Skip to content
Multi-Family and Apartment Investing

User Stats

9
Posts
36
Votes
Tyler Baldwin
  • Specialist
  • Scottsdale, AZ
36
Votes |
9
Posts

Biden introduces plan to increase taxes on Real Estate investors

Tyler Baldwin
  • Specialist
  • Scottsdale, AZ
Posted Jul 21 2020, 12:14

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

User Stats

37
Posts
23
Votes
Tom Kaser
  • Investor
  • Denver, CO
23
Votes |
37
Posts
Tom Kaser
  • Investor
  • Denver, CO
Replied Jul 29 2020, 13:45

Being facetious yes. I’m guessing they won’t eliminate the 1031 but proceed with caution.  Not trying to get political here, but keep in mind both parties in Congress probably own investment real estate. So they would not want to hurt themselves. 

User Stats

8,547
Posts
8,852
Votes
Dave Foster
Pro Member
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
8,852
Votes |
8,547
Posts
Dave Foster
Pro Member
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
Replied Jul 29 2020, 20:14

@?everyone - Take a page from Doris Day - ce sera sera - whatever will be will be! I'm amazed at the 8 pages of fear.  I've been in the industry for over 20 years now and every so often there s speculation of a threat just like this.  The threat has come from red and it's come from blue.  It's come in good economies and in bad economies.  And yet what's amazing is that over 100 years later here it still is - the 1031 exchange.  Yes it's changed and evolved.  And it could go away tomorrow (or in a few months or a few years).  But right now it's here.  And if you're making it part of your strategy then use it till it's gone. 

Relax - It's a good day today!

PropStream logo
PropStream
|
Sponsored
Nationwide property data Use our robust, multi-sourced data to find off-market properties and close your next deal.

User Stats

4,277
Posts
3,952
Votes
Jerry W.
Pro Member
  • Investor
  • Thermopolis, WY
3,952
Votes |
4,277
Posts
Jerry W.
Pro Member
  • Investor
  • Thermopolis, WY
ModeratorReplied Jul 29 2020, 21:27

@Anthony Wick, I can assure you that if you run a business that insurance proceeds are taxable.  The good thing is that yes if you spend the money putting new roofs on it is deductible, but there is an argument that you must depreciate it out over time and thus still take a big tax hit, but I am going on the assumption that it is a repair, we will see.  My problem is that it cannot all be spent in one year and so it was going to be taxed.  They did away with income averaging when they made so many other changes recently.  Perhaps we could get @Steven Hamilton II, (a really good accountant) @Linda Weygant, or any other really top notch accountants on this site to explain it better for us.  (Actually to explain it better for me as I really want to know if I can just expense my roofs, not depreciate them)  Now it is my understanding that if your private car or house gets hit by damage and you get a huge insurance check it is not taxable as the item itself is not a business or income generating asset.  I was able to defer the full $70K I paid for the truck, so the taxable amount I paid on was decreased, but it still had some serious tax consequences that will set be back quite a bit on my goals for growth and financial independence.  On the other hand I have been blessed to be able to deal with the issue and not change my standard of living that may have happened to a newer more leveraged investor.

User Stats

4,277
Posts
3,952
Votes
Jerry W.
Pro Member
  • Investor
  • Thermopolis, WY
3,952
Votes |
4,277
Posts
Jerry W.
Pro Member
  • Investor
  • Thermopolis, WY
ModeratorReplied Jul 29 2020, 22:19

