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Mitt Romney's $102 million IRA; it takes someone special
- Thread starter tmarket
- Start date
sorry man, I already got what I was looking for over on the economics thread, good luck to you.Quote from bigarrow:
So your taking his IRA advise, good for you gramps.
But hey I appreciate your concern for me.
CYA next weekend and we'll bullshit some more
otherwise, If you are American, Happy Fourth of July
It use to be fun when you were a kid and could damn near blow your friends finger off with a cherry bomb.
Quote from Free Thinker:
i can. you are fricken wrong. but i will give you this. like my grandma used to say. some people are seldom righ but never in doubt.
I guess the IRS is wrong, too, then.
http://www.irs.gov/publications/p590/ch01.html#en_US_2011_publink1000230422
More Than Maximum Contributions
If contributions to your IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. However, a penalty or additional tax may apply. See Excess Contributions , later, under What Acts Result in Penalties or Additional Taxes.
So, dude, where is your proof of the contrary? Obviously, the IRS rules ALLOW contributions beyond the maximum. Clearly, Romney made an excess, non-deductible, subject to additional tax contribution to his IRA at some point. He didn't grow it to $102M from a bunch of $5,000 contributions. Use some freaking common sense.
Seriously, if you want to see the direct application of your grandmother's saying, look in the mirror.
But, by all means, just quote your grandmother on how I'm wrong again. It's much more convincing than citing the actual IRS rules on the subject.
What passes for argument in debate amongst some of you would get you booted from a high school debate team on day 1.
Quote from bigarrow:
I feel sorry for anyone who takes logicmans Ira "expertise" advise.
See my response above to the other guy playing tax lawyer in the thread.
I feel sorry for people who make it a rule to disregard the old saying, "It is better to be silent and thought a fool, than to open one's mouth and remove all doubt".
hi robert. you are the chief tax guy around here. can you clear this up? is this a true statement?Quote from Robert A. Green:
Gov. Romneyâs taxes look to be compliant. Sure there are some valid questions, but thatâs the case with most taxpayers. - GreenTrader Weblog
http://www.greencompany.com/blog/index.php?postid=135
I wondered about Mitt Romney's IRA size, too. I raised some questions that others haven't and they could be off base.
For the huge chunk of Romney's IRA growth in size, I suspect carried interest investment gains - which can be huge - on positions he received in connection with his Bain management agreements. While some tax attorneys think that's fully legal, I have some lingering questions. Where it might be inappropriate to receive business income - like management and incentive fees - in your IRA, it's probably not a problem to receive a carried interest on investment income. Private equity and hedge fund managers structure carried interest in deals in lieu of incentive fees. Carried interest is a share of capital gains, whereas fees are business ordinary income.
I agree with other pundits on the usual suspects. Low valuations on private equity turnaround investments made through C-Corps using high leverage, so equity is a low value and there is no UBIT taxes in the IRA, since it's offshore in a C-corp structure.
Rollovers can transfer big dollars into an IRA, but I haven't heard it's a "Rollover IRA."
It's okay and smart to trade in your retirement plans. That's not running a business. Trade in taxable accounts to achieve trader tax status for business deduction treatment.
If Romney was planning to run for office, and if he wanted to keep his public tax returns more modest, he might have seen the added value of parking income producing investments in his IRA. So, his IRA may have become a dumping ground for everything he didn't want to show the public details on. Plus, as a smart guy, he saw the incredible value of tax deferral.
This all seems fully legal, with the possible exception of the carried interest. His answer should be that carried interest is not business income, it's capital gains and that's okay. The reason I wonder about it is because an IRS audit manual claims that carried interest is disguised incentive fees, but that's probably more of a question for hedge funds and not private equity. Audit manuals do not dictate tax law, the code does, and carried interest has withstood challenge. Democrats tried to repeal it, but Republicans blocked them.
"That's just the maximum annual deductible contribution. You can put $100 million in your IRA any time you want, "