tax arbitrage ↔ capital gains

Relations (1)

related 2.00 — strongly supporting 3 facts

Capital gains are central to the practice of tax arbitrage, as investors use the timing of recognizing these gains to offset immediate interest deductions, as described in [1], [2], and [3].

Facts (3)

Sources

Taxes, Government Transfers and Wealth Inequality milkenreview.org Eugene Steuerle · Milken Review 3 facts

claimTax arbitrage is a strategy used by individuals and corporations where they immediately deduct interest and other expenses while choosing to recognize taxable gains only when they sell their assets.

perspectivePublic policy should limit tax arbitrage that allows expenses like interest to be fully deducted while avoiding taxes on capital gains and other tax-deferred income.

perspectiveLimits on tax arbitrage, such as preventing the full deduction of interest expenses while avoiding taxes on capital gains and tax-deferred income, are a policy priority.