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This analysis investigates how asymmetrical treatment of gains and losses under U.S. tax law affects business investment decisions.

The Dynamic Effects of Tax Law: Asymmetries.

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Working paper analyzes how different treatments of gains and losses impact investment decisions, suggesting implications for recent tax changes.

This analysis investigates how asymmetrical treatment of gains and losses under U.S. tax law affects business investment decisions.
Examines distinctions between gains and losses for businesses under U.S. tax law.
Analyzes penalties on carried forward losses due to interest loss and expiration after fifteen years.
Reviews previous literature that addressed tax systems lacking full loss offset affecting risky projects.
Finds that asymmetrical treatment of taxation leads to higher expected tax payments for risky investments.
Demonstrates that the consequences of tax law changes could significantly influence investment behaviors.
Provides a framework for understanding the implications of recent tax alterations.

Philip J. Harmelink (1984) studied this question.

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Working paper analyzes how different treatments of gains and losses impact investment decisions, suggesting implications for recent tax changes.