Romney gave $100 million to his sons and paid zero gift tax

Mitt Romney has released his 2010 tax return and the inestimable David Cay Johnston, who has had questions all along, got some answers.

If I understand the following correctly, Johnston confirmed with Romney's lawyer that the Romneys paid no taxes on $100,000,000 (that's $100 million) by passing it to their sons as a gift.

Here's Johnston, quoted in a Kevin Drum article at Mother Jones (my emphasis):

Johnston: The Romneys gave $100 million to their sons and paid not one penny of gift tax. They were able to take assets they have that are producing enormous income and, under the law, give that money to their children and not pay any taxes on it.

Sambolin [the interviewer]: Is that something you specifically found in what has been released to you?

Johnston: Yes. I have suspected this and written about it in my column that this is what happened, and last night, Brad Malt, the attorney for the Romneys, confirmed to Reuters that we were correct. They have not paid a penny of gift tax.

That's because Congress allows a very tiny group of people — the Romneys by their income are in the top 1% of the top 1% — to not count as having any value the real source of their income, something called carried interest, if they give it to their children.

Later in the interview, Johnston says that, on a $100 million gift, most Americans would pay $35 million. The Romneys again, pay "zero."

Here's the entire CNN interview:



Drum adds:

The Romney kids will have to pay taxes when they start taking income from the trust their father set up for them — at the usual 15% rate paid by millionaires, of course — but the inheritance itself is blissfully tax free.

Needless to say, I want some too.

Care to have fun for yourselves? Here's a link to that Romney 2010 return (pdf; thanks to GottaLaff at The Political Carnival via Twitter).

Enjoy. Several of those pages hold nice surprises, if you can read a tax return.

GP