…It usually is.
The New York Times today has a story on tax shelters (free registration required). It’s good reading, and brings up the basic issues that you need to consider about any tax shelter:
– Is there a purpose (other than sheltering tax) behind the transaction?
– Do you understand the transaction?
– Can you explain it to your spouse or best friend?
– Do you have independent professional advice on the transaction?
If the answer to any of these questions is “no,” get professional advice and reconsider the transaction!