Romney's IRA: Investment gurus can you explain this to me?

[lawgator1]

Romney was at Bain for 15 years. When he left, his IRA for that position was worth $102 million.

If he contributed the max of $30,000 per year, he could have put in $450,000 during that time.

How could it get up to $102 million?


The Secret Behind Romney

Did Romney put Bain Capital shares in his IRA? | Felix Salmon

 

[VolsNSkinsFan]

because he hit a grand slam on a postion

 

[lawgator1]

because he hit a grand slam on a postion

Articles I posed say that is not plausible. At best, it could be around $11 million.

 

[utvolpj]

actually the article you posted says:

Romney may have made use of an Internal Revenue Service loophole that allows investors to undervalue interests in investment partnerships when first putting them into an IRA…

An investor could even set an initial value for a partnership interest at zero dollars, because under tax regulations an interest in a partnership represents future income, not current value.
​

Tax lawyers and accountants suggest an answer: Romney may have made use of an Internal Revenue Service loophole that allows investors to undervalue interests in investment partnerships when first putting them into an IRA. These assets can produce returns far in excess of those that could be generated from other investments made at the capped level.

An investor could even set an initial value for a partnership interest at zero dollars, because under tax regulations an interest in a partnership represents future income, not current value, said Chris Sanchirico, co-director of the Center for Tax Law and Policy at the University of Pennsylvania Law School.

Whether Romney used this technique, which is legal, when he put partnership interests into his IRA is a question that won't likely be answered when he discloses his 2010 tax returns on Tuesday.

 

[Velo Vol]

Hard work.

 

[Velo Vol]

Romney's the kind of guy you'd want to share an off-shore account and tax loophole with.

 

[VolsNSkinsFan]

Articles I posed say that is not plausible. At best, it could be around $11 million.

when the iphone was announced, I saw people turn 10K into a million the next day by owning out of the money options. Ive got a stock position in my IRA thats up 5000% from 2009. Its very possible

 

[lawgator1]

actually the article you posted says:

So he can put in shares of a company "worth" next to zero, as his $30,000 a year, in anticipation that when Bain takes them public the actual value of the contribution will be in the millions?

That's quite a loophole.

Can I do that?

 

[vols4sure]

I guess a presidential hopeful is not supposed to be able to utilize legal tax strategies. Is that hidden in the tax code somewhere?

 

[milohimself]

So he can put in shares of a company "worth" next to zero, as his $30,000 a year, in anticipation that when Bain takes them public the actual value of the contribution will be in the millions?

That's quite a loophole.

Can I do that?

Indeed you can.

 

[utvolpj]

So he can put in shares of a company "worth" next to zero, as his $30,000 a year, in anticipation that when Bain takes them public the actual value of the contribution will be in the millions?

That's quite a loophole.

Can I do that?

why not? If you do the same as Romney possibly did then it is legal for you too

 

[lawgator1]

I guess a presidential hopeful is not supposed to be able to utilize legal tax strategies. Is that hidden in the tax code somewhere?

Not at all. Of course he can.

I'd just like to understand it better and have me some access to shares that I can proclaim are worth $30,000 when I, and everyone in the biz, knows they are actually worth millions.

That's a powerful strategy. I think everyone should have access to such shares of stock.

Don't you?

 

[lawgator1]

Indeed you can.

Where do I get the shares of stock that I can say are worth $30,000, but are actually worth millions?

 

[volinbham]

the politics of personal destruction continue...

 

[utvolpj]

Not at all. Of course he can.

I'd just like to understand it better and have me some access to shares that I can proclaim are worth $30,000 when I, and everyone in the biz, knows they are actually worth millions.

That's a powerful strategy. I think everyone should have access to such shares of stock.

Don't you?

technically everyone does have access but it appears to require a significant investment and risk.

Where do I get the shares of stock that I can say are worth $30,000, but are actually worth millions?

read the articles you posted (which it appears will be for the first time)

 

[lawgator1]

the politics of personal destruction continue...

What? He did nothing illegal, right?

And so I imagine that anyone can do it. Since its legal.

I just don't know where I can get such stock. Sounds like a heckuva good deal. Would really like to find some stock like that.

 

[lawgator1]

technically everyone does have access but it appears to require a significant investment and risk.



read the articles you posted (which it appears will be for the first time)

Well, I'm not sure it requires investment and risk. He didn't risk anything. In fact, to the contrary, he paid basically nothing for those shares. Knowing that, with a wink and a nod to the $30,000 limit, they are actually worth hundreds of times that.

