Select Page

Tax
University of Mississippi School of Law
Davis, Donna Raye

CAPITAL GAINS AND LOSSES

A. Historical Overview
1. Preferential Treatment for long term capital gain
2. Limitation of the deduction of capital losses
3. Justification for Preferential Capital gain treatment
B. Current Law: §1(h)
1. Maximum rates on long-term capital gain
2. Net capital gain: 28% gain, unrecaptured §1250 gain, and adjusted NCG
a. 28% gain: collectibles gain and §1202
b. Unrecaptured §1250 gain- 25% rate
c. adjusted net capital gain: 15% and 5% rates
d. adjusted net capital gain: qualified dividend income
3. Attribution of capital loss included in the computation of net capital gain
C. Current Law: Application of the Section 1211(b) Limitation on the Deduction of
Capital Losses
D. Definition of Capital Asset
E. The Sale or Exchange Requirement
F. The Arrowsmith Rule
G. Holding Period
Hort
Davis
Bynum
Corn Products
Arkansas Best
Arrowsmith
Skelly Oil
Kenan

LIKE KIND EXCHANGES
Overview
A. Continuity of Interest
B. The Like Kind Requirement
C. The Holding requirements
D. Solely for Like Kind Property: The presence of Boot
E. Treatment of Liabilities
F. Basis Calculations
G. Sale or Exchange?
H. Three-Way Exchanges and Deferred Exchanges

Installment Sales

Part A
A. Statutory Framework
B. Payments and Liabilities
C. Recaptur

ns
C. Special Rules for Nondealers
D. Installment Obligations and Like Kind Exchanges

Original Issue Discount

A. Original Issue Discount: Introduction

B. Original Issue Discount: Debt Instruments Issued for Cash
1. Determining the Amount of OID
2. Current Inclusion of OID
3. Deduction of OID
4. Gain of Loss on Sale, Exchange or Retirement

Market discount

C. OID and Unstated Interest: Debt Instruments Issued for Property
1. Determining Issue Price Under §1274: Inadequate Stated Interest
2. Determining Issue Price Under §1274: Adequate Stated Interest
3. Adequate Interest Charged and Paid Currently: No OID
4. Exceptions to §1274
5. Unstated Interest: §483
6. Special Rules: The Cash Method Election of §1274A- The $2M Rule
7. Special Rules: Interest Rate Limitation of Qualifying Sales of $2.8M or Less
8. Special Rules: Interest Rate Limit of Certain Land Transfers B/T Rel Part

The Alternative Minimum Tax

Overview
A. Mechanics
B. Determining Alternative Minimum Taxable Income
C. Determining Tax Liability
D. Credits Allowed
Klaassen V. Commisioner