has market ever been hotter?

[Biggd]

Originally Posted by joey2665

Great idea. That’s the best of both worlds. Pay cash for the negotiating leverage then pull cash back out after the purchase to be invested wisely.


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Of course a cash buyer can still back out of a deal but once you sign that P&S and have to come up with a sizable amount of money, usually 5% that is non refundable, it's unlikely they will back out.

[mswlogo]

Originally Posted by Biggd

Of course a cash buyer can still back out of a deal but once you sign that P&S and have to come up with a sizable amount of money, usually 5% that is non refundable, it's unlikely they will back out.

It is very rare a deposit is not refunded.

It all depends on the reason the deal didn’t go through and there are many reasons $$$.

[Biggd]

Originally Posted by mswlogo

It is very rare a deposit is not refunded.

It all depends on the reason the deal didn’t go through and there are many reasons $$$.

In todays world of multiple offers, you make it non refundable in the P&S.
In my sons case he didn't make the offer on his new house until the buyers of his house signed the P&S and came up with a 50K non refundable deposit.
They either sign it or they don't. In this market the seller has the upper hand.

[fatlazyless]

No one here ever talks about the 2018 imposed federal income tax limit of ten thousand dollars on deducting your state income and local property taxes from your federal income tax. Starting with tax year-2018, due on April 15, 2019, the deductible "salt" or state and local taxes, was reduced from no limit down to ten thousand dollars/year.

So, instead of getting a tax deduction for all your home owner property taxes, you have to pay with "real" money on the amount over ten thousand dollars.

Apparently, this new limit seems to have no effect on the upward rising purchase price that buyers will pay. There's so much demand that the ten thousand dollar limit makes no difference to potential NH second home buyers who also have a primary home in states like NH, MA, RI, CT, NY, NJ ..... all states with high property taxes.

With a yearly Wolfeboro property tax bill of 108,770-dollars, the 20 Wyman Drive, Wolfeboro house with the asking price of ten million dollars sure seems like a whopper property tax bill ...... $108,770 ...... or $298/day, or $8940/month. Who knows, maybe a religious organization can buy it and make it into a legitimate summer camp for kids, or a school. It includes 6.2 acres of land.

[tis]

There was also something like 3.8% to help pay for Obamacare. Was that on a sale of a house? I have forgotten.......
No guess not. It is a tax on net investment income for people making over $200,000.

[joey2665]

Originally Posted by fatlazyless

No one here ever talks about the 2018 imposed federal income tax limit of ten thousand dollars on deducting your state income and local property taxes from your federal income tax. Starting with tax year-2018, due on April 15, 2019, the deductible "salt" or state and local taxes, was reduced from no limit down to ten thousand dollars/year.

So, instead of getting a tax deduction for all your home owner property taxes, you have to pay with "real" money on the amount over ten thousand dollars.

Apparently, this new limit seems to have no effect on the upward rising purchase price that buyers will pay. There's so much demand that the ten thousand dollar limit makes no difference to potential NH second home buyers who also have a primary home in states like NH, MA, RI, CT, NY, NJ ..... all states with high property taxes.

With a yearly Wolfeboro property tax bill of 108,770-dollars, the 20 Wyman Drive, Wolfeboro house with the asking price of ten million dollars sure seems like a whopper property tax bill ...... $108,770 ...... or $298/day, or $8940/month. Who knows, maybe a religious organization can buy it and make it into a legitimate summer camp for kids, or a school. It includes 6.2 acres of land.

You’re only telling one side of the story yes the tax is limited to $10,000 but you’re leaving out the fact that the tax brackets were lowered significantly. So leaving state taxes out for the moment your federal tax rate still went down even though you lost the deduction over $10,000.


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[FlyingScot]

Originally Posted by joey2665

You’re only telling one side of the story yes the tax is limited to $10,000 but you’re leaving out the fact that the tax brackets were lowered significantly. So leaving state taxes out for the moment your federal tax rate still went down even though you lost the deduction over $10,000.


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If you're rich--high income, plenty of stock holdings and capital gains income--you're way ahead on the Trump tax cuts.

But if you're kind of in the middle economically, but with high property taxes, it was a mixed bag. This, combined with an increase in the national debt that may be $2 trillion(!), is why most folks did not benefit from them.

[thinkxingu]

Originally Posted by FlyingScot

If you're rich--high income, plenty of stock holdings and capital gains income--you're way ahead on the Trump tax cuts.

But if you're kind of in the middle economically, but with high property taxes, it was a mixed bag. This, combined with an increase in the national debt that may be $2 trillion(!), is why most folks did not benefit from them.

Absolutely. I get a couple hundred bucks more a year, but the deficit will take out much more from my kids than I ever benefited.

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[joey2665]

Originally Posted by FlyingScot

If you're rich--high income, plenty of stock holdings and capital gains income--you're way ahead on the Trump tax cuts.

But if you're kind of in the middle economically, but with high property taxes, it was a mixed bag. This, combined with an increase in the national debt that may be $2 trillion(!), is why most folks did not benefit from them.

Sorry I disagree. Based on the over 250 returns I prepared last year 90% paid a lower tax rate than previous years and mind you most are in New York with a high income and property tax rate.


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[FlyingScot]

Originally Posted by joey2665

Sorry I disagree. Based on the over 250 returns I prepared last year 90% paid a lower tax rate than previous years and mid you most are in New York with a high income and property tax rate.


