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According to a Tuesday column by Lee Sheppard in the tax industry publication Tax Notes, Trump may have benefited greatly in the 1990s from a tax loophole related to forgiven debts — a loophole that would have allowed him to deduct business losses on his personal income tax return, even if those losses were actually borne by banks that loaned Trump money and never got it back.

...

In general, if someone cancels a debt you owe them, you're supposed to count the amount forgiven as income. Let's say you buy a building worth $1 million, using $200,000 in equity and an $800,000 mortgage. Then the building is destroyed, and you have no insurance. Now your investment is worthless, and the bank gives up all attempts to collect on the mortgage.Your loss, for tax purposes, should generally be just $200,000, not $1 million.One of the big mysteries about Trump's 1995 tax returns is how he managed to run up such a large tax loss ($916 million) when so many of the losses related to his business implosion of the early 1990s ended up being borne not by himself, but by banks and other creditors that forgave Trump's debts or otherwise didn't get paid back.

...

 People often use "loophole" to refer to tax deductions they don't like, but this one was a loophole in the true sense of the word: a tax break created by legislative accident.This loophole was the subject of a 2001 Supreme Court case, Gitlitz v. Commissioner, in which the IRS argued the relevant tax law could not have possibly meant what it appeared to say, which was that business owners could in some cases deduct losses they had not actually borne.After the IRS lost that case, the loophole was closed by the Job Creation and Worker Assistance Act of 2002, a bill that then Sen. Hillary Clinton voted for and President George W. Bush signed. But that law only stopped taxpayers from using the loophole going forward; they were still allowed to benefit from tax losses they had booked through it in prior years, such as 1995.  

http://www.businessinsider.com/why-did-trump-pay-so-little-tax-2... 
http://www.taxnotes.com/tax-notes-today/cancellation-debt-income... 

well played sir, well played. taxnotes article behind paywall, but business insider has dense tax details for those interested

https://supreme.justia.com/cases/federal/us/531/206/case.html

thats the supreme court decision upholding the loophole, more dense tax details

here is the NY times reporting on how Trump lobbied congress for the rules
[quore]=16px“The debt forgiveness rule was most important to highly leveraged, big players like Trump,” said Edward D. Kleinbard, a law professor at the University of Southern California. “The 1993 act was designed to loosen the screws on the real estate industry.”

Mr. Trump — like his fellow real estate developers — did not get all he sought. But in 1993, Congress made two significant changes. One allowed real estate investors with highly leveraged properties to accept forgiveness of their bank loans without paying taxes on the money, in exchange for giving up other tax benefits. Another allowed them to apply some real estate losses against other kinds of income.[/quote]http://mobile.nytimes.com/2016/10/07/us/politics/donald-trump-ta...
 

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how about that , my rental lease is 12 pages and the only parts i ever use are the tenants names, rent amount, duration ... (more)

rufflesinc (Nov. 02, 2016 @ 2:07p) |

The people who wrote the law are bought and paid for by the people who benefit from the law. This is what lobbyists do. ... (more)

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I'm not sure Trump has paid taxes in the last couple of decades, but I'm pretty sure he will not be paying any for the n... (more)

samko (Nov. 09, 2016 @ 7:09p) |

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Thank you for clearing this up.

I was having this exact discussion with a CPA on Sunday. I said the only way he could have written off $900 Million is if it were his personal money and not loans from the bank because if the bank forgave those loans then it would be recaptured as income. We just gave up guessing because we don't know what his later returns (1996-2016) look like. Now I know that there used to be a crazy stupid loophole.

Speaking of advantages rich people get, I'm reading "Perfectly Legal" which describes how a company jet ends up costing less than a Coach ticket because of the way the tax code is written. There is other stuff in there about charitable remainder trusts, but I haven't gotten that far into it. Basically, the tax code is written by the wealthy, for the wealthy. We upper-middle incomers pick up the tab.

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Just curious since I'm not up on the details of tax law, but if I take the 1m loss in 2016, and the bank does not forgive the 800k, do I take the 1m loss in 2016?

