Posted on June 12, 2008 @ 9:14 pm - Written by BawldGuy
There are a few myths out there held as nearly doctrinaire by many. This one though packs a surprise waiting in ambush — timed to go off at retirement.
It’s held as almost the 11 commandment that once you retire, your income tax rate will drop significantly. This is so far from the reality, it’s akin to teaching summer brings cooling temperatures.
Ya can’t have it both ways. Those for whom the myth is almost a spiritual mantra, are the same ones who preach save and invest from the crib. Amass ginormous amounts of capital. Capital which will yield massive amounts of retirement income. Really? Massive income? Yet lowered income tax rates? Anyone see a problem here?
There’s only one reason for most folk’s income tax rate to fall in retirement: They simply didn’t Purposefully Plan — resulting in a retirement income capable of keeping food on the table, but sadly, not much more. Of course their income tax rate will fall.
Posted on June 4, 2008 @ 11:07 pm - Written by BawldGuy
Wanna know when clients ask that question the most? After their most recent round of purchases/exchange has closed, and before they’ve had a chance to take a breather from the process. The ink isn’t dry on their new deeds, and they wanna know when they’re supposed to get rid of them. And they’re serious as a heart attack. It’s gotten to the point where I just make fun of them immediately.
Still, their question addresses one of the most important quandaries a real estate investor faces — when is the right time to move capital/equity from where you are to some place and/or situation you judge better?
I dunno, let me ask the Guardian Angel in charge of real estate. Or better yet, I’ll consult that black ball we had as kids. You know the one — Answer Ball. Come on, you either had one or knew a kid who did.
Posted on May 30, 2008 @ 10:56 pm - Written by BawldGuy
To my friends and all real estate investors in San Diego/California, here’s the tune you’ll be dancin’ to once yer Outa Dodge.
Not only does it rock, but so does your capital growth rate since you saw the light. Massively increase your net worth, tax shelter, flexibility, and best of all? Your retirement income. Purposefully Plan your way to the retirement you deserve.
Step away from the local real estate San Diego. Yer just a 1031 exchange away from jump starting your future back to life. Your retirement is dying a slow death here. Hhellllooooo!
Crank this one up to 11, kick back, and try to remember where you were the first time you heard this one.
Posted on May 22, 2008 @ 10:06 pm - Written by BawldGuy
I was due for the conversation that transpired recently. A friend of a currently inactive client was a few days from entering into a tax deferred exchange. My client called me to ask if I’d talk with their friend about what they were doing and why. Not a problem.
After the conversation with her investor buddy, it occurred to me she had an immediate problem which was easily remedied, but a much larger problem that was systemic. Her tax pro was allowing her to enter into a classic delayed exchange when there was another obviously superior option.
In a nutshell, the investor had unused depreciation in an amount sufficient to offset a pretty impressive hunk of the capital gain she was deferring. In plain English? She’d be able to take out over 1/3 of her net proceeds in cash — without ever paying capital gains taxes. She’d accumulated massive unused depreciation as a result of being barred from using any of it against her ordinary income. (read: job income) Hence, the unused accumulated tax shelter.
By executing a tax deferred exchange (1031) sans the huge tax free cash exit, she’d have been penalizing herself. Read the rest of this entry »
Posted on May 22, 2008 @ 1:31 am - Written by BawldGuy
Still draggin’ from spending three days in Hell’s Special Oven — more often called Phoenix. You don’t realize the toll taken by all the activity, plus intensity, plus the 198˚ heat. I’m exaggerating, as it never got above 154˚ even once.
As I was saying to some of the Phoenix guys there, “Dry heat my hinie. Ask a baked potato what he thinks of dry heat.”
The momentum is beginning to show as it relates to California real estate equity grabbin’ their spurs and headin’ to the Lone Star state. (Did I really write that sentence? See? I’m really that tired.)
When the average CA investor learns they can increase the value of their portfolio by 3-6 times, they sometimes began channeling Rod Serling, background music and all. Increase their tax shelter by 4-8 times? In no time, the only CA real estate left is where they sleep.
Yer just a 1031 exchange away from jump starting your future back to life. Your retirement is dying a slow death here. Hhellllooooo!
