How do the Rich/Wealthy Business Owners have tax loopholes do they just hide their mo

[truthseeker63]

How do the Rich/Wealthy Business Owners have tax loopholes do they just hide their money ?

[Woodrow]

Tax loop holes do not necessarily mean somebody is getting free money. The loop holes are often done as a means to coerce big business into helping others. Such as if a large industry were to move into North Dakota, they would have several years of tax exempt status. While they would gain by not paying taxes, the state would gain by having new jobs come into a poverty ridden area.

But like all things with good intentions there will be those who will find out ways to get the exemptions and never provide what they are promising in order to get the exemptions.

[Beardo]

Swiss banks, anyone?

That's why this Nigerian guy offered me $20 million the other day. All I had to do was pay him $250 for the bank transfer or something! But I declined. I'm pretty stupid, aren't I?

[Verdetequiero]

Tax rates should be 0 to solve the tax loophole problem.

[truthseeker63]

This is true.

[Trumble]

Tax loop holes do not necessarily mean somebody is getting free money. The loop holes are often done as a means to coerce big business into helping others. Such as if a large industry were to move into North Dakota, they would have several years of tax exempt status. While they would gain by not paying taxes, the state would gain by having new jobs come into a poverty ridden area.

But like all things with good intentions there will be those who will find out ways to get the exemptions and never provide what they are promising in order to get the exemptions.

True, but I wouldn't really describe such incentives as 'loopholes', even if they are open to abuse. The usual reason loopholes exist is simply that if people (i.e. accountants and tax lawyers) look long and hard enough they find them in, or can construct them from gaps in, overly complex tax legislation. Governments of all persuasions don't like them, and generally tend to close them as soon as they can. The trouble is, the relevant tax can't be recovered retrospectively.

Hiding money away is actually pretty hard to do, 'offshore' havens are being 'closed down' one by one as a result of substantial pressure exerted by national governments, including the US. And wherever you put it, a good tax auditor will generally be able to deduce it exists and track it down.

The essential difference between the two is that hiding money or concealing profits is tax evasion, which is illegal and can carry very significant criminal penalties including long prison sentences. Making use of 'loopholes' is just one form of tax avoidance (or as accountants would call it, good tax planning!) which is just using the law as it stands to your advantage.

[Fivesolas]

True, but I wouldn't really describe such incentives as 'loopholes', even if they are open to abuse. The usual reason loopholes exist is simply that if people (i.e. accountants and tax lawyers) look long and hard enough they find them in, or can construct them from gaps in, overly complex tax legislation. Governments of all persuasions don't like them, and generally tend to close them as soon as they can. The trouble is, the relevant tax can't be recovered retrospectively.

Hiding money away is actually pretty hard to do, 'offshore' havens are being 'closed down' one by one as a result of substantial pressure exerted by national governments, including the US. And wherever you put it, a good tax auditor will generally be able to deduce it exists and track it down.

The essential difference between the two is that hiding money or concealing profits is tax evasion, which is illegal and can carry very significant criminal penalties including long prison sentences. Making use of 'loopholes' is just one form of tax avoidance (or as accountants would call it, good tax planning!) which is just using the law as it stands to your advantage.

Trumble is correct. Using the term loophole to describe legitimate strategies to manage, avoid, defer, or eliminate taxes is good tax planning. Section 1031 in the IRS code, for example, allows a property owned for business or commercial use to sell their property and defer capital gain tax, state and local tax, and depreciation recapture. Should the exchanger pass the property to their heirs, the heir under law gets a step up in cost basis on the property to current market value, effectively eliminating any captial gain, and thus the tax.

This is an example of a legitimate tax planning strategy that some might call a loophole. In fact, if memory serves me correctly, there was a politician here in GA that some reporter went after for a 1031 exchange trying to exploit the story as tax evasion. The story fizzled because the legitimacy of the transaction. lol

[Zuzubu]

Swiss banks, anyone?

That's why this Nigerian guy offered me $20 million the other day. All I had to do was pay him $250 for the bank transfer or something! But I declined. I'm pretty stupid, aren't I?

Hahahahahah, omg that's so hillarious they are still doing that stuff, didn't people learn from it yet? xD No one just gives random people millions.