$50,000 | Non-recurring |
| Bonus depreciation above normalized capital spending | +$110,000 | Tax depreciation is not the economic cost of keeping the fleet and equipment running |
| Normalized pre-tax earnings | $671,600 | From $420,000 reported |
A hypothetical company with round numbers. Every real add-back needs documents behind it: the general ledger, the card statements, the payroll records, the lease. An add-back without them is a guess.
The same company, two calculations: value and income.
| Item | For the value | For support |
|---|---|---|
| The owner’s salary | Replaced by the $180,000 market salary (−$60,000) | Counted as paid: $120,000 |
| Reported ordinary income (the K-1) | $420,000 | $420,000 |
| Perks: vehicles, phones, travel, dues | +$48,600 | +$48,600: significant in-kind payments that reduce living expenses, and personal draws deducted as business expenses (C.R.S. § 14-10-115(5)(a)(I)(X), (O)) |
| Family member on payroll, no services | +$43,000 | +$43,000 |
| Above-market rent to the owner’s LLC | +$60,000 | Not added back: the LLC’s rent is already the owner’s income |
| One-time lawsuit settlement | +$50,000 | Left open, and not in the total below |
| Bonus depreciation above normalized capital spending | +$110,000 | +$110,000: the accelerated component is not an ordinary and necessary expense (C.R.S. § 14-10-115(5)(a)(III)(B)) |
| Total | $671,600 of normalized pre-tax earnings | About $741,600 of income |
Support income runs under the support statutes (C.R.S. § 14-10-115(5); C.R.S. § 14-10-114(8)(c)), not valuation practice. Since 2025 the child support statute lets the court use straight-line depreciation even if the return used accelerated; the maintenance statute does not say so. Income Determination covers the support side.
The K-1 is a tax allocation. The value is built on what the company earns for an owner; the income, on what this owner controls.
Cap rates and the value grid: two assumptions, $1.6 million.
The capitalization of earnings method divides next year’s expected cash flow by a capitalization rate, the discount rate less long-term growth. The discount rate is built up from a risk-free rate, an equity risk premium, a size premium and a company-specific risk premium, and the last is the most subjective number in the report. Here the normalized earnings are grown 3 percent for next year, tax-affected or not, and capitalized at 18, 20 or 22 percent.
The value grid.
| Tax-affecting | Cap rate 18% | Cap rate 20% | Cap rate 22% |
|---|---|---|---|
| None | $3.84 million | $3.46 million | $3.14 million |
| At 21% | $3.04 million | $2.73 million | $2.48 million |
| At about 30% | $2.69 million | $2.42 million | $2.20 million |
Value = $671,600 × (1 − tax rate) × 1.03 ÷ cap rate. Same company, same earnings, same year: $2.20 million to $3.84 million.
| Discount for lack of marketability | None | 10% | 20% | 30% |
|---|---|---|---|---|
| Value, at 21% tax-affecting and a 20% cap rate | $2.73 million | $2.46 million | $2.19 million | $1.91 million |
The discount is discretionary. On these numbers each ten points is worth about $270,000.
Discounts: marketability, control, and a sale nobody plans.
Discretionary, with a clear record; strongest for a minority interest, weakest for a 100 percent owner who is keeping the company.
Marketability. The discount reflects that a private interest cannot be sold quickly. Thornhill left it to the trial court’s discretion, and the Court of Appeals in the same case required a clear record of the reasons for the rate chosen (200 P.3d 1083 (Colo. App. 2008)). The argument is strongest for a minority, non-controlling interest. For a 100 percent owner who is keeping the company, a discount for a sale nobody contemplates meets the same logic that keeps selling costs off a house nobody is selling (Bayer; Finer). I never promise one.
Control. A minority (lack-of-control) discount belongs only to a non-controlling interest. An owner with control does not earn it by calling the company illiquid.
Goodwill: Colorado divides it, on past results.
Goodwill has long been accepted in Colorado as an attribute of a business, trade or profession, and the goodwill of a professional practice is divisible. These are the cases I cite most. None adopts the personal-goodwill exclusion some states use.
