Week 4 Prompt:

In Chapter 8 we learn that individuals can deduct per year up to $3,000 of net capital loss against taxable income. Also, individuals get preferential tax treatment for long-term capital gains.

Corporations, however, do not. Corporations do not get to deduct a net capital loss in the current year. They can only deduct capital losses against capital gains. Furthermore, corporations do not get preferential tax rates for long-term capital gains. They pay the ordinary tax rate on long-term capital gains.

Remaining unpolitical with your comment (and respecting other student comments), why do you think the tax law favors individuals to corporations with regard to these rules? Would you recommend tax reform to allow for corporations to have similar laws as individuals? (Remember, try to put yourself in the shoes of the IRS.)

Note: there is no right answer here. We are just wanting to think about the tax law and spark conversation.