I'm more of a long term Flipper, holding properties for a year or more which allows me to do additions to add equity and my whole strategy has revolved around long term capital gains..
I'm very concerned that she will raise long term gains like Obama did, who brought it from 15 - 20%. I hear she might bring it up to 40% to fund more immigration and also add an extra sales tax on RE transactions. Seems building permits have also gone up since Obama has been in office.
My margins have already been pretty low in this slowing RE market, I feel she would spell doom for me, all the people I employ and the many other Flippers who utilize the same strategy..
Any one else feel this concern??
Business will always find ways to make money in any environment. The reality is that the added costs always get passed along.
Continue as usual and adapt as the environment changes. The smart one will always survive.
She is proposing that long term capital gains would not kick in until holding the asset for 2 years instead of 1 year like it is now. Then, there is a sliding scale where the tax burden would be reduced by 4% per year until it reaches year 6. At this point, you would be paying the same 20% capital gains rate.
Whatever either candidate proposes has to ultimately be ratified by Congress so I'm more concerned about how the Congressional races will play out at this point. CA is an expensive place to do business regardless of who wins this race. Our state electeds are responsible for many of the policies that are driving our costs as real estate investors. And the cost of building permits is dictated by your local jurisdiction, not the federal government. But I agree with @Thomas S. that good business people will always find ways to make money in any economy.
It's always those that don't pay much in taxes that are the most worried about their tax burden.
Hate to burst your bubble, but if you're flipping these houses, they DON'T qualify for capital gains treatment, regardless of how long you're holding them. Flipping income is considered ordinary business income -- as such, you'll likely pay taxes as your marginal tax rate, plus self-employment taxes.
On the bright side, you can now base your voting decision on other stuff...
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