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James Daily and his friend Ryan Davidson are lawyers who run the blog LawAndTheMultiverse.com. Their new book, The Law of Superheroes, examines legal issues that would arise in a world with superheroes.
We asked them to explain a few superhero personal finance issues. Read on for their responses.
Clark Kent recently quit his job at the Daily Planet to pursue blogging full-time. How will this affect his 2012 taxes and what should he consider writing off??
Moving from being employed to being self-employed has a lot of tax consequences. Probably the two largest changes are having to pay self-employment tax (i.e. the share of Social Security and Medicare that were previously paid for by the employer) and having to make quarterly estimated tax payments.
As a blogger, Kent likely won?t have a lot of business expenses to deduct. Since he will presumably work from home he may be eligible for the home office deduction, but it?s a tricky deduction to get right and many accountants advise against it.
Which superhero should really spring for home insurance and why?
Presumably most homeowning superheroes have homeowners insurance, but renter?s insurance would be a good idea for those that don?t own a home. Homeowner?s and renter?s insurance often include off-premises liability coverage that covers negligent acts away from home. That could come in handy if, for example, a superhero accidentally damages a bystander?s property during a fight with a supervillain. The trick is that a superhero with a secret identity couldn?t make a claim on their homeowners or renter?s policy without revealing his or her secret identity.
What other assets should certain superheroes consider insuring?
Gadget-based superheroes (e.g. Batman, Spider-Man with his web shooters) should certainly consider insuring their gadgets. It?s not a normal insurance policy, but some superheroes might consider insuring against the damage caused if their secret identity were to be revealed. Ordinary identity theft insurance probably wouldn?t cover it.
Which superhero probably has debts keeping him up at night? And what can he/she do about it??
Tony Stark (aka Iron Man) has gone bankrupt a few times, or at least his companies have. My advice would be to take fewer risks, but I doubt he?d take my advice. Famously, Bruce Wayne is bankrupted in ?The Dark Knight Rises,? and my advice to him would be to hire a good lawyer, since he should have been able to avoid losing any money on such obviously faked stock market trades.
Which superhero is likely dealing with student loan debt and what would be the most efficient (yet highly illegal) way to pay them off?
Peter Parker (aka Spider-Man) is a good candidate, depending on how good his scholarship to Empire State University was. He could probably use his abilities to cheat at certain casino games (craps, maybe, by throwing the dice just so), or he could try his hand at mixed martial arts, which is illegal in New York, where Parker lives.
Which superheroes are shelling out for gift taxes?
Probably none of them. For example, Superman probably hasn?t given away enough diamonds to reach the lifetime limit. Others, like Tony Stark, have given away a lot of money but gave it to non-profits (e.g. the Maria Stark Foundation). Estate tax is another matter. It?s probably a good thing Superman?s valuable assets are in Antarctica!
Could you point out some bad spending habits you?ve noticed among certain superheroes?
Not so much bad spending habits as a failure to capitalize on their powers financially. For example, Peter Parker could be an amazing professional basketball player.
In previous interviews, you?ve mentioned that a lot of superheroes are ?judgment proof,? meaning they don?t have that much in assets. How would you recommend they use their powers to start investing?
It depends on the superhero and their power, but the first thing I would recommend is selling media rights and making endorsement deals. And any superhero that can see into the future could make a killing in the stock market, possibly even legally.
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