Profits a tax-exempt organization earns from business activities that are not related to the organization's exempt purpose are subject to the unrelated business income tax (UBIT). This paper shows that when the taxable and tax-exempt activities are substitutes, taxable income exceeds the...

The revised Treasury Regulations interpreting Internal Revenue Code Section 482 allow the use of profit-based transfer pricing methods, as well as the older methods based on prices from comparable transactions between independent parties. This paper compares the effects of price-based and...

The new Treasury Regulations interpreting Section 482 allow the use of profit-based transfer pricing methods, as well as the older methods based on market prices and gross margins. This paper examines the effects of the Regulations in a model in which organization structure affects the level of...

Using a model of corporate investment in which the deferred tax liability never reverses, I show that deferred taxes are a real economic burden whose value is the amount recognized multiplied by a fraction. The numerator of the fraction is the tax depreciation rate, and the denominator of the...

This paper develops and analyzes a model in which tax considerations and financial reporting considerations have countervailing effects on a firm's investments in internally developed intangible assets. It also proposes and estimates a new measure of tax preferences, which we call the economic...

This paper develops and analyzes a model in which tax considerations and financial reporting considerations have countervailing effects on a firm's investments in internally developed intangible assets. It also proposes and estimates a new measure of tax preferences, which we call the economic...

This study identifies a tax disadvantage of debt that arises when a firm’s business model fails and it liquidates its assets at a loss. If the outstanding debt is greater than or equal to the salvage value of the firm’s assets, the firm will not have assets to generate income to use the loss...