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8 types of income the IRS can't touch
MSN Money ^ | 12-27-07 | Jeff Schnepper

Posted on 03/16/2008 6:50:31 AM PDT by RKBA Democrat

Want to keep the tax man away from your money? It's easier than you think. There are lots of ways to increase your wealth without having a chunk gobbled up by the IRS.

It's not that the agency doesn't want your money. It's just that the tax law prohibits the IRS from touching it. And with a bit of planning, you can start to cut your current tax bill and put money in your pocket now.

Let's look at a few examples....

(Excerpt) Read more at articles.moneycentral.msn.com ...


TOPICS: Business/Economy; Extended News
KEYWORDS: income; irs; survivingsocialism; taxes

1 posted on 03/16/2008 6:50:33 AM PDT by RKBA Democrat
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To: freespirited; oblomov; Jet Jaguar; wastedyears; nascarnation; Henry Belden; petercooper; ...
Surviving Socialism Pinglist
Stories and tips with a financial emphasis to help conservatives prosper during difficult times.

To be added or taken off this list, please send a FR mail to RKBA Democrat

2 posted on 03/16/2008 6:51:25 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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To: RKBA Democrat

Later BTTT


3 posted on 03/16/2008 6:51:53 AM PDT by Old Sarge (CTHULHU '08 - I won't settle for a lesser evil any longer!)
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To: RKBA Democrat

bump,,,and ,,, marked


4 posted on 03/16/2008 6:55:06 AM PDT by piroque
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To: RKBA Democrat

Complex, social micromanagement by the IRS does indeed leave some areas free from taxation ... if you or your employer are willing and able to contort to the micromanagement. It’s time for a flat tax or NRST!


5 posted on 03/16/2008 6:56:09 AM PDT by coloradan (The US is becoming a banana republic, except without the bananas - or the republic.)
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To: RKBA Democrat

Bookmark


6 posted on 03/16/2008 7:07:58 AM PDT by squarebarb
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To: coloradan

“It’s time for a flat tax or NRST!”

I would agree that a flat-tax is overdue. The problem is that the ability to reward and penalize via the tax code is not a power Congress is going to give up. The best you can do for now is to plan your own finances accordingly.


7 posted on 03/16/2008 7:08:00 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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To: RKBA Democrat
The problem is that the ability to reward and penalize via the tax code is not a power Congress is going to give up.

You are right on the money (pun intended)!

8 posted on 03/16/2008 7:18:01 AM PDT by Starboard
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To: RKBA Democrat

Bump


9 posted on 03/16/2008 7:18:17 AM PDT by colinhester
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To: RKBA Democrat
>>The problem is that the ability to reward and penalize via the tax code is not a power Congress is going to give up.<<

Neither will the American public readily allow politicians to change a tax system they hate but have grown accustomed to. And too, many Americans are just leary of playing "tax system musical chairs" when they already have a chair and politicians are the disc jockeys.

10 posted on 03/16/2008 7:18:22 AM PDT by Muleteam1
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To: RKBA Democrat

It seems like the home gain exclusion could be used to pay almost no income taxes. Say you and your spouse are employees of your own corporation that pays a minimum salary. After two years the corporation buys your house for up to $500,000 more than you paid for it, with seller financing. That $250k/year is tax free. Now the corporation sells it back to you for a $500k loss, so the corporation pays no taxes for having no profits. Rinse and repeat. Obviously you’d have to structure it so the IRS doesn’t think you’re just working the system but couldn’t the basic idea be made to work legally?


11 posted on 03/16/2008 7:22:58 AM PDT by Reeses (Leftism is powered by the evil force of envy.)
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Comment #12 Removed by Moderator

To: RKBA Democrat

Bookmarked


13 posted on 03/16/2008 7:35:59 AM PDT by VRWCer ("The Bible is the Rock on which this Republic rests." - President Andrew Jackson)
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To: Baynative

This thread is life altering. I think I will buy a foreclosure and sign up for a tax deductible online university, get formally educated in investing. Becoming a professional investor is one of the few jobs that can’t be outsourced. This is the only way to go in the new global economy.


14 posted on 03/16/2008 7:38:14 AM PDT by Reeses (Leftism is powered by the evil force of envy.)
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To: RKBA Democrat

Very nice to know!


15 posted on 03/16/2008 7:45:15 AM PDT by Edward Watson (Fanatics with guns beat liberals with ideas)
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To: Baynative
When I learned about that law, it became my exit visa from the corporate life treadmill.

Ya, it was a fun ride, but I think that merry-go-round has stopped. All kind of flippers are filing bankruptcy or letting the financier eat it.

