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Where is the Alternative Minimum Tax? You know, that tax law that pops up frequently for high earners in the tech field when they have more deductions than seem

Where is the Alternative Minimum Tax? You know, that tax law that pops up frequently for high earners in the tech field when they have more deductions than seems fair? Why isn't Trump subject to the same minimum taxation that I would be?

jeffbee 6y ago
The AMT is for ... uh ... "wagecucks" is the 4chan terminology. If you are actually rich you never have income as such.
- Gibbon1 6y ago
  I think of Mitt Romney who last reportedly has $87 million in his IRA. You can't contribute more than $30k/yr to an IRA. How do you get an IRA with close to 8 figures in it? Same trick of filling your bosses locked office with balloons. Slip the balloons (worthless stocks) under the door and then blow them up from the outside.
  - jjk166 6y ago
    > Tax lawyers and accountants suggest an answer: Romney may have made use of an Internal Revenue Service loophole that allows investors to undervalue interests in investment partnerships when first putting them into an IRA. These assets can produce returns far in excess of those that could be generated from other investments made at the capped level. > An investor could even set an initial value for a partnership interest at zero dollars, because under tax regulations an interest in a partnership represents future income, not current value, said Chris Sanchirico, co-director of the Center for Tax Law and Policy at the University of Pennsylvania Law School. > Whether Romney used this technique, which is legal, when he put partnership interests into his IRA is a question that won’t likely be answered when he discloses his 2010 tax returns on Tuesday. [0] https://www.reuters.com/article/us-usa-campaign-romney-ira/how-did-romneys-ira-grow-so-big-idUSTRE80N04E20120124 https://www.reuters.com/article/us-usa-campaign-romney-ira/h...
throwawaysea 6y ago
The AMT isn’t a hard minimum on federal taxes. It is a different set of rules for what incomes and deductions count towards the “income” figure AMT is calculated against. There are ways to pay less than AMT, legally, and this is a purposeful choice in its design. There are still certain adjustments allowed. See https://www.thebalance.com/alternative-minimum-tax-3192753 https://www.thebalance.com/alternative-minimum-tax-3192753
- throwawaysea 6y ago
  Apparently my factual comment above deserved downvotes. Here is evidence of how Trump was able to legally reduce his taxes below AMT (carry forward): https://www.nytimes.com/2020/09/29/us/trump-750-taxes.html https://www.nytimes.com/2020/09/29/us/trump-750-taxes.html
mmcconnell1618 6y ago
I should have kept reading: Mr. Trump paid alternative minimum tax in seven years between 2000 and 2017 — a total of $24.3 million, excluding refunds he received after filing. For 2015, he paid $641,931, his first payment of any federal income tax since 2010.
- makomk 6y ago
  So basically, the big headline "$750 in income tax" claim that's been repeated everywhere else and gone viral on social media is technically true but also massively misleading to the tune of millions of dollars? Guess that figures for media coverage of anything remotely involving Trump in 2020. Also, this Reuters piece is terrible at the time of writing my reply: https://uk.reuters.com/article/uk-usa-trump-taxes-idUKKBN26J2DB https://uk.reuters.com/article/uk-usa-trump-taxes-idUKKBN26J... It makes it sound like the New York Times piece contradicts his claim to have paid many millions of dollars in taxes, when it actually seems to confirm it - but that detail is buried, obfuscated, and omitted from most of the coverage elsewhere of the NYT's reporting.
  - mmcconnell1618 6y ago
    It looks like Trump has paid millions in taxes at some times but also has more than $1 billion in losses that have offset almost all of his taxes for decades. My takeaway is that he has been able to rake in huge amounts of money (like $200 million+ from the Apprentice) but he then pours it into businesses that appear to lose money on paper. He lives his life on the back on these businesses so his lifestyle is almost 100% deductible. He's found away to keep spending an extra 20% to 30% by avoiding income tax. However, he's also spending like a drunken sailor and currently has more than $400 million in loans due in just a few years with personal guarantees.

jeffbee 6y ago

The AMT is for ... uh ... "wagecucks" is the 4chan terminology. If you are actually rich you never have income as such.

Gibbon1 6y ago
I think of Mitt Romney who last reportedly has $87 million in his IRA. You can't contribute more than $30k/yr to an IRA. How do you get an IRA with close to 8 figures in it? Same trick of filling your bosses locked office with balloons. Slip the balloons (worthless stocks) under the door and then blow them up from the outside.
- jjk166 6y ago
  > Tax lawyers and accountants suggest an answer: Romney may have made use of an Internal Revenue Service loophole that allows investors to undervalue interests in investment partnerships when first putting them into an IRA. These assets can produce returns far in excess of those that could be generated from other investments made at the capped level. > An investor could even set an initial value for a partnership interest at zero dollars, because under tax regulations an interest in a partnership represents future income, not current value, said Chris Sanchirico, co-director of the Center for Tax Law and Policy at the University of Pennsylvania Law School. > Whether Romney used this technique, which is legal, when he put partnership interests into his IRA is a question that won’t likely be answered when he discloses his 2010 tax returns on Tuesday. [0] https://www.reuters.com/article/us-usa-campaign-romney-ira/how-did-romneys-ira-grow-so-big-idUSTRE80N04E20120124 https://www.reuters.com/article/us-usa-campaign-romney-ira/h...

throwawaysea 6y ago

The AMT isn’t a hard minimum on federal taxes. It is a different set of rules for what incomes and deductions count towards the “income” figure AMT is calculated against. There are ways to pay less than AMT, legally, and this is a purposeful choice in its design. There are still certain adjustments allowed. See https://www.thebalance.com/alternative-minimum-tax-3192753 https://www.thebalance.com/alternative-minimum-tax-3192753

throwawaysea 6y ago
Apparently my factual comment above deserved downvotes. Here is evidence of how Trump was able to legally reduce his taxes below AMT (carry forward): https://www.nytimes.com/2020/09/29/us/trump-750-taxes.html https://www.nytimes.com/2020/09/29/us/trump-750-taxes.html

mmcconnell1618 6y ago

I should have kept reading: Mr. Trump paid alternative minimum tax in seven years between 2000 and 2017 — a total of $24.3 million, excluding refunds he received after filing. For 2015, he paid $641,931, his first payment of any federal income tax since 2010.

makomk 6y ago
So basically, the big headline "$750 in income tax" claim that's been repeated everywhere else and gone viral on social media is technically true but also massively misleading to the tune of millions of dollars? Guess that figures for media coverage of anything remotely involving Trump in 2020. Also, this Reuters piece is terrible at the time of writing my reply: https://uk.reuters.com/article/uk-usa-trump-taxes-idUKKBN26J2DB https://uk.reuters.com/article/uk-usa-trump-taxes-idUKKBN26J... It makes it sound like the New York Times piece contradicts his claim to have paid many millions of dollars in taxes, when it actually seems to confirm it - but that detail is buried, obfuscated, and omitted from most of the coverage elsewhere of the NYT's reporting.
- mmcconnell1618 6y ago
  It looks like Trump has paid millions in taxes at some times but also has more than $1 billion in losses that have offset almost all of his taxes for decades. My takeaway is that he has been able to rake in huge amounts of money (like $200 million+ from the Apprentice) but he then pours it into businesses that appear to lose money on paper. He lives his life on the back on these businesses so his lifestyle is almost 100% deductible. He's found away to keep spending an extra 20% to 30% by avoiding income tax. However, he's also spending like a drunken sailor and currently has more than $400 million in loans due in just a few years with personal guarantees.