I genuinely can't tell if this is a super illegal shitpost or an actual tax loophole.

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https://media.piefed.world/posts/n3/pQ/n3pQwQ06HiJvQW5.jpg

I genuinely can't tell if this is a super illegal shitpost or an actual tax loophole.
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It’s legit, but may be limited to the gift taxable limit of 19k when going to grandma. The step up basis is what “removes” the tax after.

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When would it not be limited by the 19k annual exemption?

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Tax code is so complex given enough readings and creative interpretations, I’m sure there’s a way. If I had to guess, it would be putting the stock into some financial vehicle, making grandma the custodian of the vehicle, then grandma disassembles the vehicle and kicking the bucket, giving the step up basis.

Legal notice: I am not your accountant.

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Find more relatives in poor health?

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If I’m reading it correctly, the gift limit would apply to the purchase price of the stock, not the current value. As long as the stock isn’t converted to cash, the current value is potential rather than actual, and the actual value is the purchase price. That is what triggers capital gains/capital losses, the change from potential to actual value to compare to the original price.

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I want to withhold as much tax as possible so that I am not funding the MAGA invasion on our country. But I want to do it in such a way so that I will not face a penalty and have to pay them more later.

According to the IRS tc306;

The law allows the IRS to waive the penalty if:

  1. You didn't make a required payment because of a casualty event, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or
  2. You retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.

Does this mean I can withhold all taxes if I claim that I was devastated by charlie kirk's timely murder?

What if I also claim to have Tylenol and circumcision induced autism?

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"Casualty event" means something else in insurance. You would personally have to have suffered a quantifiable material loss.

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Dang...what about my 'tism?

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If you can prove that Charlie Kirk's untimely death caused you to consume Claviceps purpurea fungus, you may be entitled to compensation.

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"Look people, this is how you can steal from society!"

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We should absolutely be closing tax loopholes like this. Everything I’m about to say should be viewed in that light.

If the society says “here’s a situation where you don’t have to pay us” and you choose to be in that situation, is it really theft?

This is really leveraging the “step up in basis” which has been done to simplify distributions from wills and help farmers, but has always been very controversial.

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https://en.wikipedia.org/wiki/Wikipedia:Ain%27t_no_rules_says_a_dog_can%27t_play_basketball

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An alternative interpretation as it applies to Wikipedia is that if you're going to try and abuse the system in a way everyone understands is abuse but isn't technically against the rules, you better be as charming, winsome, and friendly as a golden retriever.

Oh, I'm savin' this one

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Let me just conveniently have a grandparent who's about to pass away... I know there's one around here somewhere...

Hey grannie. I know you lived a long and full life, but I can save a couple thousands in tax. You don't mind having a cold-hearted shell of a human for a grandchild. The apple doesn't fall far from the tree, right?

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A pillow will shorten the wait time. Granny had a fulfilled life!

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Oops, now it's Apple gift cards for the nice "IRS" guy who found grandma's Toyota Corolla on the border with a trunk full of cocaine.

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This just feels like a great formula to have the grandma gift the funds to someone else or for the son to take the money and run. Either way, this seems really stupid.

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I mean I don’t see how the son could take the money and run in this scenario, the whole point is to gift it to him. I mean I guess he could run if he wants but it’s kind of irrelevant

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I think the real key take away here is how they think, the hoops they're willing to go through to not pay taxes, the average person can't understand this and therefore they don't understand how corporations get away with extremely low taxes because they buy politicians and tell them that a little loophole like this ain't that bad.

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Yeah, the incentives of our systems are seriously fucked up when playing games with money and laws is more profitable than adding anything of value to society.

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Rich uncle be comin for granma

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Sounds like actual tax loophole and one for the "poorer" stock holders. I'm pretty sure shell companies have an easier exploit

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Pretty sure this is illegal. 1) you're gifting the stock. Gifts have limits 10k I think? Anything past that would be Grandma's income. 2} when the grandson inherits it they'd be taxed on both the inheritance and then on Capitol gains when they liquidate.

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