Yes it is, but if the equity I'm my home drops, it's only on paper. I don't get to record a loss.
Not sure this was even noticed?
- Thread starter davekc
- Start date
Very true. One of the parts that some seldom see with Trump. He did lose a lot through that period but was able to recover and rebuild. There is some value in that from my prospective.
Most business losses are paper. Very few are actual cash losses. Those are reserved for the government. lol
Yup. Once you sell the home and realize the loss, it's at that point you can write it off. Same with a stock. If you buy at $50 a share and now it's worth $25 a share, you can't write it off until you sell the stock at a loss.
However, with real estate developers, they can write off paper losses for depreciation and other things, as well. Real estate developers usually own several properties and businesses (Trump owns all or part of me than 200), and all of the income (and losses) from those "pass through" companies end up on the developer's personal income tax form. If any one or more of those companies lose money (including regular run o' the mill building depreciation), the loss can be applied to the developer's tax liability as a whole rather than keep it restricted to just the company that incurred the loss. Not only that, you can spread the losses of over several years to offset taxes on future income, which is what Trump did.
For most businesses any income and loss comes from the same source, so the writeoff happens once, in the same year, done. But for real estate professionals (developers, managers), they have a special little corner of the tax code carved out just for them (section 469 of the tax code) that lets them use depreciation and other loss deductions to offset non-real-estate income.
And you see why Trump doesn't want to release his tax returns from the last few years. Look at all the hullabaloo over one tax return from 20 years ago. Clearly, there are people who think that you shouldn't take any tax deductions at all to which you are entitled.
Kaine went on and on about how Trump took all these tax deductions and didn't pay any taxes. But when directly asked by Pence if he took any tax deductions, Kaine's hearing took a walk. Ignored the question several times.
Is not like Trump did anything illegal or unethical. He didn't write the tax code. A senator did that. If Hillary thinks this tax deduction is soooo unfair, then she had four years to fix it, but she didn't even try.
Trump did lobby for the very tax law changes that he used. Some people are aghast at that. These same people apparently think congressional lobbyists are altruistic in nature and never lobby in their own self interest. <snort>
When Trump said the system is rigged, he knows what he's talking about. He helped rig it. Trump Lobbied Tax Changes 25 Years Ago
as Turtle said you can spread losses out over some years....I don't now if it works this way here too....the same goes with bumper years...have a great year you can spread that money back so many years and forward, a thing called "Income forwarding".....now you have a thing called "income averaging"......a relative of mine was a pro at this ..with his businesses....
Trump should toss this back to the Dems...That most Americans know the tax law to some degree...and to think they could fool the American public with this non issue is like calling Americans stupid....
They're are pros and cons to a flat tax (as well as the Fair Tax). The argument against a flat tax is mostly an emotional one, driven by jealousy and envy and the need to somehow punish those who have more money than you do.
It really would take about a 20% flat tax across the board to equal the revenue that the current progressive tax takes in. Everybody would pay the same 20% with no deductions (would be bad for expediters). Even though everyone would pay the same exact percentage of their income, liberals argue that such a tax would be disproportionate to low income peoples, despite it being precisely proportional. Someone making $10,000 wouldn't have enough money for bread and milk, much less cold cuts and Nestlé Quick. The rich can afford to pay more than their absolutely proportional fair share (the 'other people's money' argument). Nearly all of the flat tax proposals exempt income from capital gains and dividends, which I think needs to be taxed as any other income
The way to offset that is to make it so that anyone making less than $50,000 doesn't have to pay taxes. Of course, that would still mean less revenue for the government than the current progressive tax brings in. The easy way to deal with such a shortfall is for the government to spend less and live within their means.
I'm more of a proponent of the "fair tax" which is a hefty sales tax, say 30%, on everything except food. Capital gains would still need to be taxed to prevent an even worse rich-get-richer runaway effect. And it would all require the government to spend less. But since retailers would be sending the sales tax collected directly to the Treasury, no need for an IRS, so that will save gazillions right there.
