But if he sells theproperties immediately after the kids don’t need them, he’s paying the taxes through recapture on the sale, right?
What I find bizarre about all this with companies and people opening letter box accounts in places like Panama, the British Virgin Islands and all other jursidictions is that the United States is the number one country for wanting to close down these practices see Switzerland and then at home Delaware is one of the places that has almost the most of such accounts. Sounds hypocritical to me
^ What? I couldn’t understand that long run-on sentence, if you can call it that.
^^ Yes, he’d have to pay depreciation recapture. And residential rental property is on a 27.5 year depreciation schedule, so it is unlikely that it was fully depreciated.
The strategy that Higgs’ finance professor executed is not necessarliy a slam dunk. I can see it easily losing money. Rents collected would have to be significantly higher than the cost of financing, maintenance, etc. Remember, he’s not collecting rent on his kid’s unit.
^Yes, but he would still get to deduct all of his kid’s living expenses, such as property tax, cable/internet, utilities, etc.
Plus, if the kid were really paying rent to another apartment complex, then those expenses wouldn’t be deductible. But since he’s not paying rent, then the foregone rent is another “invisible income” item that the government isn’t collecting tax revenue on.
HIgg’s example is a little less shady, because you can at least make the case that this is a business enterprise and the kid is managing it.
I’m doing this *******'s tax return again. Yay.
Pizza
^hahah
each dollar placed into the irs generates $6 of revenue.
they need to up the irs budget until mr = mc
http://time.com/money/3819382/john-oliver-and-irs-tax-gap/
also the odds of an audit by income
http://www.foxbusiness.com/markets/2017/02/06/here-are-odds-irs-audit.html
what would the ethics section suggest for greenie?