November 1, 2012

Romney ‘rented’ Mormon church’s exemption to defer taxes for 15 years

http://current.com/community/93945453_romney-rented-mormon-church-s-exemption-to-defer-taxes-for-15-years.htm

Republican presidential nominee Mitt Romney used a loophole to “rent” the Mormon church’s tax exemption status and defer paying taxes for 15 years, according to a new report.

Tax returns obtained by Bloomberg News through a Freedom of Information Act request indicated that Romney set up a charitable remainder unitrust (CRUT) in June 1996 just before Congress cracked down on the loophole in 1997.

“In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years,” Bloomberg’s Jesse Drucker explained. “At the same time he is benefitting, the trust will probably leave the church with less than what current law requires.”

Estates lawyer Jonathan Blattmachr told Bloomberg that Romney’s trust benefits from the Mormon church’s exempt status because charities don’t pay capital gains taxes when they make a profit from the sale of assets.

“The main benefit from a charitable remainder trust is the renting from your favorite charity of its exemption from taxation,” Blattmachr said, adding that the charitable contribution “is just a throwaway” and the church would receive little if any financial benefit from the trust.

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