Prompt Cast
How accountants use tax loopholes to help individuals avoid paying taxes
TLDR Accountants use tax loopholes such as 1031 exchanges, step-up in basis, and forms like FEIE to help individuals avoid paying taxes they don't have to, benefiting both the wealthy and regular people.
Timestamped Summary
00:00
Accountants find ways to use the tax code to help people avoid paying taxes they don't have to pay.
03:48
Tax loopholes allow individuals to claim unusual deductions, such as counting a sprawling estate as a farm or a Mercedes G wagon as heavy machinery, within the limits of the law.
07:18
Tax loophole 1031 exchanges, originally for farmers, now benefits real estate investors, saving billions in taxes and exacerbating inequality.
10:40
Borrowing against stocks and utilizing the step-up in basis loophole allows wealthy individuals to potentially avoid paying income taxes forever, benefiting both billionaires and regular people inheriting assets.
14:27
Expats living abroad can potentially avoid paying federal taxes by utilizing forms like the FEIE or form 2555.
18:24
The Flexible Spending Account (FSA) originated as a way for corporate executives to receive perks instead of taxable income, but now it allows anyone to use untaxed money for health expenses, although it can be challenging to spend the funds within a limited timeframe.
22:15
Health FSAs typically operate on a "use it or lose it" basis, requiring careful planning to avoid losing any untaxed funds.
25:47
The podcast episode ends with a discussion about making tax-deductible donations to NPR.
