I'm calling shens on the below.
Didn't read the whole thread, but I'll say at $200K income it's dang hard to get down to a fed income tax bill of $2,000.
So he inhereted a lot of money. Conceivably he could have made large charitable contributions, but those are, under the best circumstances, limited to 50% of your income (AGI). Any excess is carried over to future years.
Can't be because of capital losses, net capital losses are limited to $3,000 per year. Again, any excess is carried over.
Mortgage interest seems unlikely. First, he wouldn't seem to need a mortgage. Second, it's limited to no more than $1 million of mortgage. At most that's about $40k or so.
Might be that his investments are in foreign countries and he pays tax there. If so, he's paying income tax, just not much to the USA.
I'll also add, we don't really know what he means by "$200k of income". We do know he received an inheretence, it's possible that large losses flowed through to his return from the trust set up under the inheretence.
His situation is too vague and too unusual to be used to draw conclusions from IMO. (Again, I only read about 50 posts, so pardon me if more info was later developed)
Edit: Forgot to mention the Alternative Minimum Tax (most itemized deuctions not allowed, no exemptions etc). Hard to see how he legitimately got to a bill of $2K on $200K income.
Edit #2: After thinking more, I'm gonna have to assume he used TurboTax and got tax advice help from Tim Geitner.
Fern