Gains and Losses on Business Depreciable Property


This proposal would repeal section 1231, which accords capital gain treatment to gains but gives ordinary treatment to losses. That asymmetry increases the expected value of volatile investments over the pretax value of the investments. During a revenue crisis, the tax system should not increase an investment’s value. Moreover, section 1231 has been expanded to make the ordinary business profits from timber, iron ore, and coal eligible for 15 percent…
Andrews & Kurth Centennial Professor of Law, University of Texas at Austin - School of Law, USA
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