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The World’s Smallest Shipwreck

Research & Commentary
October 08, 2012

by Salvatore Babones

Last month Mitt Romney released a somewhat redacted version of his 2011 tax returns. The Romneys reported $13,696,951 in adjusted gross income, not a cent of it earned through work (i.e., “wages, salaries, tips, etc.”). No W-2s for the Romneys. Not so much as a paper route.

The Romney return runs to 379 pages. There are the expected millions of dollars in interest, dividends, and capital gains. But there are also many unexpected and sometimes mysterious items, some of them for staggeringly small sums of money. The Romney tax accountants are nothing if not thorough.

For example, the Romneys went to the trouble of filling out a Form 4684 (Casualties and Thefts) to report losses of $39 in two family trusts. Interestingly, one trust lost $29 and the other $10. One can only wonder what was broken or stolen.

According to the IRS instructions for Form 4684, you can use Form 4684 to “deduct losses of property from fire, storm, shipwreck, or other casualty, or theft (for example, larceny, embezzlement, and robbery).” I like to think that the $39 were lost in the world’s smallest shipwreck. I guess it’s just the romantic in me.

Other small claims include a $114 work opportunity credit, $28 for a bonus depreciation on a research tax credit, $27 for a “flow through empowerment zone employment credit,” and — no kidding — $2 for “increasing research activities” in a small business.

I am no tax accountant, but this last figure I believe to be in error. It appears on Romney’s Form 3800, page 3, line 1c (page 27 of Romney’s PDF return). It references Form 6765, but Romney’s form 6765, page 2, line 37 (page 279 of the Romney’s PDF return) reports $25, not $2. I think Mitt may be cheating himself out of $23 of his tax credit. Maybe.

You can download Romney’s returns and check for yourself at Politico. Fair winds and following seas. And no texting while yachting, please!

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