[HN Gopher] How to not pay your taxes legally, apparently
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How to not pay your taxes legally, apparently
Author : jimhi
Score : 95 points
Date : 2025-07-05 18:21 UTC (4 hours ago)
(HTM) web link (mrsteinberg.com)
(TXT) w3m dump (mrsteinberg.com)
| madaxe_again wrote:
| Similar mechanisms exist in the U.K. - entrepreneur's relief/BADR
| allows you to pay a flat 10% on the full or partial sale of a
| business you founded, up to PS1M - was PS10M until 2020. You can
| of course do similar shenanigans with family to use their
| allowances too.
|
| You can also of course emigrate to Portugal under the NHR scheme
| and between the fifth and seventh year sell whatever you fancy
| and not be liable for CGT _anywhere_.
| jimhi wrote:
| They are proposing to raise ours to 15 million person
| https://news.ycombinator.com/item?id=44471896
| pydry wrote:
| 14% now
| trollbridge wrote:
| The headline is a bit clickbait-y. If your business turns a
| profit, it's quite challenging to not legally pay taxes on the
| profits. Not to mention taxes owed on a salary you pay yourself.
|
| If your business just has losses, I suppose it's true you can
| eventually find someone else to sell to who apparently wants to
| spend a lot of money to buy your money-losing business?
| jimhi wrote:
| This article is literally only about legal means to not pay tax
| when your company makes a profit
| coliveira wrote:
| If you cannot do what the article says, the only reason is that
| you're not rich enough.
|
| > pay taxes on the profits
|
| There are techniques to show zero profits, or to get tax breaks
| on these profits. Some of the most successful companies do
| this.
|
| > taxes owed on a salary you pay yourself.
|
| You don't need to pay anything to yourself. Some of the richest
| founders proudly say they receive a $1 salary.
| swat535 wrote:
| And yet, a trillion dollar corporation like Apple pays little
| tax.
| SoftTalker wrote:
| What on earth is wrong with not paying taxes legally? What taxes
| does anyone pay other than those that they must pay?
|
| If the government wants a tax to be paid they need to make it
| simple and unconditional. If there are loopholes or ways to
| legally avoid it, they will be discovered and people will take
| advantage of them.
| webdevver wrote:
| i think the latest term is 'tax optimisation'...
|
| you could make an argument that in order to optimise your
| taxes, you have to be quite wealthy to begin with (hiring a tax
| guy, etc.) - otherwise you don't have any time left in the day
| to run your business.
|
| so in practice, the little guy winds up just paying the
| 'sticker price' so to speak, while the big guy has pros who can
| make their big profits even bigger.
| f4c39012 wrote:
| If everyone had access to the same kind of tax advice that
| minimised taxes for the rich, I bet a bunch of loopholes
| would get closed pretty quickly. Some publicly available
| templates and simple to follow guides would encourage
| governments to act when they see a general shortfall in
| revenue. When new loopholes emerge, rinse & repeat. Maybe
| everyone would pay their fair share then
| smallmancontrov wrote:
| No, because most loopholes cost $$ to set up so they only
| break even above a certain income that few people have. You
| must be _this_ rich to play.
| anthonypz wrote:
| I'm curious to know: what are some of the things that
| need to be set up? Specific bank accounts to route money
| around?
| AlotOfReading wrote:
| An easy example: buy a house in Monaco, put EUR500k in a
| bank, and declare it your legal residence for tax
| purposes to avoid most taxes.
| v5v3 wrote:
| Or get some one else to move...
|
| The UK billionaire Phil Green lived in UK, his wife moved
| to Monaco and everything was in her name. So he could run
| the companies in person and she would recieve the
| hundreds of millions in dividends.
| thatguy0900 wrote:
| I'm not sure governments would act on a shortfall in
| revenue. Some governments seem to just consider money not
| real, just add a couple trillion to the debt and call it a
| day
| carlosjobim wrote:
| You could make that argument, but it is incorrect. Creating a
| limited liability company is one of the few (the only?)
| things which is still allowed and accessible for any person
| to do, no matter if you're rich or poor, no matter your
| family name, no matter your political connections, no matter
| any visible or invisible handicaps you might have. In most
| places it costs very little to create an LLC or other similar
| kind of entity.
