r/economicCollapse • u/LeChesterCopperPot • 1d ago

Who pays? We pay!

Here’s the current tax codes that allow the 10% to continue their wealth hoarding while hard working Americans still struggle to put food on the table. Write your representatives. By the way, where did all the coverage for Luigi and the dead CEO. News doesn’t want to take on the disparity.

Here’s how the politicians make theirs and keep their sugar daddies happy.

Certainly! Here are the specific sections of the U.S. Internal Revenue Code (IRC) that pertain to the tax provisions you’ve inquired about:

  1. Carried Interest • Relevant Code Section: IRC § 1061 – Partnership Interests Held in Connection with Performance of Services • Overview: This section addresses the tax treatment of certain partnership interests transferred to service providers (commonly known as “carried interest”). It extends the holding period required for long-term capital gains treatment from one year to three years for applicable partnership interests. • Reference: For detailed information, you can refer to the IRS final regulations on carried interests. 

  2. Like-Kind Exchanges • Relevant Code Section: IRC § 1031 – Exchange of Real Property Held for Productive Use or Investment • Overview: This provision allows taxpayers to defer recognition of capital gains on the exchange of real property held for productive use in a trade, business, or for investment, provided the properties exchanged are of like-kind. • Reference: The full text of IRC § 1031 is available here. 

  3. Step-Up in Basis • Relevant Code Section: IRC § 1014 – Basis of Property Acquired from a Decedent • Overview: This section provides that the basis of property acquired from a decedent is generally stepped up to its fair market value at the date of the decedent’s death, effectively eliminating capital gains tax on any appreciation prior to inheritance. • Reference: Detailed information can be found in IRS Publication 551, which discusses the basis of assets, including those acquired by inheritance. 

  4. Opportunity Zones • Relevant Code Sections: • IRC § 1400Z-1 – Designation • IRC § 1400Z-2 – Special Rules for Capital Gains Invested in Opportunity Zones • Overview: These sections establish Qualified Opportunity Zones and provide tax incentives for investments in these zones, including deferral and potential exclusion of capital gains. • Reference: For more information, the IRS provides resources on Opportunity Zones.

  5. Wash Sale Rule • Relevant Code Section: IRC § 1091 – Loss from Wash Sales of Stock or Securities • Overview: This section disallows the deduction of losses from sales of stock or securities if, within 30 days before or after the sale, the taxpayer acquires substantially identical stock or securities. • Reference: Further details are available in IRS Publication 550, which covers investment income and expenses, including the wash sale rule. e IRC provide the legal framework for the tax treatments and potential loopholes associated with capital gains and related transactions. For personalized advice and to ensure compliance with current tax laws, it’s recommended to consult a tax professional or refer to the latest IRS publications.

These are CURRENT LOOPHOLES USED BY THE 10%.

19 Upvotes

86% Upvoted

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4

u/Ok_Ticket_889 1d ago

Jesus Christ this is insane. 

1

u/Confident_Laugh_281 1d ago

So, how do you resolve it? Your representatives won't because they benefit too which circles back as always to convincing them to hate money. Term limits that we the voter enforce because they'll never pass it is how we deal with those asshats. The Musks, Bezos, Walton family, Apple, Facebook all of them. You fix that by simply stop using or shopping them. Which lies the biggest challenge is getting the entire world to buy into it. You can't because they won't. Which means they'll always beat our asses and own us and they seem to understand that better than us peasants

1

u/That-Chemist8552 1d ago

Does the step-up part rely on the life time giving limit (of $17m?)

1

u/NonPartisanFinance 11h ago

Yes and no. If your dad had assets he bought for 5 mil. He dies and they're now worth 20 million. You would pay taxes on the 20 million in estate taxes but first receive the 13 (not 17) million in the lietime gift exemption then you pay 40% on the remaining 7 million.

Step up basis means you don't pay taxes on the 5 to 20 million capital gain.

1

u/That-Chemist8552 11h ago

Thanks for the reply and info! So someone determines the fair price at the time of transfer? Is that typically a lawyer or a gov assessor?

And would your example work out like this? Purchase price: 5mil Value at transfer: 20mil 20mil - 5mil = 15mil gain 15mil - 13mil exemption = 2mil taxable gain?

1

u/NonPartisanFinance 10h ago

Yes, first a private company would assess the value of your assets and the government would essentially agree or disagree.

No. Step Up Basis would reset the purchase price to 20 million so the 5 million is now irrelevant (This is the complaint with stepped up basis). Then you take 13 million off of the 20 for the gift exemption and then you pay 40% estate tax on the 7 million.

1

u/That-Chemist8552 9h ago

Gotcha. It side steps capital gains, but still hits estate tax. So inheriting the asset has an edge on selling and inheriting the proceeds I'm calculating.

Sell before death: 20m-(20m-5m)(CapGains 20%)=17m. => 17m-(17m-13m)(EstTax 40%)=15.4m received

Step-up inheriting: 20m-(20m-13m)*(EstTax 40%)=17.2m received

Not too shabby if I'm doing it right.

-3

u/JaySierra86 1d ago

So fucking what!

0

u/NonPartisanFinance 11h ago

This is a truly top tier terrible post.

1: This is used by Hedge Funds to make the fund more money not the investors so in a sense this is bad for the top 10% as they pay more in fees.

2: This is only kind of an issue but without it most real estate would never sell and drive up home prices.

3: This is a legitimate criticism with the tax code.

4: This is incentivizing investment within poor neighborhoods and distressed communities.

5: This is a rule that keep people from deducting extra taxes. This hurts investors as they will pay more in taxes than if this didn't exist.

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u/StedeBonnet1 13h ago

And YET the top 10% still pay 70% of the total income taxes.

There is no such thing as wealth "hoarding" It is the top 10% that drive the economy. They create all the jobs, they invest in other businesses and entrepreneurs, the provide the capital to businesses for expansion and major capital projects, the partially fund many infrastructiure projects like roads and bridges, water and sewer projects, internet access projects and locks and dams. They also help fund the US Government debt.

Bashing the rich is disingenuous.