@Jon Schwartz, if you come out to Thermopolis again, I have a vacation rental you are welcome to stay at.  As to your friend from Meteetse the odds are quite high that I know him or at least know of him or his family.  Wyoming is that kind of place.  First I really appreciate your breaking the numbers down and citing the source.  I simply do not have the time or to be honest the inclination to go that far into detail, so I appreciate the enrichment that I receive by reading articles or comments written that way.  When people refer to Millennials the things written by @Shiloh Lundahl, are things commonly associated with them, but there are also other things that are to be admired like your writing skill and quoting your sources as you just did.  I have had some work for me and I have been both amazed and impressed by certain traits and incredibly annoyed by others.  You like me are in part a product of your times.  The folks who lived through he great depression of the 1930s were very obvious to me in business.  They could be cunning and amazing in business, but there was a caution few can imagine.  In doing the estates of many from that era I always found lots of cash tucked into places.  Things like books, in cookie jars, under the mattress, etc.  Nothing usable was thrown away.  You might need it later.  You have no idea of the number of margarine containers with lids I have seen stockpiled in my lifetime.  My own mother in law left a legacy of nearly a hundred boxes of tin foil because of the rationing in World War 2, when it was on sale she bought it.  Being influenced by your times is not really bad, nor are traits acquired from living in your own era.  Our era is passing, yours is beginning, treat the world well.  Thank God you have not lived with the constant threat of global nuclear war.  The 1950s saw a large percentage of the population building nuclear fall out shelters, and led to the Joe McCarthy witch hunts.  Most millennials are more socially conscious, and amazing with new technology, etc.

You are absolutely correct that you are as experienced and emotionally stable as most your age, but don't forget that you don't know what you don't know.  Even old men can be fools, but investing for 40 years gives you insights that investing for 10 or 15 does not give you.  However you may be able to see trends us baby boomers will not.  I digress.

When I buy a refrigerator from Sears, I do just as much to stimulate the economy as the guy buying the flat screen from Best Buy.  I have no real figures, but there are probably 100 renters for every landlord, but it is interesting that investors make up 18% of gross sales.  That means despite being one person I spend as much as 4 consumers normally do.  If a new tax were to limit the amount I can make or invest it will have a disproportionate effect on the economy.  I am small potatoes compared to the guys owning 2 or 3 hundred unit apartment buildings.  We have to be careful that an unintended tax consequence won't derail investing that is helping the economy.  Trickle down economics is real.  You can argue how much it matters, but it is real.  One of the great mysteries of life for me is inflation.  How can we have pumped so many trillions of dollars from increased national debt and not have triggered massive inflation?  One drawback to investing for a long time is being able to recall double digit inflation and having interest rates on loans being 14 to 18%.  Yes I had them and yes they were the norm, not the exception.  I live in mortal fear of that happening again.  The Achilles heel of my investment portfolio is high interest rates.  I watch for it like a hawk, I take steps to try to mitigate the damage it might do.  I may just be paranoid, but spend a lot of time in planning with that lurking in my mind.  I am a product of my times.  Please look me up if you come to WY.

User Stats

936
Posts
1,130
Votes
Jon Schwartz
  • Realtor
  • Los Angeles, CA
1,130
Votes |
936
Posts
Jon Schwartz
  • Realtor
  • Los Angeles, CA
Replied Jul 29 2020, 22:51
Originally posted by @Jerry W.:

@Jon Schwartz, if you come out to Thermopolis again, I have a vacation rental you are welcome to stay at.  As to your friend from Meteetse the odds are quite high that I know him or at least know of him or his family.  Wyoming is that kind of place.  First I really appreciate your breaking the numbers down and citing the source.  I simply do not have the time or to be honest the inclination to go that far into detail, so I appreciate the enrichment that I receive by reading articles or comments written that way.  When people refer to Millennials the things written by @Shiloh Lundahl, are things commonly associated with them, but there are also other things that are to be admired like your writing skill and quoting your sources as you just did.  I have had some work for me and I have been both amazed and impressed by certain traits and incredibly annoyed by others.  You like me are in part a product of your times.  The folks who lived through he great depression of the 1930s were very obvious to me in business.  They could be cunning and amazing in business, but there was a caution few can imagine.  In doing the estates of many from that era I always found lots of cash tucked into places.  Things like books, in cookie jars, under the mattress, etc.  Nothing usable was thrown away.  You might need it later.  You have no idea of the number of margarine containers with lids I have seen stockpiled in my lifetime.  My own mother in law left a legacy of nearly a hundred boxes of tin foil because of the rationing in World War 2, when it was on sale she bought it.  Being influenced by your times is not really bad, nor are traits acquired from living in your own era.  Our era is passing, yours is beginning, treat the world well.  Thank God you have not lived with the constant threat of global nuclear war.  The 1950s saw a large percentage of the population building nuclear fall out shelters, and led to the Joe McCarthy witch hunts.  Most millennials are more socially conscious, and amazing with new technology, etc.

