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patientrenter
ParticipantSorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.
Patient renter in OC
ParticipantSorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.
Patient renter in OC
ParticipantSorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.
Patient renter in OC
ParticipantRusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?
I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.
I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?
Patient renter in OC
ParticipantRusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?
I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.
I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?
Patient renter in OC
ParticipantRusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?
I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.
I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?
Patient renter in OC
ParticipantRusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?
I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.
I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?
Patient renter in OC
ParticipantRusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?
I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.
I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?
Patient renter in OC
ParticipantHats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.
Patient renter in OC
ParticipantHats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.
Patient renter in OC
ParticipantHats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.
Patient renter in OC
ParticipantHats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.
Patient renter in OC
ParticipantHats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.
Patient renter in OC
ParticipantRustico: “…wamu… LTV had recently been changed from 95 to 75”
For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.
If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).
HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?
Patient renter in OC
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