It will take me a while to get that image out of my head.Quote:
Originally Posted by bae
Printable View
It will take me a while to get that image out of my head.Quote:
Originally Posted by bae
Talk about blending two things that totally don't go together, did anyone see the Meet the Press segment on Sunday where Michael Moore and Glenn Beck agreed with each other on Donald Trump? It was actually very interesting to see Michael Moore talk about why Trump was going to win and then have Glenn Beck do everything in his power to NOT ADMIT to agreeing with Moore while totally agreeing with him.
Smoothie, indeed!
Well, yes and no. I'm not sure what you would change about the loss carry forward rule. If you lose $100 in June and make $90 in July people don't seem to get worked up over saying that is no taxable income. If you lose $100 in December and make $90 in January why should the result be any different?Quote:
Originally Posted by CathyA
The part that is more controversial is the ability of real estate professionals to use depreciation to offset other income. That may have contributed to the $15 million loss on his form, but probably not much to the $900 MM. In most businesses you can setoff depreciation against other income, that isn't the issue. It's that in RE business a lot of the investment is passive, so ordinary people get caught up in limitations that prevent the offset of depreciation from those investments against other income, but there is a special out for real estate professionals that let's them take it.
As someone who owns a fair bit of real estate, and makes use of depreciation, it is not exactly a tax dodge. Depreciation is real. And if it turns out it isn't, you still end up paying the tax man later when excess depreciation is recaptured. You can dodge and swerve for a while of course, but sooner or later the IRS gets its cut.
Everyone can take depreciation against the the income from the property. The rule some have a beef with is real estate professionals being able to take it against other income. You probably can meet the test easier than most of us. I don't have 750 hours a year for it and couldn't keep it under the time spent on other jobs etc. Nor can most people, which is why some have an issue with it.
I could, but don't bother, because I oddly have enough income from the properties that I don't need to use the depreciation to whitewash *other* income. I don't mind that "real estate professionals" can do so though.Quote:
Originally Posted by Yossarian
May I query why there is not a time limitation on how long one may carry forward from a loss this year? I know in farming in Canada, we can carry forward a loss of income from one year due to weather etc., only or a limited number of years. We used it one year when we had the perfect crop of wheat, a continuous rain right before harvest with high temps that caused the grains of wheat to develop fusarium. It had no marketable value, didn't even pay for the combining or trucking. We could carry that loss forward but it had limits. I vaguely remember it might have been 3 years. Excellent crops for the following few years did not trigger any tax liability as a result.
I think the rule, as it applies to this topic, is that a loss can be carried over for 15 years and also applied to 3 years prior to the loss. That's where the speculation of Trump not paying taxes for 18 years comes into play.Quote:
Originally Posted by razz
It's now 2 and 20 but I think it was 15 back then.
https://www.irs.gov/publications/p536/ar02.html
One of the sillier aspects of this kerfuffle is that despite the lugubrious tears shed for those "tens of millions of working families" neither Mrs. Clinton nor the Times have demurred from tax avoidance strategies when it served their interests.
http://spectator.org/hypocrisy-alert...voiding-taxes/
An article I was reading separated carry over losses from real estate loop holes. My rough summary was that carry over losses come from old tax law that intends to even out gains and losses over a longer period than the traditional 365 day reporting period and was fair in intent. They defined a loophole as a tax law that is so poorly written that one could avoid taxes that really should be paid. Their simple example of a loophole would be a person lives on rural land and in order to qualify for agricultural land for tax purposes he might plant a few fruit trees or graze a few head of livestock. While it might meet a grey area of legality, it's not really within the intent of the law. There obviously more tricky ways to manipulate the tax laws that may fall into a grey area of ethics. Trump apparently has not provided enough information to identify any of these.
If one is in the camp of trickle down economics, easing the tax burden on the wealthy so they can invest in business growth that will stimulate the national economy in some sort of multiple, a person could say that the act of following the law and paying as few taxes as possible is patriotic.
