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CoronitaParticipant[quote=bob2007]It can depend on your income as well. If you make too much to contribute to a roth, and don’t have a 401k, your left with contributing to a non-deductable traditional ira. Some whole life plans will provide a minimum return guarantee, like 5%, with the additional advantage that it grows tax free.
Fees are higher (and hidden) in a whole life plan, so most people say to go with term plus your own investments. I treat the whole life as the lower risk part of my retirement planning.[/quote]
Interesting. Not that I can participate anymore, but care to share what folks are looking at in terms of fees, and examples of hidden fees?
February 22, 2014 at 6:44 AM in reply to: Windoze 8 is such a piece of crap.. And customer service is worse #771179CoronitaParticipant[quote=flu]ooo…. I think I live running windoze in a virtualized container….
It works pretty well from vmware on linux…
Now I’ll see if it runs ok from vmware on mac…I’m not a hardcore gaming, and besides my mac is used for productivity + media(though it’s not very productive these days)…
I thought about switching to mac to manage my media.. BUT, one thing that turned me off on older OSX was the way they store image/videos in their own volume management system I think… I like having my images unmolested… But honestly, haven’t looked into it seriously…until now..
Anyone know if picasa desktop for mac exists ? heh heh..[/quote]
Hah!.. Picasa….It exists for a mac… hmmmmmm… now it gets interesting.
Kinda ironic… In 1992, I was an avid mac user all the way to 1996.
Starting in 1996, I switched over to windows for home after a catostrophic crash on my mac….
(Unix then linux at work)….I never bothered to switch back to mac’s at home..A few years ago, I bought my first mac to do some iOS work….Then afterwards, I bought this quad core mac server just for the footprint and predominantly used linux and windows on it…. Now, maybe I’ll switch back to mac, after a this “incident”….
Hey, just about the same time that apple is in decline!!!
Me, cutting edge? At home.. Clearly not… Lol.. If it was up to me, I’d still be using my monochrome monitor…
Anyone got a creative use for an old Mac SE/30. I thought I’d dust that out of my shelf it a linux box too with a whopping 32mb ram, 160mb hard drive an 68030/32 processor. I think it can hook up an external vga monitor too…. whoohooo
February 22, 2014 at 6:37 AM in reply to: Windoze 8 is such a piece of crap.. And customer service is worse #771178CoronitaParticipantooo…. I think I live running windoze in a virtualized container….
It works pretty well from vmware on linux…
Now I’ll see if it runs ok from vmware on mac…I’m not a hardcore gaming, and besides my mac is used for productivity + media(though it’s not very productive these days)…
I thought about switching to mac to manage my media.. BUT, one thing that turned me off on older OSX was the way they store image/videos in their own volume management system I think… I like having my images unmolested… But honestly, haven’t looked into it seriously…until now..
Anyone know if picasa desktop for mac exists ? heh heh..
February 21, 2014 at 6:34 PM in reply to: Windoze 8 is such a piece of crap.. And customer service is worse #771171CoronitaParticipantSo i tried unerasing my bad drive. Nope…
Looks like I’ll be reinstalling afterall..
Ubuntu sure is handy… Heck, OSX sure is handy right now….
Anything but windoze…
Maybe I should bit the bullet and just let Mac manage my pictures and videos instead of picasa.. And for the rare occasion I need windows, run the virtualized windows in a mac….
CoronitaParticipant[quote=scaredyclassic]Pizza is just beautiful. I recall walking home from franks pizza on Ave P in brooklyn in the 70s. A dark little Hole of a pizzeria. The box so hot my fingers felt burnt. Every one so happy when we walked in the door. So perfect.
I like everything about pizza.[/quote]
Sammy’s Woodfired Pizza… Yum yum….
CoronitaParticipant[quote=scaredyclassic]I do have low blood pressure 112/72. I feel like I should have high blood pressure. I get uptight. Nervous. But I dont. So in spite of the potential futility of it, I will eat my oatmeal and flax. Some herring from Costco and some salad. And the occasional protein shake at the gym.[/quote]
I think you’re taking things a bit too extreme. I think unless you have a hereditary condition, just do normal things in moderation is fine…
Cardio-exercise (not that I do regularly..loll..).. Eat relatively healthy (most of the time)….
And get your annual checkups…If it makes you feel better, a glass of red wine every so often, since it’s suppose to be good for the heart too. (your liver on the other hand…)…
For the longest time, I took a small baby aspirin almost every day, as recommended by my doctor… It was for something else (supposedly cuts down on colorectal polyps) but supposedly he mentioned also beneficial for the heart..
