Official Lance Armstrong Thread: Part 3 (Post-Confession)

[Scott SoCal]

Not such a good post to be honest. Because I'm not arguing Armstrong's tax position. I'm just correcting the method being applied from yourself & others. You're simply creating a basic ledger and subtracting arbitrary A, B & C expenses from D. It's not how tax is applied. You're just trying to overcome the basic premise that if he hands back the money to SCA he's not actually losing. The most likely scenario is that he gains. But we will have to wait and see what comes in October & beyond.

The rest of what you wrote makes no sense. Whether the SCA money arrived in Jan or December tax it's applied at the next return, withholding amounts withstanding. Generally paid quarterly. You know that.

Basic tax principle 101:

Either:

1. You are willfully missing the point, or

2. There really isn't a second possibility.

Good post SoCal.

 

[thehog]

Either:

1. You are willfully missing the point, or

2. There really isn't a second possibility.

Good post SoCal.

Again, not such a good post.

I think the rampant speculation on your own & others behalf has got you into trouble. Not to mention a lack of understanding how the taxation system works.

See here:

Shortly after SCA paid lance $7.5 million he paid Ferrari his cut, $465,000. He then paid Stapleton his portion, and taxes, and was left with about 3,000,000......oh, they also paid $420,000 to SCA in the first place, so maybe his net is closer to $2,500,000.

Somehow $7m was magically turned into $2.5m! That's not accounting. That's just taking one number and subtracting arbitrary figures from it to make it lower.

Speculation on your own behalf below... you know none of this. And you'll never get away from the fact that he's had an interest free loan neigh on 8 years now and it still hasn't been called in.

I know it's not pretty but in this particular situation it is what it is. It's not that SCA has lost money, as I believe they would have spread their risk but you'll never get away from the fact that Armstrong is not losing here.

Only Lance knows.

But what do we know about the guy? A narcissistic control freak with a high school GED that is quite comfortable taking enormous risks.

It's not at all hard to imagine that he bought high and sold low. I sincerely doubt the guy has a buy and hold strategy - on anything.

It's delicious, isn't it? He loses and he has to pay back loads more than he ever put in his piggy bank then hope he can qualify for future tax relief through section 1341. There's even problems with that deductibility if what's lost was "ill gotten" gains, which most certainly would be considered as fraud and perjury are in play.

Yeah, he loses this case and I think the fork will have essentially been inserted.

 

[Benotti69]

............. but you'll never get away from the fact that Armstrong is not losing here.

that is why he is fighting it so hard!

 

[thehog]

that is why he is fighting it so hard!

Correct! Because they gave him free money. And if someone gives you free money and you've made profit from it and then made profit from that profit, you can afford to pay and fight to keep some or all of it.

Which of course is all tax deductible.

 

[Race Radio]

Taxable income: $1m

It is good to see that you finally understand that Lance did not get the entire $7,500,000

 

[thehog]

It is good to see that you finally understand that Lance did not get the entire $7,500,000

You've just taken one small snippet from my post and turned it into something else. Not sure why you would do that? It demonstrates what?

The post in full is much better.

There would be several revenue streams in total not just SCA. And you don't apply tax to the one gain of SCA, tax is applied as a whole to the legal entity with relevant expenditures subtracted from the income to provide the total tax liability, be it Tailwind or Lance Armstrong Inc. or whatever.

And one should note that an individual will take a salary or dividends from the legal entity and not record all credits as a taxable income against themselves.

Perhaps something like this; (this is for basic illustrative purposes, reality would suggest its much more detailed).

Lance Armstrong holdings:

Credits:

Nike $5m
Nissan $5m
SCA $7m
Salary USPS: $5m
Race winnings $5m

Total $27m

Expenditure:

Insurance polices: $2m (including SCA policy)
Agent fees: $5m
Doctors/masseur: $5m
Private Jet: $3m
Staff salaries: $8m
Donations: $2m

Total $26m

Taxable income: $1m

 

[Benotti69]

Correct! Because they gave him free money. And if someone gives you free money and you've made profit from it and then made profit from that profit, you can afford to pay and fight to keep some or all of it.

Which of course is all tax deductible.

It would appear that Armstrong has been paying his lawyers big bucks since 1999, 15 years, my guess he is on a loser. If he was on a winner, he wouldn't have came back in 2009......

 

[Race Radio]

A you'll never get away from the fact that he's had an interest free loan neigh on 8 years now and it still hasn't been called in.

Of course, nobody is saying that he did not have a loan for 8 years. Not sure why you are pretending otherwise.