|
| If you're "a little guy" - as I would consider myself - there
| are usually zero open doors and zero opportunities in this
| world, except for starting your own company. And it is
| possible to optimize your taxes from the start when your
| business is small. Most governments and states in the world
| actively encourage this by giving tax relief to small
| businesses, and then other types of incentives. The price for
| "hiring a tax guy" depends very much on the scale of your
| business, in the beginning it's not a lot of money, if you
| even need him.
|
| For all this talk about "equality", this is the only thing
| that actually functions in our modern world.
| ryandrake wrote:
| > Most governments and states in the world actively
| encourage this by giving tax relief to small businesses,
| and then other types of incentives.
|
| At least in the USA, I don't think there is any need to
| "incentivize" going into business via the tax code. Most
| people who can afford to own a business already do, and
| many people who really can't afford it still try! "I'd love
| to start a business and try to make a bunch of money, but
| those _darn taxes_ are stopping me! " - said no US
| entrepreneur ever. They're not doing it for these small tax
| incentives, but they are certainly taking advantage of them
| whenever they can.
|
| So it seems like we are simply incentivizing activity
| that's already going to happen and allowing people who were
| already going to do it anyway to have that activity be not
| subject to taxes.
| phtrivier wrote:
| I always wonder if there was an opportunity for a startup to
| "uberize" tax avoidance.
|
| The article is mostly about avoiding taxes on "having your
| startup acquired" - not everyone will be able to do that.
|
| But setting up funds and deduce everything you buy ? Creating
| shill companies ? Becoming a trustee for some random that
| badly wants to avoid their taxes ? Sounds like that can be
| automated ?
|
| Sure, it would be insanely immoral, and I hope the person who
| master tax avoidance get to loose access to everything payed
| by the tax payers, just doe thrill.
|
| Or maybe we should have voluntary taxation ; but, beyond a
| certain level, you really loose access. Don't want to pay ?
| Sure. You put off the fires yourself, you heal and tech your
| kids yourself, you build and drive on your own roads, fund
| your own research, don't access supermarkets that are full of
| FDA-vetted food, etc...
|
| In all seriousness, if budgets were voted by "real" people
| and not representatives, how many of things would survive ?
| Can you convince people about the usefulness of tax free 10M$
| startup sale, where every cent your earn is taxed as some
| portion ?
|
| Anyway, let the tax avoidance experts be the richest of their
| graveyards.
| coredog64 wrote:
| The IRS takes an extremely dim view of setting up a shell
| and deducting everything. You don't have to take my word
| for it, you can ask Wesley Snipes if 28 months in the
| federal pokey was worth the illusory tax savings he
| managed.
| jt2190 wrote:
| > in order to optimise your taxes, you have to be quite
| wealthy to begin with (hiring a tax guy, etc.)
|
| Another way of thinking about this is that the wealthy person
| is incentivized to invest their wealth directly into higher-
| risk, economy-boosting activities like starting businesses
| that (if successful) create jobs that then pay income taxes.
| Ideally tax revenue is generated from this incentive. The
| wealthy person could just buy gold bars and create no jobs
| that generate income tax, but they don't get as good a tax
| deal on that.
| pengaru wrote:
| > i think the latest term is 'tax optimisation'...
|
| How does this differ from the long-standing term "tax
| avoidance"?
|
| It's the "tax evasion" flavor that gets you into legal
| trouble afaik.
| Muromec wrote:
| There is a spectrum where tax optimization is one side and
| tax fraud on the other. Depending on who you ask, some
| behaviors can be put on different points in it.
| chillingeffect wrote:
| The actual functioning of everyday society and quality of
| everyday life are based on moral grounds. Legal grounds are a
| backstop, not a hand rail.
|
| Those who exchange moral indulgences, clinging to legal
| grounds, are naturally and inevitably bound to accept the moral
| consequences. It's not just your Sunday school teacher making
| frowny faces at you: It's being afraid of armed robbery at
| every step because you have squeezed every bit of wiggle room
| out of every one elses' lives.
| capitol_ wrote:
| What is legal and what is moral are two circles in a venn
| diagram.
|
| In a good and just society there is a large overlap between
| them, and in others there is less overlap.
|
| But it's impossible to build a legal system where there is a
| 100% overlap, and it would most likely be a broken society in
| other ways.
|
| I totally agree with your second paragraph, that the government
| needs to remove loopholes and other ways for people to weasel
| out of contributing to society. But there will always be some
| corruption and a lot of money to be earned by only taking from
| our shared resources and never contributing back.
