patrick.net

MisdemeanorRebellionNoCoupForYou says

That's a lot of money for the weather, which has enervating qualities. Heat, Humidity, and Cold make you tough.

That's not even considering you have to sleep, shower, make dinner, get kids ready, run errands, etc. Oh and work...

Never have understood the weather point. I get it's nice, I like it. I can visit it. I'm not living there though. There are limited hours in a day to enjoy it if you're working and have a family. I'd rather take the cost of living savings and check out as nice or nicer places than CA for about 2 months a year. So that's what I do.

St. John, USVI (no passport required) is better than any beaches you'll find in CA from November to July, no hurricanes. BVI's are even better if you want to fork over the customs fees and once they're done with Covid BS. Sargassum is bad in Caribbean Mexico, but I can get a $500/nt all inclusive 5* place that would run $1,500 a night for just the room, no food or booze or service, in CA in a place like Big Sur.

And I know there are even better places I haven't even explored yet. Seems like people are pumped to get out of CA lately. Not saying it can't be enjoyable, but most the migration to a place like Bozeman, MT is Californians and the weather can absolutely suck there. That speaks volumes that the weather isn't worth it.

This new "raise taxes, including capital gains, but only for rich ppl making over XXX per yr" is becoming a theme.

I know with businesses, it seems normal to split the business up, and sell partial stakes in it. This tactic could allow you to realize capital gains in smaller chunks, staying under the yearly limits if you're willing to split and sell it over multiple years.

But I wonder, is there some way to do this with SFH residential homes?

Misc says

This is going to lock people into place even better than Prop 13.

So true. They know ppl are fleeing their blue paradise states, making blue policy look like loser policy. This would be a slick counter to lock ppl + their money in place, so they can tax it.

B.A.C.A.H. says

By the 1950's the top rates were higher than 90%.

That was to pay off the WWII debt and the booming, ever expanding economy could tolerate it. And you realize that anyone in that top rate was smart enough to avoid taxation.

We bought for $400k in 2011... Put maybe $50k into the house and it would currently sell for $900k. Still won’t pay any taxes if we sold. I’m pretty satisfied with that rate of return and paying extra taxes on future appreciation doesn’t bother me. Nothing else I invested in could have had that kind of non-taxable leveraged return anyway.

We have considered moving out a little further in the burbs and getting a more updated slightly bigger house if my work from home proves permanent. Then my cost basis for future taxes resets.. If prices crash after that I was playing with “house” money anyway.

The biggest deterrent from buying now is paying double in taxes on the new home at higher purchase price. My current tax basis from our 2011 purchase is so so sweet. Gotta love Prop 13.

It's expensive to leave CA , but it's worth it.

Where do I go that has a similar climate and lowish humidity?

With out the rich California would just be a waterless wasteland.

rocketjoe79 says

Where do I go that has a similar climate and lowish humidity?

Not knocking you, but what's the deal with low humidity? I've never understood the point of view that it's a negative. I personally like sweating. Having lived my life in humid IL summers it just seems normal. My biggest beef would be swamp ass on the golf course or doing other activities. That happens to me in AZ or CA though anyway.

I guess I'm asking what are the negatives of humidity? Outside of 2-3 days a year here in IL, it's just normal. I do like CA climate, but I'm a fan of season changes that are more dramatic. December to early March can suck a dick in IL, which is when we generally will travel. Though I still like winter as a snowboarder.

I don't know, I like change I guess to an extent. My biggest weather beef is the shortness of daylight during the winter. That is the hardest part, more so than the cold. Mainland US generally is shortened daylight anyway though, so that would suck for me anywhere. I hate waking up in the dark and coming home in the dark. It's awful.

What about taking out a home equity loan for a million dollars, rolling that loan into the home loan during a refinance, and then selling the house for a half million profit? Boom! No high capital gains tax.

Anecdote herewith:
My friend told me about a guy in San Diego who makes a lot of money.

He is single, no kids.

He established residency in Texas, bought a condo or something there.

He didn’t sell his San Diego house; he donated it to his college.

He arranged that he has exclusive use of the house during his lifetime. The university pays all bills and taxes related to the house.

He lost the equity in the house, but he got a huge tax deduction and saves money in California taxes on his income and capital gains.

rocketjoe79 says

Where do I go that has a similar climate and lowish humidity?