After having lived in TN for a number of years with no state income tax but a high sales tax, I'm convinced that's the fairest, most equitable manner for revenue generation.
It really would take about a 20% flat tax across the board to equal the revenue that the current progressive tax takes in. Everybody would pay the same 20% with no deductions (would be bad for expediters). Even though everyone would pay the same exact percentage of their income, liberals argue that such a tax would be disproportionate to low income peoples, despite it being precisely proportional. Someone making $10,000 wouldn't have enough money for bread and milk, much less cold cuts and Nestlé Quick. The rich can afford to pay more than their absolutely proportional fair share (the 'other people's money' argument). Nearly all of the flat tax proposals exempt income from capital gains and dividends, which I think needs to be taxed as any other income
The way to offset that is to make it so that anyone making less than $50,000 doesn't have to pay taxes. Of course, that would still mean less revenue for the government than the current progressive tax brings in. The easy way to deal with such a shortfall is for the government to spend less and live within their means.
I'm more of a proponent of the "fair tax" which is a hefty sales tax, say 30%, on everything except food. Capital gains would still need to be taxed to prevent an even worse rich-get-richer runaway effect. And it would all require the government to spend less. But since retailers would be sending the sales tax collected directly to the Treasury, no need for an IRS, so that will save gazillions right there.
After having lived in TN for a number of years with no state income tax but a high sales tax, I'm convinced that's the fairest, most equitable manner for revenue generation.
The math says is has to be a minimum of 19 percent across the board, be cause that's the percentage of total US income that the IRS rakes in every year. If you exempt those households making less than $25,000 (which is virtually exempt currently), then it bumps up to 20 percent. If you exempt those making less than $50,000, it bumps it up to about 25 percent for everyone else. Currently those making between $50,000-$130,000 are paying 25 percent, as it is. The top one percent bracket is 39.6% so they'd be paying less, at first blush, but as most deductions would be eliminated, the effective tax rate paid by that group would actually jump from around 14% to the flat 25%.
Nope can't do that. Too hard to have smoke and mirrors with that plan.
Great observation Dave I hope you don't mind if I re post this on another Forum.Government fiscal year ended September 30th with us 19.5 trillion in debt. Many know that part. What I found interesting is that is a increase of 1.5 trillion over last year. Wonder where it went? Total silence. That increase puts us at roughly 7 or 8 percent of GDP. The 2008 bank bailout was somewhere around 700 billion and was just under 5 percent of GDP. That aside, what I find amazing is 2016 was third highest level of spending EVER.
There is no bank bailouts, wars are suppose to be over (wink) where did it all go? Ummm? Sadly, I think social security and medicare are going to get a good hit unless there is a huge bump in taxes. Nope, not enough corporations or rich people to pay it all. Even taking all the military spending, parks, Obamer jet you name it, doesn't even come close to the costs of those two programs. Disability ran out sort of and it had to be refunded. Going to be a bumpy ride coming. Still wonder where 1.5 trillion went?
No problemGreat observation Dave I hope you don't mind if I re post this on another Forum.Government fiscal year ended September 30th with us 19.5 trillion in debt. Many know that part. What I found interesting is that is a increase of 1.5 trillion over last year. Wonder where it went? Total silence. That increase puts us at roughly 7 or 8 percent of GDP. The 2008 bank bailout was somewhere around 700 billion and was just under 5 percent of GDP. That aside, what I find amazing is 2016 was third highest level of spending EVER.
There is no bank bailouts, wars are suppose to be over (wink) where did it all go? Ummm? Sadly, I think social security and medicare are going to get a good hit unless there is a huge bump in taxes. Nope, not enough corporations or rich people to pay it all. Even taking all the military spending, parks, Obamer jet you name it, doesn't even come close to the costs of those two programs. Disability ran out sort of and it had to be refunded. Going to be a bumpy ride coming. Still wonder where 1.5 trillion went?