If they forgive in 2017, do I add it to income and wipe out 800k of the loss I realized in 2016

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samko said:   Speaking of advantages rich people get, I'm reading "Perfectly Legal" which describes how a company jet ends up costing less than a Coach ticket because of the way the tax code is written. There is other stuff in there about charitable remainder trusts, but I haven't gotten that far into it. Basically, the tax code is written by the wealthy, for the wealthy. We upper-middle incomers pick up the tab.
  You just know this now?

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cr3s said:   samko said:   Speaking of advantages rich people get, I'm reading "Perfectly Legal" which describes how a company jet ends up costing less than a Coach ticket because of the way the tax code is written. There is other stuff in there about charitable remainder trusts, but I haven't gotten that far into it. Basically, the tax code is written by the wealthy, for the wealthy. We upper-middle incomers pick up the tab.
  You just know this now?

As Anatoly France would say, the rich and poor alike are allowed to write off real Estate losses

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Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.

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cr3s said:   
samko said:   Speaking of advantages rich people get, I'm reading "Perfectly Legal" which describes how a company jet ends up costing less than a Coach ticket because of the way the tax code is written. There is other stuff in there about charitable remainder trusts, but I haven't gotten that far into it. Basically, the tax code is written by the wealthy, for the wealthy. We upper-middle incomers pick up the tab.
  You just know this now?

I learned how warped the tax code is when I started my business, giving me advantages that the average w-2 employee does not get. Now, I am the owner of a corporation, but not one large enough that would warrant buying a corporate jet. Nor am I any where near rich enough to need to learn about charitable remainder trusts. I'm only 1/4 of the way through the book. If you understand these loopholes, you should have written the book I'm reading. Or maybe you're the author, David Cay Johnston?

Though I am the beneficiary of some provisions of the tax code, I would sooner pay more taxes to have a more equitable system, especially if it meant not having to see additional posts on FWF regarding medical bills. 

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xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  
  I don't think that's the same thing since not only is trump not paying for cancelation of debt, he is also deducting it.
  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.
So how many FWFers did this?

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xerty said:   If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.
  I don't know.  I don't think it's required.  Couldn't he easily have manipulated his "income" to below the amounts he could use the NOL against by 1031 exchanges (to avoid realizing gains that should have been realized by any normal person) and depreciation used against regular income?

IMO, the only reasonable reason he hasn't released tax returns is because he's paid ~$0 in taxes.  And he's railed against closing "loopholes" but specifically has not proposed doing away with the 1031's or depreciation vs regular income, the most favorable ways to game the system that apply to him directly.  Eliminating the estate tax as he proposes would make 1031's and depreciation an actual loophole rather than a just really favorable carve-out in the tax code, because then that "income"/gain through real estate depreciation and 1031 exchanges would conceivably never be taxed, right?

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xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.

  See like-kind exchange. Probably didn't pay anywhere near what you're talking about.

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rufflesinc said:   
xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  
  I don't think that's the same thing since not only is trump not paying for cancelation of debt, he is also deducting it.

  
https://www.irs.gov/uac/newsroom/special-exclusion-for-cancelled...

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Bend3r said:   
rufflesinc said:   
xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  
  I don't think that's the same thing since not only is trump not paying for cancelation of debt, he is also deducting it.

  
https://www.irs.gov/uac/newsroom/special-exclusion-for-cancelled-home-mortgage-debt

  That doesn't allow the home owner to deduct the loss to offset other (W2) income

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rufflesinc said:   
Bend3r said:   
rufflesinc said:   
xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  
  I don't think that's the same thing since not only is trump not paying for cancelation of debt, he is also deducting it.

  
https://www.irs.gov/uac/newsroom/special-exclusion-for-cancelled-home-mortgage-debt

  That doesn't allow the home owner to deduct the loss

  It doesn't mention reducing the cost basis anywhere that I see.
 

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xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.
 

  Umm no. If it weren't for the fact that the IRS considered me insolvent when I lost my houses I would've been paying taxes on canceled debt (1099-c)

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xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.

