Nontaxcosts(英文版)(pdf26页)分析.pdf

Session 7 - Nontax costs �One important non-tax cost we have already seen is the implicit tax on tax-favored assets �We now focus on other types of non-tax costs: • Organizational form costs • Risk • Administrative costs • Agency (incentive) costs • Financial reporting costs • Transaction costs 15.518 Fall 2002 Session 5 Organizational form costs �Suppose you want to use a partnership to reduce tax costs. What types of non-tax costs will you face? • The Boston Celtics Limited Partnership (BCLP) faced this decision in 1997 when Congress changed tax law in 1987 to tax publicly traded partnerships as corporations. The provision was grandfathered so that it did not apply to existing publicly traded partnerships for 10 years • BCLP was operated as a publicly traded limited partnership 15.518 Fall 2002 Session 5 Alternatives considered by BCLP �Maintain BCLPs tax status as a partnership by paying the toll tax imposed under the tax law. The tax would be a federal tax at a rate of 3.5% of gross income from the active conduct of trades or businesses in taxable years beginning after December 31, 1997. • Benefit—still have partnership tax treatment • Cost—the toll tax �Allow BCLP to be taxed as a corporation • Benefit—dont have to do anything • Cost—future earnings subject to double taxation �Become a corporation • Celtics, Inc., the general partner, would have to give up control of the team • Subject to double