Charitable giving of the ultra-wealthy

[albertGQ]

Originally posted by CaramonLS@Sep 28 2004, 11:15 PM
I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

If that was the case, then everybody would donate all their money to taxes. And we all know that is not the case

EDIT: whoops. i meant donate all their money to charity, not taxes

[CaramonLS]

Originally posted by albertGQ+Sep 29 2004, 03:50 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (albertGQ @ Sep 29 2004, 03:50 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-CaramonLS@Sep 28 2004, 11:15 PM
I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

If that was the case, then everybody would donate all their money to taxes. And we all know that is not the case [/b][/quote]
Sorry Albert, not everyone knows Tax Law inside out.

Nor are people going to tell the general public secrets that could save them money, unless it earns them some money back.

Hence why tax planners appeal so well to the people in the highest tax bracket.

[Daradon]

Originally posted by CaramonLS+Sep 29 2004, 09:55 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (CaramonLS @ Sep 29 2004, 09:55 AM)</td></tr><tr><td id='QUOTE'>

If that was the case, then everybody would donate all their money to taxes. And we all know that is not the case

Sorry Albert, not everyone knows Tax Law inside out.

Nor are people going to tell the general public secrets that could save them money, unless it earns them some money back.

Hence why tax planners appeal so well to the people in the highest tax bracket. [/b][/quote]
???

I will agree with the premise of what you say here Caramon, there are oddities and things professional tax people could draw upon, but still, it's impossible for you to get all of your charitable donations back and pay NO taxes. And especially ludicris to suggest you could even get more back as your original post stated. Common sense just staes this isn't possible. And it certainly wouldn't be a secret for long if it was, nor would the govenment allow it to be a loophole for long if it was.

[Lurch]

If you were to commit to charitable giving and use an insurance policy in a certain way, the net result through time might be to retrieve a good part of the money so that you can give it to your kids when you die. I believe that's the way it works.

Nothing so complicated. Though I didn't understand the details, I wrote my planner a cheque, it went through a charitable 'fund' of some sort, and I got a larger tax break than the original cheque by around 10% for that tax year. Basically, a $100 'donation' (for the sake of round numbers) created a $500 tax credit AND capital gains of say $400 (this may not be quite accurate). My tax liability, at the end of the day, fell by $110, so I came out $10 ahead. In essence, I forced the Canadian government to subsidize a donation of medical supplies to a 3rd world country through their tax code, which they have since closed as a loophole. This was effective up to the amount that your employment income exceeded the top bracket, after which the donation cost more than the tax benefit (and became true charity, not tax planning!!).

As for Bill Gates, there is no way that he is getting a tax benefit anywhere near as large as his donations. His wealth is held largely in stock - his actual annual income is probably measured in millions not billions. US tax law is incredibly favorable to wealth and capital accumulation, i.e. Gates wouldn't pay all that much tax in the first place.

[Daradon]

'As for Bill Gates, there is no way that he is getting a tax benefit anywhere near as large as his donations. His wealth is held largely in stock - his actual annual income is probably measured in millions not billions. US tax law is incredibly favorable to wealth and capital accumulation, i.e. Gates wouldn't pay all that much tax in the first place. '

More or less exactly what I'm saying. Your point about paper (or now electronic) wealth though is a very good point.