Actually, there are jurisdictions where that would be exactly taxes. In Ohio, school supplies bought by teachers aren’t subject to sales tax.
How many beers get you drunk? If you have fewer than that number, are you drunk? When exactly do you know that you are drunk, since we are only talking matters of degrees? If we can’t put a number on it, does it mean that nobody is ever drunk?
This is a useless line of inquiry. Sad!
Then yeah, sure: there’s zero chance I’d get caught for evading tax this way, but even though this tax dodge is completely 100% available to me, I wouldn’t take it. I’m responsible to my society, I benefit from it. I’m not going to dodge the taxes I, in the spirit of the law, owe.
Trump mentioned Warren Buffett in the second debate as an example of a “liberal” who would take similarly huge tax deductions as him. In response Buffett has released his 1995 taxes and stated that he has paid federal income tax every single year since 1944 and has never carried a loss forward.
He also gave almost $3 billion to charity in 1995 and didn’t take a deduction for it. So I guess according to a few people on here Buffett is a fool right?
Your link does not indicate Buffet released his tax returns, says that $3 billion happened last year and that tax laws wouldn’t have allowed him to take even remotely close to a full deduction on it. It specifically says
So while Buffet seems like a heck of a billionaire, you seem to have completely mangled the story.
Yep sorry, I blame insomnia. He released info on his 2015 taxes (not 1995). I read another article where he claimed to voluntarily choose to not take deductions for his personal donations to charity but can’t find it now.
I suspect that Buffett has never carried a loss forward because he’s never had a net loss.
So Buffet gave away in one year as much as Forbes says Trump is worth.
Yes, because he’s a competent businessman.
Not intended to damn with faint praise: Buffett is far better than that, of course. But, yeah: competent businessmen don’t lose nearly a billion dollars in a year.
And before anyone says it, of course Buffett loses money sometimes. It’s just that, over the course of a year, he has more gains than losses.
Berkshire Hathaway lost $11.5 billion in 2008:
Besides the fact that a loss of the value of Berkshire Hathaway is the same as a loss of the same amount of value for Buffet (he is a large shareholder, 33% of Class A stock and 10% of Class B) but not the only one, is the fact that unrealized share value loss does not count as loss any more than unrealized gain does. Income-wise “the total pretax earnings of all Berkshire’s operating businesses (not including insurance for this calculation) fell by a bit, from just over $4,000 per share to just under that figure.”
He made money, lotso money, that year, and shares of Berkshire Hathaway are worth 2 1/2 times as much now as they were at the end of 2008 and 1.6 times as much as the peak before 2008’s drop. No carry-forward tax-payer propping up involved.
Which is not to say that Buffet does not take advantage of the tax laws. He does. That income is mostly interest and dividends which is treated favorably in the tax code … in his case something he has been vocal about as something that should change and who has worked to get it changed.
Not according to Forbes:
http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_Warren-Buffett_C0R3.html
Again, those were unrealized losses. That’s meaningless.
To state that a $25 billion financial loss is “meaningless” just because it wasn’t realized is just plain stupid.
Not sure what part you do not understand.
Let us imagine a Doper in 2008 with a million dollars in a retirement fund for some reason all put in an S&P500 fund who makes $250K/yr income.
From the beginning to the end of 2008 his fund was only worth 59% of what it was. He still earned his $250K income. A huge paper loss. I experienced something similar. So likely did you. He let his fund sit. As I did mine. (That S&P fund would now be worth 45% more than it was before that drop and has increased 2.46 times what it was at the end of that year but nevermind that.)
The Doper made money that year, actual real and taxable income, and that loss of his fund’s value was not yet a loss unless he had sold it.
Buffet’s Berkshire Hathaway holdings in that same 1 year period ended up being worth about 65% of what they were. His income remained pretty unchanged, about $40 million a year. Not huge as a fraction of his worth but lots of dollars. A huge paper loss. He let his holdings ride and continued to invest, as did I. (And did much much better than I did and the market average did from there on as well.)
Buffet made money that year and lost value in the market, to a lesser degree than most, but still, lost value, which, like the rest of us who remained invested, he regained, but only much more so.
Buffet is right now only the 3rd richest person in the world FWIW, worth about $72.7 billion at the end of 2015, behind Bill Gates and Carlos Slim.
I understand it perfectly. Even though I’m mostly a buy-and-hold type I deliberately sold losses from taxable accounts and bought back similar (but not substantially similar) investments in order to harvest losses. I’ve also carried losses forward. Pretty much every very savvy investor has done this.
What I’m saying that it’s silly to state that a multi-billion dollar drop in your net worth is “meaningless” just because it the securities weren’t actually sold and the loss actually realized.
Except this is a discussion of taxes paid, not of assets. Unrealized losses have zero impact on personal taxes.