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Blockage: Valuation of Large Blocks of Publicly Traded Stocks for Tax Purposes.

Sandra S. Kramer

Assistant Professor of Accounting, University of Florida 1

ABSTRACT: Publicly traded stock is normally valued in tax settings by multiplying the mean between the highest and lowest sales price on the valuation date by the number of shares of stock. However, when a large block of publicly traded stock must be valued, the valuation process is more complex. This study identifies the variables cited by the courts and the tax literature in these valuation cases. Multiple regression analysis is then used to develop mathematical models of the courts' decision results. The model developed using Tax Court cases is compared to a model developed using cases from the Tax Court, the Court of Claims, and the district courts.

DOI

10.2308/tar-4489479

Volume

57 (1)

Pages

70-87

Language

en

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