Biden introduces plan to increase taxes on Real Estate investors
Presidential candidate Joe Biden plans is announcing a $775 Billion dollar plan to boost Child and Elderly care. It’s a decade long plan that will be paid for by reducing or eliminating 1031 tax breaks for real estate investors making more than 400k a year.
Quote from Bloomberg: “a senior campaign official said a Biden administration would take aim at so-called like-kind exchanges, which allow investors to defer paying taxes on the sale of real estate if the capital gains are reinvested in another property.”
According to The NY Times: “Biden’s campaign said the programs, some of which would be operated with state and local officials, would be paid for by rolling back some taxes on real estate investors with incomes over $400,000, as well as by increasing tax enforcement on the wealthy.”
How will this potential new policy impact you?
My first thought, put more emphasis on Cost Segregation Studies to reduce tax liability in a world without/reduced 1031’s
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Your taxes are not increasing, you are just not able to defer them.
Note this is not to delegitimize the issue or support any candidate, but taxes based on what I read are not going up, you just cannot defer them was my understanding
The tax increase is another target to increase tax rates but that is for everyone.
Originally posted by @Shiloh Lundahl:Originally posted by @Jon Schwartz:Originally posted by @Shiloh Lundahl:@Jon Schwartz So let me see if I understand. I suggest a book that maybe helpful to you in expanding your understanding of poverty and how to get out of poverty. You say you looked it up online and are not interested. I say with more time and experience you may adjust your views a little. You say you don’t think you need more time or experience.
It seems like you have it all figured out.
There are many people who come onto BiggerPockets to learn from those who are more experienced in real estate investing and overall financial success. And then there are many people who are very successful in business and real estate investing that come onto BiggerPockets to contribute and share their experience and ideas with others so that others can learn and follow similar paths to success. I believe I mistakenly thought you were in the category of someone who was looking to learn from experienced and successful investors. But now I realize that you are in that category of the successful and experienced and are here to benefit the group with your contributions. So I thank you for being a contributor.
Shiloh, I don't need any more time or experience to change my views on your self-righteous feelings about your role in our economy. And yes, you recommended a book; I did some research, and I'll pass. Would you read every book recommended to you on the internet?
I'm afraid you did make condescending assumptions about me. But thanks for all you do to create jobs, provide housing, and stimulate our economy.
@Jerry W., @JD Martin, @Stone Jin, @Joe Villeneuve, @Joe Splitrock,
Jonathan Schwartz commented that I am coming across as self righteous in my posts. I just wanted to get some of your feedback.
I don't get that vibe about your posts, but if you challenge someone's thinking, you generally get push back and even insults in return.
I don't even think the argument about the 1031 only being removed for people making over $400K is even correct. The campaign has mentioned removing the like kind exchange and mentioned removing tax incentives for people making over $400K. They are mentioned as two separate things. All the references I have seen to $400K earners refer to capital gains tax rate. From what I have gathered, they plan to remove the 1031, but keep the capital gains rate lower for people making under $400K. So you still lose the 1031, but your tax rate will be lower. Think about it logically. How could you even take away the 1031 based on salary? What if I was making $350K in 2020, did an exchange in January 2021, then later in the year my income changed and it pushed me over $400K? My point is the 1031 will either stay or go. It is the capital gains rate that will be based on salary, like it is now.
There is also a misconception by people that a 1031 is "avoiding taxes". It is actually delaying taxes and transferring basis. Each time you do an exchange, there is less depreciation in the new property (less tax benefit). The purpose of the 1031 exchange is to encourage real estate transactions. The economy only works when people are buying and selling things or services. People like to hate on wealthy people, but they invest in businesses, buy cars, boats, hire lawn care, take vacations, etc. Think of all the people who's jobs depend on wealthy people spending money. Poor people stimulate the economy less, because they have less money.
Originally posted by @Joe Splitrock:Poor people stimulate the economy less, because they have less money.
Joe, this is a misconception.