There isn't much. The weather is underrated on here. A long and dry summer plus a snowy winter at reasonably warm temps in Tahoe are hard to beat. You can rationalize all you want and yes, politics and taxes suck, but there's a reason that many people still live and stay in CA. It's a love-loathe thing ;) There maybe some areas in WA, OR, AZ and UT with similar climate. But it's pretty much the left coast.

OK, if fleeing is not an option, I'll stay. Will stop paying property taxes as soon as senior exemption kicks in, HELOC/cash-out refi/reverse mortgage the shit out of the house to have access to my millions for less money than paying Joe's draconian income tax on the gains.

Shaman says

What about taking out a home equity loan for a million dollars, rolling that loan into the home loan during a refinance, and then selling the house for a half million profit? Boom! No high capital gains tax.

Oh, and actually take or spend the HELOC money? That sounds like it would work.

Eric Holder says

OK, if fleeing is not an option, I'll stay. Will stop paying property taxes as soon as senior exemption kicks in and then HELOC/cash-out refi/reverse mortgage the shit out of the house to have access to my millions for less money than paying Joe's draconian income tax on the gains.

I guess a reverse mortgage would work too, given enough time, for those with paid off homes.

Good ideas!

Taking cash out/heloc you still have to deal with capital gains right? It's going off homes bought price vs sales price, regardless of money borrowed.

RC2006 says

Taking cash out/heloc you still have to deal with capital gains right? It's going of homes bought price vs sales price, regardless of money borrowed.

I think you're right - that's what this says
https://www.lendingtree.com/home/reverse-mortgage/is-a-reverse-mortgage-taxable/#:~:text=1.-,Reverse%20mortgage%20income,credit,%20or%20a%20personal%20loan.

Say you bought your home for $400,000 in 1989 and sell it for $650,000 today. You would have $250,000 of capital gains, none of which would be taxable due to the capital gains home-sale exclusion.

But let’s say you took out a reverse mortgage on that same house and currently owe $700,000. Upon the sale of your home, you would have $50,000 of the reverse mortgage forgiven. Besides the $250,000 gain from home appreciation, you also have $50,000 in “gains” from loan forgiveness for a total of $300,000 in capital gains. Only $250,000 of that would be excluded, meaning you’ll owe capital gains taxes on the remaining $50,000, even though you walk away from the sale with no money in your pocket.

So we need to find another way

How does it work when 2 children inherit the same home? I would imagine they each get 50% stakes. And, when the home is sold, the cap gains would be split 50% between them, on their own tax returns.

Could one of the children sell their stake to the other, without the entire home being sold? I'd bet they can, the question is whether the one receiving the money would need to file cap gains in that tax year.

If selling a stake would create a cap gains tax event in that tax yr, then I would imagine you could just sell a stake in the house to someone, even if there's no inheritance involved. That would let you log part of your cap gains in different years.

The possibility of selling a stake in a business sounds likely to exist, but a residential home may be different. If needed, maybe the home could be put into an llc or something, and rented, making it a "business" so you can sell a stake in it.

Hircus says

But let’s say you took out a reverse mortgage on that same house and currently owe $700,000. Upon the sale of your home, you would have $50,000 of the reverse mortgage forgiven. Besides the $250,000 gain from home appreciation, you also have $50,000 in “gains” from loan forgiveness for a total of $300,000 in capital gains. Only $250,000 of that would be excluded, meaning you’ll owe capital gains taxes on the remaining $50,000, even though you walk away from the sale with no money in your pocket.

Who said anything about selling? Ride it to the ground, baby. Whoever dies with most debt - wins.

clambo says

Anecdote herewith:
My friend told me about a guy in San Diego who makes a lot of money.

He is single, no kids.

He established residency in Texas, bought a condo or something there.

He didn’t sell his San Diego house; he donated it to his college.

He arranged that he has exclusive use of the house during his lifetime. The university pays all bills and taxes related to the house.

He lost the equity in the house, but he got a huge tax deduction and saves money in California taxes on his income and capital gains.

If you can, always have a 2nd home in a tax advantaged place. We're going to be looking in Puerto Rico and St. Thomas/John this October. Currently getting my research started on the USVI and PR taxes. I know PR is a super tax advantaged place.

IRS has little way to prove that it's not your primary residence even if you only spend a week in the tax advantaged place. Just have to be smart with your paper trail ;) Not tax advice.

clambo says

A house is nice to have, but the government uses the lack of liquidity and mobility of house owners to tax them.

