[SK in CV]

Investing in real estate through IRA’s has some pretty major pitfalls. It can create a situation where IRA income is NOT tax free. Net rental income in an IRA is not tax free.

[SK in CV]

[quote=CA renter]

We’re in total agreement about both parties not really helping the middle class, and I also agree that many government policies redistribute wealth. This is where things grey, as one could make the argument that the redistribution of wealth is unjust, unethical, etc. because the wealthier person worked harder and earned his/her wealth (which isn’t necessarily true at all). [/quote]

I’m way late to this thread, so my apologies for brining up day old topics, but this one struck a nerve.

All government activities, if paid for by general revenue dollars, redistribute wealth. Every single one of them. Unless the benefits of an expenditure are evenly distributed, wealth has been redistributed. That’s true even if taxes are truly flat ($x per person). In a system more commonly referred to as a flat tax (X% of income per person), there is always redistribution, irrespective of how benefits are distributed. Same with a progressive system (which our current system is, partly only in theory).

So when “redistribution of wealth” is discussed, it is always wrong to point at a single change and call it redistribution. It can only change the degree of redistribution. There is no system of income tax that is not redistribution of wealth.

[SK in CV]

[quote=SK in CV][quote=paramount]

I was also surprised to hear SAIC is breaking up.[/quote]

When did this news break? I can’t find anything on it. Or is it inside baseball?[/quote]

Nevermind, i found it.

[SK in CV]

[quote=paramount]

I was also surprised to hear SAIC is breaking up.[/quote]

When did this news break? I can’t find anything on it. Or is it inside baseball?

[SK in CV]

[quote=flu]

And yes, SAP software sucks donkey….

[/quote]

I gotta disagree here. Neither SAP nor Oracle suck. They both make incredibly powerful enterprise tools. Some installations suck because those designing and implementing it suck. Sometimes. There are thousands of installations around the world that provide exactly what they’re designed to do.

But yeah, it’s a dirty business. Both on the sales side and the implementation side where I worked. As is any industry where single sales can involve tens of millions of dollars, and consulting costs related to implementation can easily be double that.

[SK in CV]

[quote=no_such_reality]
We want to remove the mortgage deduction.
We want to remove the 401K deduction.
We want to raise income tax.
We want to raise sales tax.

Okay, now be reasonable and compromise with us.

They’re playing the game of asking for a ton of things and then whining about compromise not getting them half of them.[/quote]

Except….no one is asking for all these things. In fact, at the federal level, no one has asked for any of these things for the vast majority of taxpayers.

[SK in CV]

[quote=Allan from Fallbrook]FLU: Lynch, according to Larry Ellison, tried to sell Autonomy to Oracle, but they sent him packing, claiming that Autonomywas way overvalued.

I don’t remember the number that Lynch floated to Oracle, but I want to say it was $2B and Ellison said that was too high. Lynch is vehemently denying that this ever took place, Ellison has been releasing notes, along with the Autonomy slide deck presented.

All of which begs the obvious questions. First, how in the hell did HP get to an $11B valuation number, and, second, how did that insane number survive due diligence?

Perhaps SK, the resident CPA, can answer that because I have no clue.[/quote]

Beats the f outta me. I don’t know if I ever knew that Apotheker was an SAP guy. If I did, I’d certainly forgot it. It kind of sounds to me like he was envisioning some sort of magical synergy between Autonomy and HP that would help redirect and rebrand HP into a space where they’d never been. And if it worked, the price paid would almost be incidental. That synergy never developed. I have slightly better than a laymans understanding of the space Apotheker and the other HP guy that came from Oracle had their backgrounds in. (I spent some time working in that industry.) But I don’t know enough about Autonomy’s product to know whether that synergy was ever realistic. Acknowledging my lack of qualifications, I have my doubts.

When that wishful thinking synergy never developed, blame the numbers. They didn’t write down the acquisition costs by 10 or 20%. They’re claiming now that its worth only 25% of what they paid, down near the price Ellison was discussing. I think it has nothing to do with bad accounting.

I find it almost bizarre that Ellison is saying anything. The NDA’s on these kinds of negotiations are usually pretty damn tight. If he really is sharing presentations, he’s gonna get his ass sued.

[SK in CV]

[quote=SD Realtor]Your entire premise appears to be based on a belief that we will return to the way things were. I don’t think that is true at all. Your argument about a return to 2004 levels to me is not solid. I think it is safe to say that the 2004 economy was robust but for the wrong reasons, (see a housing boom fueled by unrealistic pricing and artificially low rates). This is not about any republican candidate at all. It is about the current level of spending and the lack of economic growth, not about increased revenues.[/quote]

No, my premise is drops. And how a few drops can go a long ways.

[SK in CV]

[quote=SD Realtor]No I don’t think it is a narrative at all. Given the cost to service our debt if we even see a modest rise in the interest rates we are in big trouble. I agree with you about war spending. We may or may not see an economy to 2004 growth levels but I doubt we will see sub 5% employment levels. Seems to me we are also seeing substantial increases in general welfare spending, food stamps, etc. While reduction in defense spending is needed, the resulting rise in unemployed white collars will not be consumed by the private sector.

