IRS

Get your “whoops!” defense ready. Read more »

  • 25 Mar 2014 at 6:50 PM

The Bitcoin Bugle: Derivatives and Taxes

Those 200,000 bitcoins that Mt. Gox forgot about? Yea, well, they’re still not legal tender, according to the IRS, which will have some unpleasant consequences in about three weeks. Read more »

  • 01 Jul 2013 at 10:13 AM

Renaissance Technologies: Buy-And-Hold Investor

You can think of a margin loan as being like an option on the underlying security: if I lend you $50 (nonrecourse) against a $100 share of stock, and tomorrow the stock is worth $45, then you’ve lost $50 and I’ve lost $5, same as if I wrote you a $50 strike put option on the stock.1 This isn’t quite right – margin calls, etc. – but what it lacks in precision it gains in tax efficiency:

James H. Simons, who became a billionaire when he turned his extraordinary mathematical ability from defense work to investing, has deployed an unusual strategy at Renaissance Technologies LLC to skirt hundreds of millions of dollars in taxes for himself and other investors, said people with knowledge of the matter.

The Internal Revenue Service is challenging the technique, which it called “particularly aggressive,” without identifying the hedge fund in the dispute. … Renaissance’s strategy involved buying an instrument called a “basket option contract,” from banks including Barclays, the people said.

That’s from today’s wonderful Bloomberg article about the IRS’s investigation. Here’s the IRS memo about the trade. Here’s the trade.2 Actually wait: here’s the trade, twice. You can just read down the left side if you enjoy getting mad at evil tax-dodging hedge funds, or just read down the right side if you don’t want to believe that Jim Simons could ever get up to no good:
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Christian Lopez, 23, will probably be on the hook for $5,000 to $13,000 because of the luxury seats the grateful Yankees gave him, the accountants said. “He’s a great guy,” says Terry Ganer, a die-hard Yankees fan and accountant for Ganer Grossbach & Ganer in midtown. “But I’m pretty sure the tax man, unfortunately, is not a Yankee fan and will not look at this so sympathetically.” Lopez says he’ll pay – but he wouldn’t mind a little help. “Worse comes to worse, I’ll have to pay the taxes,” he told the Daily News on Monday. “I’m not going to return the seats. I have a lot of family and friends who will help me out if need be. “The IRS has a job to do, so I’m not going to hold it against them, but it would be cool if they helped me out a little on this.” [NYDN]

Do you love cats? Do you love every kind of cat? Do you want a house full of them? Do you want a house full of so many that it’s starting to cost you a pretty penny but the idea of not having the cats to roll around with is too much to bear? Help is on the way. Read more »

Sometimes these things are unclear. Read more »

  • 30 Aug 2010 at 5:41 PM

Get Paid To Shoot Someone From UBS

Looking for a new gig (or a gig period)? Disheartened by the dearth of openings in the industry at the moment? Itching for the chance to get all up in UBS’s face? If you’re under 37, in “prime physical condition” and can shoot a gun, the IRS wants you for its Criminal Investigation Divsion, which is now hiring. [FINS]

Marcos Esparza Bofill is a twenty-something native of Barcelona who moved to New York in 2006 to “try his hand at day trading.” He did so for a year, in a little set up in his Alphabet City walk-up, to not much success. So after losing most of his money, not being able to pay the rent and figuring that chicks dig musicians more than day traders anyway, Bofill headed home to try and get career number two off the ground. He stayed in touch with his NYC buddies though, and actually had plans to come back to the states to help a friend with a clothing business, perhaps by offering to model the threads (celebrity endorsements and whatnot). Maybe try and get a gig with a hedge fund too, who knows. What Bofill did not anticipate was the possibility of not being let back in the country, and a bill from the IRS for $172 million. Read more »