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View Diary: UPDATE: Wealth Tax -- Solve the Piketty Dilemma With Amendment XXVIII Intangible Property Tax (110 comments)

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  •  Family trust? You mean family foundation? (3+ / 0-)
    Recommended by:
    ElaineinIN, NotGeorgeWill, VClib

    The assets in that have to be used for contributions to 501(c)(3)s.  Sometimes - rarely, but sometimes - family members will draw some small salary or something, but it's highly inadvisable (because of the self-dealing rules) and can't be used to shift more than peanuts.  Neither is it terribly tax efficient, since the income drawn is subject to ordinary tax rates + SE tax (which is between 3.8% and 15% on top of ordinary income tax)

    •  Trust funds live in a 3D maze of loop holes. (0+ / 0-)

      They exist to avoid taxation. Works just fine.

      "Stealing kids' lunch money makes them strong and independent." -- Ryan Paul von Koch

      by waterstreet2013 on Tue Apr 22, 2014 at 07:43:31 AM PDT

      [ Parent ]

      •  no, they're taxable. (3+ / 0-)
        Recommended by:
        ElaineinIN, waterstreet2013, VClib

        Their tax treatment really isn't that complicated.

        Like I said, I work w/ trust tax all the time.  Any questions, let me know.

      •  You might want to check your trust tax law (3+ / 0-)

        But for a charitable remainder trust under 664 or a private foundation that Johnny describes above, trusts are in fact taxable for income tax purposes, and quite unfavorably - they reach the top marginal tax bracket on undistributed income almost instantaneously.   Distributed income is deductible, but taxed to the beneficiary on receipt.

        There are family trusts that are designed to limit multiple impositions of the estate/gift tax (not the income tax) - those are generally dealt with by the generation skipping transfer tax, which is an imperfect vehicle and often avoided by good planning.

      •  And there's no way that trust fund money (0+ / 0-)

        finds its way to offshore "tax haven" pirate-banks. And the Cheneys and Romneys are honest.

        And the concept of a tax loop hole is fantasy.

        O.K., fine. (But I'll still push for Tax At Source and against letting tax advisors gain much influence over public policy.)

        "Stealing kids' lunch money makes them strong and independent." -- Ryan Paul von Koch

        by waterstreet2013 on Tue Apr 22, 2014 at 09:07:15 AM PDT

        [ Parent ]

        •  Offshore trusts have *horrible* tax (1+ / 0-)
          Recommended by:
          VClib

          consequences. Really, there's nothing worse for tax purposes than an offshore trust (unless it was grandfathered in by the law that established punishing consequences for offshore trusts.  I think that was in the 70s or something)

          It's not that loopholes are fantasies, it's that non-experts have really, really weird ideas of what trusts are and do.

          •  So only the Cheneys and Romneys use them. (0+ / 0-)

            Horrible! HORRIBLY !! Indeed.

            "Stealing kids' lunch money makes them strong and independent." -- Ryan Paul von Koch

            by waterstreet2013 on Tue Apr 22, 2014 at 09:48:37 AM PDT

            [ Parent ]

            •  No, they didn't. (1+ / 0-)
              Recommended by:
              VClib

              No offshore trusts for them.  Offshore vehicles are so sucky, in fact, that offshore partnerships and LLCs and whatnot typically make an election to be treated as US partnerships for tax purposes.

              That's what Mitt's partnerships did, for example.

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