| ffsm8 wrote:
| > _But it 's impossible to build a legal system where there
| is a 100% overlap, and it would most likely be a broken
| society in other ways._
|
| I strongly disagree with this one. It's not that hard to
| _not_ define loopholes and exceptions. Really, a simplified
| tax system without such should be the goal, and then the
| circles so match.
| RHSeeger wrote:
| I expect it is _much_ harder than you think it is.
| ffsm8 wrote:
| I didn't think it's easy in practice at all. Frankly, I
| don't think it's politically feasible, even.
|
| the people with money prefer being able to employ someone
| to essentially skip paying altogether.
|
| But if they couldn't - because there are no exceptions
| and loopholes - society would be better off.
| reillyse wrote:
| I would agree and it's what we should be aiming for. As
| it is people are just throwing up their hands "what can
| you do". Well close all the loopholes for one. I would go
| as far as to say the vast majority of the loopholes are
| just grift in one form or another. Some pork barrel BS is
| the rest (and I think these should be gotten rid of too).
|
| I'm actually in favor of removing all charity exemptions
| too. They are just used by rich people to spend our money
| (the taxes they owe) on pet projects depriving everybody
| of that income.
| RHSeeger wrote:
| > our money (the taxes they owe)
|
| I'm all for removing loopholes where it's possible.
| However
|
| - It's not "our money". It's money that, we a society,
| feel validated in taking from members of our society to
| pay for things that make our society better. But it is,
| in no way, "our money". We're taking it from people, at
| force, because we believe it's worth it.
|
| - The only taxes that are "owed" are the ones defined by
| the rules (laws); pretty much by definition. If the rule
| doesn't say they owe it, then they don't owe it.
| jemmyw wrote:
| Although you could argue that all money is our money, if
| "our" means our society and government and collectively
| all of us. It exists by social agreement, as do all the
| rules around it that mean some have more and some have
| less.
| RHSeeger wrote:
| I think it's about as easy as writing bug-free software.
| And I can count the number of non-trivial pieces of
| software that are likely to be bug-free on one hand.
| Analemma_ wrote:
| To have a tax sytem with no loopholes would almost
| certainly require having no credits or deductions. I
| actually think there's something to that idea, but
| politically it's an absolute non-starter: taxpayers love
| the credits and deductions they have now and don't want to
| give them up, and governments love using them to shape
| policy and don't want to give up that particular tool in
| the toolchest.
| swat535 wrote:
| Who defines objective morality here ?
|
| If you're going to argue the majority, then I'll remind you
| that the majority had no problem with slavary either not too
| long ago in Western nations.
|
| If you're goning to argue democratic values, then I'll remind
| you that many brutal dictators also rose to power by the same
| values.
|
| So put another way , by which definition of morality are we
| drawing this diagram?
| ada1981 wrote:
| Paying any tax supports genocide and other US colonization
| projects, so not paying is the moral path.
| ashoeafoot wrote:
| Taxes are one of those funny defector games, that win you a
| free shave at the neck when you win to much. You not paying
| legaly gals the honest suckers who do into funny witchhunts,
| that when they come around make you wish you did.
| delusional wrote:
| You cannot make them "unconditional" without totally
| constraining all political freedom. The laws are rules that
| society imposes on itself. We all expect each other to operate
| within those bounds fairly, anyone who does not operate like
| that should be subject to digressional democratic liquidation.
| That is, forced bankruptcy with a simple majority.
| HenryBemis wrote:
| The issue with democracy (which imho is by far the best
| political system) is that the parties can collect "donations"
| which (again just imho) is legalized bribing and ultimately
| ends up creating servants of the sponsors and not the voters.
|
| People are not heroes. They want to be elected, hire the ones
| they want for their "court" (think Kings and their courts).
| And politicians want to change only the things that won't
| stop them from getting reelected.
|
| Secondary consequences are irrelevant to many politicians'
| mindset.
| smallmancontrov wrote:
| If person A lobbies a self-serving loophole into the tax code,
| it's reasonable for person B to object.
|
| > If there are loopholes or ways to legally avoid it, they will
| be discovered and people will take advantage of them.
|
| Most loopholes take a certain amount of time and effort to
| exploit, so they only break even if you are above a certain
| income level. You don't "write | | | | - - - - B A on your
| 1040, collect $200." That's never how it works. It always takes
| effort to set up the necessary "excuses," this effort can be
| expressed as a dollar amount, and your dollar savings typically
| apply in proportion to your overall income, so a given loophole
| works AMAZINGLY WELL if you are ultra rich, ok if you are super
| rich, meh if you are rich, and it has negative expected value
| if you are not rich.
