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Capital gains

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Full-Text Articles in Law

Taxing Buybacks, Gregg Polsky, Daniel J. Hemel Jan 2021

Taxing Buybacks, Gregg Polsky, Daniel J. Hemel

Scholarly Works

A recent rise in the volume of corporate share repurchases has prompted calls for changes to the rules governing stock buybacks. These calls for reform are animated by concerns that buybacks enrich corporate executives at the expense of productive investment. This emerging antibuyback movement includes prominent politicians as well as academics and Republicans as well as Democrats. The primary focus of buyback critics has been on securities-law changes to deter repurchases, with only passing mention of potential tax-law solutions. This Article critically examines the policy arguments against buybacks and arrives at a mixed verdict. On the one hand, claims that ...


Debate On Carried Interest, Jeffrey H. Kahn, Calvin H. Johnson, Douglas A. Kahn Dec 2018

Debate On Carried Interest, Jeffrey H. Kahn, Calvin H. Johnson, Douglas A. Kahn

Scholarly Publications

No abstract provided.


Please Don’T Make Me Pay Taxes: How New Irs Law Helps Art Collectors Avoid Hefty Taxes, Stephanie Dunn Sep 2017

Please Don’T Make Me Pay Taxes: How New Irs Law Helps Art Collectors Avoid Hefty Taxes, Stephanie Dunn

Journal of the National Association of Administrative Law Judiciary

No abstract provided.


The Fallacious Objections To The Tax Treatment Of Carried Interest, Douglas A. Kahn, Jeffrey H. Kahn Jun 2017

The Fallacious Objections To The Tax Treatment Of Carried Interest, Douglas A. Kahn, Jeffrey H. Kahn

Articles

“The tax treatment of carried interest has become a notorious bete noire for many politicians and some academicians and practitioners. Both 2016 presidential candidates denounced the current tax treatment and vowed to change it. President Obama described the current treatment as a "tax loophole" which should be closed. Others have also characterized the current tax treatment as an abusive loophole.' It is the thesis of this article that those criticisms are unfounded. To the contrary, the current tax treatment accords with sound tax policy and is proper and appropriate. Given the broad approval that attended the attacks on carried interest ...


Taxing Sales Of Depreciable Assets, James R. Hines Jr. Jun 2016

Taxing Sales Of Depreciable Assets, James R. Hines Jr.

Michigan Business & Entrepreneurial Law Review

Investors in depreciable assets used in a trade or business claim depreciation deductions following investment, and upon sale or other disposition of their assets are taxed on gain or loss equal to differences between amounts realized and adjusted basis. The taxation of these realized gains and losses is asymmetric: losses are deductible against ordinary income, whereas a portion of the gain on sales of personal property, and virtually all gains on sales of real property, are taxed at more favorable capital gain tax rates. Evidence from U.S. tax returns in 2012 indicates that the aggregate annual magnitude of the ...


Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke Apr 2016

Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke

Karen Burke

Reform of the U.S. corporate tax system is again on the agenda. Despite important differences, many current proposals share two common goals: (1) reducing the statutory corporate tax rate to improve U.S. “international competitiveness” and (2) broadening the corporate tax base by reducing or eliminating business expenditures to offset revenue losses. Given the significance of the passthrough sector and the relationship between individual and corporate taxes, however, such reforms need to be considered within a broader context. Part I of this article discusses the growing significance of the passthrough sector, which now accounts for roughly half of net ...


The Business Purpose Doctrine In Corporate Divisions, Stephen Rigsby Aug 2015

The Business Purpose Doctrine In Corporate Divisions, Stephen Rigsby

Akron Law Review

The corporate division, however, lends itself to schemes for avoidance of tax. These schemes are attempts to convert ordinary income into income taxable at capital gains rates. An elaborate statutory mechanism has been created to prevent this conversion. In addition, the courts have created judicial doctrines which sometimes work by adding to the statutory framework and sometimes overlap. The resulting confusion of statute and judicial doctrine is the subject of this article. The investigation will focus on that part of the statute known as the device clause and its interaction with the judicial doctrines which together are known as the ...


Reinvigorating The Reit's Neutrality And Capital Formation Purposes Through A Modernized Tax Integration Model, Simon Johnson Nov 2014

Reinvigorating The Reit's Neutrality And Capital Formation Purposes Through A Modernized Tax Integration Model, Simon Johnson

The Journal of Business, Entrepreneurship & the Law

Efforts at reform have not spared the REIT arrangement, but have focused on objectives unrelated to its model of tax integration, despite its significant flaws. Owing to the interaction of several provisions, the model largely precludes capitalization through retained earnings. This increases the cost of REIT capital and limits its capacity to realize the neutrality and private real estate capital formation objectives Congress pursued in creating the arrangement. Accordingly, it is important to consider how to durably improve the REIT tax integration model. Ultimately, the article concludes that the shareholder allocation model, a complete integration model conceptually similar to the ...


