Theoccurrence of capital losses under worthless securities may notnecessarily be of significant impact to the individual as there is a$3000 loss limit. Individuals suffering huge losses exceeding the setlimit therefore have little to benefit from. It is also unclear howthe sale of 1244 stocks certain stock is classified as ordinary lossas opposed to capital loss (James & Nobes, 2010).
Casualtyand Theft gains and losses occurring together does not seem a normaloccurrence. The special set of rules that guide this kind ofincidence is complex. Individuals may not even recognize that suchrules apply and may not benefit from tax exemption or gains. Settingoff the personal causally losses and personal casualty gains may notbe easy for a taxpayer as losses and gains are treated differentlyunder the rules. In addition, personal losses or deductions are notaffected on Net Operating Losses (NOLs) even though personal casualtyand theft losses are excluded.
Domesticproduction gross receipts are provided under the American JobCreation Act 2004. The five categories that qualify for domesticproduction gross receipt deductions are useful not only in jobcreation but in encouraging innovation (Raabe al., 2015). In myopinion, even the sale or distribution of electricity, potable waterand natural gas should be included in the domestic productionreceipts. This is so to encourage people to concentrate on the energysector that is important in the growth and development of theeconomy.
Conclusively,the study of taxation chapter seven of the text has provided usefulinsight on the issue of taxation. Although it is an extensive topic,this reflection has provided an insight in understanding andapplication of the different concepts in this subject.
James,S., & Nobes, C. (2010). Theeconomics of taxation: principles, policy and practice.Fiscal.
Raabe,W. A., Maloney, D. M., Young, J. C., Smith, J. E., & Nellen, A.(2015). South-Western federal taxation 2016. Essentialsof Taxation: Individuals and Business Entities,19,62-75.