Posted on 01/03/2006 10:18:43 AM PST by NormsRevenge
A company owned by Gov. Arnold Schwarzenegger has deferred paying state and federal income taxes on millions of dollars in revenue it generated since late 1997, thanks to a deal under which it bought a 747 jet from Singapore Airlines and leased it right back to the airline.
Despite claims by Schwarzenegger's top advisers during a 2003 campaign briefing that the actor's investments included "no tax shelters" and were "absolutely not tax-driven," a Bee examination of his company's 747 deal shows his company took advantage of what experts say is one of the most attractive tax sheltering devices available to the super wealthy.
While sale and lease-back deals are legal, some are now under scrutiny by the Internal Revenue Service.
--snip--
In documents it filed with Australian securities regulators, Babcock & Brown disclosed that IRS auditors are scrutinizing leasing deals developed by its advisory business between 1993 and 1999.
--snip--
Though he discussed several aspects of the jet transaction with The Bee in the fall, Paul Wachter, the governor's longtime investment manager who looks after his investments in a blind trust, declined to comment when asked whether IRS auditors have challenged tax deductions claimed by the governor's company.
Schwarzenegger spokesman Rob Stutzman said he was unable to say if the IRS has either audited or challenged any tax deductions associated with the jet purchase.
"I do not know and I cannot get answers to those questions," Stutzman said. "Mr. Wachter is not willing to discuss business matters inside the blind trust."
--snip--
Typically, buying a jet and leasing it to an airline is such a huge investment, it is the stuff of specialty leasing corporations and billion-dollar hedge funds.
(Excerpt) Read more at sacbee.com ...
Lower taxes for arnold. I like it. I want lower taxes for you, me and the man behind the tree.
"Typically, buying a jet and leasing it to an airline is such a huge investment, it is the stuff of specialty leasing corporations and billion-dollar hedge funds."
and "fly for free"...sweeeeeeet!
I like it!
sure beats dealing with the morons at the airlines and the airport! LOL
It must be nice to be able to dabble in billion dollar hedge fund transactions.
deferred paying state and federal income taxes
Note this deferred paying taxes, not eliminated. Most business are interested in deferring taxes and buying that plane created a lot of employment.
Sweeet.
Long Term Capital Holdings? Ahhh... a fine client list B&B has. What a bunch of crooks (imo).
For a guy on the latter end of an acting carreer, the difference isn't chump change.
Wachter is quite the operator, no? Arnold's blind trust manager, President of Arnold's After-School All-Stars (afterschool programs?), UC Regent (appointed by Arnie), long term cohort of Bobby Shriver, ex Shroeder executive (while Tony Coelho was CEO) and currently the chair of the Austrian Holocaust Reparations Committee. Another Kennedy clone.
I have been unable to watch his movies since his election. I used to like them.
Sweeet.
George Soros and Warren Buffet (and his Salomon cronies) agree with you.
Unfortunately, the taxpayers who have to fund trillion dollar bailouts for scum like LTCM are the ones that suffer.
You'd do the very same thing if you could buy a jet.
It's legal.
Happy New Year, doodlelady.
Indeed , it is legal.
And that's why the IRS is involved, I guess.
or is this just a Clinton holdover rogue agency of the government investigation on a witch-hunt?
I hope they clear this up soon so it's not hanging over the next election cycle.
Hedge funds.
They're legal , right?
Unless they are abused.
I hope this little item gets cleared up soon, regardless who posted the article .
"For a guy on the latter end of an acting carreer, the difference isn't chump change."
His money from acting was chump change - he made a lot more from his businesses.
The investigation I really want to see wrapped up is the Perata investigation.
It's been over a year..
Time will tell if it is legal. The article says the IRS is looking at it and there seem to be a lot of tight-lips. The IRS won their case against LTCH, set up by the same people that set up Arnold's deal.
I guess it bothers you not that Arnold's spokesman consistently lied to the media saying he did not participate in any tax shelters?
Yes. But sale-leaseback arrangements are another animal in themselves. There are plenty of regulations where one can get tied up.
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