16 posted on 03/16/2008 7:48:35 AM PDT by MrPiper
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To: Baynative

I have been seeing people do exactly that. One of the reasons for the real estate boom and someone eventually will be holding the bag.


17 posted on 03/16/2008 7:50:21 AM PDT by Orange1998
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To: RKBA Democrat

Bump for later.


18 posted on 03/16/2008 7:50:48 AM PDT by Angelwood (FReepers are Everywhere! We Support Our Troops! (Hillary's Vast Rt Wg Conspiracy))
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To: RKBA Democrat

“...that the IRS can’t touch”

With a stroke of the pen, the law of the land can be changed to fix that any moment the legislature is in session.


19 posted on 03/16/2008 7:51:15 AM PDT by theBuckwheat
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To: theBuckwheat

“With a stroke of the pen, the law of the land can be changed to fix that any moment the legislature is in session.”

Thus insuring an income for those who specialize in keeping their clients one step ahead of the game.


20 posted on 03/16/2008 8:07:15 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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To: RKBA Democrat

bump for later


21 posted on 03/16/2008 8:16:09 AM PDT by a_screen_name
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To: RKBA Democrat

Ping


22 posted on 03/16/2008 8:16:44 AM PDT by Keith Brown (Among the other evils being unarmed brings you, it causes you to be despised Machiavelli.)
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To: RKBA Democrat

Bookmarking for later


23 posted on 03/16/2008 8:17:36 AM PDT by 2nd amendment mama ( www.2asisters.org | Self defense is a basic human right!)
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To: coloradan
social micromanagement by the IRS does indeed leave some areas free from taxation

Right up until they figure that out and take action to close those "loopholes for the rich" that take food out of the mouths of babies and elderly people who would otherwise be living on cat food.

/angry economic illiterate socialist rant

24 posted on 03/16/2008 8:18:38 AM PDT by Hardastarboard (DemocraticUnderground.com is an internet hate site.)
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To: RKBA Democrat

The article didn’t include being a legislator with your office in Washington DC either.
The possible ways not to paid taxes may be legal but I’m just assuming that everyone of them will raise a big red flag to the IRS. Thus, making you a bigger target to them and also wanting the IRS to possibly make an example of you. But I may be incorrect.


25 posted on 03/16/2008 8:24:41 AM PDT by antiunion person (President McCain, what a disgusting phrase.)
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To: RKBA Democrat

I’m scanning FR today for articles to read and comment on AFTER St.Pat’s... Got to prepare for this eve & tommorow you know...


26 posted on 03/16/2008 8:25:41 AM PDT by AFPhys ((.Praying for President Bush, our troops, their families, and all my American neighbors..))
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To: RKBA Democrat

Cross the border illegally. With no paperwork, the IRS can’t tax you.

Or just sell weed, blow and meth.

Millions already do this, I guess us schmucks who do pay taxes are the losers.


27 posted on 03/16/2008 8:30:06 AM PDT by Malsua
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To: antiunion person

“The possible ways not to paid taxes may be legal but I’m just assuming that everyone of them will raise a big red flag to the IRS.”

And if the strategies are legal, it could raise flags of several colors with the IRS and still not matter. It’s still income that isn’t taxable.


28 posted on 03/16/2008 8:34:27 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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To: Reeses

That sounds like something Eliot Spitzer would do.


29 posted on 03/16/2008 8:36:40 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: RKBA Democrat

A flat tax is still an income tax, it still requires you to pay lawyers and accountants to file taxes, and it empowers the IRS.

The only real answer is a Fair Tax that does away with the IRS. Only until the IRS is eliminated, tax accountants, tax lawyers, and the whole ilk will Americans have a chance to regain their prosperity.


30 posted on 03/16/2008 8:39:47 AM PDT by Concho (IRS--Americas real terrorist organization.)
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To: RKBA Democrat

Slaves arguing over the best way to redecorate the cell.


31 posted on 03/16/2008 8:40:15 AM PDT by EternalVigilance (George Soros now owns two Parties, and their likely nominees...)
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To: Moonman62

I have a criminal mind. It’s just that getting rich legally is easier and has less jail time.


32 posted on 03/16/2008 8:42:14 AM PDT by Reeses (Leftism is powered by the evil force of envy.)
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To: RKBA Democrat

Pay into a tax benefited indexed universal life insurance plan with growth and a tax free death benefit. Take an annual pay-out after five-ten years and it’s tax free. See Missed Fortune 101 or Last Chance Millionaire.


33 posted on 03/16/2008 8:42:55 AM PDT by purpleraine
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To: Baynative

I am thinking of making the jump soon myself, looking to invest in property and maybe open a business. Do you have any advice or literature regarding this? Thanks!


