Famspear's secret information

[The Operative]

Farmer Giles began his idiocy over 200 posts ago by quoting a statement from the International Accounting Standards Board about how equity contributions from owners are not income. That part is true, but he wants to use that definition in an effort to eliminate income from practically all transactions. When told that he does not know WTF he is talking about, his response was...

thats is Unfortunate. Why do you think the Intl Acct people are so interested in it then? They originally published it. Do they not know WTF they're talking about? If you're so smart, why don't YOU tell us what it means and how it applies to taxation? Or maybe you know better than this Int'l body of learned scholars and experts.

What Farmer Giles doesn't realize is that the way he is attempting to structure his transaction violates the rules of determination of income by the accounting standards boards. He latches onto a single definition that he believes supports his decision, not realizing that it really doesn't. Then, he ignores all other accounting standards. Obviously, he thinks he knows better than that international body of learned scholars and experts.

BTW, another thing that Farmer Giles doesn't realize is that while there are differences between the net income for financial statements of a business and the net income for income tax purposes for a business, the tax laws require that taxable income is to be computed under the method of accounting that the business uses to regularly computes its income in keeping its books. So, no, Farmer Giles, you cannot structure the transaction the way you say because the accounting standards and the tax laws say that you can't.

[iplawyer]

FG said:

With all this supposed expertise, I'd say Quatloos is waiting for your answer before mine. They are your questions!

Stupid Nitwit (your posts have proven you are both) Giles,
No - I'd have to say that pretty much all of us here know the answer to the hypothetical. We are waiting for you - the self-proclaimed tax expert - to answer it. There is no "secret information" as you put it. This is tax law - plain and simple.

And by the way, "tax logic" means not one hill of beans to the IRS. What matters is "tax law." So your gibberish in the guise of "tax logic" is just that - total and complete gibberish. If you made enough money to matter and practiced what you preach here - the IRS would eventually figure it out and ask you to pay what you owe. The fact of the matter is - you are too insignificant to matter to them. If you filed according to the rules - you might even get lots of money back in tax credits that available to the working poor. Instead - you tilt at windmills. Thank you for leaving more money in the treasury.

You can also claim that nobody here has cited any authority to you to prove you wrong. But your claims just make us smile - smugly at that. The more you post - the more amused we all are. But then you'll get to the point that others get to - your amusement value will fall and we will just ignore you.

When you ""buy" money for an apple - as you put it - you owe tax on the difference between the amount of money you "bought" for the apple, and the amount of money you bought the apple for - and certain deductions for expenses you incurred in the transaction. If you are not operating as business - you may not take the value of your labor as an expense. Plain and simple.

If it is a business - the business can deduct what it pays a laborer as an expense - but the laborer must pay taxes on what the business pays him or her. That is true even if the business pays the laborer in apples.

Finally, I am waiting to fail at something so I can retire. So far, succeeding seems to be my thing. Sadly - it isn't for you.

[silversopp]

Farmer,

Why do you believe that tax accountants and tax lawyers are all so incredibly wrong about the way to handle income taxes? You complain about Famspear's "secret information" but his information is WIDELY accepted by somewhere around 99% of the population of the United States.

It seems that it's you who believes that you have special information, and that if you just make up the right story about how you received your money, you'd be tax free.

You've admitted that you have no formal schooling in accounting or law. You've never worked as a tax professional. Why is it that you think you're right and those with education and experience else is wrong?

I've never worked on a farm a day in my life. I believe you mentioned you have several years of experience working on a farm. If I came up to you and told you that everything you know about planting crops is completely wrong, that the soil doesn't matter, that the amount of water the crops receives has nothing to do with whether it will grow, would you really believe me? If you showed me the results of your method, that you had grown a nice batch of crops, and I rejected all that evidence with a simple "nope, you're wrong" would you give me much respect? If you presented scientific studies that show that crops need to have good soil and plenty of water to grow, and I rejected that by saying the studies were wrong, would you think I'm rational? That is akin to what you are doing here. Wouldn't you expect me to put my money where my mouth is and out-grow your crops using my no soil no water method?

I've never run into any IRS problems. Never had to pay late fees, interest, etc. Never had to go Tax Court. Never had any threat of going to jail for failing to pay my taxes. Do you think that my chances of running into legal trouble would increase if I followed your advice? Why do you suppose that people who look for the magic bullet to get out of taxes end up ruining their finances (and sometimes go to prison) while those who follow the advice of the tax professionals here do not run into those situations?

