Real Estate

Real Estate and AMT: Rental or Investment Property

The Alternative Minimum Tax is a very important consideration for taxpayers who own real estate because almost all the tax rules that apply to real estate are different for the AMT than they are for the Regular Tax. This article on real estate and the AMT will address those situations where the person owns the property as an investment, usually as rental property. The differences in tax treatment between the Regular Tax and the AMT can be significant.

Interest expenses

The interests paid on the mortgage contracted to acquire the property are fully deductible, both from the Regular Tax and the Alternative Minimum Tax. Unlike itemized deductions that allow a tax benefit for personal expenses, tax law generally allows all deductions that a taxpayer must make to earn business income. Therefore, the limitations discussed in the previous article on home mortgage interest do not apply.

However, if the value of the rental property is used as collateral for an additional loan, such as a second mortgage, the taxpayer must analyze how the proceeds from that loan are used to determine the interest deductibility. If the proceeds are used for a car loan or to finance a child’s education, for example, then the interest is non-deductible personal interest. If the proceeds are used to improve the rental property, the interest is deductible.

Tip: Taxpayers better keep personal loans separate from business loans. Mixing the two creates record keeping challenges and can result in disputes with the IRS.

Property taxes

Property taxes paid on rental or investment properties are allowed in full for both Regular Tax and Alternative Minimum Tax purposes.

Planning idea: If you have the opportunity to pay your property tax bill either this year or next, do so in a year when you have enough income from the property not to result in a rental loss. This strategy can help prevent the passive loss of activity limitations described below from activating.

Example: In Florida, property tax bills are mailed in October and paid according to the following discount schedule: November – 4%, December – 3%, January – 2%, February – 1%. If you have a property loss in 2010 but expect to generate income in 2011, don’t pay your bill in November or December; Waiving that small discount could help you avoid the stop-loss rules.

Depreciation

Depreciation of property held for investment is allowed. The part of the cost attributable to the land is not depreciable, but for the building itself and the furniture, appliances, carpets, etc. you can take a deduction for depreciation.

Real property (this is the legal definition of the house or other building) held for rental / investment can only be depreciated for Regular Tax purposes under the “straight line” method, over a useful life of 27.5 years. Therefore, a property with $ 275,000 allocated to the building would depreciate at a rate of $ 10,000 per year.

Personal property (this is the legal definition of things like furniture, appliances, carpets, and the like) can be depreciated for regular tax purposes under an “accelerated” method over a useful life of five years. An accelerated method allows for a higher deduction for depreciation in the early years, in recognition of a factor of obsolescence or decline in value seen in new properties (automobiles are a good example).

However, for AMT purposes, personal property can be depreciated only using the straight-line method. Therefore, an AMT article will be generated in the first few years if the expedited method is used.

Planning Idea: For personal property, consider choosing the straight-line method for regular tax purposes. While forgoing a small tax benefit for the higher depreciation in the early years, it could mean avoiding paying the AMT.

Active / Passive Investment Rules and “At Risk” Rules

A taxpayer who is not “active” in investment property management cannot use rental property losses to offset other income such as wages and salaries, dividends, interest, capital gains, and so on. Instead, these losses are deferred until the taxpayer sells the property or generates passive income from this or other sources of passive investment.

Similarly, the risk rules deny the use of this type of loss to the extent that the taxpayer has acquired the investment with borrowed money and has no personal liability for the debt.

Planning idea

If these loss limitations apply, consider the planning ideas mentioned above to minimize the losses that occur each year. Anyway, they are not doing you any good.

Property sale

Several different AMT issues can arise in the sale of rental / investment properties. One is that your profit or loss may be different for the AMT than it is for regular tax purposes. This would occur if different depreciation methods were used. For example, if personal property was depreciated using an accelerated method for regular tax purposes, then the basis in that property when figuring the gain or loss on sale would be different because the straight-line method had to be used for minimum tax purposes. alternative.