You are absolutely correct that you are as experienced and emotionally stable as most your age, but don't forget that you don't know what you don't know.  Even old men can be fools, but investing for 40 years gives you insights that investing for 10 or 15 does not give you.  However you may be able to see trends us baby boomers will not.  I digress.

When I buy a refrigerator from Sears, I do just as much to stimulate the economy as the guy buying the flat screen from Best Buy.  I have no real figures, but there are probably 100 renters for every landlord, but it is interesting that investors make up 18% of gross sales.  That means despite being one person I spend as much as 4 consumers normally do.  If a new tax were to limit the amount I can make or invest it will have a disproportionate effect on the economy.  I am small potatoes compared to the guys owning 2 or 3 hundred unit apartment buildings.  We have to be careful that an unintended tax consequence won't derail investing that is helping the economy.  Trickle down economics is real.  You can argue how much it matters, but it is real.  One of the great mysteries of life for me is inflation.  How can we have pumped so many trillions of dollars from increased national debt and not have triggered massive inflation?  One drawback to investing for a long time is being able to recall double digit inflation and having interest rates on loans being 14 to 18%.  Yes I had them and yes they were the norm, not the exception.  I live in mortal fear of that happening again.  The Achilles heel of my investment portfolio is high interest rates.  I watch for it like a hawk, I take steps to try to mitigate the damage it might do.  I may just be paranoid, but spend a lot of time in planning with that lurking in my mind.  I am a product of my times.  Please look me up if you come to WY.

 Jerry, thanks for the warm and thoughtful message. I can't disagree with a thing you say, and I appreciate your taking the time to share some of your viewpoint with me. I will certainly be in touch when next I'm headed to Meteetse. I just texted my friend to see when we can go again.

All the best,

Jon

User Stats

2,834
Posts
3,898
Votes
Anthony Wick
  • Rental Property Investor
  • Ankeny, IA
3,898
Votes |
2,834
Posts
Anthony Wick
  • Rental Property Investor
  • Ankeny, IA
Replied Jul 30 2020, 06:29

@Jerry W.. Here's to hoping a huge expense like that is not taxable for you. That would absolutely be one instance wherein the tax code is absolutely ridiculous. I am also about to have two roofs replaced through hail damage and an insurance payment. Not nearly the dollar figure for you, however. 

User Stats

4,039
Posts
2,370
Votes
Steve Morris
  • Real Estate Broker
  • Portland, OR
2,370
Votes |
4,039
Posts
Steve Morris
  • Real Estate Broker
  • Portland, OR
Replied Jul 30 2020, 07:11
Originally posted by @Shawn M.:

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.  

Google search - Wharton Biden tax plan real estate.

Unless you think Wharton is biased, then I wouldn't bother looking for facts.

User Stats

386
Posts
329
Votes
Greg O'Brien
Tax & Financial Services
  • Accountant
  • Boston, MA
329
Votes |
386
Posts
Greg O'Brien
Tax & Financial Services
  • Accountant
  • Boston, MA
Replied Jul 30 2020, 08:11
Originally posted by @Tom Kaser:

Being facetious yes. I’m guessing they won’t eliminate the 1031 but proceed with caution.  Not trying to get political here, but keep in mind both parties in Congress probably own investment real estate. So they would not want to hurt themselves. 

Yep!  IE Bob Corker (retired) and what he did at 11:59pm on the TCJA!  He slipped in RE friendly language for the QBI deduction....come to find out he has a mini RE empire. 

User Stats

20
Posts
11
Votes
Shawn M.
  • Investor
  • Metro Detroit
11
Votes |
20
Posts
Shawn M.
  • Investor
  • Metro Detroit
Replied Jul 30 2020, 10:46
Originally posted by @Steve Morris:
Originally posted by @Shawn M.:

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.  

Google search - Wharton Biden tax plan real estate.

Unless you think Wharton is biased, then I wouldn't bother looking for facts.

