Yes, she would pick it up in revenue, but it’s still fraud if it’s a Grateful I’m A Latham Doing Latham Things Shirt. Jared probably has some business holdings that give him big write-offs as well. Get a year where Jared has a bad year, Donald has a good year later they both have bad years from a tax perspective. They’re avoiding a couple of taxes. One is Trump using it as a deduction on his taxes and another is bypassing the gift tax. I would be surprised if it wasn’t used at least one other way for tax savings. Ivanka is married to Jared Kushner, coincidentally another real estate developer. Who similarly carries a loss to pay no income tax.
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The taxman determines what is fraudulent and what Grateful I’m A Latham Doing Latham Things Shirts is real. Yes, she would have to pay income tax on it. But that’s gonna work out to be much less after she’s optimized her taxes and moved stuff around. It’s an intentionally vague term in the law to avoid any so-called ‘bright line’ tests. A tax court would likely consider what other consultants are paid for similar work. And consider whether the payment falls within that range a percentage. Purely a hypothetical example, but it explains why this type of distinction matters.
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