So, I guess while your post makes sense about a few drops here and there, physical evidence especially over the past 4 years are absolutely contrary to it. I guess we will see how things go this year.

So yes to me it is a spending issue and that is not just narrative. It was under Bush and it has been perpetuated by Obama.[/quote]

I’m sure you understand that the increase in welfare and similar spending (including direct payments, SNAP, EITC, federal unemployment, medicaid, etc.) are all a function of the economy. None of these programs have undergone any signficant expansion in eligibility or benefits in years. If the economy expands, the costs of these programs drop proportionally. If the economy improves, we’ve cut spending. That was the entire basis of the republican candidate’s plan to move towards a balanced budget. His path just couldn’t possibly get us there.

[SK in CV]

[quote=SD Realtor]I hope that is the case SK.

I have no problem with the top 1% paying more however it is a drop in the bucket with regards to the real problem.

We have a spending problem not a revenue problem.[/quote]

It’s an attactive narrative, but it’s hardly true. It’s only a drop in the bucket if 10 drops fill the bucket. Restoring the economy to 2004 growth levels adds another 3 or 4 drops. Eliminating war spending is another couple drops. Another few drops and we have a balanced budget.

[SK in CV]

[quote=SD Realtor]It wouldn’t surprise me if some of the expenses on your schedule E are proposed for the chopping block. You know how rich all those evil landlords are.[/quote]

Because of the way the code is written, it would seem unlikely. The same code sections that allow little landlords to deduct their repairs and supplies and property taxes, are the same code sections that allows General Electric to deduct its expenses. Over the last few decades, the only deductions that have been messed with at all are depreciation and the deductibility of business meals. I don’t expect it to happen now.

[SK in CV]

So far, they’re only “on the table” in the same respect that legalizing pot under federal law is on the table. Nobody that’s actually involved in the negotiations has publicly mentioned eliminating, capping or even limiting the mortgage or 401K deductions. Remember, eliminating or capping deductions was the preferred Romney method of increasing revenue. It kind of, sort of, sounded like a good idea until he was asked to name specific deductions. He wouldn’t. He couldn’t. And the reason is that these deductions don’t mainly hit the top 1%. They hit mainly those between the top 1% and the top 3%. The 2%ers. Those earning between $250k and $400K. Anything to save the really rich from paying more. If they can’t get the poor to pay more, maybe they can get the almost rich to pay more.

I think your deductions are safe.

[SK in CV]

[quote=bearishgurl]
barnaby, Amazon is obviously building its distribution centers in CA on the cheapest land they can get … which makes sense (to hold their prices down). Any “beleaguered area” in the “armpit” of CA with 50%++ of distressed properties would be thrilled to have a new employer move in, offering the locals 750-1000 new jobs.

As it should be. If that’s the deal they made with Jerry, then so be it. Imagine how much sales tax the (small) state of TN collects (from their own residents and a poss % of other states) with all those online distribution centers located within minutes from the one of the country’s main UPS shipping hubs![/quote]

I’m a little confused by parts of this, so I’ll just add the way it works and move on from there. An Amazon distribution center does generate sales tax revenue for the state in which it’s located, to the extent that distribution center ships within the state. Products shipped out of state don’t create sales tax revenue for the local state. So Tennessee doesn’t get sales tax for stuff shipped from the local Amazon distribution center to another state.

But irrespective of that, Amazon has in place agreements with at least 8 states that it already charges sales tax for all deliveries within those states, regardless of where the products are shipped from. California and Tennessee among them. There’s another handful of states it has agreements to do so in the future.

[SK in CV]

[quote=CA renter]

SK,

I thought the first $100K is deductible, but any amount over that is not unless you use it for improvements on that property. Does this only apply to owner-occupied cash-outs/HELOCs, or might it also apply to rentals?

From what I understand, it is the first $100K that is pulled out via cash-out refi or HELOC on ALL owned properties that can be deducted, so if flu were to cash out $80K on his primary, he could only deduct the interest on ~$20K of the cash-out on another property.

Am I totally off on this?[/quote]

Correct on the $100K on primary residence is deductible, but it’s not considered purchase money debt. Does not apply for rentals.

[SK in CV]

[quote=flu]
Shit. I did not know this… So let me get this straight.. If one took out a loan on the original property when buying it, the mortgage interest is deductible. But if one first purchase it with cash and subsequently refinance it taking cash out, it’s not? That sucks….

Looks like plan B… rolling it into another investment property it is….[/quote]

On a personal residence, I think financing put in place within 30 days of COE is treated as purchase money debt for tax purposes. (the part I’m not remembering right now is whether its 30 days. It might be 60.) I don’t think there’s any such exception for investment property. Yeah, it kinda sucks.

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