patrick.net

got stuck paying cap gains on the amount over $250K because I’m one of those dirty disgusting single people.

Well DennisN, maybe you could have "gamed the system" by marrying one of those Russian mail order brides just prior to closing. Possibly from one of those companies that advertised Russian Brides on this blog.

Rich people don’t spend 100% of their incomes, that’s why they’re rich, you’re confusing rich people with the pretend to be rich people.

Rich people (those who 1031 into new jets every 5 years) are not the same as high-income people (those who pay high fees for charter jets).

Rich people enjoy life AND make money out of it. (e.g. fully "depreciating" a jet in 5 years AND getting more money from the sale than the original purchase price.)

High-income people are "professionals" who must catch up. They pay dearly for their high lives and many of them are near bankruptcy.

If he had a $3mm commercial property and bought 6 $500K homes he would have a huge amount of negative cash flow over the next 12 years.
Why is that? Shouldn't rents be able to cover taxes and upkeep? About the only negative I could see to the plan would be signifcant depreciation over that time period (which, even now, seems unlikely).

@ Headset
Well, the only way to totally avoid depreciation recapture is death; your heirs will thank you :-) Just ask FAB (assuming he outlives his parents)!

Didn't even need to marry anyone, just add someone you trust to the title as a tenant in common. No one would have questioned it.

Idea for what to do with the $800 Bush sends you this spring:

BUY 1 GOLD EAGLE.

Sorry, $800 will not buy you one ounce of gold.

even on those jobs now I realize, I could have saved money.

In the early nineties, I was paid $822 per month as a stipend in grad school.

I managed to save about $200 of that every month by sharing an apartment with other grad students, cooking my own meals and walking everywhere.

Tell me why you got married

Because she can cook. Everything else is available when your single. Even classy women will sleep with you before they will make you a home cooked meal.

Why can’t you count your blessings
Hey, what fun is life if you can't bitch and moan?

The point is that it's unfair to tax someone based on their sexual parnership arrangement. I'm not FOR gay marriage - I think the government should butt-out of heterosexual marriage. Leave it to be between the couple and their religious organization.

Really the "fairness" issue which taxes differently long-term vs. short-term cap gains is that it's a crude attempt to make up for inflation.

Say you have money in the bank at 5%, but inflation is 4%. It's blatently unfair to tax the whole 5%. You should only be taxed at the amount ABOVE the inflation rate, as the amount of interest below the inflation rate is NOT really "income".

The government tax-tables should include an inflation percentage, so you would only pay "income tax" on amounts in accounts above the inflation rate. This would go for demand accounts, mutual funds, stocks, etc. If you held an asset for X years, then you could track inflation over the years and make an accounting thereby.

Since I lived in my SJ home from 1981-2006, and say inflation rose 150% during that time period, it would be more fair to raise my original purchase price by 150% before subtracting it from the sale price to get a "capital gains" amount subject to taxation.

Peter, you're garnishing a bad point with some truthes. On any depreciation schedule of an asset if the book value is exceeded on the sale it is a gain. If the jet is in a business, the depreciation, yes is deductible, but obviously buying a jet for a business has a pretty good effect on the economy. The jet is also subject to property tax, and jets actually hold their value pretty well.

High income people have to catch up because many times they are idiots. Rather than focussin on amassing true wealth, they want to show it off. It amazes me how many people are out there that earn many times what I earned at my best jobs who are broke.

Did you see this movie "Mad Money"?

http://www.madmoneymovie.com/

Steal your way out of debt? This will make you 'Mad'
By GARY THOMPSON
Philadelphia Daily News

thompsg@phillynews.com 215-854-5992

In "Mad Money," Diane Keaton plays a suburbanite who turns to crime when she discovers she's $280,000 in debt.
She drives a Land Rover, her husband drives a Lexus, they live in a house that's worth probably $2 million and is well-stocked with posh furnishings.

Now it's true that we don't know how much of this stuff is paid for, but it's strange that Keaton and her downsized husband (Ted Danson) move directly past belt-tightening to outright theft as a means of achieving solvency.

Stranger still that director Callie Khouri tries to position Keaton as some kind of populist hero, sticking it to The Man and to a system that asks more and more of working folk while giving them less and less in terms of benefits, salary and security.

It's health insurance that Keaton's character is seeking when she takes a job at a federal reserve, where federal workers take worn-out currency and burn it.

Keaton (along with fed-reserve colleagues Queen Latifah and Katie Holmes) devises a scheme to steal small parcels of wrinkled cash, due to be shredded, so that over time a great fortune is accumulated.

"Mad Money" is a politicized attempt to make a comedy out of the middle-class squeeze - much as Jim Carrey's "Fun With Dick and Jane" remake tried to do a few years ago.

Because she can cook.
That's not a good enough reason for me. We have different criteria. I for one am rarely turned out by classy women. I like the wild, unruly (but pretty) ones, women with higher-than-average T.

Dennis, gay partners would not pay any extra penalty if they each own half the house. And yes, when you have nothing better to do, go out and bitch about someting, I'm all for it. Hell, I'll even march in some anti tax march right along side with you if you catch me on the right day.

I managed to save about $200 of that every month by sharing an apartment with other grad students, cooking my own meals and walking everywhere.

