Almost no Income Tax: New York Times

I myself have been dealing with finances for a long time. Why? Finances are a matter for the boss. Your tax advisor is often only “consultant”, not “designer”, I know that from my own experience. Then the New York Times had a headline yesterday:

Story: 750$ Income Tax

“Donald J. Trump paid $750 in income taxes (or federal income taxes in the United States) in the year he won the presidency. He paid another $750 in his first year in the White House. In 10 of the previous 15 years, he had paid no income taxes at all-mainly because he reported losing much more money than he earned.”

While the president is leading a re-election campaign, which according to polls is in danger of losing, his finances are under stress, he has suffered losses and hundreds of millions of dollars in debt, which he has personally guaranteed, are coming due. He is also under pressure from a decade-long dispute with the Internal Revenue Service over the legality of a $72.9 million tax refund that he demanded and received after declaring large losses. A negative ruling could cost him more than $100 million. – Extract New York Times.

At a briefing at the White House on Sunday, Trump denied the New York Times story and claimed that he pays “a lot” in federal income taxes.

“I pay a lot, and I pay a lot of federal income taxes” – Donald Trump

Trump added that he is willing to release his tax returns as soon as he is no longer audited by the Internal Revenue Service, which, he said, “treats me badly.”

Must a US president disclose his tax return?

Importantly, the President is not required to keep his tax returns during the audit, despite his repeated assertions to the contrary. Trump also refused to answer in the briefing how much he paid in federal taxes.

Tax Avoidance: How does he do that? 4 examples

The Times article describes a number of corporate and transactional tax claims that could raise significant audit issues for the president and his business organizations. It also points out ways in which the tax laws provide for entrepreneurs to reduce their taxes.

Note, for further details see the full article on Investopedia. Here are 4 examples from the article:

Casino ‘Waiver’ Loss

The Times’ research puts certain tax reduction strategies on Trump’s tax returns in the spotlight.

The $70.1 million refund received for 2005-2007 appears to be due to the recovery of approximately $700 million in business losses claimed for 2009. These losses were probably based on the allegation that Trump Atlantic City’s casino business was completely “abandoned” (Source: IRS. “Publication 544 (2019), Sales and Other Dispositions of Assets. Accessed Oct. 1, 2020).

They would be permissible provided Trump received nothing in return for giving up its interest in the business. However, records of the bankruptcy proceedings show that Trump received 5% of the shares of the successor company, which would have disqualified any loss from the abandonment and limited its deduction to a loss of $3,000 for the year (source: IRS. “Part I, Section 165. Losses.” Accessed Oct. 1, 2020)

Consulting Fees vs. Employee Compensation vs. Gift

Unspecified “consultancy fees”, which can be seen in tax returns, may indicate a common strategy for reducing corporate income and taxes. The $747,622 in consulting fees paid to Ivanka Trump raises several questions. As an employee of the Trump organization, Ivanka should not be paid as a consultant, that is, as an independent contractor.

Unlike employee compensation, consultant fees avoid withholding taxes that are payable by the payer. But in order to be deductible, they must be reasonable, marketable amounts. Although a consultant is subject to reporting and taxation, Ivanka may be able to avoid any tax liability. As a real estate professional, Ivanka may have enough real estate losses to offset the payment. This fee deduction may cause the IRS to raise another issue. Officials may question that the fee – which far exceeds the annual gift tax exemption of $15,000 for 2020 – is in fact a transfer of assets to a family member on which the transferor owes gift tax (source: IRS. “Publication 950.” Accessed Oct. 1, 2020).

Business vs. Personal Expenses

Although not all Trump’s business expenses are explained, the article lists items that may be non-deductible personal expenses (source: IRS. “Publication 529.” Accessed Oct. 1, 2020)

It is noted that on this basis, the IRS may not allow deductions for aircraft used for personal travel and television entertainment expenses. Since the deductions for attorneys’ fees are stated as a lump sum, The Times wonders if the total amount includes fees paid to attorneys representing Donald Trump, Jr. in investigations and the President’s personal legal agreements to obtain confidentiality agreements from the plaintiffs.

Residence or Investment?

The Trump Seven Springs housing estate in Bedford, N.Y., asks additional questions. Although Forbes reported that Eric Trump described the property as a personal residence, Donald Trump called it an investment and deducted the $2.2 million property tax as a business expense. Wealth tax deductions for personal residences are subject to a $10,000 cap on state and local tax deductions (IRS. “Topic No. 503 Deductible Taxes.” Accessed Oct. 1, 2020).

Reading tips: Asset Accumulation & Co.