California – Land Of “Lawless Taxation” And The “Midnight Special”: Outlier Or Leader In A Growing Trend?, Mystica M. Alexander Jan 2014

California – Land Of “Lawless Taxation” And The “Midnight Special”: Outlier Or Leader In A Growing Trend?, Mystica M. Alexander

The University of New Hampshire Law Review

[Excerpt] “Taxpayers in California recently found themselves the target of a retroactive grab for revenue by the Franchise Tax Board (FTB) in what has called an act of “lawless taxation” by the state of California. The source of the conflict was the Qualified Small Business Stock credit that had been in place in California since 1993. The tax credit, which was designed to encourage innovation and investment in California-based enterprises, allowed business owners who had at least eighty percent of their assets and employees in California to take a credit of fifty percent of the capital gain realized on a ...


Capital Gains Distributions Treated As Principal Under The Uniform Principal And Income Act, James H. Seckinger Nov 2013

Capital Gains Distributions Treated As Principal Under The Uniform Principal And Income Act, James H. Seckinger

James H. Seckinger

No abstract provided.


Return Of The 20% Capital Gains Rate For Certain High Income Individuals, Victoria Lau Jul 2013

Return Of The 20% Capital Gains Rate For Certain High Income Individuals, Victoria Lau

The Contemporary Tax Journal

No abstract provided.


Preferential Treatment Of Capital Gains, Jenny Phan Jul 2013

Preferential Treatment Of Capital Gains, Jenny Phan

The Contemporary Tax Journal

No abstract provided.


Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke May 2013

Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke

Pepperdine Law Review

Reform of the U.S. corporate tax system is again on the agenda. Despite important differences, many current proposals share two common goals: (1) reducing the statutory corporate tax rate to improve U.S. international competitiveness and (2) broadening the corporate tax base by reducing or eliminating business expenditures to offset revenue losses. Given the significance of the passthrough sector and the relationship between individual and corporate taxes, however, such reforms need to be considered within a broader context. Part I of this article discusses the growing significance of the passthrough sector, which now accounts for roughly half of net ...


Slump Sale Transactions - Taxation Issues In India, Mubashshir Sarshar Mar 2013

Slump Sale Transactions - Taxation Issues In India, Mubashshir Sarshar

Mubashshir Sarshar

No abstract provided.


Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke Jan 2013

Passthrough Entities: The Missing Element In Business Tax Reform, Karen C. Burke

UF Law Faculty Publications

Reform of the U.S. corporate tax system is again on the agenda. Despite important differences, many current proposals share two common goals: (1) reducing the statutory corporate tax rate to improve U.S. “international competitiveness” and (2) broadening the corporate tax base by reducing or eliminating business expenditures to offset revenue losses. Given the significance of the passthrough sector and the relationship between individual and corporate taxes, however, such reforms need to be considered within a broader context. Part I of this article discusses the growing significance of the passthrough sector, which now accounts for roughly half of net ...


Retirees Beware: Don't Worry About The British, 'Taxmageddon' Is Coming, Douglas A. Kahn, Lawrence W. Waggoner Jan 2012

Retirees Beware: Don't Worry About The British, 'Taxmageddon' Is Coming, Douglas A. Kahn, Lawrence W. Waggoner

Articles

"Taxmageddon" is coming. Unless Congress extends the current rates or reaches an agreement on tax reform, dividends will then be taxed as ordinary income at a marginal rate as high as 39.6 % and net capital gains will then be taxed at 20%. For high-income taxpayers, a 3.8% Medicare surtax will be added to the taxation of net capital gains, dividend income, interest, and other investment income, bringing the highest marginal rate to 43.4%.


Tackling Investor And Managerial Myopia, Emeka Duruigbo Dec 2011

Tackling Investor And Managerial Myopia, Emeka Duruigbo

Emeka Duruigbo

Market observers and legal commentators link the collapse, a few years ago, of giant energy company Enron and some fabled financial firms to the short-termism phenomenon – investors acting like traders and influencing corporate managers to make policy decisions based on quarterly earnings statements. Opponents of short-termism note that the future well-being of many investors, corporations, overall economy and society at large is in jeopardy if investors with a near-term horizon, especially hedge funds, enjoy a dominant role in corporate governance. Skeptics dismiss the concerns, insisting that the notion of pervasive short-term investing is a figment of opponents’ imagination. Moreover, short-term ...