  Firstly, Forbes does not know what Trump is worth. The same CPA I was speaking with a few days ago had once worked for a firm that managed the money of someone on the Forbes 400. She knew the exact net worth of this individual (they calculated it once a year) and let me know that Forbes was "way off." I asked if it was too high or too low, but  she was sworn to secrecy and would not tell me. Now when I ask, she said she would tell me, but now she has forgotten (it was more than a decade ago). Forbes doesn't know. Forbes is in the business of selling advertisements and getting you to view them.

There are some who claim that he's not even a billionaire. He sued someone claiming that he's not a billionaire, but he did not win. Until the tax returns are released, no one will know. Period.

Also, there are special tax laws regarding the depreciation of real estate. So long as you are a "real estate professional" working 15 hours per week in RE, you get special tax rules. I don't claim to fully understand all of this, but it's in the book, "Perfectly Legal". 

Also, I know of several wealthy doctors who invest in RE for the tax advantages it confers. The system is rigged by those who can pay the lobbyists. Until we get money out of politics, nothing will change.

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samko said:   Also, there are special tax laws regarding the depreciation of real estate. So long as you are a "real estate professional" working 15 hours per week in RE, you get special tax rules. I don't claim to fully understand all of this, but 
  They're pretty simple.  You've got 90% of it there.  If you're a real estate professional, you get to deduct depreciation beyond the income for that property from regular income with no cap on amount.  The depreciation is recaptured (you pay extra taxes) when the property is sold.  The second step to really game the system is to use a 1031 exchange when you sell the property --  This means basically we pretend the property was never sold it just turned into a new property and is figured into the new property's tax basis and the depreciation theoretically would still be recovered when the new property sells for a profit.  The only actual loophole (not working within the rules as intended) is if you 1031-exchange forever until you die and then find a way to avoid estate taxes.  Then taxes are never collected on that income, which would violate the overt intention of only tax deferral with depreciation and 1031 rules.

Non real-estate professionals can also deduct depreciation (or other losses, based on total of all income/expenses for the property) in much the same manner, except if there's overage you can't apply it to regular income or income from other properties except within limited rules.  The limited exception is you can deduct up to $25k/yr vs regular income, if your income is below a threshold. 

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Unfortunately, as a W2 employee you have to accept your role in society or do something to escape it.

No one is going to save you.

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It is noteworthy that these tax laws have been in effect for years and have been used by both prominent Democrat and Republican politicians.  Yet all of a sudden,  some people on Fatwallet are interested enough to question the legitimacy of the tax code.

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samko said:   
xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.

  Firstly, Forbes does not know what Trump is worth. The same CPA I was speaking with a few days ago had once worked for a firm that managed the money of someone on the Forbes 400. She knew the exact net worth of this individual (they calculated it once a year) and let me know that Forbes was "way off." I asked if it was too high or too low, but  she was sworn to secrecy and would not tell me. Now when I ask, she said she would tell me, but now she has forgotten (it was more than a decade ago). Forbes doesn't know. Forbes is in the business of selling advertisements and getting you to view them.

There are some who claim that he's not even a billionaire. He sued someone claiming that he's not a billionaire, but he did not win. Until the tax returns are released, no one will know. Period.

Also, there are special tax laws regarding the depreciation of real estate. So long as you are a "real estate professional" working 15 hours per week in RE, you get special tax rules. I don't claim to fully understand all of this, but it's in the book, "Perfectly Legal". 

Also, I know of several wealthy doctors who invest in RE for the tax advantages it confers. The system is rigged by those who can pay the lobbyists. Until we get money out of politics, nothing will change.

  Actually they closed that loophole in the 80s/90s because doctors were doing exactly that - applying paper real estate operating losses (building depreciation on a cash flow positive investment) against their practice income. They also closed the public company executive incentive stock option loophole with AMT (which many of us in the tech sector have recently learned).

I am friends with many wealthy families all of whom are professionals with massive real estate holdings passed down from their grandfathers. They pay a very low effective tax rate because of the depreciation and 1031 exchange laws. They are also heavy donors to lefty causes, and don't care about very high income tax rates because they don't have very large marginal incomes. Their wealth will continue to go up because their portfolio value goes up which does not show up on a tax return. They are the biggest hypocrites in the world IMO. 

