How Romney Used Mormon Church to Defer Taxes
Bloomberg reports on loophole he used
By Evann Gastaldo, Newser Staff
Posted Oct 30, 2012 8:43 AM CDT
Mitt Romney speaks during a campaign stop at Seven Cities Sod, Monday, Oct. 29, 2012, in Davenport, Iowa.   (AP Photo/Charlie Neibergall)

(Newser) – Since 1996, Mitt Romney has been deferring some of his taxes through something called a charitable remainder unitrust, a tax shelter Congress cracked down on little more than a year after Romney set his up. As Bloomberg describes it, the trust “allowed rich people to take advantage of the exempt status of charities”—in Romney’s case, the Mormon Church—“without actually giving away much money.” Since Romney’s trust had been established before Congress clamped down, he is not only perfectly legal, but also exempt from new rules that would require he donate more to the church.

When selling assets for a profit, charities typically don’t owe capital gains taxes; by setting up this trust, Romney basically benefits from that same allowance. It’s like “renting” a charity’s “exemption from taxation,” says one lawyer who set up many such trusts. As for the donation part, that’s “just a throwaway,” the lawyer says, adding that his goal when he set up the trusts was to make sure “the value dedicated to charity was as close to zero as possible.” So, Romney’s money has been growing tax-deferred, and he receives yearly cash payments. Anything left when he dies will go to charity, but at this point that amount will be less than 8% of the initial contribution. Click for more.

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Showing 3 of 186 comments
NorCalHal
Nov 1, 2012 9:47 PM CDT
Must be hard up for real news - this is three days old !!
MSCOTTASHLEY
Nov 1, 2012 9:55 AM CDT
Elitists like Romney think they deserve all kinds of special breaks from Uncle Sam but when it comes to food stamps they cry and cry about how they are burdened by the government. SOB's. The Constitution states that citizens will contribute for the public welfare.
OuttaHere
Oct 30, 2012 10:25 PM CDT
Thank you Congress for writing this loophole into the tax law and then not closing it retroactively.