The Misuse Of Tax Incentives To Align Management-Shareholder Interests, James R. Repetti Oct 2011

The Misuse Of Tax Incentives To Align Management-Shareholder Interests, James R. Repetti

James R. Repetti

The U.S. tax system contains many provisions which are intended to align management of large publicly traded companies more closely to stockholders. This article shows that many of the tax provisions that have been adopted are of questionable effectiveness because they fail to address the complexities of stockholder-management relations in attempting to motivate management to act in the best interests of stockholders. The article proposes that rather than Congress attempting to identify the best way that it can use the tax system to motivate management, Congress should eliminate tax provisions which subsidize management's inefficiencies in order to encourage ...


Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah Jul 2011

Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah

Articles

On March 21, 2011, AT&T announced that it will buy T-Mobile from Deutsche Telekom for $39 billion. This transaction will be tax free to Deutsche Telekom (DT) not because it qualifies as a reorganization, but because DT is a foreign corporation and capital gains of nonresidents are generally not subject to U.S. taxation because they are deemed to be foreign source. Also, DT is protected from taxation by article 13(5) of the Germany-U.S. tax treaty, which provides that capital gains are generally taxable only by the country of residence.


Gain From The Sale Of An Income Interest In A Trust, Douglas A. Kahn Jan 2010

Gain From The Sale Of An Income Interest In A Trust, Douglas A. Kahn

Articles

A tax doctrine that is related to the anticipatory assignment of income doctrine, but yet different from that doctrine is variously referred to as the "substitute for ordinary income doctrine" or the "anticipation of income doctrine." This latter doctrine arises on the sale of an item. The test often utilized to determine whether that latter doctrine applies is whether the sale of an item substantively represents the receipt of a substitute for future income - i.e., are the proceeds of the sale given "in lieu of" ordinary income that the seller would have otherwise received at a later date. The ...


The Taxation Of Private Equity Carried Interests: Estimating The Revenue Effects Of Taxing Profit Interests As Ordinary Income, Michael S. Knoll Nov 2008

The Taxation Of Private Equity Carried Interests: Estimating The Revenue Effects Of Taxing Profit Interests As Ordinary Income, Michael S. Knoll

Faculty Scholarship at Penn Law

In this Article, I estimate the tax revenue effects of taxing private equity carried interests as ordinary income rather than as long-term capital gain as under current law. Under reasonable assumptions, I conclude that the expected present value of additional tax collections would be between 1 percent and 1.5 percent of capital invested in private equity funds, or between $2 billion and $3 billion a year. That estimate, however, makes no allowance for changes in the structure of such funds or the composition of the partnerships, which might substantially reduce tax revenues below those estimates.


Is The Corporate Tax System "Broken"?, Karen C. Burke Oct 2008

Is The Corporate Tax System "Broken"?, Karen C. Burke

UF Law Faculty Publications

The slated expiration of the Bush Administration's tax cuts in 2010 highlights the instability of the current 15% rate on dividends and capital gains. Meanwhile, pressure has mounted to reduce U.S. corporate tax rates to improve competitiveness in an increasingly global economy. Much of the 1986 Act reform of the corporate tax-base-broadening combined with lower rates - has unraveled, leaving the U.S. with a high statutory corporate tax rate and narrow corporate tax base. Despite renewed interest in base-broadening and loophole-closing, the goal of corporate tax reform remains elusive. Thus far, proponents of corporate tax reform have largely ...


Taxation The Consumption Of Capital Gain, Calvin H. Johnson Mar 2008

Taxation The Consumption Of Capital Gain, Calvin H. Johnson

Calvin H. Johnson

"Taxing the Consumption of Capital Gain" argues that the lower tax rate on capital gain should be available only for capital gains that are reinvested. The article traces the history of the capital gain concept in American and British law and in the policy literature and finds that there is an unstated assumption that capital gains will remain part of capital and not be consumed. The assumption needs to be turned into a requirement.


Can You Have Your Cake And Eat It Too? Achieving Capital Gain Treatment While Keeping The Property, Ronald H. Jensen Oct 2007

Can You Have Your Cake And Eat It Too? Achieving Capital Gain Treatment While Keeping The Property, Ronald H. Jensen

Elisabeth Haub School of Law Faculty Publications

I will attempt to show in this article that the cases and rulings dispensing with the need for a sale or exchange are unjustified under the statutory scheme and prevailing capital gain jurisprudence, and further that such holdings constitute bad policy. Part II will set forth a number of examples, based largely on decided cases, where it has been held or contended that recoveries in excess of basis qualify for capital gain treatment even though the taxpayer did not sell or exchange the property. These cases will illustrate the contexts in which this issue arises and will provide a basis ...