The Colorado goodwill cases.
| Case | The business | What the court held |
|---|---|---|
| In re Marriage of Huff, 834 P.2d 244 (Colo. 1992) | A law partnership | The partnership agreement’s withdrawal figure did not control. The excess-earnings method capitalizes the attorney’s historical earnings above what a comparable attorney earns, valuing tangible assets and goodwill together, and avoids valuing the business on post-divorce earnings. |
| In re Marriage of Bookout, 833 P.2d 800 (Colo. App. 1991) | A physical therapy practice | Goodwill supplements the earning capacity of a business; it is not the earning capacity itself. It reflects a probability based on existing circumstances, is measured on past results rather than the professional’s post-marital efforts, and dividing it does not divide future income. |
| In re Marriage of Graff, 902 P.2d 402 (Colo. App. 1994) | A State Farm agency | Goodwill may be valued even though an agreement prevents the agency’s sale; that it is difficult to value, elusive and not easily marketable are not reasons to disregard it. $129,500, valued on cash flow. |
| In re Marriage of Keyser, 820 P.2d 1194 (Colo. App. 1991) | A 25% interest in an ophthalmology professional corporation | A buy-sell price or formula is not facially dispositive; practice goodwill is divisible. The wife’s expert, at $150,800, was accepted over a $45,000 book value. |
| In re Marriage of Nichols, 606 P.2d 1314 (Colo. App. 1979); In re Marriage of Martin, 707 P.2d 1035 (Colo. App. 1985) | A dental practice; an owner’s business | Practice goodwill must be considered as marital property; the question is whether the business has a value to its owner beyond the tangible assets. |
| In re Marriage of Fischer, 834 P.2d 270 (Colo. App. 1992) | — | A court may require a covenant not to compete to protect goodwill awarded to the other spouse. |
The rules on who may own a licensed practice, and the three reported practice valuations, are on Professional Practices.
Personal goodwill, and the professional practice.
Colorado has no personal-goodwill exclusion; the owner’s personal role is argued through the method, not as a rule of law.
No exclusion. Many states exclude goodwill personal to the owner, the skill, reputation and relationships, from the marital estate. I have found no published Colorado decision adopting that exclusion: Graff upheld a value for an agency’s goodwill though the agency could not be sold, and Keyser divided a practice’s goodwill despite a buy-sell formula. The distinction still matters, but as method: what a buyer would pay without the owner, what a covenant not to compete would cost, and how much of the earnings exceed what the owner would earn as an employee.
The practice. A medical, dental, law or accounting practice is usually valued by excess earnings: the professional’s historical earnings above what a professional of similar education, experience and ability earns, capitalized (Huff). The compensation benchmark is therefore most of the case. A high benchmark shrinks the goodwill; a low one inflates it. The same earnings are the income for support, which is where the double dip begins.
The valuation date and the buy-sell agreement: two rules owners get wrong.
Valued at the decree, whatever the agreement says.
The date is the decree or the earlier property hearing, by statute; a buy-sell price is evidence, not the value.
The date. Property is valued as of the decree, or the property hearing if it comes first (C.R.S. § 14-10-113(5)). The provision is mandatory; the one exception is marital property dissipated before the decree, valued as of the date it last existed. When the decree precedes the property hearing, the value is fixed at the decree (Graff), and projecting a vested partnership interest to an expected retirement date was error (In re Marriage of Nevarez, 170 P.3d 808 (Colo. App. 2007)). Growth during the case belongs in the estate; revenue that dips only while the case is pending is one of the first things I look at.
After the decree. In In re Marriage of Durie, 2020 CO 7 the jointly retained expert valued the husband’s company at $770,000; thirteen months after the decree he sold its assets for $6.9 million. A spouse seeking reallocation of misstated or omitted assets under C.R.C.P. 16.2(e)(10) must plead with particularity and prove, by a preponderance and without automatic discovery, a misstatement that materially affects the division. The five-year window cuts both ways.
The buy-sell agreement. A price or pricing formula in a buy-sell agreement is not facially dispositive; it is considered in light of its provisions and all the circumstances (Keyser). In Huff the withdrawal figure did not control, and in Graff a bar on sale did not keep the goodwill out. A formula written to keep departing partners cheap is evidence of what a departing partner receives, not of what the interest is worth to the partner who stays.
Joint expert or two, and what a forensic accountant actually does.
One expert, or one each.
A joint expert saves money and credibility; then one wrong input becomes the case. A consulting expert can check the joint report.
The joint expert. Colorado practice allows the parties to retain one expert together; in Durie they did so, in line with C.R.C.P. 16.2(g), to value their businesses. A joint expert costs about one fee split two ways, carries credibility with the court, and can still be deposed. The risk is concentration: one wrong input, one undisclosed contract, and the error is the only number in evidence.
Two experts, or a reviewer. Where the value is large or the records are disputed, each side retains its own expert and the court decides between two reports. The middle path is a joint expert plus a consulting expert for one side, who reviews the joint report, drafts the deposition questions and testifies only if needed.
