Mitt Romney gives lots of money to his church! Sorta. It turns out heâs also a very clever man, with a deep knowledge of the tax code, who has cunningly used loopholes to generate the appearance of giving money to the church while keeping most of it for himself.
Romney reportedly took advantage of a loophole, called a charitable remainder unitrust or CRUT, which allows someone to park money or securities in a tax-deferred trust marked for their favorite charity, but which often doesnât pay out much to the non-profit. The donor pays taxes on the fixed yearly income they get from the trust, but the principle remains untaxed . Congress outlawed the practice in 1997, but Romney slid in under the wire when his trust, created in June 1996, was grandfathered in.
The trust essentially lets someone ârentâ the charityâs tax-exemption while not actually giving the charity much money. If done for this purpose, the trust pays out more every year to the donor than it makes in returns on its holdings, depleting the principal over time, so that when the donor dies and the trust is transferred to the charity, thereâs often little left. The actual contribution âis just a throwaway,â Jonathan Blattmachr, a lawyer who set up hundreds of CRUTS in the 1990s, told Bloomberg. âI used to structure them so the value dedicated to charity was as close to zero as possible without being zero.â
Indeed, this appears to the case for Romneyâs trust as well. Bloomberg obtained the trustâs tax returns through a Freedom of Information Request and found that Romneyâs CRUT started at $750,000 in 2001 but ended 2011 with only $421,203 â over a period when the stock market grew. Romneyâs trust was projected to leave less than 8 percent of the original contribution to the church (or another charity that he can designate). This, along with the trustâs poor returns â it made just $48 in 2011 â suggest the trust is not designed to grow for the LDS church but just serve as a tax-free holding pool from which annual payments can be disbursed to the Romneys.
http://freethoughtblogs.com/pharyngula/2012/10/31/romney-is-a-very-devout-man/
http://www.salon.com/2012/10/31/how_romney_used_his_churchs_charity_status_to_lower_his_tax_bill/
How Romney used his churchâs charity status to lower his tax bill
Mitt rented the Mormon church's tax exempt status to decrease his bill, new documents show
Romney reportedly took advantage of a loophole, called a charitable remainder unitrust or CRUT, which allows someone to park money or securities in a tax-deferred trust marked for their favorite charity, but which often doesnât pay out much to the non-profit. The donor pays taxes on the fixed yearly income they get from the trust, but the principle remains untaxed . Congress outlawed the practice in 1997, but Romney slid in under the wire when his trust, created in June 1996, was grandfathered in.
The trust essentially lets someone ârentâ the charityâs tax-exemption while not actually giving the charity much money. If done for this purpose, the trust pays out more every year to the donor than it makes in returns on its holdings, depleting the principal over time, so that when the donor dies and the trust is transferred to the charity, thereâs often little left. The actual contribution âis just a throwaway,â Jonathan Blattmachr, a lawyer who set up hundreds of CRUTS in the 1990s, told Bloomberg. âI used to structure them so the value dedicated to charity was as close to zero as possible without being zero.â
Indeed, this appears to the case for Romneyâs trust as well. Bloomberg obtained the trustâs tax returns through a Freedom of Information Request and found that Romneyâs CRUT started at $750,000 in 2001 but ended 2011 with only $421,203 â over a period when the stock market grew. Romneyâs trust was projected to leave less than 8 percent of the original contribution to the church (or another charity that he can designate). This, along with the trustâs poor returns â it made just $48 in 2011 â suggest the trust is not designed to grow for the LDS church but just serve as a tax-free holding pool from which annual payments can be disbursed to the Romneys.
http://freethoughtblogs.com/pharyngula/2012/10/31/romney-is-a-very-devout-man/
http://www.salon.com/2012/10/31/how_romney_used_his_churchs_charity_status_to_lower_his_tax_bill/
How Romney used his churchâs charity status to lower his tax bill
Mitt rented the Mormon church's tax exempt status to decrease his bill, new documents show