[Farmer Giles]

Anyone who claims "secret knowledge" but can't simply lay it out is full of it.

Famspear never claimed to have any secret knowledge, so now you've gone beyond bs'ing and you're just plain lying.

try reading. the 1st post in the thread. pay especially attention to the part about NITWITS!

[Farmer Giles]

According to the Bing 'decision engine', the definition of lien is

NOUN
1. legal claim on somebody's property: the legal right to keep or sell somebody else's property as security for a debt
[ Mid-16th century. Via French < Latin ligamen "bond" < ligare "bind" ]

Maybe you meant to say something else? Or do you have a different definition of lien? According to thefreedictionary.com, it's a synonym for spleen

2. lien - a large dark-red oval organ on the left side of the body between the stomach and the diaphragm; produces cells involved in immune responses

I meant LIEN, just as you have defined it. I like to think I have good sense of humor but I've missed what you seem to think is some clever witticism...makes no never mind the rest of the post is responsive so I'll get to work on it.

maybe you meant, "venting spleen"? Tell you what: go check any thread where i've posted and find the incoherent splatter and crybaby weeping when bullies get caught in the act. I'm thinking of starting a thread that consists only of the most obnoxious posts by regulars here. Now that WILL be funny.

[The Operative]

Famspear's scenario is a fairly common one under tax law. If you knew tax law (and accounting), you would understand it and you would know what he was talking about. I might be wrong, but I believe the type of income that Famspear is referring to is p________ income.
BTW, accountants know the difference between 'realized' and 'recognized'.

Something that I believe that Famspear left out is that the scenario's landlord may have actually paid MORE in taxes than he had to over the time he owned the property if he did not know the applicable tax law.

I really doubt it. Anyone who claims "secret knowledge" but can't simply lay it out is full of it. I'm sure he does know something interesting, and I would like to have heard it, but it doesn't change the basic fact that any business or trade can somehow be structured to create no gross income.

Famspear didn't claim any 'special' knowledge. What he is pointing out is your complete lack of knowledge about taxes and financial matters. Yes, a business could have no gross income, but that business would not be in business very long. A "structure" that you have described would violate basic accounting rules. Another thing that you have overlooked is that the tax laws would not allow it.

§ 446. General rule for methods of accounting
(a) General rule
Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books.
(b) Exceptions
If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the Secretary, does clearly reflect income.

Your structure would not clearly reflect income and would be disallowed for a business under § 446.

Edit: Edited to remove last bit of FG's quoted post that I had inadvertently left in the post.

[Farmer Giles]

As I was planning a trip to NOLA for later this year, another thought pranced through my head.

Most things in life progress in a linear fashion, A to B to C, etc., which is easy for the mind to grasp. Taxes and the Internal Revenue Code are anything but linear. Instead it is decision trees, within decision trees within decision trees, not unlike a shrub - which can make it hard to understand and follow if your mind is geared solely to linear thought.

And because it is also a hodge-podge on top of it, people can be easily confused and flummoxed by it. Instead of straight yes or no answers, the IRC generates a lot of if/if not/and/or decision sequences..

Some of us are comfortable with that, most are not and it frustrates them.

Your mileage may vary.

That's why all anyone has to do is lay it out. It may be a bit complex, but it's not too hard for anyone with a high school education to understand.

what makes people frustrated... your mileage may vary. Apparently it's a "professional secret". Let's see what else comes out, beans spill now and again; especially when you're frustrated!

[Farmer Giles]

I’ll say this to start: quote me from any other thread if I contradict myself.

Farmer,
Why do you believe that tax accountants and tax lawyers are all so incredibly wrong about the way to handle income taxes? You complain about Famspear's "secret information" but his information is WIDELY accepted by somewhere around 99% of the population of the United States.

I do not believe this at all. I did say 80% of professionals in any field were dangerously incompetent. The difference between stepping on my lettuce and sending an innocent defendant to jail is huge.

Farming is a way of life, not a profession.

It seems that it's you who believes that you have special information, and that if you just make up the right story about how you received your money, you'd be tax free.

