04-28-2021, 05:36 PM
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#91
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Originally Posted By Anachron⏩
The way I see it. Bidens tax plans for market gains and real estate gains are directly fukking over the upper middle class. Which is the class structure any American with ambition and drive can realistically hope to achieve.Capital gains over half a million per tax year are still untaxed?
There's not many people this will affect...
It shouldn't apply to principal residence, only investment properties and it's a good thing.
There's not many people this will affect...
It shouldn't apply to principal residence, only investment properties and it's a good thing.
They are trying to make it seem like 500K+ in Captial Gains on a real estate deal is only for the 'rich'. The reality is there are plenty of people/families that will be directly affected by his tax plan.
If I'm being realistic this'll likely never affect me. What does bother me is what kind of brutal azzfukking I'll receive in if the Dems maintain power and continue with their shenanigans.
04-28-2021, 05:39 PM
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#92
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Originally Posted By 5x10⏩
Where do you think the number 1031 comes from ? It’s a government regulation that allows people to do it. This would technically less regulation wouldn’t it.lmao, pro government regulations that hurt your business
Can’t make it up
Can’t make it up
I know for a fact the real estate lobby is powerful and it won’t end up passed anyways. Guarantee it.
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04-28-2021, 05:39 PM
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#93
04-28-2021, 05:40 PM
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#94
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Originally Posted By Anachron⏩
It’s going to pay taxes instead of reinvested into the market.How is that "pulling that $" out of the RE market again?
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04-28-2021, 05:42 PM
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#95
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Originally Posted By mp83⏩
only limp wrist ****s want to do thatAnd? If you get a $500k gain in stocks, you gotta pay taxes. Why should real estate be any different? I thought everyone wanted to close tax loopholes for the rich?
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04-28-2021, 05:45 PM
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#96
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There actually is a rollover provision for qualified small business stock , just not publicly traded stocks.
https://www.withum.com/resources/rol...usiness-stock/
https://www.withum.com/resources/rol...usiness-stock/
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04-28-2021, 05:47 PM
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#97
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Originally Posted By saltypits⏩
Flippers aren't making $500K per flip.This only affects flippers.
Having said that flippers have played a huge part in reviving shthole areas.
Having said that flippers have played a huge part in reviving shthole areas.
04-28-2021, 05:48 PM
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#98
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Originally Posted By eternalnoob⏩
Flipping is ordinary income and not eligible for 1031 exchanges. It’s not capital gains or Section 1231 gain to be more precise.Flippers aren't making $500K per flip.
There’s ways around it, but generally this is a fact.
https://www.sundincpa.com/1031-excha...ipping-houses/
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04-28-2021, 05:51 PM
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#99
04-28-2021, 05:51 PM
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#100
04-28-2021, 05:55 PM
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#101
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Originally Posted By 5x10⏩
Why? Depreciation is an ordinary deduction and the recapture is only taxed at 25%. The rate arbitrage is still there.Probably see a reduction in people willing to depreciate their properties(depending on their tax brackets)
I guess that would be true if capital gains was taxed at 40% over a million though but it doesn’t mention if that includes 1250 recapture.
Lots of questions with how this would work, I don’t think it will pass.
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04-28-2021, 06:25 PM
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#102
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Havent read this thread so I don’t know if it has been brought up, I imagine it has, but 1031 exchanges are used by the wealthy for a lot more than real estate
This must be why the Fed isn’t caring about asset bubbles. Pump stimulus money into the countries, let asset bubbles explode, know the wealthy will control the lions share of them, and then tax the crap out of them to retrieve the stimulus $$$
This must be why the Fed isn’t caring about asset bubbles. Pump stimulus money into the countries, let asset bubbles explode, know the wealthy will control the lions share of them, and then tax the crap out of them to retrieve the stimulus $$$
04-29-2021, 09:10 AM
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#103
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Originally Posted By IH8RICE⏩
Depending on the value of the estate, a portion would get captured in the inheritance tax.These. People aren’t even responding to the basis step up at death part.
