Custom Adjustable Rate Debt Structure - Cards Definition

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Definition Of Custom Adjustable Rate Debt Structure - Cards:

A type of tax shelter productused by high net worth individuals that involvesmakinga large paper multimillion dollarloan toa foreign party.

This party is usually acompany that is related to thecompany that is brokering out the tax shelter.After aseries of asset related swaps, the individual receives a paper loss that is equivalent to the original value of the loan. This paper loss can then be used to offset real gains that the individual has earned.CARDS were used in 2000-2002,but the IRS has since deemed them to be illegal, arguing that taxpayers should not be allowed tobenefit from losses that were not realized.Providing CARDS and other questionable tax shelter products was so lucrative that somecompanies based their businesses on providing them. For example, one of these companies allegedly charged $2 million to create a tax shelter for sum as large as $50 million.

Custom Adjustable Rate Debt Structure - Cards Definition

Definition Of Custom Adjustable Rate Debt Structure - Cards:

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