The huge difference between me and you is I’m not selling anything. It seems like “making up the right story” is all the tax system does, like all other political endeavours. It’s a perfectly constructive program but where does it attach? If it was as simple as ‘showing income’ it wouldn’t be that hard to find, and there would be no alternative. As we all seem to agree there is an alternative financial structure that precludes gross income, shouldnt’t that be the only advice for at least new businesses and people starting out on their own?

I AM tax free. And yes, the revenue man” isn’t interested in the likes of Farmer Giles, and i don’t expect him to be. That’s mostly because I live outside the system. My biggest financial goal in life is to need no money at all. To simply grow, pick, or eat an apple, and NEVER to “sell” it. That is some wicked spells.

You've admitted that you have no formal schooling in accounting or law. You've never worked as a tax professional. Why is it that you think you're right and those with education and experience else is wrong?

Everyone on the board has so far agreed with me:

There is always a taxless alternative.

That the original equity is routinely discounted.

That accession is different from succession.

That Income is only derivable by its basic concept. You can't normally accrue Income, it's a contradiction in terms since Income is a benefit derived from a 3rd party.

That the same transaction can equally be categorized in some nonliable manner, and any limitation to this is artificial. Since it can’t be found in nature, it has to come by attachment.


If I’ve shown that posters make wrong statements, well, that’s because the statement are wrong. It has nothing to do with “knowing more” than anyone else, professional or otherwise. You just don’t like it that the Truth is being pointed out, so you try to disparage somehow te messenger.

Like one young poster remarked, “a Blunderbuss can be wielded by anyone.” It can indeed.

If you showed me the results of your method

please do.

[/quote]and I rejected all that evidence with a simple "nope, you're wrong" [/quote]

Never happened. Quote me anywhere as an example.

[/quote]I've never run into any IRS problems. Never had to pay late fees, interest, etc. Never had to go Tax Court. Never had any threat of going to jail for failing to pay my taxes. Do you think that my chances of running into legal trouble would increase if I followed your advice? [/quote]

I don’t sell anything. Post some legal advice I’ve made here. You people have a hard time distinguishing between “sales” and “neutral observation”... which might go a long way to explaining the dissonance of “income” and “private”, because it’s the same thing. Its about the difference between something that is merely Hypothetical, like Income, and something that is Real, like Secured Property.

You apparently are devoted to a proposition: that Its Very Important to steer people in a certain directions. Well I do know, that’s the law school idea but it’s really it's the All School’s Idea. Its called scholasticisim. Its a Roman Catholic doctrine. Its UnAmerican in the original sense and contrary to all men.

Why do you suppose that people who look for the magic bullet to get out of taxes end up ruining their finances (and sometimes go to prison) while those who follow the advice of the tax professionals here do not run into those situations?

Because they love their freedom more than their slavery. At least they tried.

[Farmer Giles]

So, no, Farmer Giles, you cannot structure the transaction the way you say because the accounting standards and the tax laws say that you can't.

thats funny because your buddies here on the board have already agreed it's possible to avoid a taxable transaction using secured finance. now you disagree? You really think these is a liability on mortgage and forfeit? Famspear seems to think this happens with at least a full-recourse loan, though he wont tell us why. But i'll take it anyway, if thats the only way out its as big as the universe. I think that there might be a few more structures and variations we could come up with, but that would put you out of a job. i don't think you'd fare wel wth farming either, so you might just starve to death in the stret, snce you obviously have no real friends.


I can structure anything the way i feel like it! i just did. Now if you want to respond identifying the tax consequences on a given model, laid out nice and neat go right ahead, it would be a remarkable contribution to this 'conversation'.

[Farmer Giles]

and someone has turned off my edit! its hard enough to post since the Quatloos word processor seems to be jumping all over the screen, and I have to physically copy the quoted post, paste it to a worddoc, write it then past it back in small chunks on the message board here or the html and whatnot ends up in different parts of my screen.

Is it Quatloos thats screwed up, or are you doing this deliberately? I notice Mr Dave Merrill complained of the same problem. Is this a lowdown dirty rotten trick? Turn my edits back on! I only change posts for typos, which is whytext- quotes are coming up dry like that with all te code shown too.

[Farmer Giles]

FG said:

With all this supposed expertise, I'd say Quatloos is waiting for your answer before mine. They are your questions!

