Treasury's passive activity interest abuse of power David Randall Jenkins
By: Jenkins, David Randall
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Material type: 
ArticlePublisher: 2017Subject(s): PROPIEDAD INMOBILIARIA | INVERSIONES | RENTA | PLUSVALIAS | IMPUESTOS | ESTADOS UNIDOS
In:
Journal of Taxation of Investments v. 34, n. 3, Spring 2017, p. 51-69Summary: The tax law resource allocation battle among closely held business, real property, and capital market investments has a long history. The introduction of Section 469's passive activity loss rules by the Tax Reform Act of 1986 dealt a devastating blow to the two former categories in favor of the last. Congress.s announced 1986 policy goal was to limit tax sheltering activities so as to provide a more level and equitable playing field to accommodate foreseeable reductions in tax rates for all taxpayers. But Section 469's overreaching unfavorable risk-return combination and resource allocation consequences immediately manifested themselves. Within two years, the devastation's scope became apparent. Treasury responded by promulgating Treasury Regulation Section 1.469-2T(c)(2) to somewhat restore resource allocation parity. In the author.s opinion, Treasury'sview on passive activity interest disposition gains is inconsistent with legislative intent and public policy, however, and therefore should be retracted.
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|---|---|---|---|---|---|---|
| IEF | OP 235/2017/34/3-3 (Browse shelf) | Available | OP 235/2017/34/3-3 |
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| OP 235/2016/33/4-4 The financial transaction tax | OP 235/2017/34/3-1 Apple's tax debacle in Ireland | OP 235/2017/34/3-2 The European Commission's application of the state aid rules to tax | OP 235/2017/34/3-3 Treasury's passive activity interest abuse of power | OP 235/2017/34/4-1 New regulations raise critical issues concerning a partner's share of liabilities and partnership disguised sales | OP 235/2017/34/4-2 Estate of McKelvey v. Commissioner | OP 235/2017/34/4-3 Section 355 and the suffering of closely held corporations |
Disponible también en línea a través de la Biblioteca del Instituto de Estudios Fiscales. Resumen. Conclusión.
The tax law resource allocation battle among closely held business, real property, and capital market investments has a long history. The introduction of Section 469's passive activity loss rules by the Tax Reform Act of 1986 dealt a devastating blow to the two former categories in favor of the last. Congress.s announced 1986 policy goal was to limit tax sheltering activities so as to provide a more level and equitable playing field to accommodate foreseeable reductions in tax rates for all taxpayers. But Section 469's overreaching unfavorable risk-return combination and resource allocation consequences immediately manifested themselves. Within two years, the devastation's scope became apparent. Treasury responded by promulgating Treasury Regulation Section 1.469-2T(c)(2) to somewhat restore resource allocation parity. In the author.s opinion, Treasury'sview on passive activity interest disposition gains is inconsistent with legislative intent and public policy, however, and therefore should be retracted.
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