Gains from the sale of investment properties are generally capital gains, although some of it may be treated as ordinary income depending on the accelerated depreciation method used. Capital gains per se is not an element of AMT, but can nonetheless result in payment of AMT. This is because the AMT exemption amount is phased out for taxpayers at certain income levels, so this additional income may result in exemption reduction, which in turn increases taxable income for purposes of the Alternative Minimum Tax.

Shopping Product Reviews

The psychology of collecting

Where do I come from writing about the Psychology of Collecting? I don’t have a degree in behavioral science. (I took a Psychological Foundations of Education course to get my teaching credential a few years ago. I got an ‘A’, but frankly I thought it was all a bit silly.) The answer is simple. I have made a hobby of observing people’s hobbies. Talk to them – or rather – listen to them talk about a topic they love. (And I have to say, there are worse ways to learn about something. An interesting speech and a boring speech are often separated by little more than the speaker and their interest in that topic.)

Collecting could be thought of as a subset of a larger human behavior called, if only for convenience, hobbies. But I’m not sure this is true. I theorize that collectors and hobbyists are completely different things. Let’s take the model train people for proof. I used to take my casework to training programs when they came to Northern California. Nice people, the ‘hobbyist’ model train, but they come in two different flavors. There are those who build tracks and small towns and mountains, etc. and then play with their trains. Then there are the collectors who are somehow forced to own a sample of every locomotive Lionel made in a given year. Or all the engines Lionel ever made. Or all locomotives, cars, tanks, vans, etc. of a certain scale / year / manufacturer. Often they don’t even open the package; they tell me it reduces the value. Both builders and collectors go to the same show and – I suppose – talk to each other – but they are completely different species.

PATHOLOGICAL COLLECTORS:

There are some poor souls who are pathological in their collecting. It is not my word, ‘pathological’. Researchers use this word to describe harvesting to the point that it interferes with daily life. Their houses are packed – and I mean literally every square foot – packed from floor to ceiling until they crash into the floor below FULL of stuff. Usually these people have no interest in the things in their collection, but they get upset if someone tires of taking them away. There is some research that indicates how this could be explained. Steven W. Anderson, a neurologist, and his colleagues at the University of Iowa studied 63 people with brain damage from stroke, surgery, or encephalitis who had not had accumulation problems before their illness, but who later began to fill their homes with things such as old newspapers, broken appliances, or trash boxes. The good doctor says:

All of these compulsive gatherers had suffered damage to the prefrontal cortex, a region of the brain involved in decision-making, information processing and the organization of behavior. People whose collecting behavior remained normal also suffered brain damage, but instead it was distributed throughout the right and left hemispheres of the brain.

Anderson posits that the drive to gather stems from the need to store supplies like food, a drive so basic that it originates in the subcortical and limbic portions of the brain. Humans need the prefrontal cortex, he says, to determine what “supplies” are worth stockpiling.

I need to make one last point before moving on to the merely insane and non-pathological foragers. All the reading I’ve done suggests that collecting, for whatever reason and to any degree, is poorly understood and there really isn’t much clear research out there. This brings me back to where I started: I can pretend to be an expert in the psychology of collecting because there is no one else who is better qualified than me.

NUT-CASE COLLECTORS (non-clinical):

Something less “traumatic” / “dramatic”? – and it’s pretty clear I’m into psychedelic quackery here – they’re merely obsessive-compulsive disorder collectors. There’s no detectable brain damage, just old OCD, or we could call it OCCD (Obsessive Compulsive Hoarding Disorder). But I wonder how many people who are really committed to a certain topic (coin collecting, Denver Broncos, UFOs, conspiracy theories, whatever) have family and friends staring at them, shaking their heads, and muttering something about OCD under their breaths. . But before moving on to collectors, collectors with a capital C, coins, stamps, model railroad cars, collectors, etc., we might consider the collector in all of us. There is a lovely story written by Judith Katz-Schwartz: Remembering Grandma. Her grandmother was a refugee – very young – from tsarist Russia who collected … and I quote …

… the tops of the Bic pens neatly rolled up with rubber bands; hundreds of small snaps threaded into safety pins; at least a hundred glass jars, all gleaming; Eighty-seven Ace bandages neatly rolled up and attached.

