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Most of the West treats transactions between companies and their disregarded subsidiaries as not occurring for tax purposes (i.e., the transactions are "disrega
by gamblor956 5y ago
Most of the West treats transactions between companies and their disregarded subsidiaries as not occurring for tax purposes (i.e., the transactions are "disregarded").
They should expand that principle to simply disregard transactions between all members of a conglomerated or commonly owned group.
- milesvp 5y agoI might be tempted to take it a step further, and say that any interaction that would be taxed between businesses should be taxed if the same interaction happens internally. I really don’t like that the system seems to encourage acquisitions and mergers. If I buy a marketing firm so I don’t have to keep paying another firm for marketing, all those taxable events are now gone. I know my proposal starts to break down quickly and can lead to an accounting nightmare, but it seems like sort of a starting place to meditate on this topic.