WSJ: Romney DID avoid taxes with offshore investments.
Last edited Thu Jan 19, 2012, 02:00 PM USA/ET - Edit history (1)
Mitt Romney’s campaign has attacked an ABC News report on the candidate’s offshore investments, saying his holdings in the Cayman Islands and elsewhere have no effect on the amount he pays in U.S. taxes.
But the campaign’s assertions may be wrong or misleading. Tax experts said some of the offshore holdings are likely intended to help Mr. Romney avoid paying an obscure but hefty tax of as much as 35% on some of those investments, held in a tax-deferred retirement account.
As The Wall Street Journal reported in Thursday’s paper, many of Mr. Romney’s offshore investments are held through his individual retirement account, which has grown to between $20.7 million and $101.6 million. IRAs are tax-deferred accounts, in which earnings accrue tax-free until the money is withdrawn during retirement.
Mr. Romney’s IRA has grown so large, it appears, due to investments in various vehicles managed by Bain Capital, the investment fund he helped found in 1984. His latest financial disclosure report, filed in August, shows that many of the IRAs assets are in Bain-affiliated entities located offshore, including one in the Cayman Islands that the report listed as having a value of between $5 million and $25 million.