Poor people stimulate the economy more because they spend all of their money. A person making $40K/year spends $40K/year as a consumer out of need; he/she can't afford to save or invest any money. Consumer spending accounts for 70% of GDP. People making under $40k/year account for about 32% of the population (source: https://dqydj.com/average-median-top-household-income-percentiles/#:~:text=in%20the%20conclusion.-,Household%20Income%20Percentiles%20for%20the%20United%20States%20in%202019,2018%2C%20respectively.). Ergo, a third of the US population puts all of their income back into the economy as consumers, which accounts for the lion share of our GDP.
A person making $475K/year, which puts them in the top 1% of earners, saves about 38% of their income (source: https://www.financialsamurai.com/the-average-savings-rates-by-income-wealth-class/). So of that $475K pulled out of the economy, less than $300K goes back into GPD as consumer spending. Of course, much of the rest is invested, which ultimately results in GDP spending, but not directly!
So I'm not saying that the wealthy don't stimulate the economy -- they do! But it's incorrect to say that poor people stimulate the economy less because they have less money. It's all those poor people who aren't able to save and instead spend every dollar of income on rent, the cell phone bill, Netflix, a flatscreen TV, and the car payment -- these individuals are stimulating the economy (by contributing most directly to GDP, which is 70% consumer spending) at least as much as wealthy people.
Originally posted by @Kevin McGuire:@Anthony Wick
@Anish Tolia
@Shiloh Lundahl
You’ve all made good points. Here’s my experience as a Canadian living in the U.S. for ten years now. For additional context, I’m a permanent resident but not a citizen, so I’m neither Republican nor Democrat (why only two choices?!) and “don’t have a dog in the race”, yet am taxed without representation, which I read somewhere is a bad thing, but I digress.
In Canada I had much higher income tax which kicked in at lower income brackets. And since I live in WA, I don’t pay state income tax. It’s a very regressive tax scheme (using the economic term) which has benefitted me personally. That, combined with more job opportunity (high tech) has dramatically accelerated my net worth. I had a job opportunity in OR which I didn’t take for one because of taxes: WA is regressive and OR is progressive (state income tax but no sales tax). I’m an example of how those at a certain level reduce their taxes through mobility.
I hated the high taxes in Canada. I’d pay more than half in income tax, higher sales tax spending it, and again when I made money on my savings through capital gains. The capital gains in particular really irritated me because it felt like, after the pennies left over from taxes I then had to pay again.
But I never worried about my fellow human in the way I worry about them here. The U.S. is a really great place to make money, I did. But it’s a terrible place to be poor. There’s not much in terms of social safety net compared to Canada. So now I see what those taxes were paying for. Look we all want to pay less taxes and every government, here or in Canada, does a poor job of spending it. And as a “rational economic player” I will seek out and ensure I receive all the advantages that the tax scheme allows, that’s what the government wants me to do. But you get the society you pay for and we need to be very careful about the incentives and disincentives we set up. Much as I’ve benefited from the U.S. tax system and the opportunity it’s provided me, which I am grateful for, I see the signs of social erosion everywhere and a legitimately disaffected populace. The trend lines aren’t good, the system needs a reboot.
As a starting point, I think we should get rid of the 1031 exchange. In a previous post on this thread I suggested grandfathering existing holdings so they can make one final exchange as well as primary residence to avoid inhibiting mobility. I’m not against tax deferral, I just think it shouldn’t be geared towards one special interest group (us). The arguments about leaving money in the system to make more money should be applied more broadly through increased ROTH limits. That said, I’m not a believer in trickle down economics, so my tendency is to want to decrease sales tax to make the system more progressive, and move tax revenue from income tax to capital gains to allow the lower / middle class to more easily graduate to the “investor class” which we here are all a part of, with ROTH as the tax deferral mechanism to incentivize entry to the investor class. Oh, and while I’m pontificating and waving my magic wand, transfer payments from federal tax to municipalities since that’s where most of the services that affect our daily lives are provided, reducing reliance on property tax which is uncorrelated with ability to pay and thus one of the most heinous taxes devised.
