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We are $20.5+T in debt and climbing. The bill needs to be paid. Everyone needs to contribute (who can) and the special interest deductions, credits, carve outs, etc. need to go away. All income (if there is to be an income tax) should be taxed at the same rate because income is income whether it is from employment or investment. The tax code is so convoluted that even the people charged with enforcing it don't understand it. It needs to be simple, straight forward, even handed, and enough to cover the budget plus pay down the debt. Anything short of that (like this plan) is re-arranging the deck chairs on the Titanic.
It's time for everyone to pay the piper and start holding the piper accountable for future spending.
What voice did you, or I, have in taking on all of this debt?
Who benefitted from the various operating expenses which were covered by this borrowing? It didn't go into capital projects, it went into operating expenses and programs.
I think we need to be a little bit "Greek" about this. The very wealthy benefitted mostly from all of this borrowing. They managed the programs by owning the businesses to which the funds were spent, or received the kick backs from the funds which were skimmed as these HUGE sums were spent.
And now the little guy should take on the burden of paying the money back?
I don't think so. Let the people who benefitted from the borrowing take on the responsibility for paying back the funds. There is no reason for the "little guy" to pay back these monies. We didn't receive them. We didn't benefit from them. And we had no choice in the borrowing of them.
I know it sounds unpatriotic. but "not my responsibility".
That rule of deferring gain as long as you buy another home is at least OVER 15 years old. It was changed to the 2 out of 5 year rule many many years ago.
EDIT: the law enacting the 2 out of 5 year rule was enacted in 1997....TWENTY years ago.
No I think you misunderstand the rule
They were told they did not HAVE to put the equity profit into another house within two years because of the 2/5 rule--which they met--so they didn't pay tax on that profit above their equity--which was minimum--put least in and did no upgrades to house...
But that applies to money you WON'T put back into a house---
IF you sell a house you owned only 1 yr out of 5 and made profit on equity then if you take that money are reinvest into another house--different town or maybe larger/more $$ in town you sold original home--
You are just rolling it over--
Like a 1031 exchange where you defer capital gains into the future...
Surely if they change this rule to penalize flippers they will also change a 1031 rule which is used by DEVELOPERS like Trump and Kushner....(or yeah...I forgot--it's a GOP Tax Plan)...
The problem is that nobody understands the repercussions of these things (except the few who wrote it) until it's too late.
The congress and senate both are notorious for passing bills that few if any of them even read. They operate on a buddy system and trust that they are looking out for each other's and their voters' interests.
I know many of you reading this may feel disheartened if not depressed by what the outcome may mean for your families, your retirements, and your futures. My wife broke down in tears when I told her that we may not be able to list our house in the spring, as we have already bought another house that we were planning to move into.
I've also called the members of my crew and have explained to them that we may be switching gears, and unable to provide another major remodel to keep them busy through the holidays and into the spring. You can probably imagine their enthusiasm for hearing about this news. The irony being that a couple of them were Trump supporters and thought he was looking out for them.
But all hope isn't lost. The senate still hasn't passed this bill, and there are many republican senators who can still sink this plan, but I truly don't think they even understand the repercussions this bill will have on the market and our economies.
Trump conned the simple uneducated hard working middle class into electing him, promising them a better future, but in truth Trump is an egomaniac, who only wants to be the biggest most famous whatever.
He is using his understanding of power and gains, not for the common person, but for his Government.
He well understands, just as Ceasar did, that a leader of nations rules by the force of their soldiers.
Right now his Regime is convincing Mom and Pop America that we need to "upgrade" our Military, in order to protect our borders. This translates to hundreds of trillions of dollars are needed to build more bigger war ships, planes, rockets, smart missiles and the like.
Trump understands that world conquerers need world conquering militaries. Even if we don't bomb someone into submission, we only have to convince them that we can, and their land, space, water and money becomes partly our government's. The Great Negotiator understands these things well.
