An Income Capitalization Model for Land Value with Provisions for Ordinary Income and Long-term Capital Gains Taxation |
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| Authors: | Timothy G Baker Edward H Ketchabaw Calum Greig Turvey |
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| Institution: | Associate professor, Department of Agricultural Economics, Purdue University, West Lafayette, Indiana;work completed on this paper while on sabbatical leave at the Department of Food and Resource Economics, University of Florida, Gainesville, Florida;Graduate research assistant, Department of Agricultural Economics and Business, University of Guelph, Guelph, Ontario;Assistant professor, Department of Agricultural Economics and Business, University of Guelph, Guelph, Ontario |
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| Abstract: | This paper addresses the problem of growth, taxation, capital gains taxation and capital gains exemption on farmland bid prices. A maximum bid price model is developed that takes into consideration these factors. The results indicate that capital gains taxation decreases the bid price but this reduction is mitigated by the $500,000 capital gains exemption. The results also support the hypothesis that growth, taxation and discount rates do interact to affect the bid price.
Les auteurs examinent l'incidence de la croissance, de la fiscalité, de Fimposition des gains de capital et des exemptions pertinentes sur le prix aux enchères des terres agricoles. Ces facteurs ont servi à élaborer un modèle du prix maximum obtenu aux encheres. Les resultats montrent que I'imposition des gains de capital réduit le prix aux enchères, mais que la baisse est atténuée par l' exemption de 500 000 $. lis confirment également l' hypothèse que la croissance, la fiscalité et le taux d' escompte interagissent pour modifier les prix aux enchères. |
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