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bighitter said:   It is noteworthy that these tax laws have been in effect for years and have been used by both prominent Democrat and Republican politicians.  Yet all of a sudden,  some people on Fatwallet are interested enough to question the legitimacy of the tax code.
  I don't see anyone questioning the "legitimacy" of the tax code, though I am questioning how fair it is, and this is not something new for me, here in cyberspace or in the real world. It's just when we get to see tax returns from the uber wealthy like Romney do we see how unfair it can actually be, how certain laws only apply to hedge funds.

I want to see Trumps returns for a variety of reasons, not the least of which is to get Americans to wake up and demand a fairer tax system.

BTW, "Perfectly Legal" chastises both parties for creating these loopholes.

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user1337 said:   
 

I am friends with many wealthy families all of whom are professionals with massive real estate holdings passed down from their grandfathers. They pay a very low effective tax rate because of the depreciation and 1031 exchange laws. They are also heavy donors to lefty causes, and don't care about very high income tax rates because they don't have very large marginal incomes. Their wealth will continue to go up because their portfolio value goes up which does not show up on a tax return. They are the biggest hypocrites in the world IMO. 

  I don't see how this is hypocritical. If they help elect someone on the left, they may lose their low tax rates. All Congress has to do is eliminate the step-up basis and lower the estate tax threshold and their next generation is screwed. Another thing a "lefty" might do is create a wealth tax and they're screwed again. Congress may change the way RE is depreciated. It's not hypocritical. If anything, it's a bit altruistic. 

I don't claim my beliefs to be altruistic. I simply believe that having a larger middle class would create an overall stronger economy.

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Here's some more speculation to throw on the fire -- which is what the articles that ruffles share are:

http://www.forbes.com/sites/ryanellis/2016/10/03/trump-tax-retur...

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I think its time for a national property tax on homes and commercial property.

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samko said:   
bighitter said:   It is noteworthy that these tax laws have been in effect for years and have been used by both prominent Democrat and Republican politicians.  Yet all of a sudden,  some people on Fatwallet are interested enough to question the legitimacy of the tax code.
  I don't see anyone questioning the "legitimacy" of the tax code, though I am questioning how fair it is, and this is not something new for me

I want to see Trumps returns for a variety of reasons, not the least of which is to get Americans to wake up and demand a fairer tax system.

 

  Then you must have been very eager indeed to see Penny Pritzker's tax return.  Ms Pritzker, national finance chair of President Obama's presidential campaign in 2008, was President Obama's nominee for Secretary of Commerce in 2013,  .  Her family has avoided US income taxes for years by using offshore trusts. Her net worth a couple of years ago was more than $1.5 billion per the Bloomberg Billionaires Index.

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samko said:   
bighitter said:   It is noteworthy that these tax laws have been in effect for years and have been used by both prominent Democrat and Republican politicians.  Yet all of a sudden,  some people on Fatwallet are interested enough to question the legitimacy of the tax code.
  I don't see anyone questioning the "legitimacy" of the tax code, though I am questioning how fair it is, and this is not something new for me, here in cyberspace or in the real world. It's just when we get to see tax returns from the uber wealthy like Romney do we see how unfair it can actually be, how certain laws only apply to hedge funds.

I want to see Trumps returns for a variety of reasons, not the least of which is to get Americans to wake up and demand a fairer tax system.

BTW, "Perfectly Legal" chastises both parties for creating these loopholes.

  
It's not a political thing unless a candidate you do not like can be smeared with it.  The fine print said the NY Slimes and Clinton Foundation used similar 'loopholes' (a loophole being a deduction or adjustment someone who is not you is legally exploiting).  Laws are written by lawyers.  Enough said.  Making tax laws fairer means making me pay less while others pay more.  No politician does his own taxes.  Do you think a politician would list used underwear and shower curtains as tax deductions?  Rich people hire smart people to minimize their tax liability.  Services are retained based on that bottom line.  The fault lies entirely with the tax code.  Want a progressive tax system?  Charge a flat tax, provide a YUGE exemption, and tie that exemption to inflation.  No deductions, no lawyers, no accountants.  