 Thank you Steve, but there is still no mention of 1031 removal or a plan to.  Thank you for further proving my original statement correct! I was looking for this!

Curiously, why does the original poster keep spreading propaganda?  This is very dangerous.  Thankfully many investors are smart enough to see through it.

User Stats

4,039
Posts
2,370
Votes
Steve Morris
  • Real Estate Broker
  • Portland, OR
2,370
Votes |
4,039
Posts
Steve Morris
  • Real Estate Broker
  • Portland, OR
Replied Jul 30 2020, 10:54

 Thank you Steve, but there is still no mention of 1031 removal or a plan to.  Thank you for further proving my original statement correct! I was looking for this!

You missed the quotes from the article:

"Eliminate real estate loopholes. Under current law, owners of appreciated real estate assets used in a trade or business can defer capital gains taxes when exchanging the asset for property of a “like kind.” The proposal would eliminate this tax benefit and treat such exchanges as taxable events."


Admittedly, Biden (probably his crew) floats these for a reaction, but gotta think it's on the table - Especially if Ds take the Senate.


User Stats

4,039
Posts
2,370
Votes
Steve Morris
  • Real Estate Broker
  • Portland, OR
2,370
Votes |
4,039
Posts
Steve Morris
  • Real Estate Broker
  • Portland, OR
Replied Jul 30 2020, 11:01

Hey everybody, if Tom here is serious, you just got put on notice to sell all of your properties before Biden comes and personally steals every one of them. But again, I'm seriously hoping he was just being facetious in an attempt to make his point. 

More accurately, he's going to confiscate any price gains by reducing price appreciation without a 1031 option for sellers.

User Stats

1,409
Posts
853
Votes
Daniel Dietz
Pro Member
  • Rental Property Investor
  • Reedsburg, WI
853
Votes |
1,409
Posts
Daniel Dietz
Pro Member
  • Rental Property Investor
  • Reedsburg, WI
Replied Jul 30 2020, 15:57
Good discussion going on here, and pretty civil yet considering the diverse opinions we all seem to have ;-) 

I hope to some day do so 1031s in the distant future, so I get the appeal of them. At  the same time, it much like the Estate Tax  - but it an issue that only affects about 1/10th of 1%, or .0001, of the population. The net worth, not assets, for a couple needs to above $20,000,000 or so for it to even START to kick in.

Think in terms of someone who has held a large amount of land or stocks for many decades. Maybe that stock was worth 2 million when they got it, and now it is worth 40 million, that has NEVER been taxed. Should they not expect to pay SOMETHING on that gain of $38,000,000? How much would 500 workers pay on that amount of income in total tax burden? Maybe about 15-20 million....... Did you know that over 60% of wealth that IS subject to the Estate Tax has NEVER been taxed. Why would we NOT ask the .001% to 'pay their share' just like you and I?

Where this ties into the 1031s is that it IS a pretty sweet deal. But with our nation giving tax cut handouts to corporations and the ultra wealthy like like candy at a kids birthday party we collectively ARE going to have to make that up somehow, someday. Is it REALLY so unthinkable to ask everyone to pay a share currently, while it is needed.

We could start a whole other thread on IF "trickle down economics' works, which could play into whether we should target 'tax relief' to upper income, middle income etc.... Almost EVERY study out there shows that 'the lower down in the income quintiles you put a dollar of tax relief' (or add income through credits) the farther reaching the affect on our economy. To me, that says to stimulate our economy, which it is being argued that is the point of 1031s, we need to focus those relief dollars towards the middle and lower income groups. The recent tax handout to the ultra wealthy that Trump and the GOP did goes to prove that theory too - most studies show almost no known benefits to the economy overall.

Summary? Those tax benefits that are targeted to us who invest in real estate ARE nice, but how long can we realistically expect them to stay as they are, at least as favorable as they are right now?

When you look at world history, it is VERY hard to find a county that has had such a wealth disparity as ours last very much longer without a backlash..... I think we are starting to hear the rumblings of that backlash, especially as information about the huge disparities becomes SO readily available.



