Word: deductability
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Louis lawyer reduced his taxable income in 1975 to $29,000. Because a Los Angeles taxpayer bought 300 head of cattle for $45,000 and borrowed $75,000 from a bank through a cattle-feeding loan program, he will be able to deduct about $55,000 from his projected gross income of $160,000 this year. Other tax shelters include silver options, oil leases, movie financing and sport franchises. These are all chancy businesses, and the tax breaks were set up to encourage investment in them...
...principal reform in the final bill limits the use of tax shelters. These are investments-in farming, real estate, equipment leasing and the purchase of sports franchises, among many other things-that allow a taxpayer to run up "paper" losses. He can then deduct these losses from his other income and thus shield a large part of that income from taxes. For example, under present law the interest paid on a loan while a building is under construction, and taxes too, can be deducted as a current expense. Since the building produces no income until it is finished, the owner...
...Increases taxes on most U.S. citizens working abroad. At present, the first $20,000 or $25,000 of their income, depending on how long they have been abroad, is excluded from U.S. tax. The bill lowers that to $15,000. In addition, it limits their ability to deduct foreign taxes paid from U.S. taxes owed...
...serve jail sentences." When he announced his presidential candidacy in December 1974, Carter inveighed against Government that is run from "an ivory tower," against "gross tax inequities," against "a business executive who can charge off a $50 luncheon on a tax return and a truck driver who cannot deduct his $1.50 sandwich...
...several years hence, the fund's income theoretically will be taxable at the same rate that applies to single individuals: 70% on nonsalary income exceeding $100,000 a year. Actually, the fund probably will still be free of taxes, past or present. Any benefits payments it makes are deductible, and they tend to be greater than the fund's investment income. Ironically, the real losers will be either employers who contribute to the fund or rank-and-file union members. Employers, who pay $22 per week into the fund for each of more than 420,000 Teamsters...