Home > Social Scoop > Big tax break depends on difference between being investor and being businessman

Big tax break depends on difference between being investor and being businessman

Via Scoop.itTax Talks

In an era of rising income inequality, the tax breaks for rich folks are a topic of national debate.
Via www.washingtonpost.com

Here’s how one business person got most of his tax breaks. When business was booming, he wanted to be treated as an investor so that he could use carried interest clause to lower his tax rate from 35% to 15%.

It permits wealthy hedge fund operators, venture capitalists and other private-equity managers to treat their pay, for tax purposes, as a return on an investment instead of as a salary.

When his business experienced a big loss, he wanted to be treated as a business person so that he could deduct loss as business expenses. His lawyer was pretty convincing and he won the case against IRS.

 

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Categories: Social Scoop
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