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Real Estate and Oil Tycoons Avoided Paying Taxes for Years

30 points by rafaelc 5y ago

vmception 5y ago
I love the new high score streak they posted! This article is a bit more fairly balanced about the legality and purpose but it really seems like they should hire some CPAs and tax lawyers themselves because this one misses the mark in a variety of ways: 1) the tax deductions taken are not specific to real estate and oil sectors, even if the particular tax payers analyzed used a deduction specific to those sectors to accomplish the same thing 2) the depreciation over 10 years is a red herring, they could have deducted the entire value the first year and carried forward the loss against their subsequent years income for practically forever, even longer than the depreciation option 3) there are plenty of other ways to do it, but why give these guys ideas? its 1,000% more beneficial to let everyone assume you have no idea what you are talking about, and then let ProPublica leak the techniques two decades later, because you're already on to some other technique by then. Given the clear sentiment that ProPublica's clickbait articles cater to, revealing your hand could result in the tax law changing by a very reactionary Congress who also doesn't have the CPAs and tax lawyers that the taxpayers do, so there is no point in talking about what compliant things you've found.
- quantified 5y ago
  > They can deduct the depreciation of a property from their taxable income even if the money they used to buy the place was borrowed from a bank and the property is the only asset on the line for the loan. If they buy a building worth $50 million, putting $10 million down and borrowing the rest, they can still deduct $50 million from their personal taxes over time, even though they’ve put much less of their own money into the project. Thank you Congress for giving us this gift!
  - vmception 5y ago
    And they can also deduct the interest on the loan since it is for business purposes. The also mixed-unit aspect of the real estate also mitigates any recent real estate tax deduction limits.
anm89 5y ago
I pay a Porsche 911 in taxes every year and I drive a 10 year old Mazda 3. This shit is infuriating. I get why it happens and how hard it is to prevent but it is infuriating.
- freetanga 5y ago
  It’s simple. The difference goes to the guys in the article so they can ride in a helicopter, and they in turn give 5% of that to your Representative so he can ride in a Limo.

30 points by rafaelc 5y ago

I love the new high score streak they posted! This article is a bit more fairly balanced about the legality and purpose but it really seems like they should hire some CPAs and tax lawyers themselves because this one misses the mark in a variety of ways: 1) the tax deductions taken are not specific to real estate and oil sectors, even if the particular tax payers analyzed used a deduction specific to those sectors to accomplish the same thing 2) the depreciation over 10 years is a red herring, they could have deducted the entire value the first year and carried forward the loss against their subsequent years income for practically forever, even longer than the depreciation option 3) there are plenty of other ways to do it, but why give these guys ideas? its 1,000% more beneficial to let everyone assume you have no idea what you are talking about, and then let ProPublica leak the techniques two decades later, because you're already on to some other technique by then. Given the clear sentiment that ProPublica's clickbait articles cater to, revealing your hand could result in the tax law changing by a very reactionary Congress who also doesn't have the CPAs and tax lawyers that the taxpayers do, so there is no point in talking about what compliant things you've found.

quantified 5y ago
> They can deduct the depreciation of a property from their taxable income even if the money they used to buy the place was borrowed from a bank and the property is the only asset on the line for the loan. If they buy a building worth $50 million, putting $10 million down and borrowing the rest, they can still deduct $50 million from their personal taxes over time, even though they’ve put much less of their own money into the project. Thank you Congress for giving us this gift!
- vmception 5y ago
  And they can also deduct the interest on the loan since it is for business purposes. The also mixed-unit aspect of the real estate also mitigates any recent real estate tax deduction limits.

anm89 5y ago

I pay a Porsche 911 in taxes every year and I drive a 10 year old Mazda 3. This shit is infuriating. I get why it happens and how hard it is to prevent but it is infuriating.

freetanga 5y ago
It’s simple. The difference goes to the guys in the article so they can ride in a helicopter, and they in turn give 5% of that to your Representative so he can ride in a Limo.