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Open Access. Powered by Scholars. Published by Universities.®

2008

Taxation-Federal

Taxation

University of Colorado Law School

Articles 1 - 2 of 2

Full-Text Articles in Law

The Tax Treatment Of Advance Receipts, David Hasen Jan 2008

The Tax Treatment Of Advance Receipts, David Hasen

Articles

Under the present income tax, some advance receipts are neither taxable on receipt nor deductible on repayment, while others are taxable when received and deductible when repaid or paid for. From a purely theoretical perspective, it remains unclear why different sets of rules apply in different cases. For example, if the fact of unrestricted control over the payment compels the conclusion that it is income, then most advance receipts, including loan proceeds, should be included in income immediately. Conversely, if the presence of an offsetting liability compels the conclusion that the payment is not (yet) income, then most advance receipts ...


Unwinding Unwinding, David Hasen Jan 2008

Unwinding Unwinding, David Hasen

Articles

"Unwinding" is a common, if not ubiquitous, feature of tax practice. In a successful unwind, parties to a prior transaction or arrangement back out of it by means of a later transaction and are treated for tax purposes as having engaged in no transactions at all. In a failed unwind, the parties undertake the later transaction, but it is not treated as nullifying the effects of the first transaction; rather, two separate transactions are deemed to have taken place, each with its own tax consequences.

This Article develops the first unified theoretical framework for analyzing tax unwinding. It also provides ...