Romney’s Tax Returns Reveal Lessons on Keeping Wealth in the Family

“The Romneys have transferred assets into the family trust and invested them, amassing a substantial and diversified portfolio of stocks, bonds and alternative investments such as private-equity and hedge funds that generate income,” Bloomberg says. “In 2010 alone, the trust realized more than $7 million in long-term capital gains, about $1.5 million in ordinary dividends and $741,407 in U.S. government interest, according to the trust’s tax return.”

As the news service notes, the November election will not only be important for the country and Romney’s political ambitions, but also for his wallet.

“[He] would pay higher taxes under the estate-tax proposals of President Barack Obama and would pay less under Romney’s plan. Obama has proposed increasing the estate tax from current levels and curtailing wealth-transfer strategies. The Republican presidential candidate wants to eliminate the estate tax, which currently applies a top rate of 35% and a $10.24 million exemption on a married couple’s combined assets.”

A repeal of the levy may save the Romneys about $70 million in federal estate taxes after they both die, assuming the couple’s combined taxable estate was $200 million after deductions for items such as administrative expenses and charitable contributions, Bloomberg concludes. Compared with today’s rates, Obama’s proposal may cost the Romneys an additional $20 million.