I thought this was kind of funny, until the guy I share a woodworking shop with reminded me of the two big garbage bags that I have filled with carefully cleaned bottles of BBQ sauce. I love BBQ sauce and eat it in almost everything. Approximately one bottle a week. I have no idea what will come of them, but I KNOW the day will come when I am glad I have all these empty bottles of BBQ sauce.

Judith sums it up beautifully and with a kind and uncommon insight I think. In the aforementioned article, she closes with …

Some people charge to invest. Some collect for pleasure. Some people do it to learn about history. And some people “save things” because it helps fill a void, calm fears, erase insecurity. For them, collecting provides order in their lives and a bulwark against the chaos and terror of an uncertain world. It serves as a protector against the destruction of all that you have loved. Grandma’s things made her feel safe. Although the outside world was a dangerous and constantly changing place, she could still sit safely in her apartment at night, “gathering my things.”

Then there was an episode of the TV sitcom Third Rock from the Sun. You may remember that Dick (John Lithgow) became obsessed with Fuzzy Buddies. I take “Fuzzy Buddies” as the producer’s way to avoid being sued by the people who make “Beanie Babies”. If one were to be perfectly honest about things, I suspect that most, if not all of us, saw a bit of ourselves in character.

There is another rather unique type of collecting: the one that dictators practice as they accumulate trinkets. Possible motives for collecting abound: compulsion, competition, exhibitionism, the desire for immortality, and the need for expert approval. According to Peter York, a British journalist who studied the decoration of dictators for his book Dictator Style, he acknowledges all of the above in his subjects. It’s basically the job of a dictator, he says, to take everything above everything else. For instance …

Saddam hussein

Sci-fi fantasy paintings featuring menacing dragons and scantily clad blondes.

Adolf hitler

Bavarian furniture from the 18th century. Munich antique dealers were ordered to keep an eye on it.

Kim jong ii

20,000 videos (Daffy Duck cartoons, Star Wars, Liz Taylor and Sean Connery films)

Idi Amin

Several race cars and a bunch of old I Love Lucy rerun movie reels and Tom and Jerry cartoons.

Joseph Stalin

Westerns with Spencer Tracy, Clark Gable and John Wayne. Stalin also inherited the films of Joseph Goebbels.

He also notes that “some of these people,” he says, “were really very short.”

VICTIM COLLECTORS:

I don’t know what to call this set. There are some companies that sell things so well, and with such terrifying insight to their customers, and they do it with such deliberate marketing plans, carefully designed to exploit the peccadilloes of the poor collector, that these collectors are victims of something, themselves, or the bad guys. old marketing companies, I don’t know which one.

An example is Hallmark cards and their Christmas decorations. Note particularly the word “memory” and compare it to the idea of ​​”nostalgia.” (Any research on collecting by the multitude of doctors seems to depend on the word “nostalgia”). It is reasonable to collect things that speak of the past. This is neither more nor less than any historical museum does. It is also reasonable to collect things that trigger – hopefully – pleasant memories of our own past. (People my age remember the games Chutes and Ladders and Candy-Land. This is the kind of thing Daniel Arnett writes about in his Why We Collect article, posted elsewhere on this site.) But these things are authentic.

Hallmark has made millions – and I have nothing against making money – selling false nostalgia – and let’s not beat around the bush – to women. If you read the articles I have, it also seems clear that these women are not women with careers, education, children to raise, or – and we still don’t beat around the bush – much more to do.

