6 ms·

I am not a lawyer; I have no idea what the tax law says. But if the tax law says the gain event is selling the asset, then there is absolutely nothing morally

I am not a lawyer; I have no idea what the tax law says. But if the tax law says the gain event is selling the asset, then there is absolutely nothing morally wrong with exploiting this tax loophole. It's a travesty that it exists in the first place (as it was when Apple exploits Irish law), but the laws are written by the government that no individual can control. If the laws create a loophole, it's legal (obviously) and ethical to step through it.

jacques_chester 9y ago
We're talking about deliberately hiding wealth to avoid taxation. This is hardly loophole territory. I'm Australian. I've lived in the US long enough now that I am treated as a US tax resident -- worldwide income, foreign assets, the whole shebang. I have to report and pay capital gains tax on my compulsory retirement savings in Australia, which I cannot transfer here or withdraw, because of an oversight in the US-Australia tax treaty. Yes, it's absurd. But even in the matter of a few hundred bucks it is not worth messing with the IRS. There is too much to lose. You have to pick your battles. Trying to sneak past capital gains tax illegally is bitpenny wise and pound foolish. If you don't like the tax laws, do what everyone else has to do and get elbow-deep into the messy, uncomfortable and morally challenging world of representative democracy.
- aceon48 9y ago
  Actually as part of tax reform, US is moving to territorial system instead of world. It's probably the single biggest improvement and fix to come out of that bill.
  - jacques_chester 9y ago
    That is an improvement, I missed it in the hubbub about tax rates. But I expect it means I still have to report for the last tax year. Either way, I'll report and pay whatever my agent says is correct.
- phil21 9y ago
  Eh, if you're a US citizen in this situation I'd simply move to Puerto Rico and pay 4% all-in without any worries at all since it's 100% legal. Best of both worlds if that 20% bugs you so much. I still find it a little disconcerting I could renounce my citizenship and still owe taxes on things I sell years later. I get why (and in this case I feel it's largely moral), but that's quickly getting into big brother new world order level stuff. I feel it's enough "punishment" to lose the benefits of being a US citizen and holding a US passport. If the world ever goes to shit, those folks will have no place to turn for even basic human needs and protection. They will quickly find out what most of the world feels about carpetbaggers.
  - jacques_chester 9y ago
    > I still find it a little disconcerting I could renounce my citizenship and still owe taxes on things I sell years later. You owed tax at the time, is the point here. > I get why (and in this case I feel it's largely moral), but that's quickly getting into big brother new world order level stuff. FATCA in particular has probably done more harm than good. But if you want to live in the US, if you want to spend significant time in NYC or SF or Dyersville, Iowa, then federal, state and city taxes are the price of admission. If you don't, then sure: consult a lawyer about your options. He or she will probably counsel to not commit tax evasion.
gehwartzen 9y ago
Something being legal or allowable because of a legal loophole doesn't make it ethical.
- thrill 9y ago
  Something being illegal doesn't make it unethical.

jacques_chester 9y ago

We're talking about deliberately hiding wealth to avoid taxation. This is hardly loophole territory. I'm Australian. I've lived in the US long enough now that I am treated as a US tax resident -- worldwide income, foreign assets, the whole shebang. I have to report and pay capital gains tax on my compulsory retirement savings in Australia, which I cannot transfer here or withdraw, because of an oversight in the US-Australia tax treaty. Yes, it's absurd. But even in the matter of a few hundred bucks it is not worth messing with the IRS. There is too much to lose. You have to pick your battles. Trying to sneak past capital gains tax illegally is bitpenny wise and pound foolish. If you don't like the tax laws, do what everyone else has to do and get elbow-deep into the messy, uncomfortable and morally challenging world of representative democracy.

aceon48 9y ago
Actually as part of tax reform, US is moving to territorial system instead of world. It's probably the single biggest improvement and fix to come out of that bill.
- jacques_chester 9y ago
  That is an improvement, I missed it in the hubbub about tax rates. But I expect it means I still have to report for the last tax year. Either way, I'll report and pay whatever my agent says is correct.
phil21 9y ago
Eh, if you're a US citizen in this situation I'd simply move to Puerto Rico and pay 4% all-in without any worries at all since it's 100% legal. Best of both worlds if that 20% bugs you so much. I still find it a little disconcerting I could renounce my citizenship and still owe taxes on things I sell years later. I get why (and in this case I feel it's largely moral), but that's quickly getting into big brother new world order level stuff. I feel it's enough "punishment" to lose the benefits of being a US citizen and holding a US passport. If the world ever goes to shit, those folks will have no place to turn for even basic human needs and protection. They will quickly find out what most of the world feels about carpetbaggers.
- jacques_chester 9y ago
  > I still find it a little disconcerting I could renounce my citizenship and still owe taxes on things I sell years later. You owed tax at the time, is the point here. > I get why (and in this case I feel it's largely moral), but that's quickly getting into big brother new world order level stuff. FATCA in particular has probably done more harm than good. But if you want to live in the US, if you want to spend significant time in NYC or SF or Dyersville, Iowa, then federal, state and city taxes are the price of admission. If you don't, then sure: consult a lawyer about your options. He or she will probably counsel to not commit tax evasion.

gehwartzen 9y ago

Something being legal or allowable because of a legal loophole doesn't make it ethical.

thrill 9y ago
Something being illegal doesn't make it unethical.