Originally Posted By criminal_manne⏩
Your retailer analogy is quite poor. A retailer doesn't hold stock for long periods of time. They are trying to turn over inventory as quickly as possible in order to generate income.I’m indifferent to it for sure.
Why should real estate specifically get special treatment ? Fuk the feds but why does the RE industry get special rules.
Can a retailer not recognize gain if they keep buying inventory ? Lol.
Why should real estate specifically get special treatment ? Fuk the feds but why does the RE industry get special rules.
Can a retailer not recognize gain if they keep buying inventory ? Lol.
On the RE side, typically people are investing in real estate for the income generating ability of the asset. They are paying taxes on that income. Then, if they sell the asset, they want to tax any realized gains of the asset. 1031 is an incentive to re-invest the capital into another income generating asset.
Originally Posted By IH8RICE⏩
Well, it's not just the 39.6% tax. For example, in Cali income over $1m is also taxed at 13.3%. So, income over $1m would have a tax rate of 52.9% in Cali.- you should start by reading the entire thread. Reading the entire link posted would help as well.
- financially speaking, everything Biden has done so far has helped those that are in the middle class and below.
-you do realize that the 39.6% is only taxed on income beyond 1M right? In what reality can’t someone making 1M+ a year get ahead in the US?
-you’re actively seeking to lose wealth because of tax codes that won’t affect you or 95% of ALL Americans?
- financially speaking, everything Biden has done so far has helped those that are in the middle class and below.
-you do realize that the 39.6% is only taxed on income beyond 1M right? In what reality can’t someone making 1M+ a year get ahead in the US?
-you’re actively seeking to lose wealth because of tax codes that won’t affect you or 95% of ALL Americans?
We always seem to have these discussions without taking state income tax into account.
Originally Posted By criminal_manne⏩
I'm confused, if they never sell a property what are they rolling over? The unrealized gain? Are you expecting them to pay capital gains on something that isn't realized?Ask me any question I’m a CPA and specialize in commercial and residential real estate lol.
You sell a property and have to reinvest the proceeds into a new property. What else you want to know? I do Real life ones all the time.
The old basis of the property rolls over into the new property and you have a deferred gain.
Debt relief and cash taken out of the deal is boot. You can do reverse exchanges, suit to build exchanges, two for one exchanges etc.
I know literally everything there is to know about like kind exchanges.
Why I don’t care: people roll over the Properties over and over again and end up never paying tax. Their heirs get a step up in basis when they die.
I have clients that will never sell certain properties cause they’ve been rolling that chit over since the 80’s.
You sell a property and have to reinvest the proceeds into a new property. What else you want to know? I do Real life ones all the time.
The old basis of the property rolls over into the new property and you have a deferred gain.
Debt relief and cash taken out of the deal is boot. You can do reverse exchanges, suit to build exchanges, two for one exchanges etc.
I know literally everything there is to know about like kind exchanges.
Why I don’t care: people roll over the Properties over and over again and end up never paying tax. Their heirs get a step up in basis when they die.
I have clients that will never sell certain properties cause they’ve been rolling that chit over since the 80’s.
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04-29-2021, 09:14 AM
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#104
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Originally Posted By litljay⏩
Who said never sell?Depending on the value of the estate, a portion would get captured in the inheritance tax.
Your retailer analogy is quite poor. A retailer doesn't hold stock for long periods of time. They are trying to turn over inventory as quickly as possible in order to generate income.
On the RE side, typically people are investing in real estate for the income generating ability of the asset. They are paying taxes on that income. Then, if they sell the asset, they want to tax any realized gains of the asset. 1031 is an incentive to re-invest the capital into another income generating asset.
Well, it's not just the 39.6% tax. For example, in Cali income over $1m is also taxed at 13.3%. So, income over $1m would have a tax rate of 52.9% in Cali.
We always seem to have these discussions without taking state income tax into account.
I'm confused, if they never sell a property what are they rolling over? The unrealized gain? Are you expecting them to pay capital gains on something that isn't realized?
