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I always find it funny that people call a specifically targeted tax law to
be a "loophole". It used to be that a loophole was considered an
unintended but legal application of a tax law intended for a different
purpose.
"A technicality that allows a person or business to avoid the scope of a law or restriction without directly violating the law. Used often in discussions of taxes and their avoidance, loopholes provide ways for individuals and companies to remove income or assets from taxable situations into ones with lower taxes or none at all."
The home mortgage interest deduction, for example, is not a loophole. Whether you think it wise is an entirely different matter.
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> I always find it funny that people call a specifically targeted tax law to
> be a "loophole". It used to be that a loophole was considered an
> unintended but legal application of a tax law intended for a different
> purpose.
...
> The home mortgage interest deduction, for example, is not a loophole. > Whether you think it wise is an entirely different matter.
If the purpose of the mortgage deduction was to enable people to buy a home when they might otherwise not have been able to afford it, or simply to encourage home buying, then it's a loophole when it gets used by people who CAN afford to buy a home and would have bought one even without the deduction.
-- Barry Margolin
Arlington, MA
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> The home mortgage interest deduction, for example, is not a loophole.
> Whether you think it wise is an entirely different matter.
There are legal terms, well defined, and not open to debate. Then there are term where usage dictates meaning.
Maybe we can agree that the tax code is far too complex. That every 'good' thing (say the cap gain rate) can be used in a way (say for hedge fund managers to turn their millions of income to cap gains at 15%) that makes them 'bad.'
The latest round of discussion on how startup IPO options land inside Roth accounts. I can see the reaction to this becoming an overreaction and closing opportunities that can be used to help 'normal' people manage their retirement accounts.
It seems the article is all over the place in term of how it describes deductions and ways to cheat. Truth is, nothing new to read there.
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On Thursday, April 5, 2012 7:12:45 AM UTC-7, William Brenner wrote:
Some common ways I image:
Overinflate charitable contributions. Donation sites just give you a receipt with the date on it, so you can put any number of items on it, even taking thrift store value for these many items it can add up. You can donate crappy things and still claim a deduction for it, although the code only lets you take a deduction for stuff in good or better condition.
Overinflate the part of your house used exclusively and regularly for business.
Overinflate the business miles driven. I think you get something like 50 cents a mile, and that will probably become 60 cents this year if gas prices keep rising.
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> On Thursday, April 5, 2012 7:12:45 AM UTC-7, William Brenner wrote:
> Some common ways I image:
> Overinflate charitable contributions. Donation sites just give you a > receipt with the date on it, so you can put any number of items on it, > even taking thrift store value for these many items it can add up. You > can donate crappy things and still claim a deduction for it, although the > code only lets you take a deduction for stuff in good or better condition.
> Overinflate the part of your house used exclusively and regularly for > business.
> Overinflate the business miles driven. I think you get something like 50 > cents a mile, and that will probably become 60 cents this year if gas > prices keep rising.
The easiest way to cheat on your taxes is to not work, to extend your unemployment benefits as long as possible, to not work overtime when offered, allowing others to foot the bill for your consumption of government services.
or are these "loopholes"?
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On Thursday, April 5, 2012 1:06:23 PM UTC-7, Pico Rico wrote:
> <removeps-gro...@yahoo.com> wrote in message > The easiest way to cheat on your taxes is to not work, to extend your > unemployment benefits as long as possible, to not work overtime when > offered, allowing others to foot the bill for your consumption of government > services.
Sorry, this is getting political. The methods I gave are ones that seem like they are common enough.
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If a student had submitted the above article as a
paper, I would have given it a grade of "U" as in
Unacceptable. It does not deserve a grade of "A" thru "F" because it has no focus. It rambles hither and yon. But worst of all, it reminds me of the now defunct "Renaissance Group" that had
everyone filing a Schedule C.
I have been seeing a pain management doctor on a regular basis since my second back surgery (about
six years). He once asked me if there was a way for him to deduct his children's private school tuition from his gross income. I smiled and said that I knew a way, but my explaining it to him would be as unethical as him explaining to me how to make synthetic heroin.
Dick
P.S.: Just had surgery #25 since June 2003. Like
the Energizer Bunny, I just keep going.
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> "Pico Rico" <PicoR...@nonospam.com> wrote:
>> I always find it funny that people call a specifically targeted tax law to
>> be a "loophole". It used to be that a loophole was considered an
>> unintended but legal application of a tax law intended for a different
>> purpose.
>...
>> The home mortgage interest deduction, for example, is not a loophole. >> Whether you think it wise is an entirely different matter.
> If the purpose of the mortgage deduction was to enable
> people to buy a home when they might otherwise not > have been able to afford it, or simply to encourage
> home buying, then it's a loophole when it gets used
> by people who CAN afford to buy a home and would have
> bought one even without the deduction.
It was the late Jack Kemp who said: If you want more
of something, you subsidize it. If you want less of something, you tax it. Thus, the mortgage interest deduction serves tosubsidize home ownership.
You can also look at the mortgage interest deduction
as welfare for home owners. Doing so makes it easier
to swallow some of the other deductions. ;)
Dick
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On Friday, April 6, 2012 9:31:57 PM UTC-7, Dick Adams wrote:
> It was the late Jack Kemp who said: If you want more
> of something, you subsidize it. If you want less of > something, you tax it. Thus, the mortgage interest > deduction serves tosubsidize home ownership.
That might not be true. The mortgage interest deduction may have increased home ownership when it was first introduced, but over time it raises house prices as people bid more on houses. So with the deduction home ownership might be 60% and average house price $1,000,000; and without the deduction home ownership might still be 60% and average house price $800,000.
> You can also look at the mortgage interest deduction
> as welfare for home owners. Doing so makes it easier
> to swallow some of the other deductions. ;)
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