TY  - JOUR
AU  - Follain,James R.
AU  - Hendershott,Patric H.
AU  - Ling,David C.
TI  - Understanding the Real Estate Provisions of Tax Reform:  Motivation and Impact
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2289
PY  - 1988
Y2  - June 1988
UR  - http://www.nber.org/papers/w2289
L1  - http://www.nber.org/papers/w2289.pdf
N1  - Author contact info:
James R. Follain
E-Mail: JFollain@uamail.albany.edu

Patric H. Hendershott
Fisher Hall
Ohio State University
2100 Neil Avenue
Columbus, OH 43210
Tel: 218/963-1393
Fax: 218/963-9484
E-Mail: hendershott.2@osu.edu
AB  - Capital investment tax provisions have been changed numerous times in the last decade, with depreciation tax lives shortened in 1981 and lengthened ever since and capital gains taxation reduced in 1978 and 1981 and now increased. The first part of this paper analyzes these changes and attributes a large part of them, including the 1986 Tax Act, to changes in inflation: tax depreciation schedules and capital gains taxation that look reasonable when the tax depreciation base is being eroded at ten percent a year and an overwhelming share of capital gains is pure inflation take on a different appearance when inflation is only four percent. The remainder of the paper critiques the typical project model used to compute impacts of tax changes on real estate and report simulation results using a modified model.
ER  -