What is a "tax shelter" and can I benefit from one?
The word "tax shelter" comes up when people are talking. Many years ago, there were tax shelters, but most of them are gone now. The Tax Shelters of old were the kind of thing where you'd put ten thousand dollars into a Tax Shelter, and you'd get a thirty thousand dollar deduction. The problem was, most of those Tax Sheters were shams. You were buying into a "record-master". You put ten thousand dollars into the Record Master and you got to write off the thirty thousand dollar cost to produce the record. Problem was, it wasn't a hit record, it was probably some obscure band that nobody heard of and the only records that were ever produced were the 200 copies that the company gave you, of which you have 195 of them still in your closet. Those Tax Shelters were shams, eventually the IRS caught on to it, and the people had to pay back the tax for the erroneous deduction. There are very few tax shelters out there now. They're the kind of Tax Shelter that you can avail yourself of that will help you in certain circumstances. If you're in a situation where you have a spike in your income or you have some high income and you're interested in looking for Tax Shelters, talk to a professional. But be very wary. The old adage, "if it's too good to be true, it probably is."
