Rupert spent all his money in two weeks

[blankall]

Originally Posted by Agamemnon

Maybe the issue was that Hatch brought the money into the US without declaring it. I have offshore accounts where I can make whatever money I want, completely untaxable. But once I try to bring it into this country it counts as income and gets taxed like income. Might be Hatch brought some of it in without declaring it... if he earned it in a tax-haven country, and the money went straight from the show to his offshore account, and he never brought it in to the US, then he should have been fine. I guess this wasn't the case (though I'm no tax expert).

I'm only part way through my tax class, but I'm fairly sure you are still supposed to report that. Some countries will not show their bank accounts to be shown to other countries. People use them as tax havens, then you can hide money in them and not show anyone, and the government can't really do anything about it. As a canadian resident your still supposed to report all income and then maybe a treaty will stop double taxation

[Bobblehead]

I've heard that there is some controversy with the show "Extreme Makeover". The people whose homes are redone are theoretically supposed to pay tax on the value of the improvements.
The company that produces the show says that they do a short term lease, and do the improvements while it is under their ownership, and return the property "as is" to the owners.

[FlamingLonghorn]

Originally Posted by Bobblehead

I've heard that there is some controversy with the show "Extreme Makeover". The people whose homes are redone are theoretically supposed to pay tax on the value of the improvements.
The company that produces the show says that they do a short term lease, and do the improvements while it is under their ownership, and return the property "as is" to the owners.

I don't really understand where the controversy would come from... Who is the jackass that is trying to call Extreme Makeover on this? And I highly doubt the IRS would pursue this as it really is charitable what this show does for people. No one is trying to beat the system...

[Agamemnon]

Originally Posted by blankall

I'm only part way through my tax class, but I'm fairly sure you are still supposed to report that. Some countries will not show their bank accounts to be shown to other countries. People use them as tax havens, then you can hide money in them and not show anyone, and the government can't really do anything about it. As a canadian resident your still supposed to report all income and then maybe a treaty will stop double taxation

As far as I know I don't pay taxes on it until I bring it back into Canada. Once I do I have to pay income tax on it.

[Shazam]

Originally Posted by Sowa

I don't really understand where the controversy would come from... Who is the jackass that is trying to call Extreme Makeover on this? And I highly doubt the IRS would pursue this as it really is charitable what this show does for people. No one is trying to beat the system...

The property will get reassessed at a new value for property tax purposes. Then EM will pay property taxes for some period of time (can't remember, I'm sure one of you enterprising people can do a Google search).

[Bobblehead]

Originally Posted by Sowa

I don't really understand where the controversy would come from... Who is the jackass that is trying to call Extreme Makeover on this? And I highly doubt the IRS would pursue this as it really is charitable what this show does for people. No one is trying to beat the system...

It is the IRS.

Their contention is that people are receive thousands of dollars in benefit (having a house built or rebuild for them) and not paying any tax on the value of that benefit. At least that is the way I read the story.

Here is a link to a different story, but the issue I am describing:link

But Newsweek magazine reported in May that documents it obtained indicate that the producers told participating families they should face no income tax consequences. The magazine said that's because the families in the program are "renting" their houses to the production company during the frenetic renovation. A long-standing tax provision allows homes to be rented for less than 15 days a year with no tax consequences, and with improvements voluntarily made during that period by the tenant considered to have no value to the owner.
La Jolla tax attorney Cris John Wenthur called that reasoning "incredible" and predicted "Extreme Makeover" families may face skeptical IRS agents or have to battle out their cases in tax court.

[calf]

Originally Posted by Agamemnon

As far as I know I don't pay taxes on it until I bring it back into Canada. Once I do I have to pay income tax on it.

nope - you pay taxes on income earned while you're a resident in Canada. It doesn't matter where your assets are, income earned is typically taxable by the Canadian Government (depending on tax treaties with other countries, etc).

The basic jist being that you earned that money...the government wants a cut of it now. Hiding your income in off-shore accounts & waiting to pay basically when you want looks like tax avoidance.


From the income tax act -
ITA 2(1) An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year.

No mention of where it's earned, just that it's earned by a Canadian resident (implying that it's all taxable income earned, not just the taxable income earned in Canada)

[Agamemnon]

Originally Posted by calf

nope - you pay taxes on income earned while you're a resident in Canada. It doesn't matter where your assets are, income earned is typically taxable by the Canadian Government (depending on tax treaties with other countries, etc).

The basic jist being that you earned that money...the government wants a cut of it now. Hiding your income in off-shore accounts & waiting to pay basically when you want looks like tax avoidance.


From the income tax act -
ITA 2(1) An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year.

No mention of where it's earned, just that it's earned by a Canadian resident (implying that it's all taxable income earned, not just the taxable income earned in Canada)

Fair enough... though there's a lot more to it than it just being 'my money' in an offshore account. Technically its not 'my income earned' at this point, I don't technically own the money/account. There's corporations and such involved... I'd have to talk to my accountants again, but they're reputable and ok'd it, so I'm not too worried. I'll let you guys know how it works out!

[Clarkey]

Originally Posted by Agamemnon

Fair enough... though there's a lot more to it than it just being 'my money' in an offshore account. Technically its not 'my income earned' at this point, I don't technically own the money/account. There's corporations and such involved... I'd have to talk to my accountants again, but they're reputable and ok'd it, so I'm not too worried. I'll let you guys know how it works out!

Sounds unscrupulous, I would definately re-check that.

[Agamemnon]

Originally Posted by Clarkey

Sounds unscrupulous, I would definately re-check that.

I can't really ask the accountants any more times than I already have. I inherited the situation from a relative, its been ongoing for 15-20 years. My uncle (former Calgary cop, retired after 25 years service) has run the investment by his fraud buddies in the force and they say its legit, so between the cops and the accountants, I think I'm well covered. But if not, I'll give Richard Hatch a hello for all of you.