Don't let them fool you. 20 trillion in debt is nothing, and they won't pay down s****! And will use that money to grow in power. If we let it ride another 20 years, inflation itself will whittle that debt down.
Many of you who voted for this, will likely deny what is about to happen until it's too late.
Those of you who can see with your own two eyes, hear with your own two ears and can speak out are encouraged to do so. It's time to type your gripe elsewhere where it can matter the most.
Republican Senator Susan Collins from Maine is perhaps the most likely to vote against the bill, as she already has been vocal about her doubts regarding the bill, and has already shot down the Obamacare reform earlier in the year. I don't know the quickest way to get word to her, but she has a contact page in which you can submit your inquiries and requests. https://www.collins.senate.gov/contact
Do not worry that you aren't from her state, as she will understand the negative affect this will have to her own state's economy, if explained to her. I highly encourage you to give her and others the chance to understand what affect this will have on the heartbeat of our nation.
John McCain of Arizona, Lisa Murkowski of Alaska, and Bob Corker of Tennessee are also natural candidates to oppose this new bill as well, but as I have said, they must be given a chance to understand the repercussions, as it is doubtful they will have read much into it before they vote.
ALL Republican Senators deserve the chance to at least consider some the consequences, but they won't be able to unless people speak out and explain to them what havoc this can do to our economy and markets. Most of them simply aren't rocket scientists, and they simply aren't aware of much of what happens under their noses.
But don't stop there. Share this news to your facebook pages, and other social networks explaining how this will have domino effects across the board, and that America will further decay at home, while our Military flourishes overseas.
If this is important to you as it is to me, then I expect you'll be getting off your butts and moving on this one!
But before I go, I'll leave you with two of the biggest lines of BS, that most recently hit the eardrums of our Senate.
The president on Thursday went to Capitol Hill and met with a group of House Republicans before the vote, telling them succinctly: "I love you. Now vote." A majority did, and the tax bill passed 227-205, with only 13 Republicans voting against.
That enabled House Speaker Paul Ryan to say: "Passing this bill is the single biggest thing we can do to grow the economy, restore opportunity and help these middle-income families who are struggling. This is something that's going to refresh our confidence in ourselves and our confidence in each other."
Robert Reich (who I know is anathema to most GOP supporters) had notice on his Facebook page about protests organized for Monday when Senators return to Washington to consider voting on this disasterous bill...
I know my two TX Senators will support it and calling their offices or trying to send emails is a waste of time and effort--
They turn off their email boxes (it says FULL and pops back out) and set the general numbers to message...and don't listen to them..
They have done it time after time
Cruz was afraid to make any office visits in TX because of residents--not GOP voters but still HIS constituents--standing outside and picketing his offices when the ACA was going to be repealed and for various Senate Cabinet hearings...
They are inoculated against opposing voices in Texas
BUT there are states where Senate seats are more precarious
Bad news today about new repeal of banking laws that certain DNC Senators supported and even co-sponsored---the bill would repeal many of the provisions enacted after the 08 RE/Market debacle to make it easier for certain banks to do the same mistake in judgements (too small to fail this time) as before..
Not a good sign...
McCaskill was one of the supporting Democrats because her race in 18 is going to be so difficult--
They were all from states where Trump won by enough to scare them
What they don't understand is that by election time if this bill has passed enough people will have experienced blowback that even Trump voters can be disenchanted with the reality of the danger Trump (and his conservative GOP agenda) has put America in
The media--even the liberal media--has described Trump's rhetoric as making him a Populist.
That is SO FAR from the truth of the matter it is just not funny--
What Trump says to get attention and play to his base is racist, mysogenist, anti-populist because he does not really believe in the value of social programs to level the playing field and empower those in the working class and less monied stratas of society and support their upward climb...Trump's agenda and those pushing him is all about maximizing wealth and control of the ruling class...there is NOTHING Populist about that at all...
And to call him a Populist would have Teddy Roosevelt roiling in his grave...