The highest Income tax rate in canada is under 50%, so it must of gone down since you were living here, plus you must of been making well over 200k a year. Capital gains is taxed at half the income tax rate. I do a US and Canadian tax return and find I get taxed pretty similar real estate wise. Other than that agree with most you say. Not sure what you pay in health care costs but hear that can be a lot in the us, some insurances don’t even cover 100% of Care when you get sick. can’t imagine the stress of some people getting sick. It would make me more sick
Originally posted by @Dan Veld:The highest Income tax rate in canada is under 50%, so it must of gone down since you were living here, plus you must of been making well over 200k a year. Capital gains is taxed at half the income tax rate. I do a US and Canadian tax return and find I get taxed pretty similar real estate wise. Other than that agree with most you say. Not sure what you pay in health care costs but hear that can be a lot in the us, some insurances don’t even cover 100% of Care when you get sick. can’t imagine the stress of some people getting sick. It would make me more sick
Hi Dan,
It’s been a decade so my memory is likely inaccurate but I recall that Federal plus Provincial was a bit over 50%, and yes I was top marginal tax bracket. I definitely noticed more money left in my pocket having moved to WA. Agree on healthcare, it can be a financial burden even if you have insurance and can ruin you financially if you don’t. Which is why I’ll likely move back to Canada to retire.
Originally posted by @Kevin McGuire:Originally posted by @Dan Veld:The highest Income tax rate in canada is under 50%, so it must of gone down since you were living here, plus you must of been making well over 200k a year. Capital gains is taxed at half the income tax rate. I do a US and Canadian tax return and find I get taxed pretty similar real estate wise. Other than that agree with most you say. Not sure what you pay in health care costs but hear that can be a lot in the us, some insurances don’t even cover 100% of Care when you get sick. can’t imagine the stress of some people getting sick. It would make me more sick
Hi Dan,
It’s been a decade so my memory is likely inaccurate but I recall that Federal plus Provincial was a bit over 50%, and yes I was top marginal tax bracket. I definitely noticed more money left in my pocket having moved to WA. Agree on healthcare, it can be a financial burden even if you have insurance and can ruin you financially if you don’t. Which is why I’ll likely move back to Canada to retire.
If only we had the weather of Southern California, top rate over 200k is 49%, but if you made say 300k only 100k would be taxed at 49, so would probably be like 40%ish (still a lot). Looked up Washington would be in low 30s, So 20k plus savings there. Avoiding large tax bills is a lifelong sport but I’m fine paying a good chuck if I’ve done well, life is good
Yes I was referring to top marginal plus provincial. But to your point, “if done well” is critical. I think mostly people are distrustful of government and, while of course we’d all like to pay less taxes, feeling that the money goes to some good helps. That said, given the social challenges and massive debt, I suspect we’re just rearranging chairs on the Titanic.
@Jon Schwartz If someone is part of the 1% of income earners, that means that they are probably savvy with their money which also means that they make much, much more than 475k a year and that the 475k is what is left over to be tax after they are done spending a lot of their revenue through non-taxable expenses. It means that their total income is probably in the millions through business operations where they employ several to thousands, to tens of thousands of people to work for them and they pay them their salaries or income. Those salaries and income are then circulated by all of the workers when they take it home to spend.
This country was built on the backs of entrepreneurs innovating and creating which lead us to become one of the wealthiest countries in the world when this land was a land of freedom and opportunity before over regulation closed the door for many entrepreneurs. I don’t know if you are aware that regulations in some areas makes having a lemonade stand require a permit to operate. And if you want to start a garbage business in your neighborhood to take the trash cans from the side of the house to the street for the garbage truck and then back to the side of the house you can’t go knocking on your neighbors‘ doors to ask them if they would like that service or leave a flyer on their doors if they are not home.
@Joe Splitrock is correct when he states that the wealthy stimulate the economy much more than the poor.
I am ready for your rebuttal. Step aside everyone. We have an enlightened millennial here to grace us with his presence and wisdom. Here to teach us all about subjects that he may have heard spoken of one or twice but now has a firm opinion and which opinion is just as valid as anyone else’s big or small, young or old, expert or novice. After all he learned that all opinions are just as important as anyone else’s in the day when we are all winners and everyone gets to take home a trophy to ensure that we know we are all special.
Please Jonathan, continue.
