Tax Deferral
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by Moishe
This has been posted before, once by our esteemed President, Benn Dover, and other times by some of our economics experts. It is reposted here for your edification and illumination. And also to hopefully save you a couple of USD.
The term I am using is not "income tax evasion" which would technically be illegal but rather "tax deferral". That is, putting off paying income tax until later when the money is actually spent. The simply act of transferring money from one account to another should not result in a penalty. This article will explain how to do that without being penalized.
Suppose you have a very profitable weapons company which has, let us say, 2500 USD in its account. Now let us suppose you also have an oil company which needs a bit of cash infusion. If you simply collect 2000 USD from the weapons company you are going to lose part of the money to taxes. Follow these steps and you will avoid that:
1) Using the Org which manages your companies put 1 Gold (or any foreign currency for that matter) up for sell for 10,000 USD. The chances are no one will buy it. If they do then you are ahead of the game already!
2) Using the company account - the weapons company for example - buy 0.10 Gold for 1000 USD. The 0.10 Gold is now in the company account and the 1000 USD is in the Org's account. You can now Invest the 1000 USD in that oil company (or whatever.)
But what happens when a company has a couple of extra gold? Or you do like I did and Invest more gold into a company than you intended?
Simple. Just reverse the above process, such as:
1) Using the Org put 1 USD on the money market for 10 Gold. The odds are low that someone else will buy it. As we said above if they do - cool!
2) Using the company account buy the 1 USD for 10 Gold (or buy 0.5 USD for 5 gold, etc.
Now the gold is in the Org's account and the company has an extra USD.
Good marketing!
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Comments
oh thanx- very helpful
I didn't know we had income tax! no wonder every time i invest or collect money some of it disapears
Freaking awesome, this will help me a lot. Thanks
On investing it doesn't but collecting it does. I believe we should defer that tax payment until it is actually spent on something. I firmly support a consumer tax not income tax.
Thanks. FWIW, the real-world term is "tax avoidance." This will come in handy as my housing company needs an infusion from my wood company.
Re your example I find it strange that manufacturing companies can donate raw materials but raw material companies can not. It would be convenient if a wood company could just donate wood to a housing company.
I LIEK!!! 😃
Great advice, Moishe.
*saves to Notepad*
(;,,😉