|
| This is true for many things in life. Look for things expressed
| as a rate rather than a dollar amount. Then ask "what if the
| dollar amount that multiplied the rate was really big?"
| michaelmrose wrote:
| Because all the poor people have zero room for creativity
| because it is designed to be so. The loop holes aren't
| accidental they are put their on behalf of all the rich people.
| Users taking advantage of them are part of a systemic swindle
| on behalf of the rich. Participating in such is therefore both
| fairly expected and still wrong.
| lokar wrote:
| There is nothing wrong with using them. The problem is the
| mega-wealthy using their wealth to buy these loopholes.
| majormajor wrote:
| If you're seriously asking why discussions like this exist...
|
| One thing - and this may not be your intent - that often
| happens is that people will disingenuously use "nobody should
| do more than they have to" as sleight of hand to point in the
| direction of "oh it's the law that's bad" with no intent of
| actually encouraging fixing the tax code.
|
| Another thing is that there's often a big difference between
| the letter and spirit of a law, since the laws are made by
| imperfect humans and other humans have FAR more cumulative
| people-hours available after the law is passed to find holes.
| There is likely no such thing as a "simple and unconditional"
| tax law that can't be worked around in ways its authors did not
| intend. And here this may seem circular - "then the government
| should patch the hole" - but of course that would be _great_
| and yet it is something the government is rarely incentivized
| to do when people with money give them that money to influence
| them to _not want to_.
| mystified5016 wrote:
| By and large these loopholes are _only_ accessible to people
| with enough money to buy islands.
|
| The ultra-rich get tax loopholes and the rest of us have to
| make up for it with increased taxes _and_ decreased government
| services.
| ben_w wrote:
| Sometimes law is analogised to software; in this analogy,
| loopholes are bugs.
|
| One who exploits a bug is a hacker. An example of a life-hack
| is to arrange things to have lower taxation than those who
| wrote the laws were expecting.
|
| But just as bugs in software are not _meant_ to be exploited
| even though they can be, there are many loopholes in laws that
| are not _meant_ to be exploited even though they can be.
|
| Unless the law has a generic catch-all for tax minimisation
| schemes*, such minimisation may be legal, and yet frowned upon
| because it wasn't meant to be legal. Or even if it was meant to
| be legal, but you're rich and the general public thinks you're
| being unreasonable.
|
| * I think the UK does? Or at least that's what it looked like
| HMRC was saying last time I was able to file my own taxes
| there...
| spwa4 wrote:
| Don't we have a separate name for _intentional_ bugs? I mean
| it 's not like tax loopholes are there accidentally. They are
| fully, 100%, intentional features of the tax code.
| ben_w wrote:
| Some are, some aren't.
|
| You can tell the ones which aren't by watching them getting
| removed in a hurry when the government finally notices too
| many people using them. 10-15 years back, some colleagues
| had made businesses for themselves just so they could
| receive their real jobs' income at the lower rate of
| dividend income rather than the income tax rate. I am told
| this is no longer possible.
|
| Conversely there is (or was) what I think was a deliberate
| loophole for UK inheritance tax -- if I remember right (not
| a lawyer) it works like this: physical objects in your home
| are all bundled together and valued at PS1 for inheritance
| tax purposes, so fancy art, stamp collections, etc. don't
| get taxed.
| Muromec wrote:
| We have a name -- it's called "backdoors"
| general1726 wrote:
| I think that we are not really far from time, when law text
| will need to be formally verified to either prevent these
| kind of loop holes or at least point them out.
| antman wrote:
| They are not bugs, they are backdoors introduced on purpose.
| No one is forgetting how to close them, its on purpose.
| mcv wrote:
| That's what the issue is: there are loopholes, and far too many
| of them. The fact that some people get to deduct costs or have
| access to tax avoidance loopholes that most people don't have
| access to, is wrong. And governments don't do enough to fix
| this.
| hinterlands wrote:
| Because most of the "loopholes" aren't actually loopholes:
| they are created for a specific reason under some specific
| economic theory. Most often, to encourage people to make
| certain types of investments, avoid double- or triple-taxing
| certain activities, etc.
|
| We just almost never talk about it in neutral terms: why was
| this policy implemented, what are the pros and cons, etc.
| Instead, it's just political talking points to get people to
| the voting booth.