Here I have some reading tips for you:

1. “Billion-dollar gift: shares largely tax-free”
2. Taxes & Assets: learning from investor experiences

“Billion-euro Gift: Ahares Largely Tax-Free”

“Billion dollar gift for Döpfner – largely tax-free?” – this headline is not from me, but from the morning mail. In fact, Matthias Döpfner has turned the publishing house upside down as boss. While owner Friede Springer stands confidently behind his decisions. Print shares were sold, new online media such as Business Insider, Idealo, Immowelt and StepStone were acquired. Already in 2012 Döpfner has received a big share package for more than 70 million Euro, now a “billion-dollar gift” for the Axel Springer boss is going to go, according to Manager Magazin. The 57-year-old media manager is increasing his previous stake in Axel Springer SE from just under three percent to a total of around 22 percent.

Tip! How does it work that you can get a block of shares almost tax-free? A little further down in the article I explain the methodology, or rather the law behind it.

• • Give away shares: largely tax-free?

Understand and Convert Taxes & Build up Assets

Tax optimization, tax-free, the most popular buzzwords when it comes to wealth accumulation. But how do you actually convert private wealth into taxes? My tip, as before, is to learn from professionals who have all been through it.

Always remember: taxes are a matter for the boss.

• Convert taxes into private assets

Mallorca: Investment in a foreign property by the sea

Sun, wind and sea. That’s what most people think of when they hear the name Mallorca. Mallorca is the absolute favorite travel destination of the Germans. No wonder, because Mallorca has not only the famous Ballermann to offer, but also quiet, beautiful places where you can let your soul dangle. No matter in which part of Mallorca you prefer to live, with our help you will find your dream property. Not only do we recommend the best real estate portals for Mallorca, but we also show you some beautiful examples of how different life and living on Mallorca can be.

Luxury property in Mallorca

Welcome to the Germans’ favourite island. Lots of sun, relaxed people, the sea and only 1-2 hours flight from cities like Berlin, Paris and Madrid. This makes Mallorca one of the most popular regions for many from business and industry, but also for celebrities who are attracted to the island. Especially on the mainland, a little off the coast, you will find villas, fincas and condominiums of the extra class. But beware. If properties are tied up, you will quickly pay too much. Therefore, we strongly recommend working with a local real estate agent. Because in Mallorca there are also Spanish laws, from the residence obligation (subject inhabited houses) to tax issues. Therefore, before we take a look at available apartments and houses, we briefly highlight the property prices in Mallorca.

• Luxury Real Estate Mallorca

Pollensa (Pollença): Living inland

The town of Pollensa is located in the north of the beautiful island of Mallorca. When tourists spend their holidays in Mallorca and want to do more than just party, they also like to come to Pollensa to visit some sights. But which sightseeings are there in Pollensa? There is for example the Roman bridge also called “Pont Roma” and some more sights. The place itself is worth to be explored, as it is an old town and there are many winding streets. Pollensa is home to a mixture of locals and newcomers, which has created a particularly pleasant and warm atmosphere.

Pollença: Beach

Map & location: Pollença

Palma de Mallorca: Life between hustle and bustle and fun

Palma de Mallorca is the capital of the island. Even in this very popular city there is no shortage of sights. However, Palma de Mallorca is famous for long party nights. Palma de Mallorca offers the perfect mix for most holidaymakers, because there are varied beautiful places, such as an old town, a port district or a city beach. But how sensible is it to invest in a property in this popular and much visited city? From Palma, you can quickly get to all the places that could be important, such as the airport or the doctor. This will benefit you as a property owner in this city. You will also never get bored here, as there are countless varied places to visit. However, if you would rather have a bit of peace and quiet and live far away from the stress of everyday life, you should not necessarily choose Palma de Mallorca as a place to live.

Palma de Mallorca: Video Tour

https://www.youtube.com/watch?v=IjkTvUjf0jA

Map & Location: Palma de Mallorca

Son Vida: For the rich & beautiful

Son Vida is one of the most popular residential areas on Mallorca. This town is surrounded by mountains and is located west of Palma de Mallorca. As a residential area it is particularly popular here, because on the one hand the way to the center of Palma de Mallorca, so the hustle and bustle and fun is not far and on the other hand you have the opportunity to retire here in peace and enjoy the silence. This place is also a paradise for golfers and you are quickly at the airport, in the shopping mile or on the beach.