Your retailer analogy is quite poor. A retailer doesn't hold stock for long periods of time. They are trying to turn over inventory as quickly as possible in order to generate income.
On the RE side, typically people are investing in real estate for the income generating ability of the asset. They are paying taxes on that income. Then, if they sell the asset, they want to tax any realized gains of the asset. 1031 is an incentive to re-invest the capital into another income generating asset.
Well, it's not just the 39.6% tax. For example, in Cali income over $1m is also taxed at 13.3%. So, income over $1m would have a tax rate of 52.9% in Cali.
We always seem to have these discussions without taking state income tax into account.
I'm confused, if they never sell a property what are they rolling over? The unrealized gain? Are you expecting them to pay capital gains on something that isn't realized?
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04-29-2021, 09:19 AM
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#105
04-29-2021, 09:19 AM
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#106
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Originally Posted By criminal_manne⏩
You did. And I just bolded the comment.Who said never sell?
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04-29-2021, 09:20 AM
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#107
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Originally Posted By Anachron⏩
THis is how it might affect everyone. People investing in large commercial might shift some of their investments to more heavy on single family residence. Then cycle through the $500k ceiling every year with a few properties. More big investors buying up single family residence constitutes less available inventory for first time home buyers might find it even harder to find something affordable to buy as they compete with investor money.Capital gains over half a million per tax year are still untaxed?
There's not many people this will affect...
It shouldn't apply to principal residence, only investment properties and it's a good thing.
There's not many people this will affect...
It shouldn't apply to principal residence, only investment properties and it's a good thing.
04-29-2021, 09:29 AM
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#108
Originally Posted By donblaximus⏩
If Sam buys 1 building for 6 million dollars and sells it after a 10% appreciation, he has a profit of $600kTHis is how it might affect everyone. People investing in large commercial might shift some of their investments to more heavy on single family residence. Then cycle through the $500k ceiling every year with a few properties. More big investors buying up single family residence constitutes driving the price up and first time home buyers might find it even harder to find something affordable to buy as they compete with investor money.
If Jeff buys 10 homes for $600k a piece and sells them after they appreciate by 10%, he has a profit of $600k
Jeff and Sam will have the same profit and taxable income even though Sam only made one transaction, and Jeff made 10.
"It won't get better, just different."
04-29-2021, 09:33 AM
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#109
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Originally Posted By chino3⏩
Correct so what "BOb" might do is buy one commercial property for $4M, then two other single families for $1M each, and use use the tax deferral on the single family after a few years (transition to something bigger) and hold the commercial.If Sam buys 1 building for 6 million dollars and sells it after a 10% appreciation, he has a profit of $600k
If Jeff buys 10 homes for $600k a piece and sells them after they appreciate by 10%, he has a profit of $600k
Jeff and Sam will have the same profit and taxable income even though Sam only made one transaction, and Jeff made 10.
If Jeff buys 10 homes for $600k a piece and sells them after they appreciate by 10%, he has a profit of $600k
Jeff and Sam will have the same profit and taxable income even though Sam only made one transaction, and Jeff made 10.
Or Jeff wouldnt have to sell all 10 homes right? He can just sell however that will put him up to the $500k limit and hold the rest.
Unless Sam can sell a fraction of his building and still use the 1031?
04-29-2021, 09:35 AM
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#110
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Originally Posted By Anachron⏩
Correct. So if you primarily deal in commercial properties lets say $10M apartments, and the appreciation when you sell that property is 10%.....you will be paying taxes on everything over the $500k right?I am under the impression it's $500K per year per person. If they shift some of their investment to single family homes, it's still the same thing as far as the investor is concerned - just that they have smaller chunks to work with.
Reducing liquidity in real estate would help first time home buyers in my eyes.
Reducing liquidity in real estate would help first time home buyers in my eyes.
Instead, why not buy 10 x $1M homes, and only 1031 2 home with 10% appreciation and pay no taxes on those and just cycle through the next 2 the following year, and the next two the following year etc?