Relax Hog, don't take it so personal.

 

[Race Radio]

You've just taken one small snippet from my post and turned it into something else. Not sure why you would do that? It demonstrates what?

The post in full is much better.

Can you look in your Google accounting book and explain how Armstrong can inflate his expenses, in order to reduce his taxable income to almost nothing, yet still pocket $7,500,000?

Thanks

 

[thehog]

It would appear that Armstrong has been paying his lawyers big bucks since 1999, 15 years, my guess he is on a loser. If he was on a winner, he wouldn't have came back in 2009......

I don't disagree the reason for the comeback. Way too greedy and probably just thick.

Legal expenses are very normal for a business and tax deductible. You can offset your tax exposure by paying accountants and lawyers. In some situations you're better with paying them to reduce your tax burden. His legal fees up till 2010 were mainly that nutjob Henman. Since 2010 dare I say he has blood let money on legal fees.

 

[thehog]

Can you look in your Google accounting book and explain how Armstrong can inflate his expenses, in order to reduce his taxable income to almost nothing, yet still pocket $7,500,000?

Thanks

I've provided yourself with enough free tax advice. You're on your own from here sailor. H&R Block may assist.

 

[Race Radio]

I've provided yourself with enough free tax advice. You're on your own from here sailor. H&R Block may assist.

Thanks for proving my point

 

[Scott SoCal]

Again, not such a good post.

I think the rampant speculation on your own & others behalf has got you into trouble. Not to mention a lack of understanding how the taxation system works.

See here:



Somehow $7m was magically turned into $2.5m! That's not accounting. That's just taking one number and subtracting arbitrary figures from it to make it lower.

Speculation on your own behalf below... you know none of this. And you'll never get away from the fact that he's had an interest free loan neigh on 8 years now and it still hasn't been called in.

I know it's not pretty but in this particular situation it is what it is. It's not that SCA has lost money, as I believe they would have spread their risk but you'll never get away from the fact that Armstrong is not losing here.

You've derailed the thread again.

Not to mention a lack of understanding how the taxation system works.

That would be you son.

That's not accounting. That's just taking one number and subtracting arbitrary figures from it to make it lower.

You mean like this?:

Perhaps something like this; (this is for basic illustrative purposes, reality would suggest its much more detailed).

Lance Armstrong holdings:

Credits:

Nike $5m
Nissan $5m
SCA $7m
Salary USPS: $5m
Race winnings $5m

Total $27m

Expenditure:

Insurance polices: $2m (including SCA policy)
Agent fees: $5m
Doctors/masseur: $5m
Private Jet: $3m
Staff salaries: $8m
Donations: $2m

Total $26m

Taxable income: $1m

Debits and credits, right?

Speculation on your own behalf below... you know none of this

Full disclosure, I never claimed to know any of this and have been speculating all along - no different than you.

Speaking of speculation:

but you'll never get away from the fact that Armstrong is not losing here

He hasn't lost the SCA deal yet so you can withdraw the "never" in the above. To the extent that LA paid ANY income tax on the SCA paid bonus (plus paid interest) and may not be allowed to reduce his current tax amount due (in whatever future year) by the amount of income tax PAID on the bonus amount will be a loss no matter how you slice it.

You suggest LA had the money safely squirrelled away in some fail-safe high yield bank account. Surely we can all agree that this type of investment vehicle is a figment of your imagination and further agree that LA turning an investment profit with the SCA proceeds is 100% speculation on your part.

It's not that SCA has lost money, as I believe they would have spread their risk

You can believe anything you like but have you or anyone else read or know of re-underwriters that are any way connected to the SCA action against LA? Go ahead and produce some links if you have them. I'm not saying you're wrong necessarily - but I'd like to know who else besides SCA was on the hook for this.

 

[Race Radio]

You've derailed the thread again.

This is certainly true.

You can believe anything you like but have you or anyone else read or know of re-underwriters that are any way connected to the SCA action against LA? Go ahead and produce some links if you have them. I'm not saying you're wrong necessarily - but I'd like to know who else besides SCA was on the hook for this.

A while back there was some media speculation that SCA shared some of the risk on the deal but I have not seen, or heard, any confirmation of it.

 

[Scott SoCal]

Correct! Because they gave him free money. And if someone gives you free money and you've made profit from it and then made profit from that profit, you can afford to pay and fight to keep some or all of it.

Which of course is all tax deductible.

You have a direct line to his schedule D's or are you merely making this up?

