Lower Your Taxes by Thinking Rich

Daily Reckoning
Robert Kiyosaki

This post Lower Your Taxes by Thinking Rich appeared first on Daily Reckoning.

Jared Kushner paid no federal income tax for years.

A couple weeks ago, New York Times reported that Jared Kushner “paid little or no income tax from 2009 to 2016.”

Gasp!

President Trump’s son-in-law and his family company have spent billions of dollars buying real estate. His net worth is reported to be almost $324 million. But yet, they have paid almost no federal income taxes.

“In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate, according to the documents reviewed by The Times.

Last year, the White House championed revisions of the nation’s tax law that expanded many of the benefits enjoyed by real estate investor, allowing them to take even larger deductions.

This strategy isn’t new. Kim and I have been using depreciation for years to lower our tax liability.

Every investor does—or should.

The Most Patriotic Thing You Can Do is Not Pay Taxes

Seven years ago, Dallas Mavericks owner, Mark Cuban wrote on his blog:

“So be Patriotic. Go out there and get rich. Get so obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write. Your 2nd thought will be “what a great problem to have”, and your 3rd should be recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you.”

According to Cuban, the most patriotic thing you can do is pay your taxes.

While I have a lot of respect for Mark Cuban and appreciate him as an entrepreneur, I simply differ with him on this.

In fact, if there’s one thing I’ve learned from my Rich Dad tax advisor, Tom Wheelwright, the most patriotic thing you can do is not pay taxes!

As you probably know, the tax codes in the US and in many different countries are long and complicated. The question is, why?

The reason is that government leaders learned a long time ago that the tax codes could be used to make people and businesses do what they want by utilizing the tax code.

In short, the many credits and breaks that are found in the tax code are there precisely because the government wants you to take advantage of them. For instance, the government wants cheap housing. Because of this, there are many tax credits for affordable housing that developers and investors can take advantage of that minimize their tax liability, put more money in their pocket, and in turn, create affordable housing. Everyone wins.

There are many scenarios like this in the tax code that incentivize investors and entrepreneurs to do activities the government is looking for while rewarding those who take those actions with lower-or zero-tax burden.

Because of this, limiting your tax liability actually means you’re doing what the government …read more

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