Thanks Ann, Learned something about Hobby Losses, thanks to You!

[Laura PourMeADrink]

Romney's Olympic Dancing Horse Didn't Get Him Much Of A Tax Deduction (Yet)

Rafalca costs Mitt and Ann more money than most Americans make in a year. In 2010, the Romneys lost almost $78,000 on their famous horse and they only took a $50 deduction. But next year…

The Romneys declared a loss of $77,000 on their 2010 tax returns for the share in the care and feeding of Rafalca, which Mrs. Romney owns with Mr. Ebeling’s wife, Amy, and a family friend, Beth Meyers. That's actually a rounded down number; in fact, the passive investment loss that the Romneys reported on "Rob Rom Enterprises LLC," the limited liability company that owns Rafalca and pays for the horse's expenses, was closer to $78,000. The New York Times report led Matt Yglesias and some others to conclude, mistakenly, that the Romneys had taken a tax deduction for the full amount of their loss. That's not actually true.

An excerpt from Mitt and Ann Romney's 2010 tax return showing their declared loss for "Rob Rom Enterprises LLC"--the legal entity through which the Romneys and the Ebelings co-own Rafalca. When taxpayers report a loss, they aren't always able to take a deduction for it. The Romney's 2010 tax return (above) shows that the lion's share of the $77,731 "Rob Rom Enterprises" loss was, in the parlance of the tax code, "disallowed." That is, it wasn't eligible for a deduction in the 2010 tax year. The Romneys' actual "allowable loss"--the part that could be used for a deduction that year--was $50 (only 0.06% of the total declared loss).

The tax code doesn't typically allow the taxpayer to take general deductions for expenses on activities that the taxpayer doesn't undertake for a profit; these are called "hobby losses" and they can usually only be used to offset any incidental income the taxpayer gets from the same activity.

http://www.buzzfeed.com/nycsouthpaw/romneys-olympic-dancing-horse-didnt-get-him-much

[Curtland1015]

1. Yeah, I was reading up on this yesterday. I gotta be honest...

...reading about tax law minutiae makes my eyes go crossed.

Still, it's an interesting way to learn how rich people can hire very smart accountants to help them get around pretty much anything.

[Laura PourMeADrink]

2. i know...exactly the same thing I thought...You have to have money to make money

You have to have money to pay for a great accountant. And you have to have a congress full of wealthy lawyers
who knew how to create tax code for the wealthy.

Wonder how many dollars the vast majority of people have paid in taxes that they didn't have to.

[Laura PourMeADrink]

3. P.S. Good last two games ! Knew when they threw Valentine out it would end that way. :>)

[uncle ray]

4. we'll just revisit the issue when they release more than one year's tax returns.

[Laura PourMeADrink]

5. Bet he will sell it when olympics over