The forensic work
What a forensic accountant does.
- A lifestyle analysis from the bank and card statements: what the household actually spent
- Normalization and every add-back, with the documents behind it
- Cash-versus-accrual traps, and working capital at a normal level
- Related-party transactions: rent, loans, family payroll
- Tracing separate property through a series of exchanges back to the original asset (C.R.S. § 14-10-113(2)(b))
The hidden income
What it usually finds.
- Cash receipts that never reach the books
- Billings deferred, or receivables delayed past the valuation date
- Revenue that falls only while the case is pending
- Personal expenses run through the company
- Assets omitted from the disclosures, which C.R.C.P. 16.2(e)(10) reaches for five years
What the experts typically cost.
| Engagement | Typical range |
|---|---|
| Calculation engagement, small business | $5,000–$15,000 |
| Full conclusion-of-value report | $10,000–$35,000 |
| Complex, multi-entity or professional-practice valuation, with deposition and trial | $35,000–$100,000 or more |
| Forensic income or lifestyle analysis | $10,000–$50,000 or more |
| Joint expert | About one fee split two ways, plus any consulting reviewer |
Typical ranges, not quotes. The size of the company, the state of its records, the number of entities and whether the expert testifies drive the fee, and every engagement letter states its own.
How I test a valuation: the cross-examination.
I have cross-examined dozens of forensic accountants and valuation experts. The report that loses is rarely wrong in its arithmetic; it is wrong in an assumption the expert cannot defend. These are the questions I ask, roughly in the order they matter.
Twelve questions for the other side’s expert.
| The question | What it exposes |
|---|---|
| Show me every add-back, and every expense you chose not to add back. | Normalization is where most of the value moves. Owner compensation set below market inflates value; set above market, it depresses income. |
| Where did the reasonable-compensation figure come from? | Survey data, the owner’s actual role and hours, or the expert’s judgment. The source decides the weight. |
| Walk me through the build-up of the capitalization rate. | The company-specific risk premium is the most subjective input in the report. I ask for the math behind every point of it. |
| Why does this company grow faster than the economy, forever? | Long-term growth above inflation or GDP, or a terminal year whose capital spending does not match its growth. |
| How comparable are the comparables? | Size, margins, geography, date, and whether the deals were asset or stock sales, with or without earn-outs. |
| You tax-affected the earnings. Is the capitalization rate after tax too? | Tax-affected earnings at a pre-tax rate, or the reverse, is an internal inconsistency worth hundreds of thousands of dollars. |
| Why a marketability discount when no sale is contemplated? | A discretionary discount that needs a clear record, and the weakest part of many reports for a 100 percent owner. |
| What did you know on the valuation date, and what did you learn after? | The statutory date, and the events known or knowable then. |
| Is this a conclusion of value or a calculation? | The scope limits, and the procedures the expert agreed not to perform. |
| Where is the personal-goodwill exclusion in Graff, Bookout or Keyser? | An exclusion Colorado has not adopted, presented as a method. |
| Does your income figure match the one your client uses for support? | The same earnings called low for support and high for value, or the reverse. |
| Have management’s projections ever come true? | Projections against history; working capital; a revenue dip that began with the case. |
Themes from my own cases; every report gets its own list.
Tax-affecting: the illustration from the federal courts.
No Colorado appellate decision decides whether to tax-affect a pass-through company’s earnings; the federal tax cases, under a different standard, illustrate both answers.
The question. An S corporation or LLC pays no entity-level income tax; its owner does. A buyer valuing it on pre-tax earnings pays more than one valuing it after an assumed tax. In the grid above, the choice alone moves the value from $3.46 million to $2.73 million at a 20 percent cap rate. I have found no Colorado appellate decision on it.
The federal cases. In Gross v. Commissioner, T.C. Memo. 1999-254, aff’d, 272 F.3d 333 (6th Cir. 2001) the Tax Court applied a zero tax rate to an S corporation’s earnings, though, as a later court noted, it did not hold tax-affecting irrelevant. In Kress v. United States, 382 F. Supp. 3d 820 (E.D. Wis. 2019), a federal district court, not the Tax Court, accepted tax-affecting by both experts, called S status a neutral consideration, and applied marketability discounts of 25 to 27 percent. Both are gift and estate tax cases under a fair-market-value standard a Colorado divorce court is not bound to use (Thornhill). The divorce case I cite is Bernier v. Bernier, 449 Mass. 774 (2007): divorcing spouses are not arm’s-length hypothetical buyers and sellers but fiduciaries, and the Massachusetts court used an effective rate that equalized the after-tax results.
