It's called a tax return because that is a somewhat common terminology in data collection. Information is requested by the government, and the "returns" are the delivery of that data by the various parties.
Taylor Swift does not personally own that plane. She is part of a business entity, and probably actually several different business entities, that manage the various aspects of "Taylor Swift", e.g. intellectual property rights and licensing, concerts/tours, appearances, licensing her public images for products, etc.
As a business, you do not have to pay taxes on business expenses. A plane is a business expense as it is used to transport people to and from business events (and also probably for personal use, but the primary purpose as far as reporting is concerned is for business use).
So, if the business makes $10 million per year, for example, and spends $2 million on transportation expenses, $3 million on salaries, $2 million on advertising, then there is $3 million left, and this is what can be taxed (so obviously, you want to make sure every possible business expense is reported, so the amount of taxes you must pay is minimized).
One note, generally things like planes, vehicles, computers, etc., are amortized over the expected lifetime of that item. Meaning, if a plane is expected to last 10 years, then 1/10th of the cost of the plane will be reported as a business expense each year for 10 years, even if they paid for it all at once up front. This also allows for selling these items early without then needing to pay a tax on the profits of the sale, because you are generally selling it for the remainder of the value that you have not yet claimed as expenses, and thus break even on that item.
As to "transferred ownership", the business entity transferred ownership of the plane to another business entity. It may be another business entity associated with Taylor Swift, possibly a business entity that will then use a service to "rent out" that plane to other people, and thus produce revenues using that plane.
Thank you. So, I just underestimated the richness of word "return". :)
As for "transferring ownership", from my knowledge of business, in Russian version, I still don't get how one business entity could "transfer ownership" to another business entity and it will not be accounted as sale. I understand than entity that received plane will be able to write offsomething from taxing and all that stuff. But then, entity that delivered plane will have to show income or whatever from that transfer and so pay taxes, and also lose its own ability to write off expenses on plane. I just can't get in head what's the point of such operation, especially between business entities wiith one owner. First, I assumed that "transfer ownership" means some operation additional to the "sale" and "gift". Something third that doesn't involve any taxable operations. It is interesting for me personally, because f.e. I can't just take a computer from one of my businesses and just move it to the account of another without making sale deal or gift deal, which both will lead to paying additional taxes. Even if actually I'm the only real owner of this computer and it doesn't change hands at all. If there is some third option to do it in US, then highly probably it exists in one way or another in Russia too, since our business laws heavily copied from Western one.
Transer is just a more generic word in this case, that encompasses all possible methods of moving an asset from one place to another. It could be a sale, a gift, or just moving an asset with a remaining loan to another entity.
In this case with Taylor Swift, they are also probably using the generic word transfer to keep it more private as to exactly where the plane is ending up.
There are tax implications with moving assets in a fashion that is neither sale nor gift, but this is not necessarily uncommon, especially when forming the business entity in the first place. The owners generally transfer some of their personal assets to the business entity and receive some share of the business, often somewhat relative to the amount of assets they provided to the business (other assets such as talent, personal networks, etc. are not as tangible but still factor into the share each person gets).
Also, just a note, when selling the plane, there are not necessarily tax implications. If you have been amortizing your expense claims based on the expected lifetime of the asset, then you have only paid taxes on the depreciated value of the asset, and the sale amount is likely the remaining value on that asset, and therefore no profit and thus no taxes on that sale. Of course, if the asset has appreciated in value since you originally purchased it, for example real estate, then that is a different story.
The owners generally transfer some of their personal assets to the business entity and receive some share of the business, often somewhat relative to the amount of assets they provided to the business (other assets such as talent, personal networks, etc. are not as tangible but still factor into the share each person gets).
Exactly same it works here. You could add something to the "authorized capital" of enterprise anything you want as owner. Even do that not only at moment of business creation. But you (or your business entity) become an owner or co-owner of that business.
Theoretically, yes, I just looked into our laws, one business could "invest" something into another business "authorized capital", and yes, you will not pay any taxes for such "ownership transfer". But, as side-effect, first business will become a co-owner of that another business proportional to the share of "investment" among total "authorized capital".
Also, just a note, when selling the plane, there are not necessarily tax implications. If you have been amortizing your expense claims based on the expected lifetime of the asset, then you have only paid taxes on the depreciated value of the asset, and the sale amount is likely the remaining value on that asset, and therefore no profit and thus no taxes on that sale.
Here we have something similar. You could "write off" some equipment or adjust its price in business assets balance proportional to the part of manufacturer declared lifetime that passed.
