There's No Such Thing as Tax Loopholes

[Eric Williams]

It's better instead to realize there are two tax systems in the United States.

One for the educated.

And one for everyone else.

There are very few actual tax loopholes, which are often remedied with technical corrections and temporary regulations.

There are creative people, but if you know about it trust me it's not a loophole. 

Don't get caught up in gimmicks. 

Understand taxes are a part of every transaction and create friction by introducing additional concerns.

Tax planning stems from there being a lack of neutrality in the tax system.

Anytime there is an alternative treatment of a transaction across taxpayers, tax rates, tax character, timing, jurisdiction, etc., you have a planning opportunity.

Practice manipulating key variables to create alternatives - generally in one of three ways, shifting across periods, shifting across taxpayers, or converting the character.

No one actually uses the word loophole in accounting.

For example, what the hell is a STR loophole?

It doesn't sound clever.

It's a carveout, or an exception to a general rule, of which there are 5 more to the per se passive rules.

That's how to Code is structured. A general rule, followed by exceptions and carveouts.

The idea is that if I rent things out for under on average 7 days, there's likely significant personal services involved to prepare the property for the next guest, repeatedly. We're getting away from passive participation as is with residential rental, where the tenant is the one cleaning the home every day because they live there all year.

That's not a loophole that's just consistent with the intent of the law.