How Mitt Romney cheated the rules to become fabulously wealthy and pay no tax. One of the headscratchers from the 2012 election explained as reported by Richard Rubin at Bloomberg: The GAO report said IRAs were designed as a retirement savings vehicle, not as a way to shield wealth. Founders and private equity executives may know enough about a company’s prospects to know which undervalued stock to put inside an IRA. The report cited one case where shares were valued at $0.00125 each in 2008 and 4 million shares were placed in a Roth IRA. As the company got a venture capital investment, went public and saw its share price go to $60, the founder ended up with $196 million in the IRA, according to GAO. The report didn’t name the company. Roth IRAs are funded with post-tax money and their owners don’t have to pay any taxes when they remove the money. In contrast, investments outside of retirement accounts are subject to capital gains taxes of up to 23.8 percent. The issue of large IRAs gained attention during the 2012 presidential campaign. Republican Mitt Romney reported an account that had as much as $102 million at one point. Romney was a co-founder of Bain Capital LLC. bloomberg/news/2014-11-19/giant-iras-of-corporate-executives-exploit-irs-gaps-study-says.html
Posted on: Wed, 19 Nov 2014 22:30:56 +0000
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