One year Massachusetts created an online tax form.  It was free and awesome.  Lobbyists for tax preparers killed it a year later. 

Even when the IRS provides help, their help comes with a disclaimer that it may be incorrect and you may owe additional taxes.

This whole thread is political.  Should be removed.  Would be removed.  Except the mods are vulnerable to political instincts just like the rest of us.

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lonestarguy said:   I think its time for a national property tax on homes and commercial property.
  
Taxes raise revenue and affect behavior.  We live in an era where people take private jets to eco-parties where they complain about people using plastic bags.  If the government wanted to create a greener country, it would shift taxes from income to consumption -- i.e, a sales tax on stuff not services.  We'd all grow gardens and have our clunkers fixed (instead of landfilled via cash-for-clunkers).  

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samko said:   I don't see anyone questioning the "legitimacy" of the tax code, though I am questioning how fair it is, and this is not something new for me, here in cyberspace or in the real world. It's just when we get to see tax returns from the uber wealthy like Romney do we see how unfair it can actually be, how certain laws only apply to hedge funds.

I want to see Trumps returns for a variety of reasons, not the least of which is to get Americans to wake up and demand a fairer tax system.

BTW, "Perfectly Legal" chastises both parties for creating these loopholes.

I question the legitimacy of the tax code.
  

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wizwor said:   
lonestarguy said:   I think its time for a national property tax on homes and commercial property.
  
Taxes raise revenue and affect behavior.  We live in an era where people take private jets to eco-parties where they complain about people using plastic bags.  If the government wanted to create a greener country, it would shift taxes from income to consumption -- i.e, a sales tax on stuff not services.  We'd all grow gardens and have our clunkers fixed (instead of landfilled via cash-for-clunkers).  

  Its called the fairtax. A national retail sales tax. Its a good thing i think ... which is why i dont think it will ever pass.

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lonestarguy said:   I think its time for a national property tax on homes and commercial property.
What does that accomplish that local property taxes dont?

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blok said:   Unfortunately, as a W2 employee you have to accept your role in society or do something to escape it.

 

  Eh, I escape it by doing as little work for "the man" as I can without getting fired, and spending the extra time on my RE investments

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xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.

  
Trump has basically admitted he hasn't paid federal taxes of late...because he's smart.

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owenscott said:   wizwor said:   lonestarguy said:   I think its time for a national property tax on homes and commercial property.Taxes raise revenue and affect behavior.  We live in an era where people take private jets to eco-parties where they complain about people using plastic bags.  If the government wanted to create a greener country, it would shift taxes from income to consumption -- i.e, a sales tax on stuff not services.  We'd all grow gardens and have our clunkers fixed (instead of landfilled via cash-for-clunkers).  Its called the fairtax. A national retail sales tax. Its a good thing i think ... which is why i dont think it will ever pass.A tax on "stuff" won't change consumer behavior unless that tax is high enough to make fixing something significantly cheaper than not fixing it.
Any sales tax / VAT is not fair as it disproportionately affects the poor, especially in a country with high income inequality. A luxury tax would be better.

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kriskos4 said:   xerty said:   Same thing as the underwater mortgages in the most recent real estate crash - lose a bunch of money on your house, get the mortgage modified down (partially forgiven), don't have to pay for cancelation of debt taxable income.  If it didn't count as personal property like your home, you could then sell it for a capital loss and use that eventually to avoid paying taxes on future capital gains.

speaking of Trump and the breathless NYT article about how he "might" have not paid taxes for years, they aren't trying very hard with basic tax logic and are just sticking to partisan smears (like the local NY attorney general).  If Trump was nearly wiped out with the Taj Mahal deal that generated this $1B personal loss (from his personal guarantee on the business debt), and now Forbes things he's worth about $4B, you figure he's got to have earned something like $9B since then at a 50% tax rate (after the first $1B from this NOL) to get to $4B.  That would involve paying about $4B in taxes, less whatever you think he might have kept from before the blowup and any unrealized appreciation he's got in his real estate assets.  Either way, it seems reasonable to guess he's paid a billion or two.  A far cry from zero.

