What Say You? Trump's CongressionalTax Escape.

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This from a dear Christian friend and fellow memo reader. What the attached suggests is once we have taken God out of our lives the world has truly gone in the wrong direction.

If I have written this once, I have done so enumerable times. Man must have something beyond self to challenge his morality, to awaken his reason for living or otherwise he lives an empty life.

I embrace everything the attached raises and advocates. 

What say you?

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We say Christmas Tree

Apparently, the White House referred to Christmas Trees as Holiday Trees for the first time this year, which prompted CBS presenter Steven Levy to present this piece.

The following was written by Steven Levy and recited by him on CBS Sunday Morning Commentary.

My confession:

I don't like getting pushed around for being a Jew, and I don't think Christians like getting pushed around for being Christians. I think people who believe in God are sick and tired of getting pushed around, period. I have no idea where the concept came from, that America is an explicitly atheist country I can't find it in the Constitution and I don't like it being shoved down my throat...

Or maybe I can put it another way: where did the idea come from that we should worship celebrities and we aren't allowed to worship God as we understand Him? I guess that's a sign that I'm getting old, too. But there are a lot of us who are wondering where these celebrities came from and where the America we knew went to.

In light of the many jokes we send to one another for a laugh, this is a little different: This is not intended to be a joke; it's not funny, it's intended to get you thinking.

In light of recent events... terrorists attack, school shootings, etc.. I think it started when Madeleine Murray O'Hare (she was murdered, her body found a few years ago) complained she didn't want prayer in our schools, and we said OK. Then someone said you better not read the Bible in school... The Bible says thou shalt not kill; thou shalt not steal, and love your neighbor as yourself. And we said OK.

Then Dr. Steven Benjamin Spock said we shouldn't spank our children when they misbehave, because their little personalities would be warped and we might damage their self-esteem (Dr. Spock's son committed suicide). We said an expert should know what he's talking about.. And we said okay.

Now we're asking ourselves why our children have no conscience, why they don't know right from wrong, and why it doesn't bother them to kill strangers, their classmates, and themselves.

Probably, if we think about it long and hard enough, we can figure it out. I think it has a great deal to do with 'WE REAP WHAT WE SOW.'

Funny how simple it is for people to trash God and then wonder why the world's going to hell. Funny how we believe what the newspapers say, but question what the Bible says. Funny how you can send 'jokes' through e-mail, and they spread like wildfire, but when you start sending messages regarding the Lord, people think twice about sharing. Funny how lewd, crude, vulgar and obscene articles pass freely through cyberspace, but public discussion of God is suppressed in the school and workplace.

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Democrats want to embarrass Trump because he hired accountants who used the tax laws to his advantage and probably paid little, if anything, in taxes. The attached discusses how Congress allowed this to happen. Will the mass media tell the truth or try to focus on what little Trump paid using the law?

I suspect what will happen is that Congress will wind up with egg on it's own face.

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How Congress Cut Trump’s Taxes

He has benefited from every loophole that lawmakers provided to real-estate businesses.

By Jay Starkman

The House Ways and Means Committee plans to release Donald Trump’s tax returns Friday and has already put out a report faulting the former president for paying little or no income tax in recent years. But the fault lies with Congress. Mr. Trump benefited from every tax loophole that lawmakers have made available to real-estate businesses. These include deferral of income, conversion of ordinary income into lower-taxed capital gains, nontaxable income, tax credits, and artificial tax losses that ordinary taxpayers can’t obtain.

Entrepreneurs who purchase or construct a building can obtain depreciation deductions, together with deductions for mortgage interest on the loan. Using “cost segregation,” they can accelerate the depreciation deduction. A large mortgage with a low down payment magnifies the interest deduction. As the property should appreciate in value, it is arguable that a resulting tax loss is artificial. One can borrow against the appreciation to purchase more properties and investments, gaining more deductions.

Unlike the rest of us, “real estate professionals” are exempt from the passive-loss limitations on their rental properties. All their rental losses are deductible. Net operating losses can be carried forward indefinitely until used.

Gains from selling real estate used in a business or for investment can be deferred indefinitely by exchanging the property for another (so-called 1031 exchanges), usually in a three-way transaction using intermediaries, that resembles an outright sale. Should the seller add equity or debt to the exchange, he can obtain a more expensive property with more depreciation and interest deductions. Property sold at a loss can result in an immediate tax deduction.

