Business and Casualty Losses When Basis Has Not Been Lost

4 Pages Posted: 9 Dec 2009

See all articles by Calvin H. Johnson

Calvin H. Johnson

University of Texas at Austin - School of Law

Date Written: July 28, 2008

Abstract

This proposal would deny a business or casualty loss deduction for basis to the extent of the fair market value of the property held by the taxpayer after the casualty or loss event. To the extent property still has value, basis has not been lost. The proposal would have no effect on sales, total losses, or properties like cars and machinery that do not appreciate. The proposal is part of a series of proposals under a grand norm that adjusted basis needs to describe the investment value of an asset.

The proposal is made as a part of the Shelf Project, a collaboration by tax professionals to develop and perfect proposals to help Congress when it needs to raise revenue. Shelf Project proposals are intended to raise revenue, defend the tax base, follow the money, and improve the rationality and efficiency of the tax system. The tax community can propose, follow, or edit proposals at http://www.taxshelf.org. A longer description of the Shelf Project can be found at ‘‘The Shelf Project: Revenue-Raising Projects That Defend the Tax Base,’’ Tax Notes, Dec. 10, 2007, p. 1077, Doc 2007-22632, 2007 TNT 238-37.

Shelf Project proposals follow the format of a congressional tax committee report in explaining current law, what is wrong with it, and how to fix it.

Copyright 2008 Calvin H. Johnson.

Keywords: tax reform, casualty loss,business loss

JEL Classification: H20

Suggested Citation

Johnson, Calvin Harsha, Business and Casualty Losses When Basis Has Not Been Lost (July 28, 2008). The Shelf Project, Tax Notes, Vol. 120, p. 357, July 28, 2008, Available at SSRN: https://ssrn.com/abstract=1520725

Calvin Harsha Johnson (Contact Author)

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1306 (Phone)
512-232-2399 (Fax)

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