  
Trump has basically admitted he hasn't paid federal taxes of late...because he's smart.

correction: his CPAs and his taxlawyers are smart

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scripta said:   
owenscott said:   
wizwor said:   
lonestarguy said:   I think its time for a national property tax on homes and commercial property.
Taxes raise revenue and affect behavior.  We live in an era where people take private jets to eco-parties where they complain about people using plastic bags.  If the government wanted to create a greener country, it would shift taxes from income to consumption -- i.e, a sales tax on stuff not services.  We'd all grow gardens and have our clunkers fixed (instead of landfilled via cash-for-clunkers).  

Its called the fairtax. A national retail sales tax. Its a good thing i think ... which is why i dont think it will ever pass.

A tax on "stuff" won't change consumer behavior unless that tax is high enough to make fixing something significantly cheaper than not fixing it.
Any sales tax / VAT is not fair as it disproportionately affects the poor, especially in a country with high income inequality. A luxury tax would be better.

  I don't love VATs, but you usually solve some or all of this problem by automatically "rebating" or evn "pre-rebating" a certain amount of money equivalent to what you'd pay on a small salary.

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wizwor said:   
One year Massachusetts created an online tax form.  It was free and awesome.  Lobbyists for tax preparers killed it a year later. 

 

Most people can still file for free on the MA department of revenue site:
https://wfb.dor.state.ma.us/webfile/wsi/index.aspx

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owenscott said:   
wizwor said:   
lonestarguy said:   I think its time for a national property tax on homes and commercial property.
  
Taxes raise revenue and affect behavior.  We live in an era where people take private jets to eco-parties where they complain about people using plastic bags.  If the government wanted to create a greener country, it would shift taxes from income to consumption -- i.e, a sales tax on stuff not services.  We'd all grow gardens and have our clunkers fixed (instead of landfilled via cash-for-clunkers).  

  Its called the fairtax. A national retail sales tax. Its a good thing i think ... which is why i dont think it will ever pass.

  It would also be a massive tax cut for very high earners, and a huge tax increase for everybody else. 

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stanolshefski said:   
scripta said:   
owenscott said:   
wizwor said:   
lonestarguy said:   I think its time for a national property tax on homes and commercial property.
Taxes raise revenue and affect behavior.  We live in an era where people take private jets to eco-parties where they complain about people using plastic bags.  If the government wanted to create a greener country, it would shift taxes from income to consumption -- i.e, a sales tax on stuff not services.  We'd all grow gardens and have our clunkers fixed (instead of landfilled via cash-for-clunkers).  

Its called the fairtax. A national retail sales tax. Its a good thing i think ... which is why i dont think it will ever pass.

A tax on "stuff" won't change consumer behavior unless that tax is high enough to make fixing something significantly cheaper than not fixing it.
Any sales tax / VAT is not fair as it disproportionately affects the poor, especially in a country with high income inequality. A luxury tax would be better.

  I don't love VATs, but you usually solve some or all of this problem by automatically "rebating" or evn "pre-rebating" a certain amount of money equivalent to what you'd pay on a small salary.

  
That would just make the VAT shift the tax burden away from the top 1%, and toward the 2-50th percentiles.

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There's no good reason for 1031 exchanges, other than the power of the real estate lobby - if I own shares in a REIT, sell it, and buy shares in another REIT, I owe capital gains tax. Should be exactly the same if I own a building, sell it, and buy another building.

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cestmoi123 said:   - if I own shares in a REIT, sell it, and buy shares in another REIT, I owe capital gains tax. .
can someone explain why this is and why I don't hear any drums beating ? you're not getting anyour cash in your hand by selling a stock and using that to immediately buy another stock anymore than holding the same stock

or compare mutual funds where someone else is doing the buying and selling for you, yet no cap gains until you sell

Skipping 75 Messages...
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I'm not sure Trump has paid taxes in the last couple of decades, but I'm pretty sure he will not be paying any for the next four years. And I think the audits will end, but I'm rather certain that we still won't see his returns. This is the new precedent.

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