The Pitfalls Of International Integration: A Comment On The Bush Proposal And Its Aftermath, Reuven S. Avi-Yonah Jan 2005

The Pitfalls Of International Integration: A Comment On The Bush Proposal And Its Aftermath, Reuven S. Avi-Yonah

Articles

In January 2003, the Bush Administration proposed a new system for taxing corporate dividends, under which domestic shareholders in U.S. corporations would not be taxed on dividends they received, provided the corporation distributed these dividends out of after-tax earnings (the “Bush Proposal”). The Bush Proposal was introduced in Congress on February 27, 2003. Ultimately, however, Congress balked at enacting full-?edged dividend exemption. Instead, in the Jobs and Growth Tax Relief Reconciliation Act of 2003 (“JGTRRA”) as enacted on May 28, 2003, a lower rate of 15% was adopted for dividends paid by domestic and certain foreign corporations,1 ...


The Device Test In A Unified Rate Regime, Joshua D. Blank Jan 2004

The Device Test In A Unified Rate Regime, Joshua D. Blank

Faculty Scholarship

This article explores the impact of the Jobs and Growth Tax Relief Reconciliation Act of 2003 on the policy concerns underlying the section 355 device test for tax-free spin-offs. Under the 2003 legislation, individual shareholders generally are taxed on both qualified dividends and long-term capital gains realized on the sale of corporate stock at the same maximum rate - 15 percent. Unification of these rates appears to neutralize the traditional concern that taxpayers may use a tax-free spin-off as a device to transform ordinary income into capital gains. This article examines the relevance of the device test in this new unified ...


Ifa Branch Report: United States (Trends In Company / Shareholder Taxation: Single Or Double Taxation?), Reuven S. Avi-Yonah Jan 2003

Ifa Branch Report: United States (Trends In Company / Shareholder Taxation: Single Or Double Taxation?), Reuven S. Avi-Yonah

Other Publications

United States IFA Branch Report on Trends in Company / Shareholder Taxation: Single or Double Taxation?


Frictions And Tax-Motivated Hedging: An Empirical Exploration Of Publicly-Traded Exchangeable Securities, William M. Gentry, David M. Schizer Jan 2003

Frictions And Tax-Motivated Hedging: An Empirical Exploration Of Publicly-Traded Exchangeable Securities, William M. Gentry, David M. Schizer

Faculty Scholarship

As financial engineering becomes more sophisticated, taxing income from capital becomes increasingly difficult. We offer the first empirical study of a high profile strategy known as "tax-free hedging," which offers economic benefits of a sale without triggering tax. We explore nontax costs that taxpayers face when hedging by issuing so-called "DECS," "PHONES," and other publicly-traded exchangeable securities. Focusing on 61 transactions between 1993 and 2001, we shed light on why taxpayers might prefer to hedge through private "over-the-counter" transactions: An offering of exchangeable securities is announced in advance and implemented all at once, triggering an almost 5 percent decline in ...


The Misuse Of Tax Incentives To Align Management-Shareholder Interests, James R. Repetti Jan 1997

The Misuse Of Tax Incentives To Align Management-Shareholder Interests, James R. Repetti

Boston College Law School Faculty Papers

The U.S. tax system contains many provisions which are intended to align management of large publicly traded companies more closely to stockholders. This article shows that many of the tax provisions that have been adopted are of questionable effectiveness because they fail to address the complexities of stockholder-management relations in attempting to motivate management to act in the best interests of stockholders. The article proposes that rather than Congress attempting to identify the best way that it can use the tax system to motivate management, Congress should eliminate tax provisions which subsidize management's inefficiencies in order to encourage ...


Section 338 And Its Foolish Consistency Rules - The Hobgoblin Of Little Minds, Douglas A. Kahn Jan 1994

Section 338 And Its Foolish Consistency Rules - The Hobgoblin Of Little Minds, Douglas A. Kahn

Articles

The purposes of this Article are to examine whether there is any longer a reason for concern because a target corporation can choose selected assets for nonrecognition and to what extent the 1994 regulations properly deal with potentially abusive circumventions of tax goals. Before examining the current status of the consistency requirements, the historical background that led to the adoption of Section 338 and the operation of the section is discussed. The historical background includes: the judicially created Kimbell-Diamond rule, the codification and modification of that rule by the old version of Section 334(b)(2), the operation of the ...