Effect Of Capital Gains Taxation Research Articles

A Study on the Lock-in Effect of Capital Gains Taxation in Housing Markets

A Study on the Lock-in Effect of Capital Gains Taxation in Housing Markets

The Effect of Capital Gains Taxation on Home Sales: Evidence from the Taxpayer Relief Act of 1997

The Taxpayer Relief Act of 1997 (TRA97) significantly changed the tax treatment of housing capital gains in the United States. Before 1997, homeowners were subject to capital gains taxation when they sold their houses unless they purchased replacement homes of equal or greater value. Since 1997, homeowners can exclude $500,000 of capital gains when they sell their houses. Such drastic changes provide a good opportunity to study the lock-in effect of capital gains taxation on home sales. Using ZIP-code level housing price indexes and sales on single-family houses data from 1982 to 2006 in 16 affluent towns within the Boston metropolitan area, this paper finds that TRA97 reversed the lock-in effect of capital gains taxes on houses with low and moderate capital gains. However, TRA97 may have generated an unintended lock-in effect on houses with capital gains over the maximum exclusion amount. In addition, this paper exploits legislative changes in capital gains tax rate to estimate the tax elasticity of home sales during the post-TRA97 period.

Shareholder Taxes in Acquisition Premiums: The Effect of Capital Gains Taxation

AbstractWe exploit cross‐temporal differences in capital gains tax rates to test whether shareholder‐level capital gains taxes are associated with higher acquisition premiums for taxable acquisitions. We model acquisition premiums as a function of proxies for the capital gains taxes of target shareholders, taxability of the acquisition, and tax status of the price‐setting shareholder as represented by the level of target institutional ownership. Consistent with a lock‐in effect for acquisition premiums, results suggest a unique positive association between shareholder capital gains taxes for individual investors and acquisition premiums for taxable acquisitions, which is mitigated by target institutional ownership.

The Lock-In Effect of Capital Gains Taxation on Land Use

The present paper will construct a simple model of land development to reconsider the lock-in effect of capital gains taxation under perfect foresight. In the case where there is no competitive rental market, as in Japan, a lock-in effect deters the efficient land use. We will distinguish between the lock-in effect on stock variables and that on flow variables. Although a tax on realized capital gains has an ambiguous effect on allocation of land use, it unambiguously deters land development.

The Incidence of a Tax on Pure Rent: A New (?) Reason for an Old Answer

Previous articleNext article No AccessCommentsThe Incidence of a Tax on Pure Rent: A New (?) Reason for an Old AnswerGuillermo A. Calvo, Laurence J. Kotlikoff, and Carlos Alfredo RodriguezGuillermo A. Calvo Search for more articles by this author , Laurence J. Kotlikoff Search for more articles by this author , and Carlos Alfredo Rodriguez Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 87, Number 4Aug., 1979 Article DOIhttps://doi.org/10.1086/260798 Views: 10Total views on this site Citations: 26Citations are reported from Crossref Copyright 1979 The University of ChicagoPDF download Crossref reports the following articles citing this article:Shulu Che, Ronald Ravinesh Kumar, Peter J. 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