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Full-Text Articles in Tax Law
Sub S Valuation: To Tax Effect, Or Not To Tax Effect, Is Not Really The Question, Glen M. Vogel
Sub S Valuation: To Tax Effect, Or Not To Tax Effect, Is Not Really The Question, Glen M. Vogel
Glen M Vogel
There were approximately 4 million Subchapter S corporations in 2008, with around 7 million shareholders. Because these companies are not publicly traded, their valuation in estate tax matters, divorces, shareholder disputes and other cases can present difficult issues for courts. In particular, the impact on the valuation of these companies of their “pass-through” tax status has been controversial since 1999, with different courts adopting different solutions. This article explains the nature of the issue, and presents a financial model for understanding the differential impact of taxes on the values of S and C corporations. The paper analyzes key court decisions …
Tax Planning, Imbalance And Production, Yoseph M. Edrey Prof., Yoram Y. Margaliot, Eyal Sulganik, Rafael Eldor
Tax Planning, Imbalance And Production, Yoseph M. Edrey Prof., Yoram Y. Margaliot, Eyal Sulganik, Rafael Eldor
Yoseph M. Edrey
The paper analyzes the case of tax planning that tilts the government gain/loss ratio below one, and provides a proof of a certain type of inefficiency caused by tax planning. As the paper shows, the tax imbalance distorts the firm's output level, providing the firm with an incentive to produce more than the social optimum. This inefficiency is different from the general inefficiency entailed by income taxation, captured by the conventional notion of excess burden. The paper also examines the determinants of this type of distortion and offers some policy implications.
What Are Capital Gain And Capital Loss Anyway, Yoseph M. Edrey Prof.
What Are Capital Gain And Capital Loss Anyway, Yoseph M. Edrey Prof.
Yoseph M. Edrey
I will try to offer a more analytical definition for capital gains and losses. Such definition, which relies on the economic process that creates the gain or loss, is based on a distinction between what I call “actual/genuine capital gain” and “disguised capital gain.” Such suggested analysis might change the traditional discussion and enable us to appreciate that the actual (genuine) capital gain component is much smaller than what we are normally accustomed to and, hence, the lock-in and risk-taking problems on the one hand, and the possibilities of “cherry-picking” losses on the other hand, are almost nonexistent. Furthermore, the …