New info on romneys taxes

[ivwshane]

What's your take righties?
http://m.motherjones.com/mojo/2012/10/romneys-charitable-trust-not-very-charitable

Using the Freedom of Information Act, Bloomberg smartly requested the tax returns of a charitable trust set up by Romney in 1996, which have never been publicly released. (The trust is separate from both the Romneys' family trust and foundation.) The documents reportedly show that Romney used a loophole to essentially rent the tax-exempt status of a nonprofit—in this case, that of the Mormon church—to lower his tax rate while not actually giving much money to the charity itself. Bloomberg explains:

When individuals fund a charitable remainder unitrust, or "CRUT," they defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments. Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity.*

 

[rudder]

It shows that Romney knows a helluva lot about the loopholes he needs to close.

Anyway... wtf... this link here is from April.... http://ctj.org/ctjreports/2012/04/tax_tips_with_mitt.php

Bloomberg could have just googled it.

 

[CycloWizard]

Good for him. You can bet your ass if I knew a way to pay fewer taxes, I would take full advantage. Anyone who says differently is either a liar or an idiot.

 

[Apple Of Sodom]

This doesn't sound like a loophole. That is like saying giving to charity is a tax loophole.

 

[LTC8K6]

What's your take righties?
http://m.motherjones.com/mojo/2012/10/romneys-charitable-trust-not-very-charitable

I'll let you know when we have 10 years of the Romney's and the Obama's returns to scrutinize.

 

[Apple Of Sodom]

"The Romneys get theirs off the top and the charity gets what's left," he said. "So by definition, if it's not performing as well, the charity gets harmed more."

Typical. People not happy with rich folks giving enough. Why can't they be happy with the amount he gave? And how does the charity get harmed more? As long as the charity doesn't have to spend money, getting $1 is better than getting no dollars.

I think Romney is a charitable person, although I also think he is smart about it. He doesn't necessarily always give selflessly... he (pays someone to) research and think about what could also benefit him. There isn't really anything wrong with that. We all do it.

 

[dank69]

Good for him. You can bet your ass if I knew a way to pay fewer taxes, I would take full advantage. Anyone who says differently is either a liar or an idiot.

I agree. Romney is a complete idiot for not taking all the charitable deductions he qualified for in 2011. We should probably do our best to make sure he never becomes President.

 

[Todd33]

This doesn't sound like a loophole. That is like saying giving to charity is a tax loophole.

Romney call it a loophole, he has ran on closing loopholes and counts charitable deductions and home mortgage as such.

 

[MomentsofSanity]

I'll let you know when we have 10 years of the Romney's and the Obama's returns to scrutinize.

The Obama's and Biden's have been available for years dating back to 2000.

 

[MixMasterTang]

The Obama's and Biden's have been available for years dating back to 2000.

But...but..but....birth certif......Ken........Musli......... Ohhh n/m!

 

[Atomic Playboy]

The Obama's and Biden's have been available for years dating back to 2000.

How dare you bring your "facts" into this. This is about mindless partisan bickering dammit!

 

[xBiffx]

But...but..but....birth certif......Ken........Musli......... Ohhh n/m!

Nice duh-version.

Although, in your defense, considering this thread topic has already been covered ad nauseum multiple times, I can see where you might not have much to add. Neither do I for that matter.

 

[dank69]

Nice duh-version.

Although, in your defense, considering this thread topic has already been covered ad nauseum multiple times, I can see where you might not have much to add. Neither do I for that matter.

So not only do you not know what a diversion is, you also don't understand how it is used, who would use it, when it would be used or why it would be used?

 

[sm625]

Republicans are so derp derp dumb for giving the nomination to a con like this. I would say they are really closet democrats, but in reality they just want wall street to get their trillions. And so they will, no matter who wins.

 

[xBiffx]

So not only do you not know what a diversion is, you also don't understand how it is used, who would use it, when it would be used or why it would be used?

Might as well keep going off topic due to the reason in my last post amiright?

 

[ivwshane]

What Romney did wasn't illegal what it does show though is that his charitable donations are done for tax purposes and not for the benefit of the charity. He even setup a charity for tax purposes and yet the charity doesn't do anything directly and is only required to give out 5% of its assets a year.

None of this is a big deal unless your presidential campaign highlights how much you give to charity.

Forget about party for a second, the guy is a slime ball and nothing but a con man. Disgusting.

 

[xBiffx]

What Romney did wasn't illegal what it does show though is that his charitable donations are done for tax purposes and not for the benefit of the charity. He even setup a charity for tax purposes and yet the charity doesn't do anything directly and is only required to give out 5% of its assets a year.

None of this is a big deal unless your presidential campaign highlights how much you give to charity.

Forget about party for a second, the guy is a slime ball and nothing but a con man. Disgusting.

Start bitching to your congresspeople or the IRS. Bitching about Romney following the law makes you look like a partisan asshole. Wait, you didn't need Romney for that......