And how far will Hallmark go for these poor women to buy the next ornament, or a series of 5 or 10 ornaments? Seminars, conventions, newsletters, autograph opportunities (the artists) and previews. (Advance Visits for Sealed Plastic Ornaments by the Millions ??? YES!)

Not just Hallmark either. Consider Franklin Mint, Hummel Figurines, Little English Cottage Pottery, Commemorative Plaques with Elvis painted on them. Not surprisingly these things are “nostalgic”. Every time a children’s movie comes out, McDonald’s or Burger King have little plastic toys / figurines / antenna balls of each character. Then children of a certain age should be fed Happy Meals until they have the full collection. (For kids, the “nostalgia” goes back to the movie they saw a week ago.)

ACCIDENTAL COLLECTORS:

My sister tells me about a fourth and final category of collector. This guy could also be seen as a victim, but I chose to call them accidental. She writes …

Someone mentions once that they like X and then years later all their friends give them X and then they really start hating X. Loren and Bonnie [my nieces] I once had a teacher that everyone in the whole school knew loved giraffes and collected them. One day I was talking to her and she told me that it all started years ago when she was explaining a project that children had to do to tell about themselves. She used herself as an example and said out of the blue that she liked giraffes. Now this poor woman has received every possible giraffe ever made. He told me he doesn’t even like damn animals.

The psychology of these poor souls is easy to understand. They are the “co-dependent” link (“accidental facilitators”?) Of a mild mass OCD. They know you mean well, but they’re too nice to say anything to get away with it. What are you going to do?

Judith has wealth or excellent advice to offer collectors. And some very nice things of their own for sale. Visit her Twin Brooks site and her book Secrets of a Collecting Diva. If I had your book before I wrote some of my articles, it would have saved me a lot of time researching and making things up.

Sports

Digital Marketing Means Business Survival During COVID-19

Even during the heat of the pandemic, we saw companies struggling to change their operations enough to stay afloat. Now the name of the game is “adapt”, and we are all gamers trying to figure out where we fit in the bigger picture. Even if that means stepping out of our comfort zone, we are forced to leave behind the traditions we build and move into the digital age.

Contactless service

Before COVID-19, some companies didn’t even have a social media page. These companies relied on loyal customers, word of mouth, and in-store marketing efforts. You know the stores I’m talking about, the mommy and daddy stores that use printed brochures, bulletin boards, and give out an award to the 100th customer of the day.

For some, this type of business model sets them apart from conventional stores and made them popular. For others, it was a general lack of enthusiasm for technology (or an inability to pay for expensive digital marketing campaigns). Then, with a snap of his fingers, it was gone. No one could enter through the doors, and thus the entire structure of the business collapsed.

Word of mouth, brochures, or bulletin boards couldn’t be trusted. An increase in online shopping for a contactless experience became the most important. What did this mean for those who didn’t even have social media?

Dive headlong into digital

Pride must be replaced by necessity in terms of entering the digital world with your business. You have to be social media aware, you have to have a website, and you cannot rely on physical customers to bid. Forget getting used to the water. Hop on and wait for you to swim and stay afloat.

If you want your business to survive the pandemic in general now and in the future, you can’t wait for things to get back to normal. You have to move forward and adapt to the changes, and they must be done now.

Transition to digital marketing

Everything seems to be done on a smartphone or computer device, even shopping for everyday necessities. To expand your clientele and stay in full operational order, the use of digital marketing is more than a requirement. It is the only lifeline that most companies have. Business owners cannot hope to survive during COVID-19 if they do not transition to a digital marketing strategy. Make sure your business has a proper and modern website that is mobile friendly and easy to use. Customers should be able to easily contact you or buy through your website on all devices so that no potential sales are missed.

Business practices and customer care have not changed in their marketing structure, only the method in which it is delivered. Customers should feel safe shopping and feel better doing things online. Businesses will not survive this new era if they do not turn to the digital marketing platforms necessary to reach these customers.

