There’s a lot to the Mitt Romney 2010 1040. 203 pages long, with over $20 million of adjusted gross income, it tells a story of a wealthy and sophisticated investor. The would-be GOP nominee also released some trust returns that feed into the 1040. There’s a lot here, and far more than I should spend unpaid time thinking about — but I can’t resist a little bit of voyeuristic observation.
- Mitt had a much better 2010 than 2009. His “protective” estimated tax based on 2009 tax was about $1.37 million. He had to pay in another $3.25 million with his extension. Much of that was cushion to cover 2011 estimated tax payments; he had a $1.6 million overpayment on the completed return, all of which went to 2011 estimates.
- 2010 was better because of $16.7 million in capital gains, offset by a $4.8 million capital loss carryover.
- That said, with $3.3 million in interest income and $4.9 million in dividend income, Mitt can hardly have a really bad year.
- The return was signed by somebody at PricewaterhouseCoopers on October 15, at the end of the extension period. Can you imagine the scene if Mitt had pointed out a mistake on the return on the extended due date? I can only imagine the logistical nightmare of making sure the return was signed and filed by the taxpayers on time.
- The return was, of course, prepared on what Robert D. Flach would call “flawed and expensive” tax return software. To do this return by hand, like Robert does his returns, would require a small army of flawed and expensive staff accountants with good penmanship. If nothing else, it shows that the current complexity of the tax law is possible only because of computers.
- Mitt has a $2 million passive loss carryforward, of which over $1 million is attibutable to 2010 losses.
- His return is fraught with potential expensive foot-faults. For example, he has a Form 8865 to report a foreign partnership and a Form 5471 for a controlled foreign corporation. Failure to file either one of these on time would have generated a $10,000 IRS penalty notice.
- The total tax on the 1040 is just over $3 million. If you counted the 35% tax paid by corporations on income generating the $3.3 million in qualified (15%-rate) dividends he reported, it would be about $1.79 million higher.
I’m sure the Obama, Gingrich and Santorum opposition research teams will be forthcoming with much more detailed analysis soon.
Link: Romney campaign page tax return links and campaign overview.
UPDATES:
TaxGrrrl, “Romney’s Tax Returns are Remarkably… Unremarkable”
The TaxProf has a roundup.
Kay Bell, “Romney Release 2010 tax returns”
Philip Klein, “Romney needs no apology on tax returns”
Christopher Bergin, “Romney
Tags: Christopher Bergin, Kay Bell, Mitt Romney, Philip Klein, Robert D Flach, TaxProf
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
Did you notice Newt seems to have used a small local firm ? Their website is pretty sketchy. The signing preparer has 8 linked-in contacts. Low profile.
Don’t knock the Tax Pro about doing returns by hand and scorning software. Just stand in awe and wonder of him
Having prepared many returns for other folks, using fancy software, I prepare my own return by hand to this day. And, for nailbiting excitement, I do it in ink. Pencils are for the timid.
I am in awe of Robert – with my penmanship, a tax career without computers is unthinkable.
I don’t share his contempt for software, though — it is “flawed,” but everything is this side of Heaven. It does wonders for carryforward computations, error checking and productivity, and I’m sure that returns are far more accurate than they would be without it.
Well, we don’t really know if his estimate was truly “protective”, do we?
To me, the possibility of an underpayment seems a little high. A fair amount of his income seems like it should be roughly SALY…
Plenty of people don’t file a 2210 and let the IRS sort it out.
Anon, good point, but I suspect Mitt wouldn’t do that.
Contrary to Mitt’s assertion that he paid the minimum tax required he put his health insurance on schedule A instead of adjusting his gross income on page 1. He was also eligible for a SEP IRA deduction if he chose to add to his enormous IRA account. Notice the tax prep fee Newt paid last year. Not bad.