Guarantee a candidate on the D side does this and you bringing up laws being dumb, the IRS sucking, and congress needing to change them both.

 

[ivwshane]

Start bitching to your congresspeople or the IRS. Bitching about Romney following the law makes you look like a partisan asshole. Wait, you didn't need Romney for that......

Guarantee a candidate on the D side does this and you bringing up laws being dumb, the IRS sucking, and congress needing to change them both.

Naturally you missed the point, color me surprised.

 

[xBiffx]

Naturally you missed the point, color me surprised.

Pretty sure I got it.

you look like a partisan asshole

 

[Charles Kozierok]

Republicans are so derp derp dumb for giving the nomination to a con like this.

Why are they dumb? He's very close to winning. That's all that matters, right?

 

[ElFenix]

Romney call it a loophole, he has ran on closing loopholes and counts charitable deductions and home mortgage as such.

well, they are loopholes. popular ones, but loopholes nonetheless.

 

[Fern]

What's your take righties?
http://m.motherjones.com/mojo/2012/10/romneys-charitable-trust-not-very-charitable

Using the Freedom of Information Act, Bloomberg smartly requested the tax returns of a charitable trust set up by Romney in 1996, which have never been publicly released. (The trust is separate from both the Romneys' family trust and foundation.) The documents reportedly show that Romney used a loophole to essentially rent the tax-exempt status of a nonprofit—in this case, that of the Mormon church—to lower his tax rate while not actually giving much money to the charity itself. Bloomberg explains:

When individuals fund a charitable remainder unitrust, or "CRUT," they defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments. Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity.*

My take is that the article inaccurately describes a CRUT.

A CRUT is an irrevocable trust, meaning the donor, Romney in this case, has irrevocably given up all rights to the donated property (except for the annual portion to be paid him over his life).

Romney pays tax on the annual amount he receives.

I see no loophole here. This is just a complicated way of donating to a charity and is specifically authorized by Congress. The purpose is to encourage people to set aside property and donate it to charity before they die. That's why the annual (taxable) payment is in the law. Without the allowance of the annual amount many would wait until their death before donating.

Because the donor pays income tax on the annual payments (s)he receives, the only tax deferral is on the charity's money, and charities don't normally pay income tax.

As a tax professional I'm tired of watching non-tax people stupidly mischaracterize tax subjects for partisan purposes.

Fern

 

[Jhhnn]

Because the donor pays income tax on the annual payments (s)he receives, the only tax deferral is on the charity's money, and charities don't normally pay income tax.

That's not quite the whole story. The amount pledged is non-taxable in the year it's pledged, meaning that the giver has larger working capital for the rest of their lives. Even at today's 15% LTCG rates, that's significant.

Meanwhile, the charity gains nothing until the giver's death, which can be a disadvantage wrt fundraising. Other potential givers see the charity as Rich, distribute their giving elsewhere.

http://en.wikipedia.org/wiki/Colorado_Women's_College

The Wiki piece on why funding fell isn't entirely accurate- much of it at the time was attributable to the false impression that the college was rich when it wasn't, at all.

None of that is really an issue for the Mormon Church, but rather a reminder of the law of unintended consequences.

 

[Fern]

That's not quite the whole story. The amount pledged is non-taxable in the year it's pledged, meaning that the giver has larger working capital for the rest of their lives. Even at today's 15% LTCG rates, that's significant.

It's not "working capital". It's designed exactly like an annuity. In fact, it is an annuity. While not necessary in Romney's case, it is done so that the donor is assured of an annual income to live on.

Nothing really special is achieved with the tax deferral provision. One can achieve the exact same thing normally. E.g., instead of putting stock into the CRUT just hold it and sell off 10% each year.

And LTCG rates are not assured in a CRUT. If the trustee of the CRUT has invested in any normally taxed type income (e.g., interest income or STCG) the beneficiary is taxed at those rates first. I.e., LTCG are allocated lastly, if at all.

Meanwhile, the charity gains nothing until the giver's death, which can be a disadvantage wrt fundraising. Other potential givers see the charity as Rich, distribute their giving elsewhere.

Anytime a charity can lock in a donation it is to their benefit to do so. People can promise to donate their assets to a charity, but many things can happen to change their minds, particularly the elderly who are often easily swayed. And wills can be challenged in court, a CRUT cannot. This is a 'tool' charites asked for to help them lock in a donation when they get a commitment from a potential donor.

A CRUT should not be mischaracterized as a loophole or some shady tax savings scheme.

Fern

 

[Jhhnn]

You're attempting to dance on the head of a rhetorical pin, Fern.

The fact remains that the giver reaps a tax advantage up front, uses that to increase their income down the road. It's not like Mitt needs that money to live off of at all- the vast majority of his income is re-invested, anyway, and the money from this is no different. The way this trust is structured & managed, it's just a way for the Romneys to spread their income out into a period of lower taxation, anyway. There may be nothing left for the charity when they die, the way it's going.