This is true of business double. When you have a business, you have a big red bullseye on your back for every purulent bureaucrat looking for shekels, and every regulator looking for scalps, Fed, state, county and city. Also, in the urban areas, employees and their 'rights' make them bands of gypsy predators more than workers, looking for lawsuits, or just working long enough to exploit workman's comp, disability or unemployment.

WookieMan says

IRS has little way to prove that it's not your primary residence even if you only spend a week in the tax advantaged place. Just have to be smart with your paper trail ;) Not tax advice.

I read this recently regarding having a home in 2 states, one of them CA, but avoiding CA residency for tax purposes.
https://www.palmspringstaxandtrustlawyers.com/the-part-time-resident-tax-trap/

It sounds like a nightmare.

Maybe that's just CA tho.

Hircus says

Maybe that's just CA tho.

PR is unique I guess. Don't want to talk out my ass before fully researching. You're not taxed federally the same as a state though and I believe local taxes are low in PR. I've only got 10 hours in PR in October and 5 days in USVI. I don't think USVI has many, if any tax advantages though and is expensive. St. John is just fucking awesome though. St. Croix is supposedly great, but flights in and out are almost double.

WookieMan says

St. Croix is supposedly great, but flights in and out are almost double.

Be like Greta - sail everywhere. =))

HunterTits says

I believe Biden also wants to re-introduce the 100% write off of SALT from one's federal tax bill. It was Trump that reduced that write-off to just $10k, remember? Bluetard politicians are still screaming because high earners fled en masse after that. And their entire funding model in those states rely on the rich. Esp California & NY.

Multiple bluetard coworkers had little TDS outbreaks over that change. It was fun twisting it back on them and guilt tripping their lib brains by making them realize that its a tax break which mostly benefits the rich / affluent / urban, and that the majority of americans benefit little, if at all from it. A tax policy that not only contributes to wealth inequality, but is actually designed as such. I think a typical married couple needs to buy around 600-700k in actual loan, (after down payments), for rhe typical 4% interest to be enough to make it worth deducting over the std deduction. And the median home was 250-300k back then (although, it jumped to 320k this yr). Even then, since mortgages are amortized, the amount of interest per mo falls as time goes on, making you pay less in yearly interest each progressive yr, diminishing your ability to deduct.

Some accepted it and realized it was true. The pure gold was the one who responded by saying "no, my realtor told me I would save tons on my condo".

lol @ "my realtor said"...

Hircus says

lol @ "my realtor said"...

Yes, one wonders how many of those homeless people took the advice of Realtors.

WookieMan says

St. John is just fucking awesome though.

What's good about it? I haven't heard much about the usvi.

Eric Holder says

WookieMan says

St. Croix is supposedly great, but flights in and out are almost double.

Be like Greta - sail everywhere. =))

I would fuck Elena if I could tape her mouth and she cut her bangs. I still don't get as a climate change proxy Greta would sail the Atlantic on a $1M Cat. LaVagabond subscribers have stalled ever since. Go woke, go broke.

HunterTits says

Not really. They have high income and other tax rates in order to suck up whatever savings for no federal income taxes you might have had.

I know. I have to pay IL my share either way. PR can't tax my IL income. Federally, as far as I understand it's damn near nothing. I pay $30-40k/yr on average to Federal.

I'll take $10-20k back tax free and claim PR as my primary. Again, I need to look into it more. But why not have a vacation rental in PR, that you get to use and then pay less in taxes. We're talking maybe $100k federal taxes over a decade and potentially vacation home rental income and debt pay down of an asset. We're all running from taxes, seems like a decent option.

Hircus says

WookieMan says

St. John is just fucking awesome though.

What's good about it? I haven't heard much about the usvi.

Amazing beaches and water. Amazing boating opportunities. I'm sure places like Maldives or SE Asia could beat it, but for proximity and no passport hassle, cheap flights, it's some of the best beaches on the planet. There's a reason a Rockefeller once owned damn near the entire island of St. John.

I still contend that Panhandle, FL areas have the best sand I've ever experienced. They don't stay as warm in the winter, so they're less popular and pumped by people.

Misc says

There is no escape from California.

GOOD. Let 'em stay there and not poison our Great State of Texas.

Rb6d says

GOOD. Let 'em stay there and not poison our Great State of Texas.

I think the Big Tech infiltration may be more dangerous than the random Libby fleas.

Hircus says

Multiple bluetard coworkers had little TDS outbreaks over that change. It was fun twisting it back on them and guilt tripping their lib brains by making them realize that its a tax break which mostly benefits the rich / affluent / urban, and that the majority of americans benefit little, if at all from it.

