This paper presents a new approach to the taxation of capital gains that eliminates the deferral advantage present under current realization-based systems, along with the lock-in effect and tax arbitrage possibilities associated with this deferral advantage. The new approach also taxes capital...

Investors holding mutual funds in taxable accounts face a classic externality. The after-tax return of their investment depends on the behavior of others. In particular, redemptions may force the mutual fund to sell some of its equity positions in order to pay off the liquidating investors. As a...

Deferring the realization of gains is generally tax-efficient for stocks, but not for other important asset classes including taxable bonds and noncorporate business assets. These assets make up roughly half of all capital gains-producing financial assets held by households. I develop a simple...

Taxpayers should expect capital gains rates to fluctuate in light of frequent historical changes and the current divergence of rates preferred by Democrats and Republicans. This paper is the first to model the effect of such rate uncertainty on the realization incentives of asset holders and...

We use newly linked tax records to show that the large responses of UK company owner-managers to personal taxes are due to intertemporal income shifting and not to reductions in real business activity. Around half of this shifting is short-term and helps prevent volatile incomes being taxed more...

This study empirically examines the role of risk sharing between taxable investors and the government on the relation between capital gains taxes and expected returns. Specifically, using an international panel from 26 countries over the period 1990 to 2004, we find evidence that the general...

How should immovable property (in particular residential property) be treated under a value added tax? This paper considers whether proposals to tax all sales of immovable property (including consumer to consumer sales) are preferable to existing models (in which the first sale of new...

We develop an optimal tax timing model that takes into account asymmetric long-term and short-term tax rates for positive capital gains and limited tax deductibility of capital losses. In contrast to the existing literature, this model can help explain why many investors not only defer...

The objector in Anzamco Ltd v Commissioner of Inland Revenue (1983) 6 NZTC 61,522 was a company that had bought and developed a farm and sold it at a significantly higher price. The Commissioner taxed the profits under paragraphs 67(4)(a) and (e) of the Income Tax Act 1976. The court allowed the...