 

[Scott SoCal]

It would appear that Armstrong has been paying his lawyers big bucks since 1999, 15 years, my guess he is on a loser. If he was on a winner, he wouldn't have came back in 2009......

Considering LA's decisions this turned out to be the biggest loser of them all.

 

[thehog]

You've derailed the thread again.

You can believe anything you like but have you or anyone else read or know of re-underwriters that are any way connected to the SCA action against LA? Go ahead and produce some links if you have them. I'm not saying you're wrong necessarily - but I'd like to know who else besides SCA was on the hook for this.

How can one derail a thread about Armstrong, talking about Armstrong? I posted the SCA link in the first place.

He could have put the money in a low interest account as well. It doesn't matter. If he has to return the $7m he's just giving SCA the money they had already given them back. If he has made profit/appreciation from assets etc. then he's made money. If he has to give them more than $7m then he may have to cut into his profit. Etc.

I'm not actually believing anything. I'm just stating what is basic accounting and finance. Stuff you well know.

The other scenario I pointed out yesterday is how financial spreads work. The $420k or whatever Armstrong gave SCA is not simply taken as profit. Some of that is hedged on the risk and put back on the alternate, that Armstrong would actually win. Other portions of that money is spread across others risks, other sporting events etc. SCA across multiple positions could well may have profited from this deal. If they get their $7m back as well they've done very nicely.

I'm not sure why some here think a company like SCA is the bastion of Christianity. They are speculators, they gamble and they take on risk. They're not much different from a small investment house in the markets. And probably less regulated. Don't feel too sorry for them.

Bottom line is, Armstrong doesn't have to lose for SCA to win.

 

[Scott SoCal]

A while back there was some media speculation that SCA shared some of the risk on the deal but I have not seen, or heard, any confirmation of it.

It stands to reason that SCA might or should have shared the risk.

The give away, as I see it, is that Tillotson seems to be on his own. If this had been underwritten the other insurers involved would most likely have counsel present.

I could be wrong, but I haven't seen anything about other insurer involvement.

 

[Benotti69]

I don't disagree the reason for the comeback. Way too greedy and probably just thick.

It was shown that liestrong was falling out of the picture and donations were down bigtime.

Legal expenses are very normal for a business and tax deductible. You can offset your tax exposure by paying accountants and lawyers. In some situations you're better with paying them to reduce your tax burden. His legal fees up till 2010 were mainly that nutjob Henman. Since 2010 dare I say he has blood let money on legal fees.

SCA case was 2004/5? That was all Herman? Legal council in London was Herman? He took LA Confidential to court to get banned in USA.....and on and on and on.

Selling his propery, jet etc does not portray a guy with a lot of bank left....

 

[Race Radio]

I'm just stating what is basic accounting and finance. .

Cool, then it should be easy for you to explain how Lance reduces his taxable income by inflating his expenses yet still puts $7,500,000 in the bank.

 

[Race Radio]

Probably more likely he spent it all but don't forget what happened to most investments in 2008/2009. Perhaps LA has a buy-and-hold temperament... but I doubt it.

I did hear he got burned in 08/09......now where did I hear that from?

I won't go into details but a lot people lost money in the 2008 meltdown. Armstrong included.

If 2008 never happened he wouldn't have comeback. The comeback was built on making money for himself and the entourage.

He did well in 09 but since that time it has been blood letting cash. Now it's getting worse and worse.

I guess he didn't put it in a high interest bank account or "Off shore it to Hawaii"

 

[Granville57]

How can one derail a thread about Armstrong, talking about Armstrong?

True. It's never been done before. And for the life of me, I can't imagine that it's even possible.

 

[thehog]

Selling his propery, jet etc does not portray a guy with a lot of bank left....

True. What was it? Sold 3 times in 4 weeks?

Not sure he'd be able to remortgage anymore. Downsizing is just about the last form of income!

But don't get caught up in cash. Why do people always want to talk cash? Handing over an asset is an acceptable form of settlement. Paying over a number of months/years is also acceptable. Judges won't destitute a person with children. They will allow some form of modest living.

Divorces hurt more than settlement arrangements!

 

[Granville57]

Divorces hurt more than settlement arrangements!

Perhaps you and Race Radio could agree to share custody of The Clinic, but taking turns, every other week?

 

[thehog]

True. It's never been done before. And for the life of me, I can't imagine that it's even possible.

Yes, I apologise for posting a significant update on SCA with regards to the hearing scheduled to start yesterday. And a few posts later providing an opinion on one aspect from it