@Jon Schwartz, you have an interesting view on the poor stimulating the economy more, but I would disagree. It is true that they spend more percentage wise of their money, but let me give you an example of why you are wrong in this case. As @Shiloh Lundahl mentioned the rich often have many expenses that poor do not which stimulate the economy. Last year my rental income looked very good, but actually it was misleading due to a bad hail storm that took out over 20 of my roofs. So lets say I made $150K. Now I paid out $50K for having 4 roofs put on houses and enough materials to put another 4 roofs on in 2020. I also bought a new truck and expensed the whole thing to try to lower taxes. There was another $60K, I bought a dozen new windows, at least 40 gallons of paint, several hundred feet of rain gutters, light fixtures, carpet, vinyl flooring, tools, lumber, plywood, at least 4 new appliances and as many used appliances from yard sales. I employed at least 12 people part time for painting, roofing on weekends, cleaning out apartments, mowing yards, and of course there is my office staff. I paid for dozens of tire repairs from roofing nails, bought thousands of dollars in gas, filed deeds, paid local land taxes, dump fees of a couple of thousand, and many hundreds to the local convenience stores for drinks and ice for my workers, doughnuts, gatoraid, sodas, etc. I also bought 3 new houses that needed extensive work. While it looked like my rentals made me $50K, that was after I took out many thousands in depreciation and many tens of thousands in expenses. Hell I paid over $5K in just local town water and trash pick up fees. I am sure at least one full time employee is being paid by the local bank for what I pay in interest, and it is probably the Bank manager. Seriously I paid at least $70K in interest, probably a lot more.
There is value in everybody who buys things in our economy, but the tax breaks that are handed out are also there for a reason, they are not just a special interest pork barrel eating frenzy. When I make $50K in my rental business I literally generated $200K in spending that massively stimulated the local and federal economy. I pay almost $40K in land taxes to local governments each year. That helps build roads, put in new sewer lines, buy garbage trucks and of course employ municipal workers. My $50K of rental income is not just 25% more than the person earning $40K, it is 1000% more in money spent to stimulate the GDP. If I actually build a house or garage it again multiplies more.
Only a tiny fraction of what I spent would have been spent if I were not building a business. The houses I bought would still be empty and rotting, the truck would not have been bought, the new roofs would not have been put on, etc.
@Anthony Wick, I do want to challenge your statement about taxes.
@Shiloh Lundahl . Lol. What? I don't want to misquote you. Are you saying I am telling myself I don't want to make a lot of money? I'll tell you exactly what my brain is telling me. "If you are fortunate enough to be in the 1% of wealthiest individuals on earth, then you better realize that the 99% will hate you for whining about paying taxes." No, I don't want to pay more taxes. Why would I? Yes, I take full advantage of the tax code. I also believe if you're getting crushed in taxes, you are either; 1) A poor tax planner; 2) Have a terrible CPA; 3) Have more money than most human beings. While some of us are thinking about taking full advantage of the IRS tax code, there are many more individuals worried about paying rent and buying groceries this week.
My taxes were devastating last year. I had a hailstorm take out over 20 roofs. Yes I had insurance, but it only pays for about 70% of the cost doing a new roof and to be blunt some insurance companies are horrible and only pay about 50%. The reason this relates to taxes is because the $150K in insurance money is taxable income if you are in business. Since every house in town was hammered there were no available roofing companies to put 20 roofs on for me. I got 4 roofs on, but have more than 16 to do this year. So I pay taxes on the $120K I didn't spend and lose over $30K of it. Now next year I have $30K less to put new roofs on with, when I actually needed $30K more to do roofs with. I actually believe there are some intelligent folks in Congress that work hard to make taxes fair, but I also think there are career politicians who don't care. I did get creative and buy my first new vehicle for a tax break. Putting $10K down on a new $70K truck and expensing the whole thing helped on taxes, but my payments will not be tax deductible except interest, and I can take no more depreciation. Unintended consequences are one of the things I fear most about new laws. I have testified several times for and against laws based upon lawmakers trying to pass laws who didn't see the unintended consequences. I have never done a 1031 transfer but would like to. Most of the time that I sell a house it is on payments and is to one of my workers who wants to own his own home, so a 1031 is no help.