"Don't tax you,
Don't tax me,
Tax that man behind that tree."
It sells well to voters....
Just put an income limit on anyone running for Congress or Senate seat--and term limits
Repeal Citizens' United unlimited funding by corporations and uber wealthy
No I think you misunderstand the rule
They were told they did not HAVE to put the equity profit into another house within two years because of the 2/5 rule--which they met--so they didn't pay tax on that profit above their equity--which was minimum--put least in and did no upgrades to house...
But that applies to money you WON'T put back into a house---
IF you sell a house you owned only 1 yr out of 5 and made profit on equity then if you take that money are reinvest into another house--different town or maybe larger/more $$ in town you sold original home--
You are just rolling it over--
Like a 1031 exchange where you defer capital gains into the future...
Surely if they change this rule to penalize flippers they will also change a 1031 rule which is used by DEVELOPERS like Trump and Kushner....(or yeah...I forgot--it's a GOP Tax Plan)...
You are wrong. The ONLY rule that applies to the Sale of a Personal Residence is the 2 out of 5 year rule. There is NO exclusion of any capital gain if you do not own the home and resided in it for at least 2 out of the past 5 years.
If you own a home 1 year and sell it at a profit, the gain is taxed...you do NOT have the option to reinvest to defer the gain.
I think you are confused on 1031 sales vs. sale of PERSONAL residence. 1031s only apply to like-kind INVESTMENT property.
No I think you misunderstand the rule
They were told they did not HAVE to put the equity profit into another house within two years because of the 2/5 rule--which they met--so they didn't pay tax on that profit above their equity--which was minimum--put least in and did no upgrades to house...
But that applies to money you WON'T put back into a house---
IF you sell a house you owned only 1 yr out of 5 and made profit on equity then if you take that money are reinvest into another house--different town or maybe larger/more $$ in town you sold original home--
You are just rolling it over--
Like a 1031 exchange where you defer capital gains into the future...
Surely if they change this rule to penalize flippers they will also change a 1031 rule which is used by DEVELOPERS like Trump and Kushner....(or yeah...I forgot--it's a GOP Tax Plan)...
Hi loves2read,
Your posts here have been so intriguing, but it's hard to know where to start.
Maybe it's better to ask you where/if I may have gone wrong or misunderstanding in our current/past situation.
The last house we sold was in 2014 after living in it more than 5 years. The profit we made was income tax exempt due to 2 of 5 years rule, which we well exceeded.
Our current home we have lived in for 4 years, and were planning to list this spring, therefor we went into debt to buy our new house, which my crew and I were planning to remodel with the expected profits from our current homes sale.
Now, if this tax bill is passed, and the 2/5 rule becomes a 5/8 rule, we see these as our basic options:
1. Go ahead and sell the house as planned this spring, paying income taxes on whatever the difference is between buy and sell price. (As explained in a previous post, we wouldn't be able to prove at this point our costs to flip, as we never imagined we wouldn't qualify for the capitol gains exemption, and therefor threw most receipts away that would have been tax deductible) Not to mention that without these deductions, I will probably be lucky to make $3/hr or brake even for the 1500-2000 hours of labor I put into the house.
2. Rent our current home out, move into our new house, and use the rental income to slowly fix-up our new home while we live there. This means selling our current home later down the road when we'd deem the market will give us the returns we were hoping for.
It seems you are saying that I can simply roll over my investment, and defer my capitol gains like a 1031 exchange, but can you further elaborate on the process of doing this?
For example what would you do if you were in my situation, how would you or your accountant file your taxes, and what timelines would you be looking at in order to qualify for the exemption you've implied?
Thanks in advance too, if that's not too much to ask from you
Your posts here have been so intriguing, but it's hard to know where to start.
Maybe it's better to ask you where/if I may have gone wrong or misunderstanding in our current/past situation.
The last house we sold was in 2014 after living in it more than 5 years. The profit we made was income tax exempt due to 2 of 5 years rule, which we well exceeded.