Vacasa logo
Vacasa
|
Sponsored
We do the work. You get the ROI. We do it all for your vacation rental. All—marketing, pricing, guest requests, housekeeping & more.

User Stats

4,039
Posts
2,370
Votes
Steve Morris
  • Real Estate Broker
  • Portland, OR
2,370
Votes |
4,039
Posts
Steve Morris
  • Real Estate Broker
  • Portland, OR
Replied Jul 30 2020, 16:15
Originally posted by @Daniel Dietz:

Think in terms of someone who has held a large amount of land or stocks for many decades. Maybe that stock was worth 2 million when they got it, and now it is worth 40 million, that has NEVER been taxed. Should they not expect to pay SOMETHING on that gain of $38,000,000? How much would 500 workers pay on that amount of income in total tax burden? Maybe about 15-20 million....... Did you know that over 60% of wealth that IS subject to the Estate Tax has NEVER been taxed. Why would we NOT ask the .001% to 'pay their share' just like you and I?

Well, have a couple of issues:
1) The 500 workers realize that income in the same tax year.  The guy has $40M on paper, but hasn't sold it so has realized $0 gains.
2) If you want to tax on gains similarily, then we almost need to have something like a net worth tax.  So whatever something is worth on 31 Dec less the value on 31 Dec the prior year
3) The effect (not reasoning) of a 1031 is so there is a built in demand for eligible properties and an inflation factor.  Inflation increases the price appreciation which increases demand which grows net wealth.

If you take away the 1031, then properties will be like the stock market with all of its swings - Just that much less liquid.  I don't know if that is good for the economy or one's wealth.

However, when Biden says we'll raise taxes on the "rich":

1) It'll eventually hit everyone with a job and not just the "rich".  Look at Cali's income taxes that all started with only the rich paying.

2) The money won't be used to fix stuff (we get told that about every school bond and pols love using infrastructure as motivation - Both are still lousy) that he uses for justification.

3) At the end of the day, is it better a person keeps $1 or gives it to the govt to "invest" via taxes?  I'd advocate for the individual since he'll spend or invest it 100%  Give a $1 to govt, 40% (I'm guessing) goes to overhead like people shuffling paper and passing it out.

If you want an extreme example of 3), in OR, our GenFund (all the state taxes less Fed pass-thrus) is about $23B for two operating years.  PERS (the pub employee retirement) is about $30B in the hole or 2.8 years to run the state money.  If they take $1 for PERS, it'll go into a PERS lockbox and be used to invest outside OR in the stock market or REITS.  Let an Oregonian keep $1 and 80% will prob get spent in OR.

User Stats

8,547
Posts
8,852
Votes
Dave Foster
Pro Member
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
8,852
Votes |
8,547
Posts
Dave Foster
Pro Member
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
Replied Aug 1 2020, 15:11

@Jerry W., my apologies if I stray from RE slightly.  But I was just doing a webinar for some folks in a real estate association in Puget Sound and I saw two quotes in my ppt that I usually gloss over but are so appropriate for this discussion of taxation on real estate investors and the public in General I have to try to share.

Justice Learned Hand was on the Supreme Court during the original formation of the tax code and when the 1031 exchange was created.  These quotes are from 1920-21 - Read what he said very carefully - 

Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.” 

And

"There is nothing sinister in so arranging ones affairs as to keep taxes as low as possible. Everybody does so, rich or poor; all do right. Nobody owes any public duty to pay more than the law demands; taxes are enforced exactions not voluntary contributions!”

-US Judge Learned Hand

Equalizing wealth in the USA by government taxation never used to be a sought after outcome.  Equalization of opportunity was.  Taxation came into being only to support infrastructure, organizations and works that would be benefitted by all.  Taxation was not created to redistribute wealth - ever.

Govt redistribution of wealth is a tenet of other political and economical philosophies.  Capitalism allows people to achieve wealth on the merits of their own efforts free of undue government intervention.  Democracy guarantees the equality of all those who want to pursue their dreams. 

