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I'm in no way well versed in taxes... except that I pay a lot...
The way I understand it is many people with legitimate deductions are prevented from realizing them due to the Alternative Minimum Tax.
The AMT for those not familiar applies to an ever larger segment of tax payers yearly... it can be quite a surprise when you are not expecting it.
It took me about a year to read the tax code. I did that first, before I started a business. I pay no tax. I spend the money like the IRS wants us to. Keep it moving.
Interesting info to add to this thread before it dies. News out today:
Austrailians now have the biggest homes in the world
Australia has overtaken the United States, the heartland of the McMansion, to boast the world's largest homes, according to a report by the Commonwealth Bank of Australia.
Research commissioned by the bank's broking arm, CommSec, shows the Australian house has grown on average by 10 percent in the past decade to 214.6 square meters (2,310 sq ft) -- nearly three times the size of the average British house.
By contrast, the average size of new homes started in the United States in the September quarter was 201.5 square meter (2,169 sq ft), down from 212 square meter (2,282 sq ft), with the average U.S. home shrinking for the first time in a decade due to the depression.
“One market’s McMansion is another market’s standard issue house,” notes Robert Lang, former co-director of the Metropolitan Institute at Virginia Tech who now heads up the newly minted Brookings Mountain West program at the University of Nevada, Las Vegas. “If you’re in Dallas, 5,000 square feet is the house you buy on a two-faculty salary. But if you are in Boston or San Francisco, this is not a normal-sized house. It’s not fair to come up with a blanket definition. However, every area has its over-the-top houses, and people know which ones they are.”
Quote:
Originally Posted by scuba steve
One of the first times I've ever seen this acknowledged.
This couldn't be more true. I used to live in Fort Worth and 2000sqft w/2-car garage was a starter home...and is extremely common. You could pick up a nice 2000sqft house for probably $120-140k.
2500-3500sqft was like a mid-level home, possibly with a 3-car garage....~$200-250k.
5000 sqft...although not quite as common...were still readily available.
And they didn't seem to look out of place...because this is the style of the area.
They may look out of place if you put one up in the middle of Boston though.
My home in KS is a pretty average place for the area. It's roughly 1800sqft on the main floor, 1000sqft in the basement and has a 3-car garage. I wouldn't say it's any kind of mcmansion. But based on how some have defined McMansion the lable actually fits.
This is my first winter in this house so I am still playing with the thermostat but my gas bills are still reasonable keeping the house at a toasty 72F.
You are in Dallas according to your sig, no?
My wife checks the DFW weather often because she misses it. This morning when it was 35F outside here in Kansas she informed me that it was 70F in DFW.
Your energy bills in the "winter" should be the best of the entire year. It's when July/August comes that you should see some serious numbers appear on your electric bills. Gotta love TXU.
My wife checks the DFW weather often because she misses it. This morning when it was 35F outside here in Kansas she informed me that it was 70F in DFW.
Your energy bills in the "winter" should be the best of the entire year. It's when July/August comes that you should see some serious numbers appear on your electric bills. Gotta love TXU.
My electric bills since the weather turned cold have been low, but the gas bills rise dramatically to compensate. My energy costs have been about the same every month when you take electricity and gas together.
This morning we are looking at 33F, high in the mid 40s in Dallas with a hard freeze tonight and a slight chance of snow tomorrow. So it is definitely cold!
I'm in no way well versed in taxes... except that I pay a lot...
The way I understand it is many people with legitimate deductions are prevented from realizing them due to the Alternative Minimum Tax.
The AMT for those not familiar applies to an ever larger segment of tax payers yearly... it can be quite a surprise when you are not expecting it.
You are correct, the morgage write off is nto a subsidy for the wealthy. In fact, the wealthy do nto get to take a morgage write off. It mostly benefits the middle class.
The AMT takes away the deducations for people who make a substnatial amount of money. The more you make, the more deductions you lose.
We are not wealthy, but we are upper middle class. We make enough to lose a small portion of our deductions. The only good part is that there is no longer any point in trying to tack all of the reciepts and expenditures for deductable donations or expenses.
One of my partners makes enough that he loses all of his deductions. He gets no deductions. He pays $65,000 a year in interest on his morgage - his write off is $0. He donates 10% of his income to charities - his write off is $0.
I really hate the charity thing. All it does is discourage the wealthy from donating as much and they are the people who usually donate the most to charity. Realisitically in the case of eliminating charity deductions, the government is simply taking money from charities and keeping it for themselves.
When I started hitting AMT, I had to reduce the amount that I gave to charity. If I get a tax write off, I can donate that much more. Without the tax write off, I cannot donate as much. There is simply only so much money. TO illustrate, if I were going to donate $10,000 to a soup kitchen, and I would gt the wrtie off, I could donate $13,000 instead, because of the tax savings. Without the tax write off, I could only donate $10,000 because that is all that I have available for giving.
You are correct, the morgage write off is nto a subsidy for the wealthy. In fact, the wealthy do nto get to take a morgage write off. It mostly benefits the middle class.
The AMT takes away the deducations for people who make a substnatial amount of money. The more you make, the more deductions you lose.
We are not wealthy, but we are upper middle class. We make enough to lose a small portion of our deductions. The only good part is that there is no longer any point in trying to tack all of the reciepts and expenditures for deductable donations or expenses.
One of my partners makes enough that he loses all of his deductions. He gets no deductions. He pays $65,000 a year in interest on his morgage - his write off is $0. He donates 10% of his income to charities - his write off is $0.
I really hate the charity thing. All it does is discourage the wealthy from donating as much and they are the people who usually donate the most to charity. Realisitically in the case of eliminating charity deductions, the government is simply taking money from charities and keeping it for themselves.
When I started hitting AMT, I had to reduce the amount that I gave to charity. If I get a tax write off, I can donate that much more. Without the tax write off, I cannot donate as much. There is simply only so much money. TO illustrate, if I were going to donate $10,000 to a soup kitchen, and I would gt the wrtie off, I could donate $13,000 instead, because of the tax savings. Without the tax write off, I could only donate $10,000 because that is all that I have available for giving.
Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, WITHOUT TRYING to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.
Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, WITHOUT TRYING to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.
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