Our current home we have lived in for 4 years, and were planning to list this spring, therefor we went into debt to buy our new house, which my crew and I were planning to remodel with the expected profits from our current homes sale.
Now, if this tax bill is passed, and the 2/5 rule becomes a 5/8 rule, we see these as our basic options:
1. Go ahead and sell the house as planned this spring, paying income taxes on whatever the difference is between buy and sell price. (As explained in a previous post, we wouldn't be able to prove at this point our costs to flip, as we never imagined we wouldn't qualify for the capitol gains exemption, and therefor threw most receipts away that would have been tax deductible) Not to mention that without these deductions, I will probably be lucky to make $3/hr or brake even for the 1500-2000 hours of labor I put into the house.
2. Rent our current home out, move into our new house, and use the rental income to slowly fix-up our new home while we live there. This means selling our current home later down the road when we'd deem the market will give us the returns we were hoping for.
It seems you are saying that I can simply roll over my investment, and defer my capitol gains like a 1031 exchange, but can you further elaborate on the process of doing this?
For example what would you do if you were in my situation, how would you or your accountant file your taxes, and what timelines would you be looking at in order to qualify for the exemption you've implied?
Thanks in advance too, if that's not too much to ask from you
Re your Options
1. Run the numbers on cost to carry first for another year...taxes, insurance, maintenance, min. util. bills v. the capital gain hit by IRS (and maybe state income tax too, depending on where you live). Next factor in the risk of keeping another year...will there be repairs, expected or unexpected (age of roof, appliances, etc.). More risk: what do you think market will be in another year; personally I feel a chill, not a a downturn, but sales prices that were skyrocketing this past year are leveling off. Will that continue? Or do you think your local market will go up more in the next year? No one has a crystal ball but you need to factor in the unknowns.
2. If you rent it, you will NEVER get to the 5 out of last 8 year proposed new law; you will never get to defer the gain. Plus you will pay tax on rent and possibly have to add back depreciation, if you claim it. And it will be sale of investment property.
On defer of gain...that's only AFTER you convert to rental AND only if you reinvest in a LIKE-KIND property...another rental house.
You are wrong. The ONLY rule that applies to the Sale of a Personal Residence is the 2 out of 5 year rule. There is NO exclusion of any capital gain if you do not own the home and resided in it for at least 2 out of the past 5 years.
If you own a home 1 year and sell it at a profit, the gain is taxed...you do NOT have the option to reinvest to defer the gain.
I think you are confused on 1031 sales vs. sale of PERSONAL residence. 1031s only apply to like-kind INVESTMENT property.
Yes--agree about the investment aspect of 1031 deals--
that was my sarcasm in the last line about developers benefitting and not homeowners...
But thanks for the clarity on the other issue
My husband and I have been discussing whether or not to sell our TX house and downsize
The market has been decent in our area which is not the top rated school district but had good schools and is in good location for people commuting to FTW, is close to DFW airport for work in that area...and we have been here since 08
Does anyone know if this time line will be retro active--meaning selling the house you might currently own---or does it only apply to houses you buy/sell going forward?
What happens to people who do work for companies where is likelihood transfers come every 3-5 yrs for those upwardly mobile or for job-hoppers who aggressively persue opportunities that require relocation?
If the company helps defer any tax burden you pick up when you sell then that would a benefit and taxable to you--so you wouldn't come out ahead...
I just can't believe that these Senators are so stupid they don't understand how much of an impact a feature like this will make on younger, upwardly mobile professionals--
Are they just writing off that section of the economy in favor of only big donors/big business?
Last edited by loves2read; 11-24-2017 at 02:40 PM..
One of my friends sells Amway... they are incorporated just as the local Pest Control Termite company... it says "Inc." right on their business cards...
I think we all know the difference, but this bill is aimed at large corporations & doesn't seem to help small businesses such as the ones you are talking about: https://www.sbc.senate.gov/public/_c...plan-final.pdf
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