The former comes from her work in the entertainment industry and the latter comes from her properties. The streamer has both active and passive income. Supposing that both of these were equal, the business would have no income tax liability.Īmouranth however is not a business. Businesses can claim a deduction for maintenance which offsets the amount of rent collected. Thornton explains that “depreciation is taking the total cost of an asset that a business purchased and slowly recouping it by taking a little bit of a deduction each year over the lifetime of that asset.” The best example would be the wear and tear on a building. This would be where depreciation comes into question. That’s not a business tax rate because if it was a corporation, you would be limited at the 21% tax rate.” The financial planner goes on to say that “if we're talking about her personal tax rate, that means this is a passive investment for her.” The trouble in this particular case would be that “you’re limited to only taking a deduction from a passive investment against passive income, so she probably wouldn’t be able to deduct any of this passive loss against her ordinary income.” Jayson Thornton points out in a video by Spencer Cornelia that “if we’re talking about a 37% marginal tax rate, that’s her personal tax rate. Amouranth seems to have fallen into the trap of conflating active and passive income. The problem is that none of this actually holds any water. RELATED: Someone Wasted $125K On A NSFW Amouranth NFT
Now I owe $1,110,000 less in taxes for the calendar year.” Remember I invested $1,000,000 to buy this gas station. So for 2021, I will owe $1,110,000 less in income tax. I invest $1,000,000 and borrow the rest.” The streamer estimated the cost of depreciation at $3 million before going on to calculate her tax liability. And I or you can do it again and again and again.”Īmouranth ran the numbers. I was paid $110,000 and got a gas station free. “It cost me $4 million or -$110,000 depending on how you look at it. “Here’s why I bought a gas station,” she said. While she was confident enough in her decision to go and purchase a second gas station, the streamer might just be in a bind when she files her next return. But this turns out to have been a financial blunder. Amouranth recently bought a gas station to avoid paying some of her income tax liability.