It's like a land mine in the tax code that Trump buried for Dems to keep stepping on...
Seventeen New York state Democratic lawmakers on Tuesday said they will not support proposed tax increases to pay for President Joe Biden’s infrastructure plan unless it also rolls back a 2017 tax change that hurt high earners in some states.
The group urged the full repeal of the provision, which limited to $10,000 the state and local taxes that households itemizing deductions could write off their federal returns...
Leading Democrats in Congress are sympathetic to the idea of repealing the SALT cap, which would benefit primarily people making over $100,000 a year in high-tax states like New York and California.
House Speaker Nancy Pelosi, of California, has expressed sympathy for repeal, while Senate Majority Leader Chuck Schumer, of New York, has co-sponsored legislation to eliminate the cap.

Location is Hwy 1 North Palm Beach
The license plate holder indicates "Alumni UC Berkeley"

I wonder if he's going back to California.

EBGuy says

It's like a land mine in the tax code that Trump buried for Dems to keep stepping on...
Seventeen New York state Democratic lawmakers on Tuesday said they will not support proposed tax increases to pay for President Joe Biden’s infrastructure plan unless it also rolls back a 2017 tax change that hurt high earners in some states.
The group urged the full repeal of the provision, which limited to $10,000 the state and local taxes that households itemizing deductions could write off their federal returns...
Leading Democrats in Congress are sympathetic to the idea of repealing the SALT cap, which would benefit primarily people making over $100,000 a year in high-tax states like New York and California.
House Speaker Nancy Pelosi, of California, has expressed sympathy for repeal, while Senate Majority Leader Chuck...

Can they do it w/o filibuster-proof majority?

Ceffer says

I think the Big Tech infiltration may be more dangerous than the random Libby fleas.

agreed, although what I see is that Big Tech moves to Austin, drags tens of thousands if not more libbies with them, and result is California East with crappy climate.

WookieMan says

I still contend that Panhandle, FL areas have the best sand I've ever experienced. They don't stay as warm in the winter, so they're less popular and pumped by people.

How does it compare to Atlantic City sand?

Booger says

How does it compare to Atlantic City sand?

Only been once. Didn't like that either. I have no bias coming from the midwest. Lake Michigan sand blows, although the actual Indiana/Michigan Dunes are kind of fun. Sand still sucks though.

Booger says

WookieMan says

I still contend that Panhandle, FL areas have the best sand I've ever experienced. They don't stay as warm in the winter, so they're less popular and pumped by people.

How does it compare to Atlantic City sand?

I believe Atlantic City sand and Florida panhandle sand are completely different. Atlantic city is that tannish silica sand while Florida Panhandle is that white carbonate sand from granulated sea shells.

HeadSet says

Booger says

WookieMan says

I still contend that Panhandle, FL areas have the best sand I've ever experienced. They don't stay as warm in the winter, so they're less popular and pumped by people.

How does it compare to Atlantic City sand?

I believe Atlantic City sand and Florida panhandle sand are completely different. Atlantic city is that tannish silica sand while Florida Panhandle is that white carbonate sand from granulated sea shells.

Yup. Only issue I have with Panhandle is you gotta have good sunglasses due to the reflective nature of the sand. It's amazing on the feet and looks kick ass.

The surf on the Gulf is strange though. So water activities aren't the best and shoreline can change day by day in rather dramatic fashion. Calm days though it looks better than the best beaches in the Caribbean. No reefs, but emerald blue water matched up with pure white sand.

WookieMan says

I'll take $10-20k back tax free and claim PR as my primary. Again, I need to look into it more. But why not have a vacation rental in PR, that you get to use and then pay less in taxes. We're talking maybe $100k federal taxes over a decade and potentially vacation home rental income and debt pay down of an asset. We're all running from taxes, seems like a decent option.

Nah, you probably won't but I like the way you think.

I have a vacay rental in Maui and I typically gross about 78K a year and have hella write-offs. This year will be >100K. In order to get those write-offs and tax breaks I can't (admit) stay in it for something like more than 10 days a year. It would be difficult for me to call some place I stay in for 10 days a year my residence.

So only if you decide you want to pay taxes on the gross I guess, perhaps that's lots less than your other income sources.

Then there is what happens if you get audited? I've been waiting nearly 2 months waiting for my Fed refund and started to trip that I might be getting audited. Checked online and it's already approved they are just snails mailing the check this year. No, I don't want to give the IRS access to wire to my bank account.