Congress Finally Passes Carried Interest Legislation, But is it Enough?

2019 ◽  
Vol 17 (1) ◽  
pp. 9-24
Author(s):  
Hughlene A. Burton ◽  
Noel Brock
Keyword(s):  
Tax Policy ◽  
Capital Gains ◽  
Capital Gain ◽  
Short Term ◽  
Minimal Impact ◽  
Self Employment ◽  
Interest Income ◽  
Jobs Act ◽  
Unlimited Amount

ABSTRACT After numerous failed previous attempts to enact legislation taxing “carried interest” income attributable to services as compensation income versus capital gains, Congress enacted Section 1061 as part of the Tax Cuts and Jobs Act. Unlike previous proposals, which would tax carried interest income attributable to services as compensation income, Section 1061 simply reclassifies some carried interest income attributable to services as short-term capital gain. By choosing to treat carried interest income attributable to services as short-term capital gain instead of as compensation income, Section 1061 exempts such income from self-employment tax and allows taxpayers to offset such income with an unlimited amount of short-term capital losses. This paper reviews the requirements under Section 1061 and explains several ambiguities created by the new law. In addition, this paper examines whether Section 1061 follows sound tax policy. The authors find that Section 1061 does not follow the tax policy concepts of equity and fairness, economic efficiency, neutrality, simplicity, or certainty. In addition, the authors find that Section 1061 will have minimal impact, as most carried interest is held longer than the required period to qualify as long-term capital gain.

scholarly journals Short-term versus Long-term Investments: A Study of Women Stock Investors of Punjab

2017 ◽  
Vol 4 (01) ◽  
Author(s):  
Tina Vohra
Keyword(s):  
Well Being ◽  
Study Data ◽  
Capital Gains ◽  
Primary Sources ◽  
Economic Empowerment ◽  
Short Term ◽  
Policy Makers ◽  
Significant Difference ◽  
Cross Tabulation

Short term capital gains and long term capital appreciation are important factors influencing the investment decisions of every investor. The purchase of long-term and short term investments by an investor varies across gender. The present study is an attempt to identify the term for which investments are made by women investors of Punjab and to explore if there is a significant difference in the term for which investments are made by women investors based on their demographics. For the purpose of the study, data were collected from primary sources using a pre tested, well-structured questionnaire. Descriptive statistics as well as cross-tabulation analysis have been used in order to analyse the collected data. The results of the study brought out that the majority of women invest for a short term. The term for which the investments are made also varies with the personal monthly income of the respondents. In the light of results, the study suggests that government and the policy makers should undertake various initiatives for the economic empowerment of women as their economic empowerment is a pre requisite for their long term financial well-being.

scholarly journals Basis Risk and Net Interest Income of Banks

2016 ◽  
Vol 16 (2) ◽  
pp. 40-59
Author(s):  
Piotr Mielus ◽  
Tomasz Mironczuk ◽  
Anna Zamojska
Keyword(s):  
Interest Rates ◽  
Banking Sector ◽  
Balance Sheet ◽  
Actual Cost ◽  
Short Term ◽  
Basis Risk ◽  
Interest Income ◽  
The Difference

Abstract The results of the banking sector are shaped primarily by commissions and net interest income. Net interest income is determined by the difference between the profitability of bank assets and liabilities. In the case when a different method is used to determine interest for each side of the balance sheet, there occurs a basis risk that may lead to the deterioration in the net interest income of the sector. This is the situation in the Polish banking sector, which is characterized by the presence of variable interest rates for long-term assets and fixed interest rates for short-term liabilities. The study aims to verify the following thesis: in an environment of falling interest rates we can observe the deterioration in net interest income of the banking sector, as a result of the materialization of the basis risk. The authors of the article state that the source of the basis risk is the mismatch between the reference rate used to define the interest flow of loans and the actual cost of financing the balance through term deposits collected from non-financial entities.

scholarly journals Pengaruh Dividen Announcement, Capital Gain dan Kurs Terhadap Trading Volume Activity (Studi Kasus pada Saham Syariah yang Terdaftar di JII Tahun 2015-2018)

2020 ◽  
Vol 18 (2) ◽  
Author(s):  
Bella Atika
Keyword(s):  
Trading Volume ◽  
Capital Gains ◽  
Capital Gain ◽  
Measurement Tool ◽  
Volume Activity ◽  
Panel Data Regression ◽  
Data Regression ◽  
Before And After ◽  
Dividend Announcements

The capital market is a company tool to increase long-term funding needs by selling shares and issuing bonds. A measurement tool for calculating trading volume is trading volume activity (TVA). The purpose of this study is to examine the effect of dividend announcements, capital gains and exchange rates on trading volume activity (TVA) on Islamic stocks listed on JII in 2015 to 2018. This study uses eight Islamic shares, namely ADRO, ASII, INDF, LPFF, PGAS, PTBA, SMRA and UNTR. The data in this study were obtained through an annual report from the IDX website. Based on paired differences test shows that in 2105, 2016 and 2017 there were no significant TVA differences between before and after dividend announcements, whereas in 2018 there were significant TVA differences between before and after dividend announcements. The panel data regression analysis results showed that the capital gain variable has no effect on TVA, while the exchange rate variable has a positive and significant effect on TVA.Keywords: Trading Volume Activity, Dividen Announcements, Capital Gain, Kurs

