Describe the business purpose doctrine


The U.S. tax code, as overhauled in 1986, has evolved over time to include many credits and deductions. Certainly the legislative process encourages offering tax benefits for certain behavior, such as buying a new car or home, investing in manufacturing equipment, and so on. Given this, is a company that fails to take advantage of every available tax break guilty of doing a disservice to its shareholders? What is the business purpose doctrine?

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Accounting Basics: Describe the business purpose doctrine
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