Effective long-term capital gains tax rates under the Revenue Reconciliation Act of 1990.
Investment activity in both residential and commercial sectors of real estate is heavily influenced by tax law provisions. While preferential provisions still remain, the traditional stimulus provided to the real estate industry through preferential tax treatment of long-term capital gains was eliminated by the Tax Reform Act of 1986. More recently, the Revenue Reconciliation Act of 1990 reduced the maximum tax rate on long-term capital gains income. Although the 1990 tax act seemingly represents at least a partial reintroduction of more favorable tax treatment of long-term capital gains, the effective tax is higher than the new nominal maximum rate as a result of interactive provisions contained elsewhere in the act.
American Institute of Real Estate Appraisers
Johnson, L. L., & Fellows, J. A. (1993). Effective long-term capital gains tax rates under the Revenue Reconciliation Act of 1990. Appraisal Journal, 61(1), 79-89.
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