There is the black-letter law as written by legislatures and interpreted by the courts, and there are the moral/ethical/ideological shadings you may wish to assign to someone's compliance with the law. You're certainly free to ascribe motivations and "intent" in ways that define any given section of the law as an ethically indefensible "loophole". The advantage of that approach is that you will always retain finger-pointing privileges for perfectly legal activity. It's hard to conceive of any practical tax code so simple that you wouldn't be able to find some fault with "the wealthy".Quote:
Originally Posted by Rogar
That is true. And it is probably also true that the wealthy have a better means to find and use tax advantages. If there is fault it probably falls more to the law than the tax payer. That doesn't totally excuse the the use of loopholes from scrutiny and criticism.Quote:
Originally Posted by LDAHL
I saw an accountant on CNN who said that at the time of Trump's filing there was a real estate loophole that has since been closed where you could actually write off the loss even if it was funded by debt! So if the lender lost the money and took the hit, the debtor could (at that time) still take the write-off. So Trump may have carried over his leverage. Crazy.Quote:
Originally Posted by Rogar
Especially if you retain the right to define "loopholes" as any aspect of the tax code you choose to find fault with. Sometimes I think Steve Forbes had the right idea back in the day. Use the income tax to raise revenue, and leave the industrial policy, income redistribution and social engineering stuff to other tools.Quote:
Originally Posted by Rogar
I retain the right to define a loophole as as a tax law that is so poorly written that one could avoid taxes that really should be paid. That leaves room for discussion, but isn't totally malleable.Quote:
Originally Posted by LDAHL
When you use terms like "poorly written" and "really should" it seems subjective enough for any political purposes you may have.Quote:
Originally Posted by Rogar
I does define the grey area. I thought the agricultural example was a good one. Another might be what qualifies as entertainment expense that can be written off. The law says it cannot be lavish or extravagant. That is loosely enough defined (or poorly written) to allow extremes. For me, lavish entertainment is a fancy restaurant and a movie. For other circles a business conference at a golf resort might be standard. In my working days that could be referred to as a boondoggle. I'm almost certain that the courts have had to determine which side of the grey area entertainment expense falls more than once.Quote:
Originally Posted by LDAHL
That's always going to be an eye-of-the-beholder thing. Is the mortgage interest deduction a loophole? The Earned Income Tax Credit? I don't disagree that the tax code can often be convoluted. A flat tax on income or assets, or some form of VAT would be relatively simple to administer and leave less room for ideological posturing. But there will probably always be disagreement on whether the rich are being adequately soaked.Quote:
Originally Posted by Rogar
The concept of "loopholes" available only to the rich is so handy for moralizing!
The reality is a bit different. After decades of questing, with access to world-class tax advice, I have been unable to locate any *real* loopholes available to me. Everything available still ends up with taxation happening sooner, or later (in truth, with *some* exceptions that however require such contortions in one's business or personal life that they are not worthwhile.).
I agree that a VAT or flat tax would be appealing and eliminate some of the convolutions of our complicated tax code. Tax code revision seems to come up every election, but I think that degree of simplification is just too big a change for people to handle and too many special interests among the law makers.
I also agree that the term loophole may depend on the user of the word, but I just did a simple search and these are what at least one source considers "tax loopholes" that are available to the wealthy. Probably the one that comes up most often is the capital gains tax, which allows people like Warren Buffet be in a lower tax rate than his secretary. Is that truly the intent of a progressive tax structure, or is it the best way to stimulate investment growth that benefits everyone?
http://www.bankrate.com/finance/taxe...it-rich-1.aspx
I'd hardly call capital gains treatment a "loophole". You might want to look into *why* capital gains is treated differently than "regular" income. And what has to change to "fairly" treat the two types of income "the same".Quote:
Originally Posted by Rogar
Playing the "Warren Buffet tax rate" card is sloppy thinking.
