This paper presents the evolution in Tax Court thinking that has led to the misguided 2014 Estate of Richmond decision.
 
It then presents the correct economic method to provide a proper answer to the value of built-in gain based on a future exit date.  The question at hand is whether a speculative approach is appropriate.
 
Because it is based in fact, accrual based valuation has the fairest basis for built-in gain valuation, but the Richmond ruling demands that taxpayers be ready to defend against the Tax Court’s methodology with an economic rebuttal.