Tenure Buyouts: The Case for Capital Gains Treatment

2005 ◽  
Vol 3 (1) ◽  
pp. 78-93
Author(s):  
John O. Everett ◽  
William A. Raabe ◽  
Julie Gentile
Keyword(s):  
Decision Support ◽  
Faculty Member ◽  
Capital Gains ◽  
Property Right ◽  
Court Decision ◽  
Capital Gain ◽  
Capital Asset ◽  
Gross Income ◽  
Tax Court

In the increasingly common case where a faculty member accepts a buyout of tenure rights toward the end of his or her career, an interesting tax question arises. Does the relinquishment of tenure involve a “sale or exchange” of a capital asset, qualifying for long-term capital gains treatment? Or should the transaction be viewed as one generating ordinary income to “replace” normal compensation that would otherwise be received in the future? Tax Court dicta indicate that the compensation received should be reported as ordinary gross income. But statutory and judicial law effective since the Tax Court decision support an interpretation that some portion of the benefits constitute a payment for a property right, triggering capital gain treatment, a much more taxpayer-friendly result. An analogy to the capital gain result may be found elsewhere in the Code, suggesting the authors' position that the tenure buyout represents at least in part the payment for the exchange of an asset.

Long-term neighbourhood effects on immigrant self-employment

Urban Studies ◽  
2019 ◽  
Vol 57 (13) ◽  
pp. 2733-2753 ◽  
Author(s):  
Sofia Wixe
Keyword(s):  
Social Capital ◽  
Growing Up ◽  
Neighbourhood Effects ◽  
Short Term ◽  
Self Employment ◽  
Neighbourhood Characteristics ◽  
Employment Rates ◽  
Social Separation ◽  
Positive Effect

The aim of this article is to analyse how the decision to become self-employed as an adult is influenced by the neighbourhood characteristics experienced during adolescence. The focus is on individuals of foreign background since this is a group that shows low employment rates compared with native Swedes at the same time as the geographic and social separation between individuals of different backgrounds is increasing. The results show that while the short-term effects of segregation on self-employment are negative, individuals who grow up in ethnically segregated neighbourhoods are more likely to become self-employed later in life. In addition, both growing up with and residing with entrepreneurial neighbours have a positive effect on self-employment. Hence, the ethnic and social capital collected during youth seems to persist through adulthood.

scholarly journals Optimal Tax Timing with Asymmetric Long-Term/Short-Term Capital Gains Tax

2015 ◽  
Vol 28 (9) ◽  
pp. 2687-2721 ◽  
Author(s):  
Min Dai ◽  
Hong Liu ◽  
Chen Yang ◽  
Yifei Zhong
Keyword(s):  
Capital Gains ◽  
Capital Gains Tax ◽  
Short Term ◽  
Optimal Tax

scholarly journals The Impact of Capital Gains Tax Treatments on Optimal Livestock Enterprise Selection

1980 ◽  
Vol 12 (2) ◽  
pp. 139-145
Author(s):  
John T. Pounder ◽  
Richard A. Schoney ◽  
Gustof A. Peterson
Keyword(s):  
Income Tax ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Preferential Treatment ◽  
Short Term ◽  
Tax Rate ◽  
Federal Income Tax ◽  
Gains And Losses ◽  
The Impact

Current income tax provisions bear little resemblance to those enacted by the original law, the Revenue Act of 1913. Because of the progressive nature of the federal income tax, a need for special provisions for capital gains was recognized. In 1921, gains from the sale or disposition of capital assets and certain other capital items were identified and taxed differently from income from other sources. The capital gains provisions resulted in the separation of ordinary and capital gains income.Gains and losses from the sale or exchange of a capital asset and other capital items are classified as either short- or long-term, depending on the period of time the property is held. Income from items held for less than the required period is taxed as ordinary income. Income from items held for longer than the required period receive preferential treatment only if the net long-term gain exceeds the net short-term capital loss. If long-term capital gains are realized, 60 percent of the excess gain is claimable as a deduction; the remaining 40 percent of the net gain is taxed at the taxpayer's ordinary tax rate. If the net short-term capital gain exceeds the net long-term loss, 100 percent of the excess is taxable at the normal rate.

The Effect of Capital Gains Tax Policy Changes on Long-Term Investments

2019 ◽  
Author(s):  
Eric He ◽  
Martin Jacob ◽  
Rahul Vashishtha ◽  
Mohan Venkatachalam
Keyword(s):  
Tax Policy ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Policy Changes

scholarly journals Indonesia Agroindustry Growth Acceleration through Export Tax Policy: CGE Comparative Static Model

2017 ◽  
Author(s):  
Lestari Agusalim
Keyword(s):  
Tax Policy ◽  
Static Model ◽  
Output Growth ◽  
Cge Model ◽  
Short Term ◽  
Export Tax ◽  
Export Taxes ◽  
Export Competitiveness ◽  
Negative Effect

The purpose of this research is to analyze wether export tax policy on primary agriculture commodity can stimulate the growth of agroindustry. The model used in this research is a comparative static CGE model. The data used is the Input-Output Table in 2008, the System Accounting Matrix (SAM) Table in 2008, and other relevant supporting sources. Simulations carried out by applying export taxes on primary agricultural commodities, adjusted by government policy to accelerate the growth of agroindustry. The simulation indicates that it can inhibit the export growth on taxed commodities so that accelerate the long term agroindustrial output growth. Although it has negative effect on the short term. On the other hand, the policy doesn’t pro the economic growth and aggravate the export competitiveness.

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