Billionaires Duck Buffett 17% Tax Target Avoiding Reporting Cash to IRS
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When billionaire Billy Joe "Red" McCombs, co-founder of Clear Channel Communications Inc., reported a $9.8 million loss on his tax return, he failed to include about $259 million from a lucrative stock transaction.
After an audit, the Internal Revenue Service ordered him to pay $44.7 million in back taxes. McCombs, who is worth an estimated $1.4 billion and is a former owner of the Minnesota Vikings, Denver Nuggets and San Antonio Spurs sports franchises, sued the IRS, settling the case in March for about half the disputed amount.
McCombs's fight with the IRS illustrates an overlooked facet in the debate over tax rates paid by the nation's wealthiest. Billionaires -- from McCombs to Philip Anschutz to Ronald S. Lauder -- who derive the bulk of their wealth from stock appreciation are using strategies that reap hundreds of millions of dollars from those valuable shares in ways the IRS often doesn’t classify as taxable income, securities filings and tax court records show.
"The 800-pound gorilla is unrealized appreciation," said Edward J. McCaffery, a professor of law, economics and political science at the University of Southern California in Los Angeles.
Read more: http://www.bloomberg.com/news/2011-11-21/billionaires-duck-buffett-17-tax-target...
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address...
"Man this Cat makes a lot of Bread!!!"
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Paratus
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Interesting. Since McCombs was assessed back taxes I wonder what stock appreciations are being considered non taxable income as the article says. Stock sales beyond basis are considered taxable either long term or short term. No one is taxed on "unrealized appreciation" because the gain is not "realized" until as sale takes place. That is when the cash is available to pay the applicable tax. It is the difference between realized and recognized.
I would like to see an example of one of the tax avoidance "strategies" the article speaks of rather than just a statement that someone is using them. - 6 months ago
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Paratus
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FoosMaster
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Tax Increases on the wealthy will not do any good if we don't fix the problems with loopholes and offshore tax havens but it is still a good start.
- 6 months ago
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FoosMaster
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RevKen
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If there were not so many tax cheats everyone's tax rates would be more fair. It is just like shop lifting, those that steel cost the rest of us.
- 6 months ago
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RevKen
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KB723
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Billionaires Duck Buffett 17% Tax Target Avoiding Reporting Cash to IRS
"Man this Cat makes a lot of Bread!!!"
- 6 months ago
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KB723
