AB2640 Seeks to Repeal 1031 Exchanges in California

First of all, for those of you who dropped me a note wondering if I was still alive, rest assured I am. Thanks for the concern.
Now to the pressing issue, a bill within the California state assembly which seeks to repeal the tax benefits of 1031 exchanges in California. We’ve been discussing for a while [...]

S&P Cuts California Bond Ratings

California’s situation is getting worse, and S&P has taken notice by dropping its bond ratings for the second time in a year. California now has to spend more money on interest for any bonds it issues, exacerbating the budget crisis in the state and putting more pressure on the government to raise taxes at an [...]

Legislative Update: Congress Looking To Raise Carried Interest Tax

Congress is working on reforming (raising) taxes and one of the areas it is focused in on is carried interests. We discussed this earlier in March.
This would cause real estate partnerships (GPs) to be taxed at ordinary income levels rather than the capital gains rate of 15%. Here’s an email I received from NAIOP spelling [...]

Tax Implications of Loan Forgiveness

There is an article in the latest issue of the NAR’s Commnews Roundup discussing the downside of loan forgiveness as far as taxes are concerned. We weren’t able to locate the article online, so we’ll give you a synopsis:

Provisions of the economic stimulus legislation permit CRE owners to postpone tax liability on forgiven mortgage debt [...]

Unemployment Benefits and Homebuyer Tax Credit Extended

After weeks of partisan debate, the Senate voted on Wednesday to lengthen unemployment benefits by up to 20 weeks and to extend the $8,000 homebuyer tax credit.
The closely watched legislation would extend jobless benefits in all states by 14 weeks. Those that live in states with unemployment greater than 8.5% would receive an additional six [...]

Laugh or Cry? 4-Year Old Buys A House

Ah, the great american tax credit. Not a deduction, but a fully refundable tax credit. And when you can get into a house for 3.5% down or less (with seller or other first time home buyer program help) with the government’s help, what did you expect to happen? It seems we’ve come a long way since the [...]

Fixing The Fundamental Problem

The tax credit offered earlier this year pulled homebuyers from the sidelines back into the state’s beleaguered market for new homes but they have retreated since the incentive lapsed last month.
Our homebuilders reported a significant drop in traffic last month, largely due to the state closing the window on the homebuyer tax credit,” said Robert [...]

IRS Revenue Down 34% YoY

The IRS’s revenue is down 34% from last April according to a report by the American Institute for Economic Research. These numbers represent a stagflation of sorts for the federal government – their costs are rising rapidly while income is flat to down.
At this rate, ultimately what this will lead to is taxation as it always [...]

Obama Proposes Taxing Carried Interests (Promotes) as Ordinary Income

In one of his latest proposals, President Obama has raised the issue of taxing carried interests. In the real estate investment world, carried interests are often referred to promotes. Promotes are a way for investment funds to share in the success of the investment; it is essentially a right to receive a specified share of [...]

Proposition 13, Property Taxes, and Tenants

In the previous post we discussed plans on the table to hike taxes as an effort to help close budget deficits. As cities and the state continue to face tough economic decisions, there is increased scrutiny of Proposition 13, as it is seen by many as a way to help bring in additional revenue [...]