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Posted
On 8/29/2024 at 1:14 PM, Akkula said:

Your boy Trump made a tax on unrealized profit in foreign corporations in the TCJA.  That is the basis of the whole Moore case.  Even if you do not take any dividends and don't sell the share of your foreign corporation you have to pass through your personal income and report it as income.  It is called GILTI.  It is basically 100% a tax on unrealized income that is held at the corporate level.  

You nailed it. And the GILTI regime was upheld in scotus.

in theory you can game GILTI but it’s wildly difficult to do so and to the best of my knowledge largely untried. 

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Posted
On 8/29/2024 at 2:14 PM, Akkula said:

Even if you do not take any dividends and don't sell the share of your foreign corporation you have to pass through your personal income and report it as income.  It is called GILT

And domestic partnerships, and S-Corps are no different. Even if you don't receive any money you still have to pay tax on your allocable share of INCOME.

Try again. 

 

Posted
On 8/29/2024 at 2:22 PM, bornontheblue said:

And domestic partnerships, and S-Corps are no different. Even if you don't receive any money you still have to pay tax on your allocable share of INCOME.

Try again. 

 

These are not foreign partnerships nor pass through entities.  These are foreign C-CORPORATIONS completely separate from the shareholders in every sense.  Yet the shareholder is required to report income on the profits from the company on personal taxes even though the shareholder never takes a dividend or sells the shares.  

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Posted
On 8/29/2024 at 2:21 PM, Joe from Wyo said:

You nailed it. And the GILTI regime was upheld in scotus.

in theory you can game GILTI but it’s wildly difficult to do so and to the best of my knowledge largely untried. 

It is only applicable if more than 50% of the foreign corporation is owned by US persons.  Trump screwed a lot of small guys living abroad who got foreign corporations for very legitimate purposes and likely own 100%.

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Posted
On 8/29/2024 at 2:25 PM, Akkula said:

These are not foreign partnerships nor pass through entities.  These are foreign C-CORPORATIONS completely separate from the shareholders in every sense.  Yet the shareholder is required to report income on the profits from the company on personal taxes even though the shareholder never takes a dividend or sells the shares.  

Yes you are required to report income on foreign earned profits and include it in your taxable income which 1- is actually how domestic pass through entities work, and 2- has nothing to do as far as I know with market value of investments. It certainly does not set precedent for broadly taxing unrealized gains. 

You really do not know what you are talking about here. 

Posted
On 8/29/2024 at 1:27 PM, Akkula said:

It is only applicable if more than 50% of the foreign corporation is owned by US persons.  Trump screwed a lot of small guys living abroad who got foreign corporations for very legitimate purposes and likely own 100%.

Yeah but a US person is defined as someone with 10% ownership or more and who is a US Citizen or resident. You could get around the US Person issue with fractional ownership manipulation even if you are in fact the actual majority owner and a US citizen/resident

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Posted
On 8/29/2024 at 1:29 PM, bornontheblue said:

Yes you are required to report income on foreign earned profits and include it in your taxable income which 1- is actually how domestic pass through entities work, and 2- has nothing to do as far as I know with market value of investments. It certainly does not set precedent for broadly taxing unrealized gains. 

You really do not know what you are talking about here. 

The aspect of GILTI in question in Moore was that which relates to undistributed earnings which would be pretty unrealized 

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Posted
On 8/29/2024 at 4:29 PM, Joe from Wyo said:

Yeah but a US person is defined as someone with 10% ownership or more and who is a US Citizen or resident. You could get around the US Person issue with fractional ownership manipulation even if you are in fact the actual majority owner and a US citizen/resident

The foreign holding company rule lulz 

  • Haha 1
Posted
On 8/29/2024 at 2:33 PM, Joe from Wyo said:

The aspect of GILTI in question in Moore was that which relates to undistributed earnings which would be pretty unrealized 

Undistributed earnings have been recognized as income and taxed for a long time. This is wholly different than unrecognized changes in FMV. 

Posted
On 8/29/2024 at 1:37 PM, bornontheblue said:

Undistributed earnings have been recognized as income and taxed for a long time. This is wholly different than unrecognized changes in FMV. 

Not unless they were repatriated though. These weren’t repatriated per se. 

Posted
On 8/29/2024 at 12:54 PM, Akkula said:

The problem with some of the wealth is that, unlike Tesla, some of the assets are not publicly traded.  It is fairly easy to do this with Tesla as it is pretty easy to say the value of the shares at the end of the year to mark it to market.  

Again it’s no different then getting an estimate or if it is too much of a pain the leave to your heirs to value at time of death.  Nothing in what I wrote forces you to do a virtual wash sale.  It is your choice if you want to take advantage of today’s rates.  

Posted
On 8/29/2024 at 2:01 PM, mugtang said:

I agree with all this. No more cap on social security wages.  People with wealth over a certain limit pay ordinary income rates on all dividends and gains.

Fuck AMT though. Hate that shit too. 

I wouldn't mind if rather than removing cap altogether they leave ( or even lower ) current cap, then it kicks back in for income > $1M ( or whatever number makes sense ). 

 

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Posted
On 8/29/2024 at 12:34 PM, mugtang said:

You do understand your proposal to have people sell & buy back their stocks would tank the stock market...right?  Elon Musk owns 20% of Tesla.  Unloading 20% of Tesla shares, regardless of him turning around and buy it back will collapse the market. 

Just a further follow-up to this comment.  In the case of a Tesla or Amazon it is far more likely that for the shares an Elon Musk had to actually sell to raise cash for taxes…..  the company would roll their sales into their share repurchase program and it would just reduce outstanding shares.  

Posted
On 8/29/2024 at 2:50 PM, Joe from Wyo said:

It’s unrealized income though until that point. 

Agreed.  I just kinda see it as the same as undistributed but taxed income from PTEs. 

I probably don't deal with the intricate details of GILTI as much as you do, and I have spent way too much time here today.  Its fall busy season and i am trying to get enough work done to start my holiday tomorrow , lol. 

 

 

Posted
On 8/29/2024 at 3:18 PM, SleepingGiantFan said:

JFC, you guys. I had more than enough of this economics BS in grad school.

There are a lot of smart guys in this forum. 

@Akkula my apologies for calling you dumb in a heated debate. I will work on getting better.  Akkulla, aren't you a software engineer or something? 

 

 

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