Well you said it wasn’t fair to borrow money and not pay income tax on the funds received, so I was looking for clarification.

Exactly Phillip. Chip said in his prior post that Tesla contributed to their employees income taxes. I think he meant the employer match to Social Security and Medicare. I was clarifying to him that income tax is 100% on the wage earner. Tesla, nor any company, contributes to that.

Tom, consult with your tax accountant. Or Google it. Here is o e that may help:

https://www.google.com/amp/s/www.bankra ... .aspx/amp/

I never said he should pay taxes on loan proceeds. I said he uses loans, as opposed to taking income, in order to legally AVOID taxes. I have had many loans. But still had an income I pay taxes on. Do you think Musk needs to loans to live his life? There is only one reason he takes these personal loans. To legally avoid income tax. I don't do that and I doubt you do either.

Looks like the airplane market was also hot in the 1950's...

[youtube]https://youtu.be/aBYHe-PaQEU[/youtube]

There is a more important part of his plan, it isn't just for tax avoidance.

His holdings are continuing to grow at a good yearly rate, 150% in the last 12 months and 2700% over the last 60 months. He can sell his stock to have some cash, pay the 30% tax on his profits and move on. Or he can hold his stock at a cost to him of 3% and still enjoy the increase in value in the future.

Which would you choose? pay 3% to a bank (that is likely tax deductible) and still enjoy the stratospheric growth of your holdings? Or cash out on a yearly basis, pay 30% to the government, and miss out on the future growth of those stocks. I can do the math if you need it but his 300 Billion in value would be worth considerably less if he sold off stock along the way.

It's not just for tax savings, it is a smart business decision.

Maybe the right word is DEFER, it isn't AVOID.

He has to pay the loans back, which means he has to get cash, which means has to get income, which means has to pay taxes.

The loan is simply because he does NOT want to sell stock today to get $1 when that stock may be worth $10 in 5 years. So he borrows money to run his life, keeping that $1 in his stocks, and, BTW, not lowering his stock price and that of others.

This is not tax avoidance, this is investment optimization, to keep his stock as long as possible. It shows FAITH in his business, which increase his stock price.

More people have made more money from TSLA than Musk has. Real money, like cash from proceeds. Musk himself has made very little.

Mike C.

Got it. My apologies, I read the post as a stand-alone comment like you were criticizing them for not doing something they should. I did not connect the dots you were responding to Chip.

I'm not sure if you are addressing me or someone else, because of the confluence of your statements, but I did hire our employees to give them the opportunity. My two full time employees are both in their 20's and being in aviation is a career changer for both.

They work, they're talented. It isn't charity, but they aren't essential either.

Got it. My apologies, I read the post as a stand-alone comment like you were criticizing them for not doing something they should. I did not connect the dots you were responding to Chip.

Speaking of jobs... I have created one of those for myself! I'll catch up with you guys tonight!

Some of you are talking like the Bezos and Musk types have no choice but to pay whatever taxes the U.S. imposes.

Either of them could go to almost any country on earth, obtain citizenship, renounce U.S. citizenship, and make a special tax deal that would be WAY less than our existing capital gains rate. For example, they could go to Italy where they publicly offer ex-pats a flat tax rate of 100K euros for 15 years regardless of income.

We (the U.S.A.) are DAMN lucky to have them here and I appreciate both their products and the thousands of high paying jobs they provide.

I'm not sure if you are addressing me or someone else, because of the confluence of your statements, but I did hire our employees to give them the opportunity. My two full time employees are both in their 20's and being in aviation is a career changer for both.

They work, they're talented. It isn't charity, but they aren't essential either.

There are lots of jobs out there in aviation.

If they aren't employed, it is by choice.

Opportunity is not something you sit around waiting for it to appear. It doesn't come gift wrapped with a bow. You go out and find it.

Mike C.

Got it. My apologies, I read the post as a stand-alone comment like you were criticizing them for not doing something they should. I did not connect the dots you were responding to Chip.

As Published in BusinessAir Magazine Issue #10 (This is a good summary of what a broker should do for their commission and or fee)

The answer is very easy if you are buying an aircraft. By the time you see the plane advertised it will more than likely be gone. You need to be on the inside, not the outside looking in. The broker, with their databases and industry contacts, will know about an aircraft coming on the market well before the average person finds out. A buying broker is worth far more than you will pay for their fees and they will help you find that impossible aircraft.

However, what if you are selling? Many sellers are being bombarded with telephone calls and emails begging to buy your plane. So what does a broker bring to the table under that circumstance?

A couple of standard items are their expertise in helping you navigate the sale and the pre purchase process. Knowing what areas to push back on and what areas of a pre buy are industry standard. A knowledgeable person to negotiate if something is airworthy or within limits can be very important. Even with the best aviation attorneys, their expertise is in the law, not necessarily technical items related to the aircraft and its maintenance status. Misrepresentation of the aircraft can become a big show stopper. Believe it or not, you might be surprised how many mistakes we find when we review the aircraft, customer provided specs and what people think they have on their aircraft.

Perhaps the biggest one in a market that is changing dramatically and in some cases in just a few weeks, is what the aircraft would actually sell for. This is where a knowledgeable broker can save their fee in getting you top dollar.

Recently, I was discussing with a potential client about the sale of their aircraft. They decided to go without a broker on their side. The phone was ringing off the hook for people wanting to buy their aircraft. They took an offer that was easily $200K-$300K less than they could have gotten had they better understood how the market had changed in the last 30-45 days. The comment was we got even more than we thought we would get and they were happy with the number. I am sure the broker buying the aircraft is elated at the deal he got!

We feel a misunderstood part of a good broker is they know market values and trends. They are daily analyzing the market and advise their clients on current prices and the anticipated trends helping their clients get the best value for the current market.

In this market, basing a price on what sold even 45 days ago might mean you leave money on the table. As a senior aircraft appraiser I mean no disrespect to the appraisers out there, however most appraisals are based on comps and it is very hard to make a compliant appraisal report with a market trend component to that appraisal number. That is the difference between what good brokers do to find the right price to put on the aircraft.