On cross. Whichever answer the expert chose, it has to run through the whole report consistently, and through the support figure too.
The double dip: not a legal bar, a real economic argument.
The owner’s argument: the company’s value is the capitalized value of its earnings above the owner’s salary, maintenance is paid from those same earnings, so counting both counts the same dollars twice. The Colorado Supreme Court rejected it as a legal bar in Huff, because the excess-earnings method capitalizes past earnings and avoids valuing the business on post-divorce earnings, and the Court of Appeals followed in In re Marriage of Banning, 971 P.2d 289 (Colo. App. 1998). Judge Briggs, concurring there, put it most directly: the argument assumes the participating spouse is purchasing goodwill at the dissolution, with the price paid out of future income, and that is not the case.
It is still a real economic argument, and it belongs in the negotiation. In the worked example the $2.73 million value capitalizes the company’s earnings after a $180,000 market salary, and the $741,600 support figure counts those same earnings as the owner’s income. An owner who pays half the value and maintenance on $741,600 is paying from one stream twice. A settlement can price that: a lower value with higher support, a higher value with support closer to the market salary, or an equalization paid over time from the business. The court will not do it as a matter of law. The parties can do it as a matter of arithmetic.
Colorado does not bar the double dip as a matter of law. The parties can still decline to pay for the same dollar twice.
What I tell every owner, and every owner’s spouse.
Six things, before anyone retains an expert. Not legal advice for your case; the mistakes I have watched for thirty years.
- Retain the expert early.
Weeks of lead time change the answer. A report finished the week before the hearing is taken apart at it.
- The fight is in the assumptions.
Market compensation, the add-backs, the company-specific risk, growth, tax-affecting, the discount. Not the percentage.
- Keep value and income consistent.
The number used for the company and the number used for support come from the same books. An owner who argues both ways loses both.
- Know what the decree date does.
The value is fixed at the decree. A good year or a bad one during the case changes the result, and a dip that starts with the case invites scrutiny.
- Do not rely on the buy-sell price.
It is evidence, not the value, and Colorado has not adopted a personal-goodwill exclusion.
- Disclose everything.
An omitted contract or a misstated asset can be reallocated for five years after the decree, and it can cost more than the asset.
Six things owners get wrong.
The business is worth what the tax return says.
The return shows what the owner chose to report. The value is capitalized from normalized earnings.
My buy-sell agreement fixes the value.
Not in Colorado. A buy-sell price is evidence, and not facially dispositive.
Goodwill that depends on me personally cannot be divided.
Colorado has not adopted the personal-goodwill exclusion. The argument is made through method, not as a rule.
The court must apply a marketability discount.
It may, in its discretion, with a clear record. For a 100 percent owner keeping the company it is contestable.
Counting the business and the income is always a double dip.
Not as a matter of Colorado law. As economics, it is a strong settlement argument.
A slow year during the divorce lowers the value.
The value is fixed at the decree, and a dip that begins with the case draws a forensic look at billings and receivables.
What to bring, and what to settle first.
Before the first meeting
Bring the company’s paper.
- Five years of business returns (1120-S, 1065 or 1120) with every K-1
- Year-end financial statements and the general ledger
- Payroll records and the owner’s W-2s
- Business bank and credit-card statements
- The operating, shareholder, partnership or buy-sell agreement
- Leases, especially any with the owner or a related company
- Loan applications and personal financial statements given to a bank
- Any prior valuation, offer or letter of intent
Before the expert is retained
Settle these first.
- One joint expert, one each, or a joint expert with a consulting reviewer
- A conclusion of value or a calculation, and why
- The valuation date the report will use
- Any discounts to be considered, and the standard the expert will apply
- Who pays, including deposition and trial time
- The support figure, so the two numbers are consistent
Two credentialed experts can be millions apart on the same company. The case is won on the record behind each assumption.
Start with a confidential conversation: tell me about the company →
What owners, and their spouses, ask first.
Will my spouse get half of my business in a Colorado divorce?
Colorado divides marital property equitably, not automatically in half, and the business is usually awarded to the spouse who runs it, with the other spouse receiving other assets or payments for the marital share of its value. A company started during the marriage is marital. One owned before the marriage is separate, but its increase in value during the marriage is marital. The fight is rarely over who keeps the company; it is over the value, the add-backs and the payment terms.
How is a business valued in a divorce?
