How to avoid paying taxes

An equity swap is another shady method of tax evasion. Basically, it’s an official agreement that allows two parties (say, two rich individuals or companies with in interest in reducing their taxes) to exchange the gain and loss of a set of assets without actually transferring ownership. One of these swaps is generally pegged to a fixed rate, like LIBOR, which means that the participants can expect a fixed return, either in one payment or at several predetermined points.