@Jerry W.. I am not a CPA, but the google machine says the insurance payment for damages is not taxable. I'd be very interested in a CPA chiming in here to settle this. I'm thinking if you use the settlement money to pay for damages, then not taxable. You have not profited anything. If you just cash the check and don't spend the money on repairs, then perhaps taxable?
BTW: IF your $150k is taxable, then technically part 3 of my simple thoughts and explanation would apply to why you got crushed on taxes. "Have more money than most human beings". But I'm most just being belligerent here on that argument.
Originally posted by @Shiloh Lundahl:I am ready for your rebuttal. Step aside everyone. We have an enlightened millennial here to grace us with his presence and wisdom. Here to teach us all about subjects that he may have heard spoken of one or twice but now has a firm opinion and which opinion is just as valid as anyone else’s big or small, young or old, expert or novice. After all he learned that all opinions are just as important as anyone else’s in the day when we are all winners and everyone gets to take home a trophy to ensure that we know we are all special.
Shiloh, I just visited your LinkedIn to find a year attached to your degree to get a sense of how old you are. How old are you? Actually, scratch that. What I really want you to answer is: how old do you think I am? You're very confident that my opinion is worthless; what's the cutoff age for having an informed opinion? What's the cutoff net worth? What do you think my net worth is? I'm very, very interested in your answers!
Originally posted by @Jerry W.:@Jon Schwartz, you have an interesting view on the poor stimulating the economy more, but I would disagree. It is true that they spend more percentage wise of their money, but let me give you an example of why you are wrong in this case. As @Shiloh Lundahl mentioned the rich often have many expenses that poor do not which stimulate the economy. Last year my rental income looked very good, but actually it was misleading due to a bad hail storm that took out over 20 of my roofs. So lets say I made $150K. Now I paid out $50K for having 4 roofs put on houses and enough materials to put another 4 roofs on in 2020. I also bought a new truck and expensed the whole thing to try to lower taxes. There was another $60K, I bought a dozen new windows, at least 40 gallons of paint, several hundred feet of rain gutters, light fixtures, carpet, vinyl flooring, tools, lumber, plywood, at least 4 new appliances and as many used appliances from yard sales. I employed at least 12 people part time for painting, roofing on weekends, cleaning out apartments, mowing yards, and of course there is my office staff. I paid for dozens of tire repairs from roofing nails, bought thousands of dollars in gas, filed deeds, paid local land taxes, dump fees of a couple of thousand, and many hundreds to the local convenience stores for drinks and ice for my workers, doughnuts, gatoraid, sodas, etc. I also bought 3 new houses that needed extensive work. While it looked like my rentals made me $50K, that was after I took out many thousands in depreciation and many tens of thousands in expenses. Hell I paid over $5K in just local town water and trash pick up fees. I am sure at least one full time employee is being paid by the local bank for what I pay in interest, and it is probably the Bank manager. Seriously I paid at least $70K in interest, probably a lot more.
There is value in everybody who buys things in our economy, but the tax breaks that are handed out are also there for a reason, they are not just a special interest pork barrel eating frenzy. When I make $50K in my rental business I literally generated $200K in spending that massively stimulated the local and federal economy. I pay almost $40K in land taxes to local governments each year. That helps build roads, put in new sewer lines, buy garbage trucks and of course employ municipal workers. My $50K of rental income is not just 25% more than the person earning $40K, it is 1000% more in money spent to stimulate the GDP. If I actually build a house or garage it again multiplies more.
Only a tiny fraction of what I spent would have been spent if I were not building a business. The houses I bought would still be empty and rotting, the truck would not have been bought, the new roofs would not have been put on, etc.
Jerry, hello! How are things in Thermopolis? I had a wonderful time in your hot springs a couple of years ago. A good friend owns a cattle ranch just outside Meteetse, so I make it to your neck of the woods every couple of years. Lovely place and lovely people.
You're arguing a trickle-down theory, and I'm arguing a demand-driven theory. You obviously create a lot of economic activity, but it's wrong to dismiss the "common people" as not also creating economic activity.