34 posted on 03/16/2008 8:46:25 AM PDT by gr8eman (Everybody is a rocket scientist...until launch day!)
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To: RKBA Democrat

save on taxes bump


35 posted on 03/16/2008 8:53:01 AM PDT by Luigi Vasellini (What do you call 2 toddlers and some duct tape??........muslim body armor!!!!!!!)
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To: RKBA Democrat

Thanks.


36 posted on 03/16/2008 8:54:12 AM PDT by jetson
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To: Reeses

“Becoming a professional investor is one of the few jobs that can’t be outsourced. This is the only way to go in the new global economy.”

Yup. And it’s very clear that tax policy rewards investment work vice labor. If you earn a dollar at your job, you’re going to be paying say 25% Federal income tax, 7.5% for social security, plus state income tax of say 6%. Or roughly 37% of every dollar earned, and quite possibly more. Compare that to what you would pay if that same dollar were earned as a long term capital gain, with a top Federal rate of 15%, but perhaps lower.

And we wonder why the work ethic seems to be going by the wayside.


37 posted on 03/16/2008 9:26:52 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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To: Concho

“The only real answer is a Fair Tax that does away with the IRS.”

And what makes us think that the IRS, politicians, and all the other people who benefit from the current system would agree to close up shop? The “Fair tax” is a nice idea, I just don’t see it happening.


38 posted on 03/16/2008 10:04:54 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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Comment #39 Removed by Moderator

To: Baynative

My real estate agent says they might eliminate this exemption if democrats take the white house. I am wondering what to do, I’m retired, disabled, ‘cash poor’ but own my home (no mortgage). The home is worth about $300,000, and costs me money in property taxes and maintenance. I could sell it and take that capital gains exemption while it’s still the law, but would then have to rent an apartment. Also, the $250,000 gain is not taxed, but if you keep the money on hand in CD’s or whatever, then the income on it IS taxed.

You have a clever plan where you keep reinvesting in houses, but my health and limited resources won’t allow me to do that. I’m afraid of missing out on an opportunity by not selling now, as there are so many dire predictions about the economy.

Do you think this capital gains exemption is safe for a while, or in danger as the govt desperately tries to raise more taxes? Any ideas or advice for me? Thanks!


40 posted on 03/16/2008 12:57:37 PM PDT by baa39 (Defend our troops! see my profile page)
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To: RKBA Democrat
You may be right, but I look at it this way. I drive a truck for a living. Here in California, a truck must be inspected by the CHP (California Highway Patrol) every three months. Some of the inspection stations I have dealt with will find something wrong with my truck, no matter how much I keep up the repairs and maintenance. The inspections are told ‘unofficially’ to find something wrong with the truck or the truckers’ paperwork, no matter how small. Small is not a word when the fines are issued to the driver or the company that owns the truck. Two months ago, I forgot to put CA (California) after the city name where I stopped and it cost me $480. I realize I have gotten off the point some talking about the CHP but the IRS will do the same exact thing when doing an audit on someone's returns. All the tax write offs or strategies as you called them, will get you no farther ahead is some tiny error is made on your paperwork. We are all humans and humans make mistakes all matter how careful you are.
41 posted on 03/16/2008 2:13:56 PM PDT by antiunion person (President McCain, what a disgusting phrase.)
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To: baa39

Rent a portion of the house either as a small apartment or as roomates depending on what zoning permits.


42 posted on 03/16/2008 4:20:49 PM PDT by Chickensoup (If it is not permitted, it is prohibited. Only the government can permit....)
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Comment #43 Removed by Moderator

To: RKBA Democrat

bookmark


44 posted on 03/17/2008 10:05:00 AM PDT by ovrtaxt (Member of the irate, tireless minority, keen on setting brushfires of freedom in the minds of men.)
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To: RKBA Democrat
"...a flat-tax is overdue."

The NRST is the way to go. A flat tax is STILL an income tax. The IRS would STILL exist. The un-constitutional 16th Amendment would STILL be around.

Scrap the code, abolish the IRS!!!

45 posted on 03/27/2008 6:53:50 AM PDT by Mikey (Freedom isn't free, but slavery is.)
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To: Mikey

“Scrap the code, abolish the IRS!!!”

Yes, that would be nice. We’re just never going to see it. Being able to reward or punish economic interests via the income tax is something that Congress is never going to give up.

I’d prefer to spend my time and effort minimizing what I pay under the current rules as they are or are likely to be rather than spending my time lobbying for a “fair tax” or other systemic reform that we’re just not going to see this side of heaven.


46 posted on 03/27/2008 7:50:05 AM PDT by RKBA Democrat (Lord Jesus Christ, Son of God, have mercy on me, a sinner!)
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