alt Hacker NewsOfcause.
Fundamentally there are reasons why we don't allow companies to funnel all operational profits into capital assets without them paying taxes.
An analogy would be a company that used all their profits to extract gold from the ground such that they get the labor worth of gold out. In doing so they would effeciently dodge paying taxes of their profits.
Now back to your comment: you portray it is as only good that this law was changes . And in doing so you leave out these details that essentially leads to instantiating laws like these.
Your analogy suggests a deferment of taxes paid but not elimination.
In your example, they still own all the gold and would eventually pay taxes on any liquidation.
I bring this up because I, too, am as interested in your parent to know the original inspiration for these parts of the tax code…
Further: I have a suspicion that this should be applied differently to C-corps vs. pass through entities in the same way that corporate taxes and retained earnings are…