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The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
(www.propublica.org)
this post was submitted on 20 Jun 2024
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How can they offset earnings with investment losses when the maximum is like $3000/year from that method?
The maximum is much higher if it's, say, a business loss.
Business loss should not be able to be used against personal income though. Business income and business taxes and business expenses for executives is a whole other can of worms, but that shouldn't affect "income" and tax offsets.
The uber rich spending is generally via “business expenses”.
For example: Elon doesn’t own his private jets, SpaceX does. When he takes it down to Hawaii for a 15 minute investor meeting followed by hanging out with them for the weekend at the nicest hotels with all the fixings and flys back, that’s all business expenses that he “derived no personal benefit from”, so SpaceX writes it all off as a business expense, thus reducing their tax burden and he never personally gets taxed for it.
A less egregious example that happens considerably more: a person has a rental property that resides between their normal living area, which they consider the “home office”, and an area of interest they travel too. They go to the area of interest, but make sure to stop by the rental on the way there and back. The milage from the home to the rental is business miles, and thus they can deduct the travel expense from any business incomes.
I am not advocating for any of those, but it doesn’t really matter if these business expenses are legal because the IRS doesn’t have a great way to determine these minor abuses, and certainly doesn’t have the people power to track it down.