Business: Ways to Escape Taxes Entirely

HOW do some extremely rich Americans manage to pay little or no federal income taxes? Two actual cases from Treasury records:

Taxpayer A reported an income of $6,511,903. Of that amount, $4,387,834 qualified as capital gains; this cut his taxable income to $4,300,000. He deducted $465,396 for state and local taxes that he had paid and wrote off another $5,543 in medical expenses and $24,129 in miscellaneous expenses. He donated a staggering $4,080,614 to charity, mostly in property that had originally cost him far less. As a result, he owed the Government nothing.

Taxpayer B used the oil-and-gas depletion allowance to avoid...

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