Document Type


Publication Date

Spring 2006

Publication Citation

81 Indiana Law Journal 539 (2006)


Tax basis is one of the most important, yet least studied, aspects of the income tax. This analysis calls attention to its importance and argues that taxpayers have the motivation, opportunity, and means to inflate the tax basis they have in their assets and, in some cases, to avoid the reporting of gains. We discuss the likely causes of these phenomena, estimate the probable revenue loss, and propose appropriate reforms.