To real estate investing - 1031 has stimulated our economic engine through many trying times. It allowed us to transition from an agriculture to industrial society to service to information societies. It provided opportunities to build vast cities and suburbs and malls and hotels transitioning from agricultural land. It has now allowed for many individuals (not huge corporations but the REI's we hear from every day here on BP) to grow their real estate investing into a business or life style that they can be proud of and benefit from and live off of rather than depending on the Government. So have the mortgage expense write off, and depreciation, and expense write off and opportunity zones.

If the tax code is giving unfair advantage of opportunity to some then by all means change it.  But be careful that the real reason is not unfair advantage of opportunity but rather the fact that many have used the opportunities to achieve and now those who do not choose to use the opportunities want to benefit from the work of others.

"No man's life, liberty or possessions are safe as long as Congress is in session" - Gideon Tucker.  But I'm not going to worry too much until after November and the rhetoric of campaigning settles down.

User Stats

139
Posts
134
Votes
Jeremy Hua
  • Investor
  • Columbus, OH
134
Votes |
139
Posts
Jeremy Hua
  • Investor
  • Columbus, OH
Replied Aug 9 2020, 12:11
Originally posted by @Anthony Wick:

@Tyler Baldwin

This would affect an extremely small number of people. Only 1% of the people even make $400k a year or more, and who knows what percentage do 1031 exchanges. So, how many people would this affect a year? A couple thousand?

How many years of experience have you had with the United States government? 

I only ask because it seems you're under the impression that if you give them an inch, it stops at an inch.

User Stats

2,834
Posts
3,898
Votes
Anthony Wick
  • Rental Property Investor
  • Ankeny, IA
3,898
Votes |
2,834
Posts
Anthony Wick
  • Rental Property Investor
  • Ankeny, IA
Replied Aug 9 2020, 12:16

@Jeremy Hua

51 years. You?

User Stats

79
Posts
134
Votes
Replied Aug 20 2020, 18:52

To create $400,000 annual taxable income after deduction is statistically difficult. There are only about <1% of American households that make this much money. Then, among them, real estate investors who utilize 1031 exchange will be a smaller subgroup. 

On the other hand, the current administration passed the tax cut that limited the property tax deduction at the cap of $1 mil which affect almost all real estate investors big and small. 

I wonder if we should focus on our efforts roll back that tax deduction or stop the the new one.

User Stats

2,072
Posts
1,377
Votes
Carl Fischer
Pro Member
  • Rental Property Investor
  • Ambler, PA
1,377
Votes |
2,072
Posts
Carl Fischer
Pro Member
  • Rental Property Investor
  • Ambler, PA
Replied Aug 21 2020, 03:43

@Billy Zhao the cap on property tax deduction is on personal home not investment/rental property. Do you own any rental property?

User Stats

79
Posts
134
Votes
Replied Aug 21 2020, 20:37
Originally posted by @Carl Fischer:

@Billy Zhao the cap on property tax deduction is on personal home not investment/rental property. Do you own any rental property?

Carl, you are correct that it the $750k (2018 and onward) mortgage interest deduction is primary and secondary residences only. Still, for someone who's house hacking or using the 2nd property for short term rental, this can hurt. Don't forget, the 2017 tax cut also limited the deduction of local/state tax to $10k as well. This disproportionally affected coastal real estate owners like California, Washington, and New York. 

And I do own 3 rental properties and am working on expanding my portfolio.

User Stats

40
Posts
23
Votes
Nicholas Alexander
  • Rental Property Investor
  • Charlotte, NC
23
Votes |
40
Posts
Nicholas Alexander
  • Rental Property Investor
  • Charlotte, NC
Replied Aug 21 2020, 21:44

If they are looking to raise revenue they can start by rolling back the 1.5T tax cut they handed out to the multinational corporations in 2017 that have taken stimulus money while laying off thousands of taxpayers. I'll get off my soapbox now.

