3 ms·
Interesting analysis. But isn’t an overriding quality of the tax code a generalized “wash” rule - that transactions without an economic impact can be disregarde
by zaroth 8y ago
Interesting analysis. But isn’t an overriding quality of the tax code a generalized “wash” rule - that transactions without an economic impact can be disregarded?
Therefore “laundering” the debt forgiveness through a 501(c)(3) shouldn’t have any impact of Oliver’s company actually had a hand in picking the debt which was to be forgiven?
Oliver can donate to the 501(c)(3) and they can proceed with their independent mission, but if Oliver had economic autonomy in the debt selection it seems like that could theoretically skuttle the preferred tax treatment.
Of course IANAL and just a layman with an interest in tax law. And IMO literally everything is taxable income if the IRS chooses to look at it hard enough in one way or another.
- CPLX 8y agoIt’s more accurate to say that intent matters. So transactions that exist only to change the source of money but have no economic effect on the intent of the transaction can be disregarded. But in this case the intent of the act was very clearly to create a charitable act. So it’s the same principle you’re suggesting but with the precise opposite conclusion. Ultimately a charity was the source of the economic activity, and “laundering” it through the debt buyer did not make it less charitable.