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Loophole elements in the Rural Capital Formation Incentive Act |
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Section 18.2.d
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"Capitalization" means the amount of any funds loaned to the qualified rural small business capital company
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Section 20.B.4.a & b
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1. Authorizing taking tax credits worth 200% of what is claimed to be invested in new business.
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SECTION 2.G
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The credit allowed on funds borrowed by the pass-through entity to make a qualified investment.
Failing to prevent the use of artificial, dummy or fake loans.
An act of omission -- failure to include language clarifying how a loan can to be used.
Leaving it "not illegal" to use artificial loans to inflate the claimed
investment up to nearly 7 times the actual money invested at risk. 6.66 times the allowed
30% in tax credits comes to 200%.
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Section 2.B & G
Section 19.B & G
Section 20.B & E
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Authorizing the use of borrowed funds
Subtley changing the investment requirement from cash (money at risk) to a new term "qualified investment" and defining
"qualified investment" to include using borrowed money. What was "not illegal" was using artificial loans to inflate the claimed
investment up to nearly 7 times the actual money invested at risk.
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Section 19
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Specifies 30% tax credits. |
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