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View Diary: Rolling Stone Magazine Exposes how Mitt Romney Dodged his Taxes (252 comments)

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  •  IRA's passed on as Beneficiary IRA's avoid (4+ / 0-)
    Recommended by:
    Meteor Blades, VClib, drmah, elwior

    Federal Taxation, and get to be amortized by the next generation, or in his case maybe even the one after that. Even if he starts mandatory distributions at 701/2, the bulk would get to go to his kids at a favorable rate.

    My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

    by pvmuse on Sat Oct 13, 2012 at 01:34:46 PM PDT

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    •  Inherited ordinary IRA's do NOT avoid taxes (0+ / 0-)

      If Romney's IRA is a regular  or ordinary IRA, not a Roth, then any monies either he or his beneficiaries take out of it are taxed as ordinary income.  Now that longterm capital gains rates are so low, an IRA is not really a good deal.  Yes it "grows taxfree" in that you don't have to pay tax every year the way you do on the dividends from an ordinary savings account but that is a very minor benefit given that the entire amount is eventually taxed.

      •  Sorry, they DO continue to defer Federal Tax (3+ / 0-)
        Recommended by:
        VClib, elwior, madhaus

        upon death, when rolled into a Bene IRA.

        Yes, the heirs are taxed as they remove distributions, but this can be over their lifetimes.  

        The actuarial way they are calculated is the MRD is based on the single life expectancy of that particular beneficiary. If you name your grandchildren, of which he has plenty, they would be withdrawing a very small amount, and deferring the large majority of the IRA, as it continues to compound, over their very long lives.

        BTW, Long term capital gains rates will likely be going back up closer to ordinary income tax rates, regardless of who is elected, and Mitt knows this as well.

        My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

        by pvmuse on Sat Oct 13, 2012 at 04:37:46 PM PDT

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        •  pvm - capital gains rates may go back to 20% (0+ / 0-)

          But unless the Dems take the House and the rules are changed in the Senate capital gains rates aren't going up past 20% and only if all the Bush tax cuts expire. Long term capital gains rates have only been the same for a few years after the Tax Reform Act of 1986 when the top marginal rate was dropped to 28%. Historically they have been about half the taxpayers top marginal rate.

          "let's talk about that"

          by VClib on Sat Oct 13, 2012 at 05:36:14 PM PDT

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          •  You keep arguing with me, just exactly why do (2+ / 0-)
            Recommended by:
            elwior, madhaus

            you think Mitt decided to place all these assets in his IRA?

            Do you think he goofed up, and he is somehow going to get slammed on taxes?

            That his army of tax advisors gave him bad advice, but somehow you think you've got him?

            I think not, I think Mitt KNEW exactly what he was doing when he jammed all these assets in his IRA, and if he didn't, his tax attorneys and accountants surely did. This wasn't a 'mistake', as you keep trying to indicate.

            He used very low basis stock, which of course was re-valued almost immediately, he has done this repeatedly with his trusts as well. If he thought he would be getting nailed on taxes, he would have put them in another entity.

            He probably has a very complicated L.L.C. as the Beneficiary, one that will allow these types of assets to be sequestered away in perpetuity.

            I know you think you are smarter than Mitt's team of advisor's, but I think he's got you beat on this one.

            It is insane that only the top  one half of the 1% get these type of perks, but that is why we cannot let him get elected.

            My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

            by pvmuse on Sat Oct 13, 2012 at 05:53:39 PM PDT

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            •  pvmuse - I have been asking the question (0+ / 0-)

              of why put low basis stock in an IRA and there have been some very good answers in this thread. I didn't know the answer, but have been educated about some of the possibilities. It goes against conventional thinking about what type of assets should be put in an IRA, but Romney does not have a conventional portfolio or income stream.

              I am not sure why your answer is under this specific comment, which is about long term capital gains rates.

              "let's talk about that"

              by VClib on Sat Oct 13, 2012 at 06:44:02 PM PDT

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        •  Yes but it doesn't matter (0+ / 0-)

          You are right that the tax is not paid until the heirs remove the distributions.  My point is that there is no benefit to the compounding of the deferred tax unless the person's marginal tax rate drops. Imagine that the IRA is worth $1000 when first received and let's say it grows to $100,000 and is then cashed out. If the owner's marginal rate is 30% they keep $70,000.

          Alternatively, they could have cashed out the $1000, paid $300 tax (assuming same marginal rate of 30%) and invested the remaining $700 in a Roth IRA in the same instruments as the regular IRA would have been invested.  So that will grow to $70,000 by the same point in time that the IRA would have grown to $100,000 and they pay no tax when they take it out.

          •  Your point doesn't apply to Mitt, or anyone else (2+ / 0-)
            Recommended by:
            elwior, madhaus

            in his category, your examples have no bearing on the type of thing he is doing.

            Money magazine articles for IRA withdrawals, are not how Mitt does business.

            My idea of an agreeable person is a person who agrees with me. Benjamin Disraeli

            by pvmuse on Sat Oct 13, 2012 at 06:20:57 PM PDT

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