For me, I’m going sort of the opposite side… I figure I’m being scoped, doctored, monitored almost every week, I refuse to be 100% careful now.. You could be 100% health conscious and still be hit with some health issue beyond your control..You can go to the gym everyday, exercise like a fiend, and then because of the strain, get a heart attack like it happened to some early 30ies-40ies…
So live life a bit…That KFC sure tastes smacking good every so often… As much as I like Chick-fil-a… Deep fried extra crispy KFC is still the best…
February 21, 2014 at 7:26 AM in reply to: Moving money to another country for better interest rates #771140CoronitaParticipant[quote=spdrun]Why not buy a foreclosure (maybe outside of CA) with the money, rent it out for 8% on the dollar and take some nice tax deductions as well?[/quote]
Lol.. easier said than done for a lot of people.
And besides….
The OP I believe still rents. I think he would be better served buying his own home and living in it and building equity before tackling the problem of being a landlord.
(assuming he is living/working where he would settle down).
Just curious, besides the condo you picked up here in SD, did you pick up anything else recently?
CoronitaParticipant[quote=scaredyclassic]My family had pizza and I had salad … they asked if I was trying for a medal in self control.[/quote]
Get plenty of exercise.
Eat lots of fish.
Eat oatmeal in the morning everyday.CoronitaParticipantSince we’re on the topic of taxes… I got a new scenario for folks to figure out… (I don’t know the answer)…
1. Suppose you borrowed $50k from your traditional 401k…
2. Suppose you also have a Roth 401k….Now you decided you want to pay back your 401k because you don’t want an outstanding loan… BUT, you really don’t want your total 401k (both traditional and roth account) value to really increase by $50k… (for sake of argument, you feel you don’t want to put $50k back into the stock/bond markets)…
Can you withdraw from your Roth 401k $50k, ALL from CONTRIBUTION portion without incurring a tax (since it was money you contributed after taxes)… and use that money to payback off the outstanding loan on your traditional 401k….
CoronitaParticipant[quote=AN]I wonder what would happen to the early depreciated taxes if the property is foreclosed. Would you still be taxed if you refi to the hilt, then the next time the market crash, you just mail back the key. In essence, you’ve already gotten your tax free gain out.[/quote]
Not sure, never went through that scenario because never considered getting foreclosed on…….But….If I were to guess, I’d think from a tax perspective, foreclosure would be considered a “sale”…. You would recognize capital loss from the sale itself, and you would have gain from the depreciation….Whether you owe taxes would depend on how you net…
Personally, after my kid grows up to a point, I think I would want to try doing is selling my primary home every 2-4 years if I have any reasonable capital gains…. And buy another one…. Assuming that tax benefit still exists…
CoronitaParticipant[quote=joec]Thanks for all the explanations. I was familiar with the depreciation recapture and all that, but from these scenarios, I don’t think it’ll be that bad since a lot of the tax situations could be controlled. If you are ultra wealthy, you can pass it on tax free, for less so, can’t you also just move into said property for 2 years and sell for the 500k tax free benefit as well?
[/quote]Short answer. No…
Longer answer..
1) The move back in for 2 years and sell for $500k “tax free (joint)” is on capital gains only…. it wouldn’t be on the depreciation recapture portion…
So for example, if you bought a home for $300k, sold it for $500k and had $50k in depreciation while it was a rental, that $50k depreciation recapture would still be taxed….That $200k capital gains is the portion that would be exempt from capital gains in full or in part..But keep in mind also that……
2) Even the rules of the $250k/$500k capital gains “tax free” has changed…. It’s not as simple as living there two years as your primary residence anymore and getting the entire $250k/$500k capital gains tax free (like it was under the old law)….. Specifically,
“A special rule enacted in 2009 limits the $250,000/$500,000 exclusion for homeowners who initially use their home for purposes other than their principal residence, such as a rental or vacation home. The rule requires you to reduce pro rata the amount of profit you exclude from your income based on the number of years after 2008 you used the home as a rental, vacation home, or other “nonqualifying use.” ”
Probably, from a “fairness” point of view, yes this is more of a fair rule…From a practical point of view…just as I stated early, one less tax benefit that older people were able to take advantage when they could versus younger people who haven’t taken advantage of this..
Don’t get my wrong, I’m not complaining (no, really… ok, maybe a little bit..) I’m just telling it how it is (I think)…Clocking is ticking my friends. Those older tax benefits sure seem to be closing fast…
CoronitaParticipant[quote=SK in CV]Here’s the deal on rental losses. If you’re not a real estate professional, real estate rental income is always passive. If the owner actively participates in management, net losses from all rental property of up to $25,000 per year can be used to offset other income, unless modified AGI is over $100K. If modified AGI is over $100K, then the loss limitation is reduced by $1 for every $2 of income, with the deductible losses completely phased out at income of $150K. (those numbers are cut in 1/2 for married taxpayers filing separately.) Unallowable losses are carried over until they can be fully used, or until the properties are disposed of, at which time all previously un-allowed losses can be deducted.
