[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

I agree enron… It seems like at least talk of violence is becoming the norm in political discourse… It’s sad that someone took it literally.

And a 9 year old child killed as a bystander… wow!

[UCGal]

I agree enron… It seems like at least talk of violence is becoming the norm in political discourse… It’s sad that someone took it literally.

And a 9 year old child killed as a bystander… wow!

[UCGal]

I agree enron… It seems like at least talk of violence is becoming the norm in political discourse… It’s sad that someone took it literally.

And a 9 year old child killed as a bystander… wow!

[UCGal]

I agree enron… It seems like at least talk of violence is becoming the norm in political discourse… It’s sad that someone took it literally.

And a 9 year old child killed as a bystander… wow!

[UCGal]

I agree enron… It seems like at least talk of violence is becoming the norm in political discourse… It’s sad that someone took it literally.

And a 9 year old child killed as a bystander… wow!

[UCGal]

I had to figure out what you guys were talking about with the step-up basis.

(I’m an engineer, not an investor… and I don’t sell houses a lot so I don’t think about capital gains on a daily basis.)

I’m trying to figure out what you guys are suggesting.
– If a person inherits a house (free and clear) the cost basis is that of the time of inheritance. This is done for establishing whether estate taxes need to be paid. In fact this can happen several times on a home if the estate is large – estate taxes may kick in on half the house if half the estate is above the threshold when the first spouse dies and they don’t have a trust.

– In my case I paid full market for the house. My dad was still alive. I’m not an only child. The proceeds were his and eventually I got some back as my portion of his estate. But he could have gone to Vegas and bet it all on Red. Prop 58 does not address the form of transfer – sale, inheritance, gift. All are allowed in a prop 58 transfer. Prop 58 does not address estate taxes. The feds and CA still require estate taxes if the value of the estate (including the market value of a home if there is one) are above a threshold.

I guess I’m not too worried about capital gains when I sell, since I plan on living here till I die… But to suggest that the cost basis should be different than what I paid (full market value), I don’t get it.

Or am I misinterpreting what you guys mean about the step up cost basis. Speak slowly when you explain… I’m not an accountant or investor. 😉

[UCGal]

I had to figure out what you guys were talking about with the step-up basis.

(I’m an engineer, not an investor… and I don’t sell houses a lot so I don’t think about capital gains on a daily basis.)

I’m trying to figure out what you guys are suggesting.
– If a person inherits a house (free and clear) the cost basis is that of the time of inheritance. This is done for establishing whether estate taxes need to be paid. In fact this can happen several times on a home if the estate is large – estate taxes may kick in on half the house if half the estate is above the threshold when the first spouse dies and they don’t have a trust.

– In my case I paid full market for the house. My dad was still alive. I’m not an only child. The proceeds were his and eventually I got some back as my portion of his estate. But he could have gone to Vegas and bet it all on Red. Prop 58 does not address the form of transfer – sale, inheritance, gift. All are allowed in a prop 58 transfer. Prop 58 does not address estate taxes. The feds and CA still require estate taxes if the value of the estate (including the market value of a home if there is one) are above a threshold.

I guess I’m not too worried about capital gains when I sell, since I plan on living here till I die… But to suggest that the cost basis should be different than what I paid (full market value), I don’t get it.

Or am I misinterpreting what you guys mean about the step up cost basis. Speak slowly when you explain… I’m not an accountant or investor. 😉

[UCGal]

I had to figure out what you guys were talking about with the step-up basis.

(I’m an engineer, not an investor… and I don’t sell houses a lot so I don’t think about capital gains on a daily basis.)

I’m trying to figure out what you guys are suggesting.
– If a person inherits a house (free and clear) the cost basis is that of the time of inheritance. This is done for establishing whether estate taxes need to be paid. In fact this can happen several times on a home if the estate is large – estate taxes may kick in on half the house if half the estate is above the threshold when the first spouse dies and they don’t have a trust.

– In my case I paid full market for the house. My dad was still alive. I’m not an only child. The proceeds were his and eventually I got some back as my portion of his estate. But he could have gone to Vegas and bet it all on Red. Prop 58 does not address the form of transfer – sale, inheritance, gift. All are allowed in a prop 58 transfer. Prop 58 does not address estate taxes. The feds and CA still require estate taxes if the value of the estate (including the market value of a home if there is one) are above a threshold.

I guess I’m not too worried about capital gains when I sell, since I plan on living here till I die… But to suggest that the cost basis should be different than what I paid (full market value), I don’t get it.

Or am I misinterpreting what you guys mean about the step up cost basis. Speak slowly when you explain… I’m not an accountant or investor. 😉

[UCGal]

I had to figure out what you guys were talking about with the step-up basis.

(I’m an engineer, not an investor… and I don’t sell houses a lot so I don’t think about capital gains on a daily basis.)

