University of Chicago Law School Chicago Unbound Journal Articles Faculty Scholarship 1993 Unmasking the Matching Principle in Tax Law Julie Roin Follow this and additional works at: https://chicagounbound.uchicago.edu/journal_articles Part of the Law Commons Recommended Citation Julie Roin, "Unmasking the Matching Principle in Tax Law," 79 Virginia Law Review 813 (1993). This Article is brought to you for free and open access by the Faculty Scholarship at Chicago Unbound. It has been accepted for inclusion in Journal Articles by an authorized administrator of Chicago Unbound. For more information, please contact
[email protected]. UNMASKING THE "MATCHING PRINCIPLE" IN TAX LAW Julie A. Roin * INTRODUTION XItr are accustomed to believing that a taxpayer's treatment of one transaction may determine the tax consequences of a later, related transaction. For example, the amount of gain a taxpayer rec- ognizes upon the disposition of an asset depends on the circumstances under which the taxpayer acquired the asset and, in particular, on the basis created as a result of that acquisition.I We are much less accus- tomed to believing that the tax consequences of a transaction should be determined by another taxpayer's treatment of the transaction. Most commentators are willing to acknowledge that "Congress is free to enact-and should enact-rules to the effect that the tax treatment of one party is in fact keyed to that of another in particulartypes of transactions." 2 But most resist the uniform application of a "'com- mon law' income-tax principle holding that the tax treatment of one '3 taxpayer determines the tax treatment of another." * Class of 1963 Research Professor of Law, University of Virginia Law School.