JATA - Winter 1981

Volume 2, No. 2

Conditions Under Which a Dependent Can File a Joint Return:  Is the Current Confusion and Complexity Really Necessary?
R. Boley & E. Outslay

Quantifying the Poisoning Effect of Tax Preference Items on the Maximum Tax for a High-Bracket Taxpayer
J. O. Everett & D. E. Keys

Section 1248(b):  The Individual Limitation on Taxing Sales of CFC Stock Offers Substantial Tax Savings
J. L. Kramer & S. S. Kramer


Conditions Under Which a Dependent Can File a Joint Return:  Is the Current Confusion and Complexity Really Necessary?

R. Boley & E. Outslay

ATA Summary

The paper analyzes the issue of joint filing as it relates to the dependency exemption.  The authors suggest that Congress review the original legislative intent and reword  Section 151(e)(2) to reflect intended exceptions.

Research Methodology:  The paper uses legal research methodology. Conclusions are the subjective judgments of the authors.  

Quantifying the Poisoning Effect of Tax Preference Items on the Maximum Tax for a High-Bracket Taxpayer

J. O. Everett & D. E. Keys

ATA Summary

The article develops a tax preference decision model which reflects the "poisoning" effect of tax preference items on the calculation of the maximum tax on personal service income.

Research Methodology:  A set of equations are developed to determine whether or not accelerated depreciation should be elected by an individual qualifying for the maximum tax.  The equations compare the time value of money savings generated by the preference deduction with the additional tax costs created by a combination of the minimum tax and the loss of income qualifying for the maximum tax.  A numerical example is presented.  

Section 1248(b):  The Individual Limitation on Taxing Sales of CFC Stock Offers Substantial Tax Savings

J. L. Kramer & S. S. Kramer

ATA Summary

The paper examines the applicability of Section 1248(b) and the calculation of the Section 1248(b) limitation.  The authors then compare the relative tax liabilities incurred under Sections 1248(a) & (b) and the effect various variables on the effective U.S. tax rate on the dividend income.

Research Methodology:  The paper expresses mathematically the 1248(a) and 1248(b) calculations using some simplifying assumptions.  Foreign and U.S. corporate tax rates and individual tax rates are then incorporated into the model and analyzed.  A breakeven analysis determines the average individual tax rate where the taxpayer would be neutral between having his gain taxed under the Section 1248(a) or 1248(b) alternatives.

Letter from the President

To ATA Members and Visitors,

The American Taxation Association (ATA) is home to a broad group of members with interests in tax research, policy, practice, and education. We are in a time of transition that includes the ongoing pandemic; both AAA’s and ATA’s Diversity, Equity, and Inclusion initiatives; and the CPA Evolution. I thank our members Kirsten Cook, Diana Falsetta, and Annette Nellen for their service in these endeavors. I also thank Tim Rupert for his service as AAA Director focusing on Segments.

Our last mid-year meeting was virtual and could not have happened without our excellent ATA leadership. Thank you to Jeri Seidman, Mollie Adams, Bridget Stromberg, and their respective committees for their flexibility and tenacity in organizing their portions of the conference...

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Anna Catherine Fowler

In Memoriam,
Anna Catherine Fowler received her BS in accounting from the University of Alabama, after which she practiced for several years as a CPA. After moving to Texas with her husband Jim, she earned her MBA and PhD from the University of Texas at Austin.

She joined the faculty of the business school of the University of Texas in 1977 as the first female tenure track professor hired by the accounting department. She remained at UT until she retired in 2004 as the John Arch White Emeritus Professor in Business.

During Anna’s distinguished academic career, her research and teaching interests focused on estate and gift taxation. She was an active member of the AICPA’s Tax Division and the American Taxation Association, for which she served as 1993-94 president.

In 2002, Anna received the American Taxation Association’s highest honor, the Ray M. Sommerfeld Outstanding Tax Educator Award. She also received the Texas Society of CPA’s Outstanding Educator Award.

Anna and Jim made the most of their retirement years, delighting in travel all over the world. They finally settled in a retirement community in Chapel Hill, North Carolina. Even after Jim’s death in 2019, Anna continued to travel with friends, root for her beloved Alabama football team, and live her life to the fullest. She passed away peacefully on October 19, 2021.

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