Crane: Loan Proceeds as Income: A Response to Professor Dodge

Charlotte Crane (Northwestern) has published Loan Proceeds as Income:  A Response to Professor Dodge, 27 Va. Tax Rev. 563 (2008).  Here is the Conclusion:

In short, the cash-flow treatment of loans fails to account for the distinction between transfers that anticipate the creation of new value by the recipient/transferee from those that do not.  It also fails to appreciate the lender's position as well as the borrower's position to avoid overcounting wealth even when new value is created.  Thus, it would not be an imporvement, udner the norms of the income tax, over the current tax treatment of loan transactions.

Charlotte's article is in response to Joseph M. Dodge, Exploring the Income Tax Treatment of Borrowing and Accruals, or Why the Accrual Method Should Be Eliminated, 26 Va. Tax Rev. 245 (2006).