| SpicyLemonZest wrote:
| There are _some_ loopholes that aren 't actually loopholes,
| and I can't claim to have counted to know whether it's a
| majority or not. But programs like the QSBS thing the
| source article describes are definitely loopholes in the
| intuitive sense. Politicians wanted millionaire business
| owners to be somewhat richer, didn't want the political
| headache of directly giving those business owners our tax
| money, so they lowered the tax rate on a specific category
| of income that only millionaire business owners can arrange
| to receive.
|
| It's true of course that there was an economic theory
| behind the policy. It's a subsidy; the government thinks
| it's important for the US to have more small businesses,
| and hopes that more people will set one up if the financial
| rewards for doing so are greater. Perhaps you could even
| find some business owner to explain why they would have
| stayed in their corporate job if not for the QSBS. But this
| subsidy could never have gotten majority support if it
| wasn't obfuscated behind the tax code.
| barbazoo wrote:
| It's wrong if it's not equally accessible
|
| > It is incredibly simple to spin up an LLC or C corp and
| expense all kinds of things. Employees don't get this benefit.
| jrflowers wrote:
| > What on earth is wrong with not paying taxes legally?
|
| The issue is _who_ is able to avoid paying taxes. The ability
| to reduce tax burden is largely possessed by people that make
| significantly more than the median income, so if you rephrase
| your question as "What is wrong with low- and median-earners
| subsidizing the wealthy?" then you'll see people's problem with
| it.
| lucianbr wrote:
| If I understood correctly, it's "how not to pay taxes when
| selling your company".
|
| At least some of the advice requires preparation years ahead.
| What happens if the company does not become as valuable as you
| expect it to, or at all? Or way more valuable, for that matter?
| coredog64 wrote:
| Or if you set up a $10m trust for someone and they abscond with
| the proceeds.
| niklasbabel wrote:
| is the author writing this article from the future? Peter Thiel
| is 57 years old (2025).
|
| 'Peter Thiel famously bought his Paypal shares (which were valued
| at a few cents when he founded the company) into his Roth IRA
| account. When he turned 65, he was able to access the billions
| that the Paypal equity was worth with 0 tax on it.'
| jekwoooooe wrote:
| I would bet it's LLM generated like most content these days
| jimhi wrote:
| The entirety of my blog was written pre-chatgpt and pre-
| scheduled. You can even check the images I use for all blog
| posts which were the first generation of ai images from 2021
| which are quite bad looking now. LLMs were too awful to use
| nor would I use them.
| jimhi wrote:
| Wow for some reason I thought he was 65 already, thanks for the
| correction
| missedthecue wrote:
| One can access their Roth IRA penalty free starting at 59.5, no
| need to wait to 65
| jekwoooooe wrote:
| A good way to get audited is to follow this advice
|
| An llc is not a tax entity also
| withinboredom wrote:
| When you create your tax id for an LLC, you get two choices on
| how you want to be taxed. You can choose to tax it as an
| individual or as an S-corp. There are tax implications and it
| affects how you do taxes.
| jimhi wrote:
| I wish. I know several people in person who do this. Read some
| of the other commenters saying how this is their standard mode
| of operation and they don't see any problem with any of this.
| edoceo wrote:
| Clickbait? This is how to avoid a tax event. It's different than
| not paying what's due. It's known, clever method to change the
| tax class of some of your money. We teach this method in my angel
| group.
| sheiyei wrote:
| This article comments on how tax deductions/exemptions should
| not exist in the form demonstrated, but way too subtly to be
| understood by someone so deep in the bullshit.
| gist wrote:
| > This is the Qualified Small Business Stock Tax Exclusion.
| Basically as long as you wait 5 years before selling the
| business, you won't be taxed on the first $10 million dollars.
| This isn't some loophole, this is exactly what it was intended
| for so that people are encouraged to take risks.
|
| First this doesn't work for a Sub S only a 'C' corp.
|
| https://carta.com/learn/startups/tax-planning/qsbs/
|
| Second, this wouldn't work in many cases when someone only wants
| to acquire the assets of the business and not the actual
| corporation in order to avoid liability going forward.
|
| https://www.brickbusinesslaw.com/blog/should-i-buy-the-compa...