04-29-2021, 09:36 AM
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#111
Originally Posted By donblaximus⏩
Or just refi and continue to purchase more properties.Correct. So if you primarily deal in commercial properties lets say $10M apartments, and the appreciation when you sell that property is 10%.....you will be paying taxes on everything over the $500k right?
Instead, why not buy 10 x $1M homes, and only 1031 2 home with 10% appreciation and pay no taxes on those and just cycle through the next 2 the following year, and the next two the following year etc?
Instead, why not buy 10 x $1M homes, and only 1031 2 home with 10% appreciation and pay no taxes on those and just cycle through the next 2 the following year, and the next two the following year etc?
04-29-2021, 09:44 AM
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#112
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Originally Posted By IH8RICE⏩
This is also an option. The fact that there may potentially be more big money coming into small real estate is bad for people trying to find a home to live in and for smaller investors like me. Bigger money typically has a wider angle lens and network to locate deals more quickly. As they pick up and hold these properties, there will be less inventory and normal people will have to compete for whats left.Or just refi and continue to purchase more properties.
04-29-2021, 09:46 AM
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#113
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Originally Posted By Anachron⏩
Why would you consider these hypothetical situations?Instead of talking about purely hypothetical situations, do you want to look at whether reducing liquidity in the real estate market would be good or bad for the middle class?
04-29-2021, 09:48 AM
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#114
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Originally Posted By Anachron⏩
Nothing stopping it however I know investors that typically work in larger deals. So the money they are working with typically wouldnt touch smaller properties. This may shift based on the new rules.There is nothing stopping this right now though, and it's not like it's not happening.
04-29-2021, 09:51 AM
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#115
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Originally Posted By Anachron⏩
I know people right now putting these options on the table if necessary.Because that's what they are.
04-29-2021, 09:53 AM
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#116
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Originally Posted By litljay⏩
Right. What I meant was they will never sell and not do a 1031 cause the gain deferral is so much. Tax isn’t ever gonna get paid.You did. And I just bolded the comment.
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04-29-2021, 09:57 AM
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#117
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Originally Posted By donblaximus⏩
They must be small time then. Big developers doing 100 million apartment deals aren’t typically doing 1031’s anyways cause they have big institutional JV partners who want their preferred returns.I know people right now putting these options on the table if necessary.
These guys aren’t gonna start messing with houses, that space is already occupied anyways.
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04-29-2021, 09:59 AM
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#118
Originally Posted By donblaximus⏩
Agreed. This could be a disaster if supply can’t keep up with demand. We are seeing first hand how ridiculous things can get.This is also an option. The fact that there may potentially be more big money coming into small real estate is bad for people trying to find a home to live in and for smaller investors like me. Bigger money typically has a wider angle lens and network to locate deals more quickly. As they pick up and hold these properties, there will be less inventory and normal people will have to compete for whats left.
04-29-2021, 10:05 AM
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#119
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Originally Posted By criminal_manne⏩
Correct i never said they were big time. I said stated figured. $10-20M properties not $100M. BUt in my world, people buying $15M complexes are big compared to me.They must be small time then. Big developers doing 100 million apartment deals aren’t typically doing 1031’s anyways cause they have big institutional JV partners who want their preferred returns.
These guys aren’t gonna start messing with houses, that space is already occupied anyways.
These guys aren’t gonna start messing with houses, that space is already occupied anyways.
But I know people that were in that $20M range that are open to shifting portinos of that money to SFH.
04-29-2021, 10:06 AM
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#120
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Originally Posted By Anachron⏩
Drop in the bucket or not, time will tell. But the fact is.....its still added competition.Because that's what they are.
Hypothetically, a drop in the bucket. They shift a negligible portion of their real estate portfolio to residential SFH...
On the other hand, investors who have their entire investment in SFH, and these people exist, are now going to pay their fair share of capital gains ( when compared to other avenues of investing ).
Hypothetically, a drop in the bucket. They shift a negligible portion of their real estate portfolio to residential SFH...
On the other hand, investors who have their entire investment in SFH, and these people exist, are now going to pay their fair share of capital gains ( when compared to other avenues of investing ).
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