Let’s Get the Facts Straight Here!

I resent when people take a piece of information and blow it out of proportion. I have been hearing lots of rumors that there will be a new 3.8% tax on all real estate sales to fund the unpopular health care reform - Ouch, that could really hurt my business!  Then just this morning I read an article which clarifies the new tax beginning in the taxable years following December 2012, or should we just say 2013 and beyond.

As it turns out this is a tax on net investment income that could result in a small percentage of home sellers (ie: those defined as high earners) paying additional taxes on a  portion of home sales profits over the designated capital gains threshold amount. ($250,000 per individual or $500,000 per couple). The majority of home sellers will not be impacted.

An example given that was easy to follow helped me understand how it works:

A couple with a combined income of over $250,000 per year (1.5% of  all U.S. households) decides to scale back and sell their 2 million dollar residence in favor of a smaller home and they make a $750,000 profit on the sale; they would pay and additional 3.8% tax on  $250,000 (ie: $750,000 minus the $500,000 capital gains threshold).

We can argue on the fairness of the tax or weather or not we like  health care reform, but let’s at least debate with the true facts.  This information was provided by a Snopes article that was dated April 24, 2010, so this is not new information.  http://www.snopes.com/politics/taxes/realestate.asp

Bye Bye Vail’s Pharmacy

I drove by the Tahoe Forest Hospital inTruckee today and had to do a double take.  The building that has served as the hospital’s business office for the past 5-6 years was suddenly just a pile of rubble.  It is being taken down in order to make way for the new Cancer Center to be erected.   This discovery was particularly nostalgic for me since I have lived in Truckee for 30 years, and have seen the building morph through several different phases.

When I first got here, this was the location of the only pharmacy in town (well it wasn’t really a town then but nevertheless):  Vail’s Pharmacy.  The town did have a Safeway but that was in the day when Safeway was just a grocery story.  Well with the introduction of Longs over in the old Lucky center on Deerfield Drive, this little family owned pharmacy could not survive.  They saw the writing on the wall and when offered the opportunity, they sold their property to the Hospital.

People bemoan the changing landscape in small town America.  Well here in Truckee, as much as we try to prevent it, progress continues to march — forward (or backward?).  So long Vail’s. . . .

Beginning of the End

This is a photo of the first color change I have seen in Truckee. 39 degrees at 8:30 am. Days are getting shorter. The fall crowd of visitors are here. I love autumn in the Sierras!

Reprieve for the 1031 Exchange in California

We recently received a bit of good news for real estate investors in California.  Earlier this year the Senate Appropriations Committee had approved SB 1316 a bill which was going to provide tax credits for investors in low income properties in California.  The plan was to offset the tax loss by eliminating the deferral of state capital gains for taxpayers who are doing exchanges into properties out of this state.  The passage of this bill would NOT be good news for the Real Estate Industry or for those citizens who would like to have the freedom to chose another state to exchange their investment property with the IRC section 1031 vehicle.

Fortunately, as the result of some very aggressive lobbying, the bill has been moved to inactive status.  So for now it is a non-issue.  If you would like to know more about the IRC 1031 tax deferred exchange for investment properties, please be sure to check out the website of our exchange colleagues at  Starker Services.   Or if you are one of those people who doesn’t like to visit websites, give us a call and we will hook you up with an experienced professional in the field.

FW: Harrah’s Desert

My girlfriend and I shared a wonderful dinner at Harrah’s in Reno last night. We did the show Nathan Owens Motown After Dark too. Dinner at the Steakhouse and the show was fantastic. A lot of
energy, talent and work went into both. Worth every penny!

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