what are the benefits of allowing tax credits to be sold/transferred

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TIL that tax credits can be sold/transferred, (once I think). I had a knee jerk reaction to this, and I’m struggling to understand how that benefits anyone.

Is there any risk associated with buying a credit? It honestly just seems like a scam, but I’ll admit that I’m not very educated when it comes to these things. I tried to research it a bit, and it seems like the main risk would be a recapture.

In: Economics

2 Answers

Anonymous 0 Comments

It can be useful if for example you have tax credits for stock losses but don’t have offsetting gains. If the credits were allowed to be sold you could sell them to someone with stock gains to reduce the amount of your stock loss.

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