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How Harvard Can Minimize Taxes

With President Trump removing Harvard's tax-exempt status, here is a roadmap to lowering tax drag.


Run a backdoor Roth IRA. After coming in above the single filer limit of $165,000 per year (you currently make about $100,000,000 per year), just open a Traditional IRA, contribute the max $7,000 plus an additional catch-up contribution $1,000 (you are 389 years old) of after-tax money, then just convert it to a Roth IRA. Easy.


That $8,000 can grow tax-free forever, just like your $50,000,000,000 used to do.


Tax Loss Harvest. When you have a position at a loss, like the football team versus Yale the last three seasons, you can sell that position and buy a similar position.


Buying positions is like when someone donates a bunch of money to you (sadly no longer a write-off for them) and you grant admission to their kid with mediocre grades and test scores.


Relocate to Florida.




Start claiming that MIT is just a bunch of government freeloaders, and you're really the only game in town. Can you believe they don't even pay taxes?


Open up a Solo 401K. You can contribute the $23,500 employee limit plus round up to the $70,000 total limit through additional employer contributions. That's ALL shielded from current tax.


Given that you make about $100,00,000, instead of getting taxed on that amount, the federal government will only tax you on the $99,930,000. You'll save about $30,000 in taxes at your effective tax rate (and since you're already 59.5 years old, you can touch the Solo 401K immediately without penalty!). I think I overheard you tell a prospective donor once that you "sneeze at $30,000 gifts wanting strings attached," but I don't totally recall.


Hire your young children to be models. With legal employment, they are then allowed to open and fund Roth IRAs up to the amount they earned each year ($7,000 limit since under age 50).



Do a Roth Conversion. JK JK, you have no IRA assets to convert yet.

Open up an HSA. Unmarried and without dependents, you can contribute $4,150 plus a catch-up contribution of $1,000 (again, 389 years old) and will get a TRIPLE tax benefit: shielded from taxes now, growth is tax-free, and you can sell it tax-free.


Just like the old days! Oh, the nostalgia.


Rethink Florida, and choose Texas instead.



You can even keep riding a really high horse!


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My blog posts are informational only and should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in my posts will come to pass. They are not intended to supply tax or legal advice and there is no solicitation to buy or sell securities or engage in a particular investment strategy.

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© 2024 by Rubin Miller, Fortunes & Frictions

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