Except that she only wrote off $3000 of capital loss. Not quite the same thing.Quote:
Originally Posted by LDAHL
http://mediamatters.org/blog/2016/10...p-taxes/213487
I do not consider myself wealthy but capital gains relief is available to me. There is also an exclusion for much of the gain on the sale of a personal home. How is one different from the other under the definition of "loophole"? Do you think your charitable contributions are different from someone with more income? Sure it saves them some more tax but it is because of a higher tax bracket. And, if you don't itemize your deductions, some % is built into the standard deduction.
Worked for the IRS for 31 years. In the 70s, I could recomputed a return using a pencil and paper and maybe 15 minutes. No % relationships, fancy combinations, multiple definitions, etc. It is crazy now. Even the definition of child can take pages and "depends".
I truly believe that taxes are messed up due to a lot of the globalization and movement of income as well as manufacturing to different countries to make use of their more liberal laws and lower taxes. Ireland is a master of this.
Not in quantity, but certainly in quality. She's carrying forward a 2008 loss.Quote:
Originally Posted by jp1
My company bought a division of an Irish corporation and before you knew it we were an Irish plc, our corporate headquarters were in a castle, every other new employee was named Declan and we had a 13% effective tax rate.Quote:
Originally Posted by sweetana3
I was in grad school in the eighties, and remember being really ticked off that I took my tax courses right before the Tax Reform Act of 1986 made things (relatively) a lot simpler. You only had to put the codifications of the before and after IRCs next to each other to see the difference. Of course, a lot of new barnacles have accumulated since then, but at the time it was considered a great accomplishment.Quote:
Originally Posted by sweetana3
It now seems like it was easier to outlive the USSR than the urge to tinker with taxes.
Buffet is a little cliche. Maybe they should have used the Mitt Romney example.Quote:
Originally Posted by bae
And in a few hundred thousand years she will have written off the same amount as him. She still paid over $3 million in taxes last year. But yes, if she hadn't been so 'devious' she would have paid perhaps an extra $1140.Quote:
Originally Posted by LDAHL
I see the EU is demanding the Irish collect back taxes from Apple. They can't dictate member countries' tax policy, but the "Commissioner of Competition" believes Apple's preference for deploying capital where it is taxed more lightly is "unfair".Quote:
Originally Posted by Alan
So you feel the magnitude involved makes a difference ethically?Quote:
Originally Posted by jp1
Póg mo thóin!Quote:
Originally Posted by LDAHL
For all I know, that's how you get to be the Commissioner of Competition. Knowing what to kiss and when is an important talent for advancement in large, unaccountable bureaucracies.Quote:
Originally Posted by bae
I think the EU wants to be the United States, without the burden of several hundred years of chipping away at member states liberties we've enjoyed, going the full monty on government over-reach in the early stages.Quote:
Originally Posted by LDAHL
You can still write off debt funded losses. That is not really controversial. But not paying back debt is supposed to create income (called, inventively, cancellation of debt income) that usually results in you losing the tax benefit of the loss. The latest thinking/speculation on what the tax returns show is Trump may have taken a Gitlitz position, which let him take the benefit of the loss without impairment from the CODI. That's legal, the courts said so, but philosophically wrong and was subsequently changed by legislation.Quote:
Originally Posted by catherine
That only seems fair, as so many people here seem to want to be the EU.Quote:
Originally Posted by Alan
Yes. Differences of magnitude warrant different responses in all sorts of situations. For example, I'd like to think that if the 9/11 attacks had only succeeded in killing one American that our response would not have been to start wars with two countries. Or that we wouldn't consider using the same punishment for someone that shoplifts a dollar candy bar as we would someone that manages to grab a multi thousand dollar piece of jewelry at an expensive jewelry store. Or on the positive side, I will have a different opinion about one's commitment to helping people with AIDS if one has a foundation, to which they have donated millions of dollars personally, and that has bought HIV meds for half the infected people in Africa compared to another rich person who drops a check for $25 in the mail to GMHC.Quote:
Originally Posted by LDAHL