Also, you could theoretically sell something below market price but that makes sense only if you pay taxes from profit (13%), not from turnover (6%) - we have both options for LLCs and other types of businesses. And it could attract unnecessary attention from tax agency, especially if it was something expensive. Not fatal, and could be settled, but unpleasant.
Interesting, thanks for clarifications. I appreciate your patience.
It's called a tax return because that is a somewhat common terminology in data collection. Information is requested by the government, and the "returns" are the delivery of that data by the various parties.
Taylor Swift does not personally own that plane. She is part of a business entity, and probably actually several different business entities, that manage the various aspects of "Taylor Swift", e.g. intellectual property rights and licensing, concerts/tours, appearances, licensing her public images for products, etc.
As a business, you do not have to pay taxes on business expenses. A plane is a business expense as it is used to transport people to and from business events (and also probably for personal use, but the primary purpose as far as reporting is concerned is for business use).
So, if the business makes $10 million per year, for example, and spends $2 million on transportation expenses, $3 million on salaries, $2 million on advertising, then there is $3 million left, and this is what can be taxed (so obviously, you want to make sure every possible business expense is reported, so the amount of taxes you must pay is minimized).
One note, generally things like planes, vehicles, computers, etc., are amortized over the expected lifetime of that item. Meaning, if a plane is expected to last 10 years, then 1/10th of the cost of the plane will be reported as a business expense each year for 10 years, even if they paid for it all at once up front. This also allows for selling these items early without then needing to pay a tax on the profits of the sale, because you are generally selling it for the remainder of the value that you have not yet claimed as expenses, and thus break even on that item.
As to "transferred ownership", the business entity transferred ownership of the plane to another business entity. It may be another business entity associated with Taylor Swift, possibly a business entity that will then use a service to "rent out" that plane to other people, and thus produce revenues using that plane.
Thank you. So, I just underestimated the richness of word "return". :)
As for "transferring ownership", from my knowledge of business, in Russian version, I still don't get how one business entity could "transfer ownership" to another business entity and it will not be accounted as sale. I understand than entity that received plane will be able to write offsomething from taxing and all that stuff. But then, entity that delivered plane will have to show income or whatever from that transfer and so pay taxes, and also lose its own ability to write off expenses on plane. I just can't get in head what's the point of such operation, especially between business entities wiith one owner. First, I assumed that "transfer ownership" means some operation additional to the "sale" and "gift". Something third that doesn't involve any taxable operations. It is interesting for me personally, because f.e. I can't just take a computer from one of my businesses and just move it to the account of another without making sale deal or gift deal, which both will lead to paying additional taxes. Even if actually I'm the only real owner of this computer and it doesn't change hands at all. If there is some third option to do it in US, then highly probably it exists in one way or another in Russia too, since our business laws heavily copied from Western one.
Transer is just a more generic word in this case, that encompasses all possible methods of moving an asset from one place to another. It could be a sale, a gift, or just moving an asset with a remaining loan to another entity.
In this case with Taylor Swift, they are also probably using the generic word transfer to keep it more private as to exactly where the plane is ending up.
There are tax implications with moving assets in a fashion that is neither sale nor gift, but this is not necessarily uncommon, especially when forming the business entity in the first place. The owners generally transfer some of their personal assets to the business entity and receive some share of the business, often somewhat relative to the amount of assets they provided to the business (other assets such as talent, personal networks, etc. are not as tangible but still factor into the share each person gets).
Also, just a note, when selling the plane, there are not necessarily tax implications. If you have been amortizing your expense claims based on the expected lifetime of the asset, then you have only paid taxes on the depreciated value of the asset, and the sale amount is likely the remaining value on that asset, and therefore no profit and thus no taxes on that sale. Of course, if the asset has appreciated in value since you originally purchased it, for example real estate, then that is a different story.
Exactly same it works here. You could add something to the "authorized capital" of enterprise anything you want as owner. Even do that not only at moment of business creation. But you (or your business entity) become an owner or co-owner of that business.
Theoretically, yes, I just looked into our laws, one business could "invest" something into another business "authorized capital", and yes, you will not pay any taxes for such "ownership transfer". But, as side-effect, first business will become a co-owner of that another business proportional to the share of "investment" among total "authorized capital".
Here we have something similar. You could "write off" some equipment or adjust its price in business assets balance proportional to the part of manufacturer declared lifetime that passed.
Also, you could theoretically sell something below market price but that makes sense only if you pay taxes from profit (13%), not from turnover (6%) - we have both options for LLCs and other types of businesses. And it could attract unnecessary attention from tax agency, especially if it was something expensive. Not fatal, and could be settled, but unpleasant.
Interesting, thanks for clarifications. I appreciate your patience.