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post #54016 of 57336

Even when rich people lose money they benefit : (

post #54017 of 57336
Quote:
Originally Posted by Piobaire View Post

I'm not a tax expert and have a CPA handle my stuff. Take what I'm about to say with a grain of salt and seek your own professional advice.

Rental units cannot deduct passive loss during ownership but only upon sale of the asset. The depreciation is of course part of this so I have several years of accumulated depreciation and any other passive loss (rental income did not cover operating expenses + carry). Now, I'll have some capital gains due to the depreciated value of the asset on the books, but I happen to have a pool of capital loss from some prior transactions (the stuff you can only deduct at 3k per year) and will use that to offset any capital gains dollar per dollar. Near as I can figure this year's return will be tasty.

I'm not sure I follow how you get from offsetting capital gains to having a true tax benefit on your returns but I'm sure that has to do with personal and perhaps somewhat unique circumstances which sounds like it's worked out well for you.
Quote:
Originally Posted by venividivicibj View Post

Even when rich people lose money they benefit : (

Interestingly, the limitations on passive activity losses are a counterexample of this sentiment.

Spoilered for anyone who cares. teacha.gif
Warning: Spoiler! (Click to show)
This isn't intended to be tax advice and you should consult a CPA and the tax code and publications 527 and 925, etc. but generally speaking my high level understanding is that for passive losses associated with rental properties (including losses from depreciation which you are required to take), you can offset up to $25k of your ordinary income each year with these passive losses, unless your modified AGI is between $100k and $150k in which if phases out. Over $150k you cannot offset ordinary income and just carry it forward. So essentially for rich people (well people with high ordinary income) it's at best a wash because these losses can be difficult to monetize. For people with low enough AGI's (which could include high net worth financially independent people) there's a nice benefit although it's really limited to about $6 or 7k a year and you end up giving a lot of that back if you sell your depreciated property.

Most of the people I know with rental properties lament the fact that they can't take advantage of the passive activity loss because the AGI threshold is low. This could be another artifact of living in the bay area. Everything's expensive and people get paid comparatively more but brackets, thresholds, phaseouts, etc. are the same here as everywhere else.
post #54018 of 57336
Quote:
Originally Posted by MrG View Post

A little good news of my own that I'm not ready to talk about other than semi-anonymously:

We're under contract on a house. .

similar thing happened with our house. Nashville's housing market kind of crazy right now so offered list price to close quickly, the safety inspection came in and first thing needed was a new roof. we bargained to have new roof installed for free and the seller agreed (about a $10k job) then the appraisal came in and was appraised at slightly above list price. so we got the house with a new roof akin to getting akin to bargaining $10k lower anyway without any of the stress
post #54019 of 57336
Quote:
Originally Posted by UnFacconable View Post

I'm not sure I follow how you get from offsetting capital gains to having a true tax benefit on your returns but I'm sure that has to do with personal and perhaps somewhat unique circumstances which sounds like it's worked out well for you.
Interestingly, the limitations on passive activity losses are a counterexample of this sentiment.

Spoilered for anyone who cares. teacha.gif
Warning: Spoiler! (Click to show)
This isn't intended to be tax advice and you should consult a CPA and the tax code and publications 527 and 925, etc. but generally speaking my high level understanding is that for passive losses associated with rental properties (including losses from depreciation which you are required to take), you can offset up to $25k of your ordinary income each year with these passive losses, unless your modified AGI is between $100k and $150k in which if phases out. Over $150k you cannot offset ordinary income and just carry it forward. So essentially for rich people (well people with high ordinary income) it's at best a wash because these losses can be difficult to monetize. For people with low enough AGI's (which could include high net worth financially independent people) there's a nice benefit although it's really limited to about $6 or 7k a year and you end up giving a lot of that back if you sell your depreciated property.

Most of the people I know with rental properties lament the fact that they can't take advantage of the passive activity loss because the AGI threshold is low. This could be another artifact of living in the bay area. Everything's expensive and people get paid comparatively more but brackets, thresholds, phaseouts, etc. are the same here as everywhere else.

All this mirrors what my CPA told me. He said tax law was changed so high income professional folks, doctors were the profession he used as an example, could not amass a rental empire and effectively finance it through not paying personal income tax during the acquisition phase. For us it was a holding action to wait out the real estate melt down. We bought our dream house at the very trough but needed to float our then current house out. Through careful tax planning we were able to cash flow away a significant loss on our then current house and scoop a new house at 50 cents on the dollar pre-crash that was still worth 3x our then current house.

Basically, best long term financial move we ever made plus we get to live here.
post #54020 of 57336
I have a great tip!

I always liked the idea of those bleach tablets you put in the top of the toilet tank, but the smell of bleach is overpowering, so I have not really used them.

I recently bought a package of toilet tablets. The tablets come in plastic wrappers, like a klondike bar. Instead of removing the wrapper, I just cut the corner off. That way water circulates around the bleach tablet inside, but at a much slower rate. The result is that everything still gets disinfected, but you don't get the overpowering smell of bleach in your bathroom. bigstar[1].gif
post #54021 of 57336
Fuck yeah FCC rules you can get cable through roku/appleTV/ect.

This sounds good, but will still have me angry at Comcast/time Warner somehow.
post #54022 of 57336
My final appointment of the day had to cancel last-minute so now I can go home an hour or so early today. icon_gu_b_slayer[1].gif
post #54023 of 57336
Quote:
Originally Posted by venividivicibj View Post

Even when rich people lose money they benefit : (

CE that shit.
Warning: Spoiler! (Click to show)
Just kidding! Feel the Bern, assholes! We're coming after your filthy lucre, Piob!
post #54024 of 57336
Quote:
Originally Posted by erictheobscure View Post

CE that shit.
Warning: Spoiler! (Click to show)
Just kidding! Feel the Bern, assholes! We're coming after your filthy lucre, Piob!
Warning: Spoiler! (Click to show)
Sweet. I can retire early and be a taker in the 47%! I'll think of you every time I cash my government cheque and buy cheap Rhone wine.
post #54025 of 57336
I know I have a repeltation here as a tough guy who don't allow no softness into the mente but facthematter is I get weepy every time I listen to Bjork be sing "All is Full of Love" I don't even care if you buns-heads think less of me for it.
post #54026 of 57336
that is the best music video ever made not even close no second place
post #54027 of 57336
My repultation is at 989 only a few more likes and I will go over 1000. So excited to see if I evolve into something new and better than "Pillar of the Community" but I worry dat the next level might be something dumb like "guy who posts a lot" or otherwise less than pillar status which makes my mente worry for the cause that my repultation here is very importert to me.
post #54028 of 57336
I ate a protein bar for breakfast today that was labeled "Birthday Cake" and I'll be--it tasted just like birthday cake. Delicious.
post #54029 of 57336
Quote:
Originally Posted by VaderDave View Post

I ate a protein bar for breakfast today that was labeled "Birthday Cake" and I'll be--it tasted just like birthday cake. Delicious.

I hope you're not in Colorado or you're going to be tripping the rest of the day.
post #54030 of 57336
Quote:
Originally Posted by Piobaire View Post

I hope you're not in Colorado or you're going to be tripping the rest of the day.

The guy at the Greyhound station who gave it to me said it was all-natural. I'm not sure what he was trying to say.
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