Republican presidential nominee Mitt Romney used a loophole to “rent” the Mormon church’s tax exemption status and defer paying taxes for 15 years, according to a new report.
Tax returns obtained by Bloomberg News through a Freedom of Information Act request indicated that Romney set up a charitable remainder unitrust (CRUT) in June 1996 just before Congress cracked down on the loophole in 1997.
“In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years,” Bloomberg’s Jesse Drucker explained. “At the same time he is benefitting, the trust will probably leave the church with less than what current law requires.”
Estates lawyer Jonathan Blattmachr told Bloomberg that Romney’s trust benefits from the Mormon church’s exempt status because charities don’t pay capital gains taxes when they make a profit from the sale of assets.
“The main benefit from a charitable remainder trust is the renting from your favorite charity of its exemption from taxation,” Blattmachr said, adding that the charitable contribution “is just a throwaway” and the church would receive little if any financial benefit from the trust.
The CRUT allows individuals to “defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments,” Drucker wrote. “Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity.”
In fact, the amount available to go to the Mormon church has decreased from at least $750,000 in 2001 to $421,203 at the end of 2011 as Romney has collected yearly cash payments from the trust.
The Romney campaign declined to answer questions about the trust but insisted that it was “operated in accordance with the law” in an email to Bloomberg.
"Operated in accordance with the law." Is anybody else tired of hearing Mitt Romney's financial activities described in those words?
Yes perhaps it WAS legal (Just barely), but was it ethical? And it is ethical to run for President of the United States on a platform that promises to reduce taxes even further for people in your income bracket, while leaving the overall financial burden for those that can least afford it? And doing so after using every trick in the book to get out of paying YOUR fair share?
This HAS to be what Harry Reid was talking about when he accused Romney of not paying taxes for ten years. (And look, he was even five years too generous!) And as the highest ranking Mormon in public office he would undoubtedly have known about this, which in my opinion also explains his obvious anger that Romney has now become the public face of his church. Even going so far as to state that "He is not the face of Mormonism."
Okay can SOMEBODY please tell me why this son-of-a-bitch has ANY support in this election?
How stupid are these people?