None of this means that the “tax shelter” aspect of real estate is lost, even for higher income taxpayers. If there is positive cash flow, but non-deductible losses for tax purposes, that cash flow is still tax-free (for the time being). Given all the talk I’ve read here over the last few months, about 7% plus cash on cash returns, this really shouldn’t cause much of a problem for recent investors. Even with 20% down payments, if cash flow is really 7% plus, tax losses should be pretty small. With 30% or more down and that kind of return, there won’t be any losses at all in most cases. But there will still be tax sheltered income.[/quote]
Carryover losses are kinda like dirt cheap loans to uncle sam, depending on the duration of the carryover…
$3000 loss incurred today that you need to carry over on your taxes is probably worth a heck of a lot less 10-15 years from now when you add it back to your taxes….
🙂
CoronitaParticipant[quote=joec]Correct me if I am wrong, so if say my earned income (w-2) in my job is say 155k, however I have a paid and clear rental home I inherited from my parents that is paid off that generates say 30k in income a year (passive).
I also have another rental I own that I do depreciate against and currently, to simplify, say I’m running even to cash flowing. Assuming I depreciate 30k a year for that one, would I be able to pretty much eliminate my passive rental income from the other property?
I haven’t looked at this aspect of the tax code at all since I don’t have any rentals, but my guess is you could since they are the same class (both passive).
It just seems to me that no matter the tax laws, wealthy people will find ways around it to make it more beneficial for them which is now leading me to sorta favor having no corporate tax at all in America to allow re-patrioting of profits from foreign countries to at least put the money back in the US. US companies won’t pay taxes anyways and this actually helps the small business (me) that can’t afford to do these kinds of things.
Just pass the income straight through…
For the guy with the 155k income, maybe it makes sense to do a multi purchase (assuming you have the savings) to generate income in 1 property and another to write off depreciation from both. Not too certain, but maybe some of the slum lords here 🙂 can share what they do.[/quote]
My understanding is that passive losses on one rental can be used to offset only gains on other passive gains, IE gains on other estate.
It’s considered “passive” if you didn’t “materially participate” in in rental activity… (IE you or your spouse aren’t a real estate professional that actively participate”…
In your scenario (again take what I say with a grain of salt since it’s a enginerd talking, not a finance/accountant talking)… Your $30k passive loss incurred on your second property would offset the $30k gain on your first property… But keep in mind if your $30k “loss” was from depreciation, when you sell the property, it is going to bite to in the arse by lowering the cost basis of that property when you sell…
That depreciation loss you claimed is “recaptured” at the time of sales of your property… And I believe the part of the gain from depreciation is subject to what’s called a 25% “recapture” tax if I’m not mistaken…
Also, you might have thought, “what if just avoid claiming depreciation on my property” so I can avoid the eventual 25% recapture tax… But ah yes, that’s the rub in the fine print from the IRS… The rub is the tax law requires depreciation recapture to be calculated on depreciation that was “allowed” OR “allowable”… (section 1250(b)(3))…
In other words, even if you don’t claim depreciation, you’re going to have to pay for the recapture tax when you sell the property anyway whether you claimed depreciation or not. So you might as well claim it…..You can 1031 exchange it to defer that onto your next property, and keeping 1031 exchanging it indefinitely… but it goes on and on and on, and your next property has a lower cost basis from the depreciation of the previous one you rolled it from,etc,etc,etc…
Where you sort of escape from the depreciation recapture hit..is when you die, and your heirs inherit the property… In simple terms (roughly), when your heirs inherit the property, they get what’s called a “step-up” basis… The cost basis for your heirs of that inherited property ends up being the fair market value of that property at the time of your death… Basically, when a real estate is inherited, it starts with a new basis and new depreciation (more or less)…at least for now, until they change that tax rule too……Of course, there’s the other issue of inheritance tax, but that’s a separate discussion…
Again, consult a CPA if that applies to you.. I’m not an accountant, and if I butchered that in anyway, I stand corrected….
CoronitaParticipantMorale of the story. The tax loopholes and tax benefits for most common people are closing much faster than say for all the complex loopholes of I’d say corporations and and insanely rich…. Why? Because these things for more common people are lower hanging fruit…
Great if you’re older and was able to accumulate wealth when these benefits were more readily available. Sucks if you’re much younger just starting out… Those won’t be available for you anymore…
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