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There is one particular claim in the video that seems strange to me: That buying a painting for 4 million, and donating it at 10 million will net me a profit; h
by miracle2k 5y ago
There is one particular claim in the video that seems strange to me: That buying a painting for 4 million, and donating it at 10 million will net me a profit; how does that work? I 6 million dollar or 10 million dollar tax write-off does not mean you earn this amount; the actual amount you can consider a profit will depend on your tax rate; in the US, it seems to top out t 37%?
What am I missing?
- plorkyeran 5y agoFederal income taxes top out at 37% but state taxes add on to that. Most states have a top bracket over 3% to get it over the 40% threshold to break even. California has a top bracket of 13.3% for a total of 50.3%, so that example would be a net profit of a million dollars.
- tlarkworthy 5y agoyou have a charitable donation of 10M so you can deduct 10M in tax, at a cost of 4M. Tax rate is not relevant, you are subtracting 10M of your tax liabilities
- miracle2k 5y agoIn which country is this? For example, https://en.wikipedia.org/wiki/Charitable_contribution_deductions_in_the_United_States https://en.wikipedia.org/wiki/Charitable_contribution_deduct... says "The taxable income of the donor is reduced". To be specific, this would mean that instead of paying the tax rate on 100 million, you now pay it on 90 million.
- tlarkworthy 5y agoyeah that's not correct sorry