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If she's not using it and not selling it renting it is a reasonable solution.
Wait, what is this about "she is not using it" and "the property sat and sat and sat"? I am using it exactly in the way for which I bought it, and in fact am using it right now :-). It is a lovely sunny leisurely afternoon in my San Francisco condo, where I am reading a rare book, a 1910 travelogue from the excellent San Francisco Public Library, and checking mail right now :-). The issue is NOT AT ALL that I am "not using it". The issue is that the city has become dangerous, and there is some impossibly prohibitive taxation planned on 2nd homes unless that is blocked (eg, by the tax measure going on the ballot Nov 2024). It is very ugly what the city has become, I don't go out after dark here, I don't go out much at all here. and I am cautious walking down the street, but I surely still travel across the country between my condos, very often :-).
Wait, what is this about "she is not using it" and "the property sat and sat and sat"? I am using it exactly in the way for which I bought it, and in fact am using it right now :-). It is a lovely sunny leisurely afternoon in my San Francisco condo, where I am reading a rare book, a 1910 travelogue from the excellent San Francisco Public Library, and checking mail right now :-). The issue is NOT AT ALL that I am "not using it". The issue is that the city has become dangerous, and there is some impossibly prohibitive taxation planned on 2nd homes unless that is blocked (eg, by the tax measure going on the ballot Nov 2024). It is very ugly what the city has become, I don't go out after dark here, I don't go out much at all here. and I am cautious walking down the street, but I surely still travel across the country between my condos, very often :-).
Knew a lady like that and the property sat, and sat and sat. 10 years later she finally rented it.
Well, I am certainly not that lady. I have had the property that we are discussing for longer than 10 years, have been using it pretty substantially every year, and will not rent it out. No way. That has never crossed my mind as an option, and never will. Either I'll continue using it the same way I always wanted to use it, or I'll sell it if the safety issues and/or taxation become impossible - but one thing that I will most certainly NOT do with it is to rent it out. Zero chance of that. Why would I ever do that? I do not need rental income, and I would never take the legal and financial risk of being a landlord again, especially not in a place like San Francisco, where you essentially relinquish all rights to your property once you rent it out.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,754 posts, read 58,140,793 times
Reputation: 46247
Quote:
Originally Posted by BigfishTim
That's a good reminder. I had to look it up but, sadly; a 2nd home does not qualify for the $250K/ $500K capital gains exemption.
then... use "Installment sale" / owner contract and spread out your gains (and get 8%+ interest)
I do a very diligent financial analysis of buyer, with personal guarantee and minimum 30% down + required auto deposit payments to a trust acct. Payoff penalty equivalent to my extra tax obligation, refi at current rates + margin every 5 yrs (as in commercial paper).
Not for OP, but... If with spouse... consider having your spouse register 2nd home as 'primary residence'. If you split your time and travel often seperately (as we do), It will work OK to each have a 'primary residence'. Sometiomes it's 'necessary' for various reasons... Fluffy should be listening
We lived inthe Bay Area from 1980 -2010. We still have friends in the Bay Area as well. When we return to the Bay Area for events such as weddings and birthday parties and the like, we are astonished at its decline. Everything is in a state of disrepair. Weeds and trash. Potholes. Filth. Excrement. Soul-crushing traffic.
then... use "Installment sale" / owner contract and spread out your gains (and get 8%+ interest)
I do a very diligent financial analysis of buyer, with personal guarantee and minimum 30% down + required auto deposit payments to a trust acct. Payoff penalty equivalent to my extra tax obligation, refi at current rates + margin every 5 yrs (as in commercial paper).
Not for OP, but... If with spouse... consider having your spouse register 2nd home as 'primary residence'. If you split your time and travel often seperately (as we do), It will work OK to each have a 'primary residence'. Sometiomes it's 'necessary' for various reasons... Fluffy should be listening
not only is it tax fraud if the two primaries are not actually used differently but it is also insurance fraud .
so the days of faking a primary address are long over .
very few couples are going to spend 6 months apart in different homes.
why bother being married.
could we dream up scenarios where that could be ? sure but in practice i doubt it’s. more than a few
Why do people spend money for water to grow grass where it naturally doesn't grow in order to then spend money to mow it year-round? That seems to me the height of insanity. In other words, some of these "hidden costs" can be mitigated with a little common sense.
I thought you could dig a hole just about anywhere in Florida and spout water. Up here (NY) I have a supplemental well to irrigate my lawn and to use for washing the car, etc. Free.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,754 posts, read 58,140,793 times
Reputation: 46247
Quote:
Originally Posted by mathjak107
not only is it tax fraud if the two primaries are not actually used differently but it is also insurance fraud .
so the days of faking a primary address are long over .
...
You don't need to do anything fraudulent. It's quite common for snowbirds to live (together) in each residence 6 months / yr, just don't live in (one) over 183 days, and follow the domicile requirements of each state. All of our properties are in non-income tax states, so there's no obligation there. Each location has vehicles and insurance as 'primary residence'. Each location is occupied by one of us for a period every month, and many places in between. (We travel more than 50%, and often independently for eldercare, siblings, volunteer work, weather related interests.). Separate domiciles can be done legally. Many do it during their careers, out of necessity. Especially CEOs, politicians, international and interstate business owners. A few here live in multiple domiciles, and plenty live in none! (Income tax free SD nomad domicile). https://gnomadhome.com/becoming-south-dakota-residents/
Know the rules, live within them. (To your benefit).
You don't need to do anything fraudulent. It's quite common for snowbirds to live (together) in each residence 6 months / yr, just don't live in (one) over 183 days, and follow the domicile requirements of each state. All of our properties are in non-income tax states, so there's no obligation there. Each location has vehicles and insurance as 'primary residence'. Each location is occupied by one of us for a period every month, and many places in between. (We travel more than 50%, and often independently for eldercare, siblings, volunteer work, weather related interests.). Separate domiciles can be done legally. Many do it during their careers, out of necessity. Especially CEOs, politicians, international and interstate business owners. A few here live in multiple domiciles, and plenty live in none! (Income tax free SD nomad domicile). https://gnomadhome.com/becoming-south-dakota-residents/
Know the rules, live within them. (To your benefit).
it is very state specific as far as whether they allow married couples to have more then one primary who are not separated.
florida is very liberal in that regard but new york isn’t .
originally ny only allowed married couples to have one primary …then in 2005 a court case made exceptions .
lots of good info here
so one needs to check state laws with an attorney in that state and not assume they can just spend a few more days and one can be a resident of another state
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. I never said anything different.
