If one accepts the probability of some form of expropriation without compensation, there still seems to be a good case for determining the market value of the expropriated asset. In the first instance, the expropriated owner will experience a capital loss, best quantified in terms of the market value of the expropriated asset. It would add insult to injury to suggest that because of the process the market value is zero, so the "real" loss should be set off against future capital gains. In the reverse, the beneficiary of the property will receive it at either zero value, suggesting a future capital gain, or at a value greater than zero, suggesting an immediate capital gain, unless there is payment. Once again, the transfer value should be market related, implying the probability of an immediate gain that should be subject to tax. Somewhere between these two cases is the possibility that the property remains in the custody of the state, which rents it to someone or some entity. The ex...
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