User Stats

2,072
Posts
1,377
Votes
Carl Fischer
Pro Member
  • Rental Property Investor
  • Ambler, PA
1,377
Votes |
2,072
Posts
Carl Fischer
Pro Member
  • Rental Property Investor
  • Ambler, PA
Replied Aug 22 2020, 04:19

@Billy Zhao

The trump tax cuts of 2017 whacked the people with big expensive home(s). In addition, it leveled the playing field-why should states like NY and CA get a break from federal taxes when their citizens pay state taxes?  The other states citizens end up subsidizing Ny and CA. NY and CA and other states can make it right by giving their citizens state credit for the federal tax they pay-IMO that would be more fair. However fairness is not on their minds. Biden will tax more but let’s face it Trump spends a lot also. Governments tax real estate owners, business owners and their employees, and bank/brokerage account owners primarily because that is where the money is. They also tax people on social security and medicare. If they could only slow down the wasteful spending. 

I think buying places(SFRs/duplexes) in the burbs with back yards is the safest place to be in this environment and stay away from highrises which includes residential and office/commercial. Industrial is questionable and should be looked at after the election and pandemic vaccine. 

User Stats

13,199
Posts
9,970
Votes
Theresa Harris
Pro Member
#3 Managing Your Property Contributor
9,970
Votes |
13,199
Posts
Theresa Harris
Pro Member
#3 Managing Your Property Contributor
Replied Aug 22 2020, 05:40
Originally posted by @Steve Morris:

Hey everybody, if Tom here is serious, you just got put on notice to sell all of your properties before Biden comes and personally steals every one of them. But again, I'm seriously hoping he was just being facetious in an attempt to make his point. 

More accurately, he's going to confiscate any price gains by reducing price appreciation without a 1031 option for sellers.

Over all, Biden is on a bleed the rich campaign - Which won't help the poor get richer one bit.

Lots of politicians promise things during an election and rarely follow through.  Plus this would be for people with incomes over $400K-there might be a few people like that here, but most don't make that much money.

FlipSystem logo
FlipSystem
|
Sponsored
Learn From Our Team. Earn 100% of the Profits. Join our community of 500+ investors! Avg profit per flip: $14k, Avg effort per week: 4hrs

User Stats

79
Posts
134
Votes
Replied Aug 22 2020, 19:13
Originally posted by @Carl Fischer:

@Billy Zhao

The trump tax cuts of 2017 whacked the people with big expensive home(s). In addition, it leveled the playing field-why should states like NY and CA get a break from federal taxes when their citizens pay state taxes?  The other states citizens end up subsidizing Ny and CA. NY and CA and other states can make it right by giving their citizens state credit for the federal tax they pay-IMO that would be more fair. However fairness is not on their minds. Biden will tax more but let’s face it Trump spends a lot also. Governments tax real estate owners, business owners and their employees, and bank/brokerage account owners primarily because that is where the money is. They also tax people on social security and medicare. If they could only slow down the wasteful spending. 

I think buying places(SFRs/duplexes) in the burbs with back yards is the safest place to be in this environment and stay away from highrises which includes residential and office/commercial. Industrial is questionable and should be looked at after the election and pandemic vaccine. 

 Carl, a lot of urban centers have expensive houses that approaching $1 million mark for home prices. Austin, TX, for instance has several zip codes that have average home value above $1 mil. So this is not merely a coastal problem, but more of an urban vs. rural issue. It's definitely not a rural and poorer areas of America subsidizing richer America as we know that these expensive markets offer much better jobs, and in turn contribute much bigger portion of GDP than poorer states/areas. After all, these markets are expensive because they are desirable and they are desirable because they have better jobs, right?

I am more or less economic libertarian and I agree that closing tax loopholes to fund yet another government program is not a good idea. Nonetheless, loopholes are loopholes. The law was passed for some other purpose, we just found a way to take advantage of it. On the other hand, the government is running out of money and it needs fresh revenue just to fund its existing obligations. You have only a few choices: 1- raise tax, 2- close loopholes, and 3- reduce expenses. I think #3 is probably the last thing any politician want to do, and yet it's probably a much needed step. Tax cut, which is just another form of spending, is not option #4.

User Stats

115
Posts
70
Votes
Chuck Webb
Pro Member
  • Houston, TX
70
Votes |
115
Posts
Chuck Webb
Pro Member
  • Houston, TX
Replied Nov 13 2020, 10:09

So the 1031 exchange will still be available for the mom and pops making under 400k?