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What are tax shelters, trusts and other mechanisms?

 
 
fansy
 
Reply Thu 22 Apr, 2010 07:12 am
Quote:
But the big savings come from owning a business and deducting everything related to it. Landlords can also depreciate their commercial properties and expenses like mortgage interest. And that’s without doing any creative accounting. Then there are the tax shelters, trusts and other mechanisms the superrich use to shield their wealth.


What are tax shelters, trusts and other mechanisms?
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Type: Question • Score: 0 • Views: 1,309 • Replies: 3
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engineer
 
  1  
Reply Thu 22 Apr, 2010 07:15 am
@fansy,
When you receive income, you must pay taxes to the government. Tax shelters are ways to invest or shield your income so that you can delay paying taxes or even not have to pay them at all.
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DrewDad
 
  1  
Reply Thu 22 Apr, 2010 07:15 am
@fansy,
http://en.wikipedia.org/wiki/Tax_shelter
Quote:
Tax shelters are any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments. The methodology can vary depending on local and international tax laws.

In North America, a tax shelter is generally defined as any method that recovers more than $1 in tax for every $1 spent, within 4 years.
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DrewDad
 
  1  
Reply Thu 22 Apr, 2010 07:16 am
@fansy,
http://en.wikipedia.org/wiki/Trust_%28law%29

Quote:
In common law legal systems, a trust is a relationship whereby property (including real, tangible and intangible) is managed by one person (or persons, or organizations) for the benefit of another.
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