Hey dad, could you tell me something that seems illegal, but isn't?
Absolutely! Each year I shelter 30% of my income from the IRS. Is this just some secret of the rich?
Nope! Anybody can take advantage of Section 4942 of the US tax code. Just create a private family foundation.
What's the catch? I just have to pay out 5% of the foundation's market value each year to a qualified charity of my choice.
So instead of paying 37% to the IRS, you pay about 1.5% in gifts to charity. I like it!
Great, because you're also hired to run the foundation. We can do this each year, and I'm giving you the foundation when I die. Keeping it in the family. That's philanthropy, son.