|
| Note that typically the buyer would decide the issue (sure you
| with your 'small' business could say 'has to be corp' but that
| would potentially limit companies that would want to buy)
|
| My point is the OP makes a broad statement "Business owners have
| the most flexibility of everyone to not pay their taxes. I
| personally think these things are questionable but its what I
| have seen others do over the last few years and what has been
| recommended to me by every top accounting firm in New York." and
| the benefit (like anything else is specific as far as the exact
| situation).
|
| Edit: Want to make clear the liability is more than the money
| liabilities it's also potential lawsuits that hold over to the
| company acquiring.
| bgnn wrote:
| For start-up founders: There are countries, like the Netherlands,
| where there is no capital gains tax. Move to such a country.
| tecleandor wrote:
| No thanks, I'm OK paying taxes at home.
| diggan wrote:
| Technically, if you move to Netherlands, that becomes your
| new home, so you'd be OK with paying taxes there too then :)
| piperswe wrote:
| Doesn't the Netherlands have a wealth tax in lieu of capital
| gains?
| bgnn wrote:
| It works differently as it is after you make the gain, not at
| the moment. You can have a start up, buy the inital shares
| for 1k, sell it for 1M, pay no weakth tax (or close to 0) if
| your valuation during filing a tax return wasn't above a
| certain amount, get the cash and move somewhere else. If you
| stay here you will be taxed slowly every year but the rich
| doesn't do that as they put their money in LLCs etc.
| StrandedKitty wrote:
| From what I understand, you are taxed on the unrealized gains
| from your assets, so you are effectively paying ~2% of the
| value of all your assets every year. Even if you simply own a
| stake at a startup, you still have to pay the wealth tax
| regardless of whether your stake ends up having any real value
| at all (most likely it won't).
| bgnn wrote:
| It depends. I have been in this situation several times. The
| benefit of the current regulation is that you can pay 0
| income tax over stock options if you exercise them at the
| value of FMV. This is extremely beneficial for early
| employees. The disadvantage is that the tax service treat
| them as any other asset and if the company valuation
| skyrockets your shares might worth more than the 100k or so
| threshold they have for Box 3 tax. Ecen in that case you do
| pay a fractional tax over potential income they calculate
| over this. This might be tough but a very privileged position
| to be in as a good lawyer can come to an agreement with the
| tax service if the prospects are looking good (a potential
| IPO or acquisition). You will not pay ANY income tax over the
| profit you made in this scenario.
|
| The same applies to house ownership too for example. I did
| pay 0 income tax over 150k profit I made over my previous
| house when I sold it. When the money was on my account the
| wealth tax started to kick in, but it is after you make the
| capital gains not at the moment you make it.
| sigmoid10 wrote:
| They don't have an _additional_ capital gains tax, but they
| still tax you on capital gains. In fact they even tax you
| specifically on capital gains from savings and investments, but
| using a fixed assumed percentage gain irrespective of whether
| your actual gains were lower or higher than that percentage.
| And they are also going to change that law by 2028 so that it
| works like any normal capital gains tax. So if you can 10x an
| investment in the next 2.5 years you might save a bit, but
| after that it hits you like everywhere else.
| mcv wrote:
| It's effectively a 1.2% wealth tax that's based on a 30% tax
| on assumed capital gains of 4%. The thing is, the assumed
| gains are generally far lower than reality, and the tax is
| also much lower than regular income tax.
| lancewiggs wrote:
| If you are a US citizen then US tax will apply to you wherever
| you are. People form other countries switch off their home tax
| if they do not meet residency requirements.
|
| There is no capital gains or wealth tax at all in New Zealand,
| but only for domestic investments. For offshore investments
| there is a deemed return that you treat as income, so if your
| wealth is tied up in illiquid stock then it can be dire.
| bgnn wrote:
| Yeah so your offshore investment ruling is applicable for
| domestic investment in the Netherlands too.
| daft_pink wrote:
| The problem with your article is that it's extremely difficult to
| turn a company into a >$10 million asset value company for the
| founder and outside of the silicon valley VC world a company that
| doesn't generate any net income isn't worth $10 million. It's not
| that simple to conjure up a $10 milliion company out of thin air.
|
| So in the real world choosing QSBS stock results in electing into
| double taxation, so if you are starting a company to that will
| make net income that company is going to
|
| Also, just to clarify, the article says save $10 million in tax
| in at least one place, but what you really mean is $10 million in
| capital gains taxable income, so really it is saving about 2.38
| million in Federal tax (20% plus NIIT) plus the state if the
| state recognizes QSBS.