There are rehabilitation credits, such as for preserving an old building facade. Sometimes a developer will tear down an old building, preserve lower exterior walls at great expense and erect a new skyscraper inside the facade. Credits helped Mr. Trump renovate the Old Post Office in Washington into a hotel. And there is a credit for low-income housing, which might not get built without generous tax incentives.

The Inflation Reduction Act of 2022 created new energy credits that can be sold for cash by entities that can’t use them because they pay no income tax.

Conservation easements provide a triple benefit. The donor gets a large charitable deduction for donating a partial interest in property that he continues to own and use. The donor escapes the capital-gains tax on the donation because he didn’t sell it. The deduction can be excessive based on “highest and best use” rather than fair market value. The new appropriations act limits this deduction to 2.5 times a taxpayer’s basis in property held less than three years, but only for partnership syndications, not individuals. A better standard would require deduction values to be based on recent comparable property sales.

As a practicing CPA, I’ve seen how real-estate deductions can result in zero income tax for clients with high incomes. These are legal and proper deductions even if they seem unfair. One reason for low tax liability is laws intended to stimulate job creation, housing, offices, all the materials that go into building and supporting them, and the great economic activity that real estate generates for decades following completion. Real estate isn’t an easy business. Some investors go broke, while others do get rich and pay little income tax for energizing an economy that benefits us all.

The 39-page Ways and Means report, written by staffers from the Joint Committee on Taxation, provides a road map on issues that might warrant examination in auditing Mr. Trump’s returns. The report stresses: “We express no opinion regarding whether any adjustment, or increase or decrease in tax, would have resulted if these issues had been pursued on examination.”

His tax preparers may have to explain why they signed returns with so many issues. Mr. Trump’s Form 1040s include more than 400 K-1 pass-through-entity forms and up to 27 sole-proprietor self-employed Schedule Cs a year, among other complexities. The Internal Revenue Service failed to audit his returns in a timely manner because it initially delayed the audit, then assigned only one examiner (later increased to three). None of the audits have been completed. Again, blame lawmakers for making the tax code so complex and arcane that it may well be impossible to provide a definitive analysis of Mr. Trump’s returns.

Democrats propose codifying a requirement to audit and release the president’s tax returns. That should be expanded to include every member of Congress. “There are not many Senators or Representatives who sell their vote for money, and it is pretty well known who those few are,” Senate sergeant-at-arms David Barry wrote in 1933. Barry was promptly fired after a 49-year career. “An honest man does not get rich,” said House Speaker Sam Rayburn, whose savings after 48 years totaled only $15,000 (equivalent of around $150,000 today) at his death in 1961.

Other presidents had issues that would have warranted IRS examination. Franklin D. Roosevelt deducted losses from his “cotton plantation” in Warm Springs, Ga., and his “farm” in Hyde Park, N.Y. Eleanor Roosevelt failed to report more than $100,000 she received from her radio broadcasts. How did Lyndon B. Johnson, whose income came from a government salary, become one of the richest men ever to occupy the Oval Office, worth an estimated $20 million in 1963? (Again, that’s the equivalent of nearly 10 times that sum in today’s dollars.) Ronald Reagan used two cattle tax shelters to make his 1970 taxes negligible. Jimmy Carter’s taxes were sheltered by investment tax credits from his peanut farm, which reduced his 1976 tax to zero.

Mr. Trump isn’t unusual in aggressively claiming tax deductions—only in being the most scrupulously examined president ever, with no credible allegations yet that he achieved any of his or his family’s wealth through corruption. How many members of Congress can say the same?

Arnold Schwarzenegger, who also refused to publicize his tax returns when he successfully ran for governor of California in 2003, said: “There’s a balance here between what is a prurient interest versus why this data is thought to be important to disclose.”

Mr. Starkman is a certified public accountant in Atlanta and author of “The Sex of a Hippopotamus: A Unique History of Taxes and Accounting.”

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An informed investment person I spoke with does not believe BIBI will attack Iran but will continue the program of disrupting their nuclear progress and denying any culpability as they have been doing. His rationale is plausible but if Iran reaches beyond where Israel must not allow them to go all bets are off.

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