What are you talking about? There's no loophole there - equal (this year) or higher (previous years) taxes are paid for on large gifts as compared to income. (if there was a loophole there, many more CEOs would be doing it). I hope you're not preparing anyone's taxes.
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Steve Jobs Ranked as 42nd Richest American With Net Worth of $6.1 Billion
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What are you talking about? There's no loophole there - equal (this year) or higher (previous years) taxes are paid for on large gifts as compared to income. (if there was a loophole there, many more CEOs would be doing it). I hope you're not preparing anyone's taxes.
Did the government receive less than what they would've received if Steve had paid them himself?
Absolute mythology. NO. If Jobs receives a benefit, such as cash, a plane, whatever, he has to pay taxes on it, not Apple. Apple does NOT pay the "gift tax", they get a deduction. Jobs gets a minimal gift allowance and then pays all the taxes. There is NO LOOPHOLE. Apple gets to deduct legitimate expenses only, including bonuses, gifts, salaries, options, etc.; and Jobs has to pay on any "benefits", whether gifts beyond the allowance, cash, stock, use of a company plane for private purposes, etc.
You are thinking about rules for giving gifts. $13,000 is the limit to give gifts to one individual while avoiding gift tax.
The recipient of a gift does not have to pay taxes regardless of the amount as long as it meets the IRS definition of a gift.
I've seen nothing that shows that Jobs' jet was considered a gift by this definition. It was a bonus (as were the taxes paid).
I hope you're not preparing anyone's taxes.. You should do some research before replying. Read and when you're done read some more..Please
http://www.fivecentnickel.com/2010/09/17/what-is-the-gift-tax/
Like I told the last person that responded to me, Please read before responding. Especially if you don't know what you're talking about.
http://www.fivecentnickel.com/2010/09/17/what-is-the-gift-tax/
I never said it was. I responded to your post about gift taxes and you were wrong. Thats it. Like I said I don't care, I would do it if I could.
So what does this have to do with loopholes? Corporations cannot make large gifts to employees and the employees then somehow avoid taxation on that gift, in fact, it's explicitly forbidden, Mr. Expert.
And how do you know anything about Steve Jobs' taxes anyway?
I didn't say anything about gift taxes. Mattie Num Nums claimed it was a gift to avoid taxes. My post that you replied to disputed that claim. It was not wrong as far as I can tell. You are the one who brought up gift taxes.
Like the post above yours, never claimed anything about SJ and his 'gifts'. Was just responding to a post. And never claimed to be an expert, but you were flat out wrong. And did you even read what you linked. I suggest you re-read it you'll see the difference between a gift and what is income.
Sorry, I should re-phrase that. I was responding to the 'loophole' argument.
It is a loophole and we can agree to disagree. If it's used to avoid paying what you would have paid if it were income, then it is a loophole. But that's IMO
Any evidence that it was "used to avoid paying what you would have paid if it were income?" From the article I quoted, Apple simply paid the sales and income tax that Jobs would have had to pay.
Maybe you are trying to say that gifts, in general, can be used as a loophole. I would agree with that in theory. But the particular claim that I was responding to (Jobs' jet) does not appear to have been a gift for tax purposes. And so any discussion related to gifts or gift taxes, or loopholes related to either are not relevant.
That's the point of a loophole. You can't prove it either way.
Using an example don't take it as fact.
If SJ gets paid $1 for the year 2010, then is income tax would be on $1.
Then Apple says, thanks SJ here's 50 million for your being SJ. SJ would not have to pay one cent on that 50 million. Then Apple pays 45% gift tax on that 50 million.
So the difference of gift taxes and income taxes can be anywhere from 15-25%. That's a large sum saved or loss (from the gov't).
So yes it is a 'loophole' in the definition. From websters ": a means of escape; especially : an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded "
People with large amounts of money do this all the time.
And for the last time, more power to him if he is able to do this. I would do the same thing if I could.
Yes, I was just responding to the idea that gifts are used to avoid paying taxes/higher taxes.
Nothing against SJ or his jet. I wish my company would give me one.
But that's not what happened. There was no gift. There was no gift taxes. It was a bonus. Apple simply paid for the jet "plus all associated sales and income taxes that Jobs otherwise would have had to pay."
No, no, no.
If you know anybody who actually does this with their employer (transfers of assets with value to an employee in an attempt to avoid income taxation), it's illegal:
http://www.law.cornell.edu/uscode/26/102.html
You cannot exclude gifts from an employer (beyond some very prescribed limits) from your gross income. Period. If you or SJ or whomever is doing this, it's illegal. Either Apple or SJ would have to pay the income tax on said cash or assets or whatever was transferred, but the taxes get paid and no one gets a loophole.
Baldie, I don't know anything between Apple and SJ or the Jet. My example was just to show how 'gifts' could be used as loophole to avoid taxes. It was hypothetical.
Well it makes sense to me:
Get a salary of 5 Million dollars and pay the 40%+ taxes or get a gift of 5 million dollars and pay capital gains.
Sounds like a loop hole to me.
Get a salary of 5 Million dollars and pay the 40%+ taxes or get a gift of 5 million dollars and pay capital gains.
Sounds like a loop hole to me.
Ok, once again.
If employer and employee are in cohesion with their stories about the 'gift' the IRS can't prove they did anything wrong. And yes it's illegal to avoid taxes, no one said otherwise.
It's hard to prove that you're purposely avoiding paying the taxes on it.
That's why it's a loophole.
Form IRS regarding gifts. "What is considered a gift?
Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return."
http://www.irs.gov/businesses/small/article/0,,id=108139,00.html
I got that now. But the post that I made that you disputed was specifically about the situation with the jet. The poster I was disputing confused the situation by calling if a gift and implying it was reported as one to the IRS.
bill VS STEVE
how much did bill and melinda give away when they were worth 5 or 6 billion dollars? Bill went from selling 10 million copies of win 3.0 in 1990 to becoming the worlds richest man by 1994 and over 50 billion! steve Jobs rise to fortune was waaaaay more conventional. he didnt make 54 billion in 4 years of wtf. See the difference people. geez
how much did bill and melinda give away when they were worth 5 or 6 billion dollars? Bill went from selling 10 million copies of win 3.0 in 1990 to becoming the worlds richest man by 1994 and over 50 billion! steve Jobs rise to fortune was waaaaay more conventional. he didnt make 54 billion in 4 years of wtf. See the difference people. geez
What do capital gains have to do with anything related to the jet that Apple gave to Jobs? Corporations cannot give gifts to employees that are excluded from their gross income. There is no difference in getting a $5 million salary or a $5 million bonus or a $5 million trinket when it comes to income taxes.
Any "gift" given from an employer to an employee (with minor exceptions) is considered part of the employee's gross income regardless of whether the "employer and employee are in cohesion with their stories about the 'gift'."