A Clue Emerges to Romney’s Gift-Tax Mystery

[maddezmom]

Source: WSJ

By Mark Maremont

One of the mysteries surrounding Mitt Romney’s taxes is how the former private-equity executive managed to get $100 million into a family trust for his children without incurring federal gift taxes.

¬snip¬


The attorney at Ropes & Gray wrote that in the 1990s and early 2000s estate-planning lawyers “commonly advised” that executives could claim a value of zero on these transfers of carried-interest rights for federal gift-tax purposes. He said the practice ended by 2005.


Gifts of carried-interest rights are common, but several estate-planning attorneys at major New York firms said they are puzzled by the claim that the rights ever could have been valued at zero, particularly at an established private-equity firm. They said long-standing rules require taxpayers to value all gifts at fair-market value, or what a willing buyer would pay a willing seller.

In response to a reporter’s questions, a Romney adviser said the presentation by the Ropes & Gray lawyer was aimed at educating other attorneys about industry practices, not a description of Ropes & Gray’s advice to clients. Based on the presentation, the adviser said, “you should not assume” that was the firm’s advice to clients or that Mr. Romney’s gift-tax returns ever valued carried-interest rights at zero.

The adviser declined to address how Mr. Romney actually did value such rights, or whether the rights were given to the trust. The adviser declined to answer other questions about the family trust.

Read more: http://blogs.wsj.com/washwire/2012/08/24/a-clue-emerges-to-romneys-gift-tax-mystery/?mod=WSJBlog&utm_source=twitterfeed&utm_medium=twitter

[livetohike]

1. Interesting.....even if this gets widespread coverage, many Americans have no first hand

experience with this and won't understand it . Hopefully, someone who does can break it down into a simple soundbite.

[rfranklin]

2. Romney paid no taxes on $100 million using high priced tax lawyers...

That's simple enough to understand isn't it?

[Berlum]

4. Willard is a Two-fer; a standard Republican Tax dodger & Draft Dodger

[byeya]

5. Works for me: Short, unambiguous and to the point.

[julian09]

8. Normally any gift over $10,000 is taxable, for the giver. nt

[livetohike]

11. For me...but some of the right wing nut jobs out there don't understand

simple math.

[raouldukelives]

6. Some animals are more equal than others. nt

[wordpix]

9. "break it down into a simple soundbite"---Rachel and Ed are best at this

[progressivebydesign]

12. then they can explain the 100 million dollar IRA account. nt

[sarcasmo]

3. R money has some of the best accountant on the Planet.

[trailmonkee]

7. If the practice ended in 2005.. than he should have nothing to worry about and show his 5 years?

Im not sure that this is what he is holding back... it would have to be something more recent, my guess is his 09' taxes are the stinker he is hiding

[wordpix]

10. IRS tax evader amnesty in '09---come clean & we won't prosecute---did Rmoney come clean?

[mopinko]

13. this might bite.

most people are not too sure what the gift tax is about. but paying taxes on a gift to your kids while rmoney pays none if he does it- that may strike a chord.
even people who can't do it wish they could.