"Accidental" Tax Break Saves Wealthiest Americans $100 Billion

[G_j]

http://mobile.bloomberg.com/news/2013-12-17/accidental-tax-break-saves-wealthiest-americans-100-billion.html

Accidental Tax Break Saves Wealthiest Americans $100 Billion

By Zachary R. Mider
December 17, 2013 12:01 AM EST

----
A gravel-voiced man whose accent recalls his blue-collar Boston roots, Adelson, 80, has just rung the bell at the New York Stock Exchange. Shares of his Las Vegas Sands Corp. (LVS) are at a five-year high, making him one of the world’s richest men, worth more than $30 billion.

Federal law requires billionaires such as Adelson who want to leave fortunes to their children to pay estate or gift taxes of 40 percent on those assets. Adelson has blunted that bite by exploiting a loophole that Congress unintentionally created and that the Internal Revenue Service unsuccessfully challenged.

By shuffling his company stock in and out of more than 30 trusts, he’s given at least $7.9 billion to his heirs while legally avoiding about $2.8 billion in U.S. gift taxes since 2010, according to calculations based on data in Adelson’s U.S. Securities and Exchange Commission filings.

Hundreds of executives have used the technique, SEC filings show. These tax shelters may have cost the federal government more than $100 billion since 2000, says Richard Covey, the lawyer who pioneered the maneuver. That’s equivalent to about one-third of all estate and gift taxes the U.S. has collected since then.
Easy Bypass

The popularity of the shelter, known as the Walton grantor retained annuity trust, or GRAT, shows how easy it is for the wealthy to bypass estate and gift taxes. Even Covey says the practice, which involves rapidly churning assets into and out of trusts, makes a mockery of the tax code.

.. More..

[Wounded Bear]

1. All while decrying the 'unfairness' of "death taxes"...

Once again, the great shell game ensures that the money gets sucked upwards to the top 1%, while the masses are distracted by shiny objects like DEATH TAXES.

[Coyotl]

2. equals "about one-third of all estate and gift taxes the U.S. has collected ...."

[Autumn]

3. "Accidental" Tax Break

My ass.

[WillyT]

4. HUGE K & R !!! - Thank You !!!

:nuce:

[Jeffersons Ghost]

5. K&R

[winter is coming]

6. Anyone seen the latest Hunger Games movie?

The brief moment where you can see "the odds are NEVER in our favor" spray-painted on a rail car comes to mind.