|
| In my experience, most people benefit from QSBS after building a
| company for 10-15 years and selling for $3-7 million.
| HenryBemis wrote:
| How not to pay your taxes: 1) be rich (or even
| better filthy rich) 2) go to PWC/EY/etc, pay them
| handsomely, let them work their magic 3) they got offices
| all over the planet and are updated on every single
| legislation/regulation around the planet 4) they
| (PWC/EY/..) make sure you use the very best ways, tailor-made to
| not pay taxes. This could mean thwt you need to move and live to
| some random village in Switzerland (IKEA dude, the writer of the
| Alchemist (Paulo Coelho)). 5) never pay taxes
| sailfast wrote:
| The problem is not that folks aren't paying their taxes. It is
| that wealthy individuals have lobbied to make the tax laws what
| they are.
|
| The quieter and larger the exemption the better.
| giarc wrote:
| @jimhi - might need to update your article. See this other
| article on the front page now.
|
| https://www.mintz.com/insights-center/viewpoints/2906/2025-0...
| jimhi wrote:
| I saw, I will be keeping a watch if it becomes law.
| idontwantthis wrote:
| Another way for Americans is to qualify for the FEIE by working a
| remote job in a foreign country that isn't good at collecting
| taxes.
| eli wrote:
| Wouldn't claiming an exemption for foreign taxes that you
| didn't actually pay be fraud?
| coredog64 wrote:
| Yes, but I'll give a concrete example: I was an expat in New
| Caledonia. They have (or at least had) no income tax. The
| salary was below the amount that the US taxes for folks who
| are legitimately living outside the country, with a fair
| portion coming from a difficult to quantify housing subsidy.
| jimhi wrote:
| That is "only" ~100k or a so a year and if they aren't in the
| USA more than ~30 days a year. Small potatoes and arguably
| makes some sense.
| eli wrote:
| The hard part is identifying a stock you acquire for cheap or
| free now but will be worth much more than $10 million in five
| years.
| jimhi wrote:
| If you read what I wrote, it doesn't even need to actually be 5
| years if the person does some creative stuff with options which
| I have personally seen.
| rob_c wrote:
| Funded twice with nothing to show and offering better than
| realistic financial advice. I'll just leave it at that.
| anonymousiam wrote:
| The IRS sucks. They're staffed with dishonest grifters. I dealt
| with them when my dad was still alive, and hadn't paid his taxes
| for 11 years. They would send him a bill and he would just pay it
| without filing. They would continue to bill, assuming that he was
| hiding something because he never filed. Unfortunately, I was
| never able to get most of that money back.
|
| One time, the IRS "lost" the cost basis for my investments during
| a year of heavy trading. They sent me a bill for $400k. After
| fighting with them for over two years, I eventually had to pay
| them ($180 for something else I had overlooked and never got the
| records for). I went back and forth with them three times, and
| they kept claiming that I owed them smaller amounts, but still
| much larger than anything I actually owed.
|
| Most recently, I accidentally over-withheld on my 2024 income.
| They owe me about $30k and they're in no hurry to pay me.
| Fortunately, I learned that they must pay interest (7%!) on my
| over-payment. Hopefully I'll get this settled before next April
| 15th, but if I don't, I'll be sure to under-withhold on some of
| my deferred income this year to balance it out.
|
| What I've learned from all of this is that the IRS is less
| concerned with what is legal than with how much of your money
| they can grab. If you're wealthy enough to afford a good tax
| attorney, you can usually fight them and win.
| burnt-resistor wrote:
| Step 0. In America, be rich to receive all of the legalized tax
| dodges to pay less than ordinary workers.
|
| Also note that US citizens who leave the country and pay foreign
| income taxes elsewhere still have to pay federal income taxes
| just like the only other country that does this, Eritrea. The
| only way out is to renounce citizenship and be doxed in the
| Federal Register, pay lots of legal costs, and risk arbitrary
| demands for $10k fines for "not paying back taxes" and also being
| denied entry should it be determined for it was "economic
| reasons" any point in the future.
| v5v3 wrote:
| Dave Chapelle sums it up:
|
| https://youtu.be/YAJCvt9tOYE
|
| (The donors to the politicians use these loopholes, so why would
| a politician end it...)
| HWR_14 wrote:
| I don't understand how Thiel was able to buy his PayPal shares
| using a Roth. I thought you aren't allowed use your Roth to
| invest in a company you work for.
|
| Can someone who knows more than me explain how he was able to do
| that?
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