There's a big story behind your $150K in rental profit, and thank you for sharing it. But there's also a big story behind buying a flatscreen TV at Best Buy. When an average consumer buys a flatscreen TV at Best Buy, he's paying all of the dozens, if not hundreds, of employees at that store. He's paying the rent and insurance. He's paying the truckers who shipped the TV, as well as their fuel and insurance. He's contributing to global trade, paying factory-line workers the world over. He's paying Silicon-Valley inventors who are developing new technologies to put into flatscreens. That simple $400 purchase has a story leagues bigger than yours.
US GDP breaks down roughly as such:
70% - Consumer spending (personal consumption)
18% - Business investment
-5% - Imports/Exports (Net Exports)
17% - Government spending
Looking at those numbers, it's just incorrect that consumerism isn't the overwhelming driver of the economy and, ergo, consumers are the overwhelming driver. In a micro sense, you're fantastic for Thermopolis and Wyoming. In a macro sense, your renters are kicking your butt when it comes to economic activity!
Quick question: how much land do you own that generates $40k/year in taxes in WY? I have one parcel in LA that alone generates $24K/year!
@Anthony Wick and it probably won’t even result in much capital gains tax for the government. Just another way the government is trying to get their greedy paws on individuals money in my opinion.
@Jon Schwartz I really have no idea how old you are or what your net worth is. If I were to guess I'd say between 30 and 35 and a net worth of between 450k and 750k depending upon when you bought your home in California. The millennial comment was more about the way you are coming across in the forum rather than your specific age. The millennial mindset comes across as overconfident and under experienced, entitled, yet emotionally fragile.
The original comment that I made on this forum was based out of political frustration that I have been feeling as I have been catching glimpses of the news over the past few weeks with all of the protests, riots, and the political hypocrisy that seems to be at every front. If I had known that this thread was going to go on so long, I would have been more logical and less lackadaisical in my original comment. I understand the tax laws sufficiently to not get into trouble and what I don't understand, my CPA does, so I am pretty covered tax wise. I understand being taxed on gains and interest earned in accounts, with stocks or other paper assets, and with real estate assets. One of the advantages of real estate, however, has been the 1031 exchange which has allowed people to defer taxes even until death (if they are able to structure it that way).
It gets frustrating that my 1031 exchange plan that I am setting up for 2022 might be drastically changed because a politician wants to appeal to a voter demographic. That is where my original comment stemmed from. Then this thread started to take on a life of its own. And as the thread developed, and you stated that I demonstrated self-righteousness in my posts on the thread, it didn't seem to fit. But I was curious and up for a little wit of words. So I played along. And yes, I have many friends on the site that are more than happy to step in and reinforce things that I have stated that make sense (they are also willing to disagree with me when I am off base). So we continued the back and forth up till now. And the reason that I am writing this in the public forum rather than a direct message to you is to apologize publicly for going beyond banter to personal insults. So I am sorry. BiggerPockets is really a great forum to share ideas and opinions where many people can come and learn from others. Feel free to share your options on the forums openly and freely.
@Anthony Wick
Actually it will impact many low income workers.
Removing the tax benefit means a lot less trades will happen so it impacts agents, construction workers etc.
With less trades there will not but as much revenue as they projected as well!
I hope you are open minded enough to at least consider this reasoning regardless of your political affiliations.
Originally posted by @Shiloh Lundahl:@Jon Schwartz I really have no idea how old you are or what your net worth is. If I were to guess I'd say between 30 and 35 and a net worth of between 450k and 750k depending upon when you bought your home in California. The millennial comment was more about the way you are coming across in the forum rather than your specific age. The millennial mindset comes across as overconfident and under experienced, entitled, yet emotionally fragile.
The original comment that I made on this forum was based out of political frustration that I have been feeling as I have been catching glimpses of the news over the past few weeks with all of the protests, riots, and the political hypocrisy that seems to be at every front. If I had known that this thread was going to go on so long, I would have been more logical and less lackadaisical in my original comment. I understand the tax laws sufficiently to not get into trouble and what I don't understand, my CPA does, so I am pretty covered tax wise. I understand being taxed on gains and interest earned in accounts, with stocks or other paper assets, and with real estate assets. One of the advantages of real estate, however, has been the 1031 exchange which has allowed people to defer taxes even until death (if they are able to structure it that way).