I’m trying to figure out what you guys are suggesting.
– If a person inherits a house (free and clear) the cost basis is that of the time of inheritance. This is done for establishing whether estate taxes need to be paid. In fact this can happen several times on a home if the estate is large – estate taxes may kick in on half the house if half the estate is above the threshold when the first spouse dies and they don’t have a trust.

– In my case I paid full market for the house. My dad was still alive. I’m not an only child. The proceeds were his and eventually I got some back as my portion of his estate. But he could have gone to Vegas and bet it all on Red. Prop 58 does not address the form of transfer – sale, inheritance, gift. All are allowed in a prop 58 transfer. Prop 58 does not address estate taxes. The feds and CA still require estate taxes if the value of the estate (including the market value of a home if there is one) are above a threshold.

I guess I’m not too worried about capital gains when I sell, since I plan on living here till I die… But to suggest that the cost basis should be different than what I paid (full market value), I don’t get it.

Or am I misinterpreting what you guys mean about the step up cost basis. Speak slowly when you explain… I’m not an accountant or investor. 😉

[UCGal]

I had to figure out what you guys were talking about with the step-up basis.

(I’m an engineer, not an investor… and I don’t sell houses a lot so I don’t think about capital gains on a daily basis.)

I’m trying to figure out what you guys are suggesting.
– If a person inherits a house (free and clear) the cost basis is that of the time of inheritance. This is done for establishing whether estate taxes need to be paid. In fact this can happen several times on a home if the estate is large – estate taxes may kick in on half the house if half the estate is above the threshold when the first spouse dies and they don’t have a trust.

– In my case I paid full market for the house. My dad was still alive. I’m not an only child. The proceeds were his and eventually I got some back as my portion of his estate. But he could have gone to Vegas and bet it all on Red. Prop 58 does not address the form of transfer – sale, inheritance, gift. All are allowed in a prop 58 transfer. Prop 58 does not address estate taxes. The feds and CA still require estate taxes if the value of the estate (including the market value of a home if there is one) are above a threshold.

I guess I’m not too worried about capital gains when I sell, since I plan on living here till I die… But to suggest that the cost basis should be different than what I paid (full market value), I don’t get it.

Or am I misinterpreting what you guys mean about the step up cost basis. Speak slowly when you explain… I’m not an accountant or investor. 😉

[UCGal]

[quote=bearishgurl]Thank you for this clarification, UCGal, but HOW did you fill out the Assessor COO form (used to be yellow, don’t know about now). Did you claim on it that the transaction was a intra-family transfer?

Did your parents sign a form of a familial transfer deed or quitclaim deed when you signed your trust deed? And even though you took out a mortgage loan, did you indicate tax stamps on your deed in excess of the property’s current assessed value at the time??

If these questions are too personal, I understand.[/quote]
As I mentioned before we had a regular sale. I signed what seemed like thousands of pages of documents at the escrow office. I presume most were for the mortgage. I assume the deed was one of them. We had a sales agreement drawn up before we opened escrow. We put our downpayment money in and financed the balance. My dad walked away with the market value of the house. It was NOT a quitclaim deed. I assume it was a transfer deed. Under the grant deed search it shows as a deed, not a quitclaim.

The current version of the form we used to claim the tax exemption under prop 58 is available online for you to see. (The one I filled out is pretty much the same to the best of my recollection… but it was 8 years ago.) My dad filled out a portion, and my husband and I filled out a portion

http://arcc.co.san-diego.ca.us/docs/ParentChild.pdf

I hope this clarifies things.

[UCGal]

[quote=bearishgurl]Thank you for this clarification, UCGal, but HOW did you fill out the Assessor COO form (used to be yellow, don’t know about now). Did you claim on it that the transaction was a intra-family transfer?

Did your parents sign a form of a familial transfer deed or quitclaim deed when you signed your trust deed? And even though you took out a mortgage loan, did you indicate tax stamps on your deed in excess of the property’s current assessed value at the time??

If these questions are too personal, I understand.[/quote]
As I mentioned before we had a regular sale. I signed what seemed like thousands of pages of documents at the escrow office. I presume most were for the mortgage. I assume the deed was one of them. We had a sales agreement drawn up before we opened escrow. We put our downpayment money in and financed the balance. My dad walked away with the market value of the house. It was NOT a quitclaim deed. I assume it was a transfer deed. Under the grant deed search it shows as a deed, not a quitclaim.

The current version of the form we used to claim the tax exemption under prop 58 is available online for you to see. (The one I filled out is pretty much the same to the best of my recollection… but it was 8 years ago.) My dad filled out a portion, and my husband and I filled out a portion

http://arcc.co.san-diego.ca.us/docs/ParentChild.pdf

I hope this clarifies things.

[Author]

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