SP, I'll bet you had a great time, too. At that stage in life, you don't need money to have fun.

Indeed, those were good times. I bet army life was like that, too.

On any depreciation schedule of an asset if the book value is exceeded on the sale it is a gain.

What if it is 1031'ed into another asset?

The inflation tax you mention is something I agree with you on. Let's start our petitioning. At least that is tax on passive income so we don't pay FICA on it. The system does have a design to it. The CA tax return is really creative I think, there are some federal deductions that you have to "adjust" back into you income. I do have to admire the creativity.

My ideal arrangement (for when I lack sufficient funds):

A woman in her 20's, submissive, good cook, thorough cleaner. She lives in a small shack nearby. Comes to cook my meal every night. Clean once a week. Once a month, I give her some joy that she passionately desires. She doesn't talk. She disappears when I don't need her. She secretly resents the women I bring in but still considers her position with the best she can ever get and her duty to serve me, because I am the man, her lord.

It is temporarily sheltered until the final judgment day! You have to pay the piper sooner or later. It has to be a similar asset which is why 1031s are stupid for the most part, unless you just want a different colored jet, or a different house. I don't even know if it applies to jets I'm just talking out of my ass.

>> A woman in her 20’s, submissive, good cook, thorough cleaner. She lives in a small shack nearby. Comes to cook my meal every night. Clean once a week. Once a month, I give her some joy that she passionately desires. She doesn’t talk. She disappears when I don’t need her. She secretly resents the women I bring in but still considers her position with the best she can ever get and her duty to serve me, because I am the man, her lord.

You can get a Thai woman ... have you visited Thailand?

It is temporarily sheltered until the final judgment day! You have to pay the piper sooner or later.

Why would a rich guy ever NOT need a jet? :)

Quoting this website:

https://www.1031cpas.com/aircraft_exchanges.htm

Aircraft are generally like-kind to any other aircraft under the General Asset Classes or the Standard Industrial Classification (SIC) guidelines.

Not tax advice

GC,

Nice dream. Now for your reality:

Your pick up line is "wanna party" and you wave a $20 bill under her nose. She complies and is gone 10 minutes later.

Retailers know that most people aren't good at math, and they take advantage of this. More and more are using double discounts to earn more money while making customers think they are getting a better deal than they actually are.

For example, if you are given a choice of buying a $100 item at 45% off, or buying the same item at 20% off with 30% additional taken off at the register, which would you choose? Most people simply add the 20% and 30% and assume that they are getting 50% off the item.

When you do the math, however, it doesn't work out that way. Taking 45% off of $100 means the item sells for $55. But if 20% off $100 is $80; taking 30% off that $80 leaves you with an additional $24 discount, for a price of $56, or a dollar more.

Thanks Peter, I thought it was, and personally, I think anyone who is rich who doesn't have a jet is a loser. That is what it is all about.

SP - when I made $5 an hour, $800 was my monthly gross. Since the working poor pay the lion's share of taxes in the US, of course I actually took home $600 of that. Since I'd gone up from making $4 an hour, I found myself automatically saving at least $100 a month. If I'd worked at it, $200 a month savings would have been easy.

As for the Army - best deal the working-class will ever get in the Empire, I sure wish I'd stayed in.

Oh, don't worry, anyone who has a jet isn't getting their tax advice here, ha ha.

I think anyone who is rich who doesn’t have a jet is a loser. That is what it is all about.

Absolutely. :)

Even environmentalists and global-warming-propagandists fly private jets.

Please, speak for yourself.

And they look good doing it :)

Never been to Thailand. Some Taxi driver told me about Thailand, too. I'm quite curious.

Since the working poor pay the lion’s share of taxes in the US

Are you sure? I have helped a few low income people with thier taxes in my time, and have noticed lots of Earned Income Credit.

Dennis all of a sudden got quiet. I hope he didn't kick himself in the head to unconsiousness. "All I had to do is add someone else to the title? Oh CRAP!!!!"

Headset, nice addition.

Since the working poor pay the lion’s share of taxes in the US

It is true. But I am currently a working poor.

I work at a job and I am jet-less.

That's ok, you strike me as the type of guy who gets air sick anyway.

Since a bumpy flight at Grand Canyon in a Twin Otter I do not get air sick anymore.

Thanks, Malcolm

I think I flew on something like that to the Bahamas. I'm fearless now. I just knew that if I stared at the engine long enough it was going to fly off of the wing.

I just knew that if I stared at the engine long enough it was going to fly off of the wing.

This is why they have two engines. :)

Malcolm,
Believe me I thought about that. I was going to hook-up with some asian grad-student, with a quid-pro-quo: she helps me with cap gains, I help her get citizenship. But the IRS is awake to "fake marriages". The other thing - bringing in an unrelated party for tennant-in-common status - would only work with a really trusted person, whom I don't know.

BTW Dennis, I kick myself a little because one of my houses was vacant during the selling period. Had I know that vacation homes were included I might have done the deal a little differently. I had lived in that house for about a year and a half before I turned it into a rental, there was a funny cutoff because it was all right at the 5 year mark so every month in the future was knocking off one of the months in the beginning.