The Tax Prof Blog reports that Rebecca N. Morrow (Wake Forest) has published Valuation in Light of Uncertainty: How Stock Option Pricing Models Can Inform More Accurate Valuation Discounts for Built–In Gains, 102 Ky. L.J. 653 (2014), noting following:
Part I of this Article describes the inconsistent historical treatment of valuation discounts for future tax liabilities, including a currently unresolved circuit split. Part II proposes that such discounts should be calculated through the use of a modified binomial method in order to most accurately account for uncertainties about when future taxes will be incurred and what tax rate will apply at the time they are incurred. Part III anticipates and addresses potential criticisms of this proposal.