It gets frustrating that my 1031 exchange plan that I am setting up for 2022 might be drastically changed because a politician wants to appeal to a voter demographic. That is where my original comment stemmed from. Then this thread started to take on a life of its own. And as the thread developed, and you stated that I demonstrated self-righteousness in my posts on the thread, it didn't seem to fit. But I was curious and up for a little wit of words. So I played along. And yes, I have many friends on the site that are more than happy to step in and reinforce things that I have stated that make sense (they are also willing to disagree with me when I am off base). So we continued the back and forth up till now. And the reason that I am writing this in the public forum rather than a direct message to you is to apologize publicly for going beyond banter to personal insults. So I am sorry. BiggerPockets is really a great forum to share ideas and opinions where many people can come and learn from others. Feel free to share your options on the forums openly and freely.
Shiloh, I'm 39 and have a net worth approaching $2M. I bought my first house in LA in 2009, my second in 2015, and my current primary last year. I'm confident in my understanding of the world, I am as experienced as anybody of my age and worth, I am not entitled, and I am not emotionally fragile (ask my wife!). You, sir, are a jerk, though I appreciate your apology.
@Anthony Wick you do realize 1% of America is 328,000 people, not, as you say, a few thousand? Selling one property can easily put you in this category. Very easily.
@Darius Ogloza
Finally a good question. Thank you for asking it. Indeed if the 1031 is included in the 400 K then it will affect a lot of medium to bigger real estate investors that are people like you and I. I’m reading all the replies and I’m seeing a lot of people say it’s not affecting them and what they don’t realize is the government will lower the 400 K as soon as they see that it did not prop up their coffers.
@Carl Fischer
Thank you for a very thoughtful reply. I’m shocked to See people in this form not getting it. I am ploy 75 people at any heavy tax on me either personally or via my business hurts my business along with my bottom line. I gave up everything to do what I do and I deserve every penny that I make but unfortunately the government takes about 50% since I also pay state taxes in California.
@Logan Toews. Well, actually about 1.5 million people fall into the top 1% of wealth category. But we aren't just talking about the 1% here. We are talking about those that will be doing a 1031 exchange and fall into the category of this fine topic. How many is that you ask? I don't know. But not enough for 99%+ of the people to worry about it. And perhaps I misunderstand the topic and rules of this proposal, as many are saying "selling 1 property will get you into this category". I say; no it will not. I have numerous properties, and selling any one of them would not net me $400k in profits/capital gains. And if it does for you, then suck it up and pay your capital gains taxes on your $400k plus profit.
@Reza Hosseini. Ah yes, the argument of; "if we tax the rich then they aren't going to invest in America, everything will be taken overseas, and all the middle class and poor people will die". In other words, Trickle Down Economics. This is a lie and has never once worked. I believe we as a nation are on our fourth attempt at Trickle Down Economics. So how come the wealth gap is bigger than ever? It's like when the rich told you that giving major tax breaks to corporations would result in higher wages and more jobs. Only, it mostly resulted in those corporations doing stock buy backs to make themselves even richer.
@Michael D.. Sorry bud, but I also don't buy into the "you just know the government is going to lower that dollar amount to take all of our money and give it to the poor" theory. You may think that, and that's ok. But it's a straw-man argument that really has no place in discussing the actual facts.
So far, this all sounds like speculation. Does anyone have a link to Biden's tax plan? I would like to review the actual plan rather than speculate from rumors made by charged media outlets who have their own media agenda. If anyone here has the link, I would appreciate it, but so far all searches return right wing news media outlets banking on the attestation of some random reporter.
@Trent V.. I have not done the math to see how much revenue it will create for the government. But, by saying you think it will not create much revenue brings up a very good point. As does other people who say they "just know" it will then trickle down to a much lesser amount because this bill wouldn't create much revenue.
So let me get this straight. This bill will simultaneously cripple and steal from the rich, cause job loss for the middle class (quoting other posters), AND simultaneously not create much revenue (quoting you). Most interesting. Because I have no idea how all these things can happen from this one bill.