And here's the best part: He hasn't paid any taxes on it!!

Wow. I have REALLY got to get me some of that stock.

 

[volinbham]

What? He did nothing illegal, right?

And so I imagine that anyone can do it. Since its legal.

I just don't know where I can get such stock. Sounds like a heckuva good deal. Would really like to find some stock like that.

Correct - he did nothing illegal but the OP and the whole tax return canard is about creating suspicion about him rather than debating policy prescriptions.

 

[milohimself]

Well, I'm not sure it requires investment and risk. He didn't risk anything. In fact, to the contrary, he paid basically nothing for those shares. Knowing that, with a wink and a nod to the $30,000 limit, they are actually worth hundreds of times that.

And here's the best part: He hasn't paid any taxes on it!!

Wow. I have REALLY got to get me some of that stock.

Start watching more Fox Business bro, you can learn how to make crazy skrill and hate Democrats at the same time. Maybe Romney will sell you his secret techniques for three installments of $29.99+s&h.

 

[utvolpj]

Well, I'm not sure it requires investment and risk. He didn't risk anything. In fact, to the contrary, he paid basically nothing for those shares. Knowing that, with a wink and a nod to the $30,000 limit, they are actually worth hundreds of times that.

And here's the best part: He hasn't paid any taxes on it!!

Wow. I have REALLY got to get me some of that stock.

what the heck are you talking about now? Read the articles YOU linked

 

[volinbham]

So if I get stock options as compensation (in lieu of traditional compensation) I basically paid nothing for them and had no risk?

That's a new one on me.

 

[milohimself]

So if I get stock options as compensation (in lieu of traditional compensation) I basically paid nothing for them and had no risk?

That's a new one on me.

Investment 101.

 

[lawgator1]

So if I get stock options as compensation (in lieu of traditional compensation) I basically paid nothing for them and had no risk?

That's a new one on me.

Well, its not that. I mean, employees are often given stock as a benefit. I get it.

Its that there is this manipulation of the $30,000 limit on the IRA, which is a mechanism to avoid taxes, that is ... well, pretty frustrating I think for average folks.

We are told that there are limits to what we can sock away. Strict dollar limits. The purpose is to keep us from hiding massive amounts of income from Uncle Sam.

So what Romney did is get paid in some of this stock. By manipulating it so that it had a temporary value of zero (even though of course in real terms it was worth millions) he then used the stock as his contribution to the IRA.

He thus used an artificial valuation of the stock to not just bypass the $30,000 limit on untaxed savings, but basically obliterate it.

It might be legal.

But its wrong. It is tax evasion that the rest of us cannot employ. It doesn't make him a criminal or even a bad guy. But it is symptomatic of what's wrong with our system. It is how the 99 % are kept slaving away at jobs that barely pay the bills and make everyday life such a struggle for so many, while others seem take advantage of loopholes, bought and paid for by the wealthy.

Romney is emblematic of what we all know, deep in our hearts.

The game is rigged.

 

[utvolpj]

It is how the 99 % are kept slaving away at jobs that barely pay the bills and make everyday life such a struggle for so many, while others seem take advantage of loopholes, bought and paid for by the wealthy.

:lolabove:

ftr I'm laughing at your use of the 99%

 

[volinbham]

Well, its not that. I mean, employees are often given stock as a benefit. I get it.

Its that there is this manipulation of the $30,000 limit on the IRA, which is a mechanism to avoid taxes, that is ... well, pretty frustrating I think for average folks.

We are told that there are limits to what we can sock away. Strict dollar limits. The purpose is to keep us from hiding massive amounts of income from Uncle Sam.

So what Romney did is get paid in some of this stock. By manipulating it so that it had a temporary value of zero (even though of course in real terms it was worth millions) he then used the stock as his contribution to the IRA.

He thus used an artificial valuation of the stock to not just bypass the $30,000 limit on untaxed savings, but basically obliterate it.

It might be legal.

But its wrong. It is tax evasion that the rest of us cannot employ. It doesn't make him a criminal or even a bad guy. But it is symptomatic of what's wrong with our system. It is how the 99 % are kept slaving away at jobs that barely pay the bills and make everyday life such a struggle for so many, while others seem take advantage of loopholes, bought and paid for by the wealthy.

Romney is emblematic of what we all know, deep in our hearts.

The game is rigged.

And there it is folks - he shouldn't be POTUS because he's a symbol of social injustice. Well done sir, well done.

:salute: