Section Description Provided by Instructor
This course will survey the economics of a number of financial instruments, and the tax rules that apply to them. The size of the derivatives market has quintupled in the past decade alone, and a number of new financial instruments have been developed. The tax law has responded to these new instruments with new sets of rules for each type of instrument, but these new rules are often inconsistent with the rules that apply to other instruments. These discontinuities, in turn, permit taxpayers to minimize tax. Also, various financial instruments allow taxpayers to synthetically create assets without actually owning them, synthetically sell assets without actually selling them, and create tax-favorable alternatives to more traditional financial products, like insurance. The course will explore these aspects of financial instruments, the tax issues they raise, and the tax planning opportunities they present. It will also explore the broader questions of tax policy that financial instruments raise, including efficiency and equity, and alternative comprehensive regimes for taxing them.
W 6:20p - 8:10p
Method of Evaluation
J.D. Writing Credit