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I said "mixed bag". As Think points out, he's ahead by a whisker, not enough to care today. I don't know anybody who thinks it's a great plan. My rich friends don't really care about the extra money, my middle band friends got hardly a thing, all recognize we'll be paying the piper later.

[joey2665]

Originally Posted by FlyingScot

I said "mixed bag". As Think points out, he's ahead by a whisker, not enough to care today. I don't know anybody who thinks it's a great plan. My rich friends don't really care about the extra money, my middle band friends got hardly a thing, all recognize we'll be paying the piper later.

Your rich friends don’t care about extra money? I honestly highly doubt that in my experience of of 35 years as a CPA I have always found the richer they are the more they care.


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[FlyingScot]

Originally Posted by joey2665

Your rich friends don’t care about extra money? I honestly highly doubt that in my experience of of 35 years as a CPA I have always found the richer they are the more they care.


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"Extra money" in general is always nice, and I'm sure 100% of your clients want to reduce their bills during the time they are spending with you on their returns. But that's not quite what I'm getting at.

As I'm sure you know, the Trump tax cuts have been a political flop. I think this is because most people believe the individual benefit they received was insignificant to them personally, while it saddled us with a gigantic extra debt.

[joey2665]

Originally Posted by FlyingScot

"Extra money" in general is always nice, and I'm sure 100% of your clients want to reduce their bills during the time they are spending with you on their returns. But that's not quite what I'm getting at.

As I'm sure you know, the Trump tax cuts have been a political flop. I think this is because most people believe the individual benefit they received was insignificant to them personally, while it saddled us with a gigantic extra debt.

I will agree to disagree on your perception of the tax cuts. Obviously my experience with my clients had been much different than your experience


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[Descant]

I agree with Joey, more from an overview than personal experience. BUT, personal experience, the increased standard deduction was a better deal by several thousand dollars than collecting all those receipts and I benefited. Like many, my income has been erratic in the last couple of years, but overall, I have benefited significantly from improved economic conditions. As a retiree, I'm pleased to see the Dow go from 18000 to 28000 in last four years.
This may not be accurate, but it makes me worry very little: If I earn $100,000 and have $25,000 in debt, that is acceptable. If I increase my debt by $3 trillion, but I increase the GDP by $4X, that may still be acceptable. (National) Debt is only significant as it relates to income. A stand alone number means little to me.

[FlyingScot]

Originally Posted by Descant

(National) Debt is only significant as it relates to income. A stand alone number means little to me.

Good point! Unfortunately, national debt as a percent of GDP is also climbing, and it's expected to go much higher. Some said that these tax cuts would pay for themselves, but that has not happened

[Descant]

Originally Posted by FlyingScot

Good point! Unfortunately, national debt as a percent of GDP is also climbing, and it's expected to go much higher. Some said that these tax cuts would pay for themselves, but that has not happened

It's a slow process. If we did not ave the Covid interruption, I think the analysis would be more what was expected when the cuts were implemented. Any further comment would border on political, so , 'nuff said.

[FlyingScot]

Originally Posted by Descant

It's a slow process. If we did not ave the Covid interruption, I think the analysis would be more what was expected when the cuts were implemented. Any further comment would border on political, so , 'nuff said.

I wish you'd look at the numbers you directed the rest of us to check. In 2016, the year before the tax cut, the deficit was 3.1% of GDP. In 2017 we went to 3.4%. In 2018, 3.8%. In 2019, 4.6%. We were expected to be 4.8% before COVID-19 hit. So basically our ratio climb 55% (4.8/3.1) pre COVID-19.

I used annual deficit instead of total debt because it's the current budget that we have responsibility for, but the total debt to GDP numbers show exactly the same thing.

[Descant]

Originally Posted by FlyingScot

I wish you'd look at the numbers you directed the rest of us to check. In 2016, the year before the tax cut, the deficit was 3.1% of GDP. In 2017 we went to 3.4%. In 2018, 3.8%. In 2019, 4.6%. We were expected to be 4.8% before COVID-19 hit. So basically our ratio climb 55% (4.8/3.1) pre COVID-19.

I used annual deficit instead of total debt because it's the current budget that we have responsibility for, but the total debt to GDP numbers show exactly the same thing.

Thanks for that info. Probalbly clsoer to accurate than my guesstimate. From my perspective, I am so much better off this year than I was in 2015, facts are hard to accept.
Apologies, but political statement follows: I'm supporting the party who will leave me alone.

[thinkxingu]

Originally Posted by Descant

Thanks for that info. Probalbly clsoer to accurate than my guesstimate. From my perspective, I am so much better off this year than I was in 2015, facts are hard to accept.
Apologies, but political statement follows: I'm supporting the party who will leave me alone.

I've mentioned this before, but I can't help but think this forum has a sizeable amount of sample and confirmation bias. The most active posters, including myself, are people who are doing well in general. We own boats, jetskis, and other watercraft—toys typically purchased after needs are taken care of—and many own second homes. Quite a few here own multiple of both.

That's not the American norm at all. And, in less than ten years—as 06JuicedGTO recently echoed—that dream for many has sailed.

For the sizeable portion of America—my children included—it will undoubtedly be harder to achieve what we have achieved without a systemic change or a leg-up from family. I would never have been able to be where I am in today's system.

I'm voting for the party that lends a hand to those sinking rather than watch them drown, because I was a struggling swimmer once myself.

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