Finally, I am waiting to fail at something so I can retire. So far, succeeding seems to be my thing. Sadly - it isn't for you.

go ahead and retire, you made it.

[Farmer Giles]

Well now they have taken my ability to start threads too.

so it you people? Alright. My goal was to get banned for speaking the truth, so if this is a 'slow ban' then its just as well. maybe you should go back and delete all the posts ive made as well, so nobody reads them and gets any ideas.

I knew this website supported terrorism.

[bmielke]

and someone has turned off my edit! its hard enough to post since the Quatloos word processor seems to be jumping all over the screen, and I have to physically copy the quoted post, paste it to a worddoc, write it then past it back in small chunks on the message board here or the html and whatnot ends up in different parts of my screen.

Is it Quatloos thats screwed up, or are you doing this deliberately? I notice Mr Dave Merrill complained of the same problem. Is this a lowdown dirty rotten trick? Turn my edits back on! I only change posts for typos, which is whytext- quotes are coming up dry like that with all te code shown too.

My edit button works just fine.

[Farmer Giles]

My edit button works just fine.

yes, I suspected that.

[The Operative]

So, no, Farmer Giles, you cannot structure the transaction the way you say because the accounting standards and the tax laws say that you can't.

thats funny because your buddies here on the board have already agreed it's possible to avoid a taxable transaction using secured finance. now you disagree? You really think these is a liability on mortgage and forfeit? Famspear seems to think this happens with at least a full-recourse loan, though he wont tell us why. But i'll take it anyway, if thats the only way out its as big as the universe. I think that there might be a few more structures and variations we could come up with, but that would put you out of a job. i don't think you'd fare wel wth farming either, so you might just starve to death in the stret, snce you obviously have no real friends.

There are specific instances where there will not be a gain on a transaction. However, for many transactions, a person's cost-basis is NOT equal to the selling price. I could explain what Famspear is getting at, but you wouldn't understand it anyway.

I can structure anything the way i feel like it! i just did. Now if you want to respond identifying the tax consequences on a given model, laid out nice and neat go right ahead, it would be a remarkable contribution to this 'conversation'.

YOU were the one so attached to the IASB definition. The same accounting standard setting bodies in the U.S. and internationally also define earnings and how those earnings are determined. It is exactly as I and others have said. A company buys raw materials or parts and produces a product that it then sells. When the total of the cost of the parts and the direct and indirect costs associated with producing the final product is less than the selling price, then the company has income. You cannot 'structure' a transaction to eliminate that income unless the selling price is lowered to be equal to or less than the cost of making the product.
Look up SFAC No. 5 and SFAC No. 6.

[The Operative]

Well now they have taken my ability to start threads too.

so it you people? Alright. My goal was to get banned for speaking the truth, so if this is a 'slow ban' then its just as well. maybe you should go back and delete all the posts ive made as well, so nobody reads them and gets any ideas.

I knew this website supported terrorism.

You would have to start speaking the truth. So far, you have not even come close. As far as the terrorism statement is concerned, it only shows that you are an idiot.

[Duke2Earl]

First, I, for one, have absolutely nothing to do with your website problem, if it really exists. And, for the record I specifically and categorically deny that you can structure any transaction to make it "taxless." So "everyone" does not agree that you can.

[bmielke]

My goal was to get banned for speaking the truth, so if this is a 'slow ban' then its just as well. .

Lofty goal, you got there FG, My goal was to become an Admiral when I first started out, now it's to get a title.

I knew this website supported terrorism.

Not even close.

[Dr. Caligari]

Everyone on the board has so far agreed with me:

There is always a taxless alternative.

That the original equity is routinely discounted.

That accession is different from succession.

That Income is only derivable by its basic concept. You can't normally accrue Income, it's a contradiction in terms since Income is a benefit derived from a 3rd party.

That the same transaction can equally be categorized in some nonliable manner, and any limitation to this is artificial. Since it can’t be found in nature, it has to come by attachment.

I disagree with the first statement. I don't understand the other statements enough to even guess at what you think they mean., so I certainly don't agree with them.

[Farmer Giles]

You cannot 'structure' a transaction to eliminate that income unless the selling price is lowered to be equal to or less than the cost of making the product.
Look up SFAC No. 5 and SFAC No. 6.

thats exactly the model I proposed. Bond the grocery, credit the value to the owners, and sell at cost.