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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsLegal limit of $6000 per year= Romney's IRA over $100 million?
It's magic.
After a six-month hiatus, a Vanity Fair article about Mitt Romneys tangled web of investments has thrust his foreign holdings and complicated tax strategies back into the center of the 2012 campaign. But questions have persisted for months about an individual retirement account held by the Romneys valued at upwards of $100 million a stunning amount for a savings vehicle designed to provide middle class retirees comfortable, but non-lavish retirement.
His IRA raises two key questions, both of which his campaign has consistently declined to answer: How, despite a $6000 legal limit on annual contributions to an IRA, did Romneys IRA grow to over $100 million? And did he avoid any U.S. taxes on its enormous returns?
Tax law experts we spoke to explained to us how an IRA could in theory reach the size of Romneys. And though its impossible to know without more information from Romney whether hes avoided any taxes, the experts explained how a massive IRA could easily benefit from legal avoidance of one obscure U.S. tax.
http://tpmdc.talkingpointsmemo.com/2012/07/romney-offshore-ira-tax-avoidance.php?ref=fpblg
Turbineguy
(37,392 posts)Ferdinand Marcos saved $billions from his US$8,000 per year pay.
SickOfTheOnePct
(7,290 posts)There wouldn't be any taxes to avoid, as far as I know. My IRA makes money every year, but none of it is taxable until I withdraw it. And if it's a Roth IRA, he would have paid taxes on the income prior to deposit, and there would be no taxes on withdrawal.
Swede
(33,303 posts)nt
unblock
(52,438 posts)essentially the idea is that the income tax code exempts certain organizations (charities, e.g.) and accounts (iras) from income tax, but only to the extent that the income they earn is related to the intended purpose of the organization or account.
if a tax-exempt organization or account earns "unrelated" income, that income is taxable.
this is done, at least in part, to prevent huge for-profit businesses from hiding within a charity.
or, in rmoney's case, to (try to) prevent accounts intended to provide middle-class people comfortable retirement security from becoming tax avoidance schemes for the ultra-rich.
i'd be highly surprised if rmoney's strategy was actually illegal. there are so many slimy-but-legal ways to avoid income taxes that it doesn't pay to go into anything illegal, especially for a public figure.
that said, i have no doubt that it's very slimy, and that's almost as damaging politically.
elehhhhna
(32,076 posts)is the question. obviously not roth contributions - roths haven't existed long enough for that kindof return...so did he contribute over the limit and write it off, and also make tax-deferred gains on illegal over-contribitions?? That's the point here.
Cali_Democrat
(30,439 posts)Simple. Take $100 million and divide by 6,000 and you get 16,666.67
Romney is at least 16,666.67 years old and counting.
Swede
(33,303 posts)Damn.
meow2u3
(24,775 posts)Quick! Stock up on garlic before it's outlawed!
SickOfTheOnePct
(7,290 posts)Swede
(33,303 posts)Do tell.
SickOfTheOnePct
(7,290 posts)Swede
(33,303 posts)You must have a lavish life. Tell me more.
Warren Stupidity
(48,181 posts)Still that is a lot in an Ira.
dkf
(37,305 posts)That must still be incredible growth though.
unblock
(52,438 posts)one way or another, there are two investments. one's a winner and the other's a loser.
rmoney puts the winner in his ira and the loser in a taxable account. he build up massive wins in his ira and has massive losses he can use to offset wins in his normal, taxable portfolio.
the classic way of trading against the box is simply to buy shares in one account and short shares in another. that's obvious and illegal and easy to detect and it's not leveraged enough so i'm sure rmoney didn't do that.
but it would certainly be possible to create a securities, derivatives, private contracts, whatever, that suited this purpose, and quite possible were even legal, or at least so complex and obscure that in practice detection, let alone prosecution, would be impossible.
alternatively, his ira simply invested in a special class of bain shares that received special dividends, so he knew it was going to be a big winner.
eridani
(51,907 posts)So instead of almost 17,000 years old, he's only 1818 years old. That at least brings it down from vampire level to Methuselah level.
Warren Stupidity
(48,181 posts)As others have noted, you can roll all sorts of stuff into IRAs. There is probably nothing illegal with RMoney's Big Fat IRA. He is an out of touch stuffed shirt rich fucker with bags of loot stashed all over the planet in all sorts of strange "investment vehicles". I'm sure his lawyers have vetted all of them.
The Obama campaign ought to and is making a campaign issue over the odd nature of his finances, but they should avoid misstating the facts.
Ruby the Liberal
(26,219 posts)It could include 401k's, KEOGHs, potentially Deferred Comp.
Loophole for the wealthy to be able to shelter more than most of us make in a year.
FairyDust
(42 posts)If Bain acquired a company and a company owned retirement plan in a takeover could he legally move it over into a Mitt Romney DBA Bain Fund and transfer it around under different names or through consolidations since Banks are not in America? If so, I'd say those are funds stolen from the American people.
Rusty Shackleturd
(1 post)article from four months ago:
http://online.wsj.com/article/SB10001424052970204062704577223682180407266.html?mod=WSJ_hp_LEFTTopStories