Son Vida: Video

Map & Location: Son Vida

Calvia: Rural living (Santa Ponsa Calvià)

Those who would like to live in Mallorca, but prefer a quieter place to live, could be well served with the town of Calvia. The surroundings here are rather rural and ideal for hiking. If you are particularly fond of nature, you might be well served with the town of Calvia as a place to live. With a property in Calvia you have the possibility to retreat from the tourist hustle and bustle and enjoy the peace and quiet. However, if you feel like having a good time with lots of people, you have the possibility to go to the nearby Palma de Mallorca. Calvia offers a perfect balance and is worth considering when looking for a suitable property.

Calvià from above (video)

Map & Location: Calvià

Port d’Andratx: Life at the harbour

Port d’Andratx is a very popular place for potential property buyers. It is a beautiful harbour that has a yacht club. Visitors to the port love the direct waterfront location and the nature that surrounds the port. No matter who visits this place – All are enchanted. There are also two small beaches and the town of Andratx town is only 5 km away. Port d’Andratx is particularly popular as a place to live as there is the ideal mix of restaurants, cafes, clubs and quiet places to relax. Those looking to buy a property in this area should bear in mind that the cost of living in this location is slightly higher.

Port d’Andratx Video

Map & location: Port d’Andratx

360° view from the harbour

Investing in real estate: Mallorca

Living and working abroad is a very memorable experience, professionally, personally, culturally and of course financially. In this free guide, you’ll get investment tips for all the major cities in Europe, America and Asia, from New York to London to Paris.

• Investing abroad: Real estate (external)

House & Apartment for sale in Mallorca

From the valuation to the speculation tax. In this guide you will find all the important factors simply explained. Learn step by step the procedure in the apartment sale to be able to answer the question: Selling with or without an estate agent? The private sale of real estate involves many risks and sources of error, starting with the apartment valuation to the offer price to the individual marketing, from “advertising” to internal customer network and off market real estate sales.

• Sell apartment
• Sell house
• Sell land
• Sell property

Buying: Portals for cheap real estate

There are now so many real estate portals that broker real estate abroad, that you often do not even know which would be best suited to your own interests and requirements. These real estate portals could be interesting for you.

Immobilienscout24: The all-rounder for all aspects of real estate

Everyone has actually used Immobilienscout24 to search for a property to rent or sell. Immobilienscout24 is also suitable for the search for a property abroad. If you are looking for a property abroad in Mallorca via Immobilienscout24, then you will benefit from a large selection of filter functions and a wide range of different properties.

Porta-Mallorquina: The Mallorca Specialist

The real estate portal Porta-Mallorquina offers many different properties. From luxurious villas to smaller apartments, there is a lot on offer here. If you are not particularly familiar with Mallorca, it is helpful on this website that you can read not only a description of the property, but also a description of the location and the surroundings. So that you do not feel overwhelmed due to the abundance of offers, you can also limit your property search. You can limit the locations, the types of property, the prices and the regions according to your interests. Porta-Mallorquina is for you if you are already sure that you want to invest in a property on Mallorca. Moreover, not only do you have the option of finding a property for sale, but you can just as easily find a property to rent long term or for holidays.

Immowelt: Find a property abroad

The famous portal Immowelt offers not only properties on Mallorca, but as the name suggests, all over the world. Immowelt offers a nice overview of the most important facts about an apartment or a house. Since many properties are sold privately here, you can possibly make one or the other bargain on Immowelt. If you are not under pressure, but on the side looking for a suitable property in Mallorca, you have the opportunity to be informed by e-mail about new offers that match your interests.

Firstmallorca.com: The fast track to property in Mallorca

On the real estate portal Firstmallorca the chance is high that you will find your dream property. Here you can not only specify the type of property, the location and the price, but also activate other filters so that you get faster to the result that fits your ideas. The real estate portal values loyalty, honesty, transparency, respect and team spirit.

5 housing options in Mallorca – What suits you?

Here we have compiled the most popular residential locations on Mallorca for you. We briefly present the residences so that you can get an overview and find out in which place the purchase of a property would be the most sensible for you.

Buying property abroad: Tips

• New York, LA, London & Co: Luxury Real Estate
• Real estate agent
• Buy a holiday home
• Foreign property France
• Foreign property Italy
• Foreign property Spain
• Luxury Real Estate Mallorca
• Off market – especially in hot real estate markets

Second home tax at a glance: The taxation of the occupation of a secondary residence

• Taxes paid if you have a second residence somewhere other than where your main residence is located.
• Is a municipal tax and is therefore levied by the municipalities.
• Taxes the holding of a second residence
• Reason: Municipalities want to recover the tax settlement they receive from residents with primary residence
• The amount of tax varies from city to city

Back to the wiki: Real Estate