By an expert, usually a CPA credentialed in business valuation, using the income, market and asset approaches. For an operating company the income approach usually drives the result: earnings are normalized to what a buyer would actually get, then capitalized at a rate that reflects risk and growth. The market approach checks the result against comparable sales, and the asset approach is used for holding companies and capital-heavy businesses. Colorado has no statutory standard of value, and the choice of method is the trial court’s.
What date is my business valued as of?
The date of the decree, or the date of the property hearing if that comes first. The statute is mandatory; the one exception is marital property dissipated before the decree, which may be valued as of the date it last existed. Growth during the case therefore belongs in the estate, and so does a decline. Revenue that dips only while the case is pending invites a closer look at billings, receivables and deferred revenue.
Is goodwill divided in a Colorado divorce?
Yes. Colorado treats goodwill, including the goodwill of a professional practice, as divisible property, measured on past results rather than the owner’s future efforts. The Court of Appeals upheld a value for an insurance agency’s goodwill even though an agreement barred its sale, and held that a buy-sell price does not by itself fix the value of an interest in a medical practice. I have found no Colorado decision adopting the personal-goodwill exclusion some states use; the owner’s personal role is argued through the valuation method instead.
Does our buy-sell agreement set the value of my share?
Not by itself. The Court of Appeals has held that a price or formula in a buy-sell agreement is not facially dispositive and must be considered in light of its terms and all the circumstances. A formula written to keep departing owners cheap says what a departing owner would receive, not what the interest is worth to an owner who is staying. It is evidence, sometimes strong evidence, and the expert has to explain why the value differs from it.
Will the court apply a discount for lack of marketability?
It may. The Colorado Supreme Court left the marketability discount to the trial court’s discretion, and the court must make a clear record of its reasons for the rate it uses. The discount is easiest to justify for a minority interest the owner cannot sell or control, and hardest for a 100 percent owner who is keeping the company with no plan to sell it. Nobody should promise you one.
What is the double dip, and does Colorado allow it?
It is the argument that the same earnings are counted twice: once as the value of the business and again as income for maintenance. The Colorado Supreme Court and the Court of Appeals have rejected it as a legal bar, reasoning that the excess-earnings method capitalizes past earnings, not future ones. It remains a real economic argument in settlement, and a consistent set of numbers for value and for support is how it is made.
Should we use one joint expert or two?
A joint expert costs about one fee split two ways, tends to carry weight with the court, and can still be deposed. The risk is that one wrong input becomes the only number in evidence; in one Colorado Supreme Court case the joint expert’s $770,000 value was followed thirteen months after the decree by a $6.9 million sale. Where the value is large or the records are disputed, I use two experts, or a joint expert with a consulting reviewer.
How much does a business valuation for a divorce cost?
Typical ranges: about $5,000 to $15,000 for a calculation engagement on a small business; $10,000 to $35,000 for a full conclusion-of-value report; $35,000 to $100,000 or more for a complex, multi-entity or professional-practice valuation with a deposition and trial; and $10,000 to $50,000 or more for a forensic income or lifestyle analysis. These are typical ranges, not quotes. The records, the number of entities and whether the expert testifies drive the fee.
My spouse owns the business. How do I find the real income?
Through the records, not the return: the general ledger, the bank and card statements, payroll, related-party leases and loan applications. A forensic accountant normalizes the earnings and builds a lifestyle analysis from what the household actually spent. Colorado’s support statutes count significant perks, personal expenses run through the company and the accelerated part of depreciation as income. In the example on this page, $420,000 of reported profit is about $741,600 of income for support.
Keep reading
Where to go next.
The next page in this chapter, the pages that belong with it, and the blog posts on the same question.
From the blog, on this topic
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Sept 2, 2026The Double-Dip: How One Company Gets Counted Twice in a Colorado DivorceThe appraiser's value for your company and the court's number for your income are built from the same cash flows. When nobody reconciles them, you pay for the…
Sept 15, 2026Divorcing With a Business in Colorado: The Valuation Fight Inside Your CaseWhen a business owner divorces in Colorado, the valuation is often the largest and most contested number in the case. Goodwill counts, the buy-sell agreement is…
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The value is built from assumptions. Let’s find the ones that move the number.
A consultation is a working session, in person in Greenwood Village or by video: bring three years of the company’s returns and financial statements and any valuation or agreement you have, and I will tell you which approach fits, where the add-backs are likely to be, what kind of expert the case needs and what that should cost. Your note reaches my office directly; during business hours we call you back within the hour, run the conflicts check, and set the meeting.
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