Bill and Hillary Clinton have long supported an estate tax to prevent the U.S. from being dominated by inherited wealth. That doesn’t mean they want to pay it.
To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.
The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.
Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.
“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”
The Clintons’ finances are receiving attention as Hillary Clinton tours the country promoting her book, “Hard Choices.” She said in an interview on ABC television that the couple was “dead broke” and in debt when they left the White House in early 2001. After being criticized for her comments, she told ABC’s “Good Morning America” that she understood the financial struggles of Americans.
http://www.bloomberg.com/news/artic...tons-use-trusts-to-limit-estate-tax-they-back
Wealthy Clintons Use Trusts to Limit Estate Tax They Back
Discussion in 'Political Debate & Discussion' started by Revmitchell, Oct 3, 2016.
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Revmitchell Well-Known MemberSite Supporter
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InTheLight Well-Known MemberSite Supporter
The estate tax exemption for 2016 is $5.45 million for single people and $10.9 million for couples. I would guess that the number of people that qualify for this exemption is more than the upper 1%.
The estate tax is immoral and ought to be eliminated. -
Revmitchell Well-Known MemberSite Supporter
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InTheLight Well-Known MemberSite Supporter
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Revmitchell Well-Known MemberSite Supporter
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InTheLight Well-Known MemberSite Supporter
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Revmitchell Well-Known MemberSite Supporter
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Crabtownboy Well-Known MemberSite Supporter
From: http://www.slate.com/articles/busin...trump_s_massive_potential_tax_deductions.html
All of that should qualify Trump as a bad businessman, despite his boasts to the contrary. But one thing Trump is unquestionably good at is manipulating the tax code. Or at least good enough to hire people who know how to do so. As the Times put it this weekend, those leaked tax filings “suggest Mr. Trump took full advantage of generous tax loopholes specifically available to commercial real estate developers to claim a $15.8 million loss in 1995 on his real estate holdings and partnerships.”
The other $900 million, meanwhile, would’ve been carried over from previous years. But since we only have the first page of Trump’s tax filings, we can only speculate what losses, real or paper, they comprise, and we don’t know whether the states of New York, New Jersey, and Connecticut—not to mention the federal government —accepted these filings or challenged them. But given the amount, a decent proportion of the loss, University of Southern California law and taxation professor Edward Kleinbard told me, “has to relate to real estate. Where else do you lose money like this?”
For the commercial real estate business, carrying over a loss actually isn’t unusual. “It’s normal for a real estate developer to operate at a loss because of interest and depreciation,” Kleinbard told me. Here’s one reason why: Prior to the 1986 Tax Reform Act, as Justin Miller writes in a must-read article in American Prospect, anyone could invest in a real estate partnership and then declare the losses on their taxes, reducing their burden. Eventually the Internal Revenue Service wised up, and the 1986 legislation all but put the tax dodge to an end. Not shockingly, the real estate industry pushed back and was ultimately successful—at least on its own behalf. In the 1990s, real estate “professionals”—defined as people who worked on their real estate business at least 750 hours a year—gained the right to write off their losses against their personal income. -
InTheLight Well-Known MemberSite Supporter
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Revmitchell Well-Known MemberSite Supporter