Tours Travel

The History of Vanderbilt Beach

Located just three miles north of Naples, Vanderbilt Beach is one of the most popular beaches in the Gulf stretching from Delnor Wiggins State Park to the entrance to the public beach. Its glamorous name hides its more humble origins.

In the 1950s, this pristine strip of paradise was comprised primarily of oak scrub with mangroves and lagoons facing the spectacular waters of the Gulf. JB Connors, a Tampa highway builder, saw the potential of the area and completed development in 1959. By the time the plate-building process began, the only occupants were itinerant farmers and the occasional occupants of a fish camp in the north.

Connors chose the name “Vanderbilt Beach” as a marketing gimmick to convey the impression of wealth and prestige for the newly minted development. His dream of a deed restricted community with parks, open areas, easy access to water for the families who inhabited the development is still alive today. To preserve his vision, he helped create the Vanderbilt Beach Property Owners Association, which has a responsibility to protect deed restrictions.

The first owners in the early 1960s reveled in a lifestyle that included easy walks to the beach, carriage rides, cookouts, and organized water activities such as boating and fishing. The construction boom of the late 1970s ushered in condominiums for full and part-time residents, as well as the development of a small commercial section at the corner of Gulf Shore Drive and Vanderbilt Beach Road. Today, many of the original homes have been demolished to make way for a wide range of architectural home styles and sizes. Planned developments such as the Regatta, Moraya Bay and Connors estates have further expanded the neighborhood and established Vanderbilt Beach as one of the best luxury beachfront communities in Southwest Florida.

Ideal for long walks on the beach, Vanderbilt Beach’s sugary sands are flat and well-maintained. Despite the spectacular tropical scenery, you can still easily access restaurants and convenience stores from the beachfront restaurant and bar at the Ritz Carlton Beach Hotel to the famous Turtle Club to the north. Cabana Dan’s on the beach sells snacks, drinks, and rents beach gear. Beach parking is available in a 340-space garage located just west of the Ritz Carlton hotel and just steps from the beach.

From nature to its position as one of the most popular attractions in the Gulf, Vanderbilt Beach has earned its luxury name while fulfilling JB Connors’ original vision.

Arts Entertainments

3 myths about basketball training

The basketball industry is the most rampant disinformation industry anywhere in the world. There are more myths and misinformed folks in the basketball coaching and training market than in any other market I’ve seen.

Today we are going to cut through the myths and misinformation and get to the truth of what it takes to be a great basketball player.

1.) Train 6 hours a day

I did this for years, simply because I heard Kobe Bryant did it. I found out the hard way that your body can’t handle 6 hours of hitting a day on the basketball court. It’s too much.

I don’t think it is possible to train with a high quality for more than 1 to 2 hours a day, at most.

There’s a reason most games are only 30-40 minutes long. It’s because after that, the quality drops severely.

Train for no more than an hour on the court and make it count while you’re there. Train hard and efficiently and make the most of your time. That approach will beat the “6-6-6” program any day.

2.) Weightlifting hurts your jumper

This is totally and completely untrue. I can’t believe this really becomes a myth, because it couldn’t have been started by someone with half a brain or ANY experience with basketball training.

Of course, if you are going to lift weights, you will immediately play basketball, you will play like shit. But besides that, there are no long-term negative effects of lifting weights. There are only positives.

Your range will improve and you will be able to shoot more effectively than ever. Your whole game will expand. Get into the weight room and get strong. It can only help.

3.) You have to play basketball every day to improve

This one is hard to swallow because it’s so believed. It is also a vessel. There is no reason to train daily, your body cannot handle it and after a few weeks you will be too exhausted to get any benefit from your mediocre training.

Take at least two days off a week. I recommend lifting 2-3 days a week and training on the court 3 days a week as well. Ideally, you should do your training on the court just before your lift. This way, you will have 3-4 full days off each week to recover. Your results will explode with your new resilience.