Saturday, February 03, 2007
Ah Walmart
This probably won't interest most of you, but I got a good laugh out of this. Walmart has apparently avoided paying approc 350 million dollars of taxes over the past couple of years by paying themselves rent.
In a nutshell, Walmart, the parent company, sets up 3 subsidiaries, A, B, C.
A is the actual store, which will pay taxes on its profits. To reduce profits(and hence taxes), A pays rent to B. B turns around and pays dividends to C, which are non-taxable because B is a REIT. C hands the money back to A, again tax free because C is a subsidiary of A.
If only I could devise such a devious plan to avoid paying taxes.
In a nutshell, Walmart, the parent company, sets up 3 subsidiaries, A, B, C.
A is the actual store, which will pay taxes on its profits. To reduce profits(and hence taxes), A pays rent to B. B turns around and pays dividends to C, which are non-taxable because B is a REIT. C hands the money back to A, again tax free because C is a subsidiary of A.
If only I could devise such a devious plan to avoid paying taxes.
# posted by Greg @ 6:26 AM 
