Taxation smack upside the head

[SteveO]

Clearly I don't follow along with happenings as well as I should. I called my accountant to help with understanding the taxes that should be expected if I wanted to cash out of the commercial building.

As we went through the list.... one stood out.... about 80K to the affordable care act....

What?

I'm not looking for advice or understanding and don't want to get into a political debate. Just surprised that I did not know.

 

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[GlobalWealth]

Clearly I don't follow along with happenings as well as I should. I called my accountant to help with understanding the taxes that I should expect if I wanted to cash out of the commercial building.

As we went through the list.... one stood out.... about 80K to the affordable care act....

What?

I'm not looking for advice or understanding and don't want to get into a political debate. Just surprised that I did not know.

#socialcontract #muhroads

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[SteveO]

#socialcontract #muhroads

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Bobby can smell these types of posts.

 

[jon.a]

Can you point to a reference that I can read about this shit?

 

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[SteveO]

Can you point to a reference that I can read about this shit?

Did not look into it. The accountant went through a list and sort of laughed when he went through this one. No probing questions from my end.

 

[jon.a]

was it 3.8%

 

[MJ DeMarco]

I called my accountant to help with understanding the taxes that should be expected if I wanted to cash out of the commercial building.

Never heard of this unless it's the 3.8% on investment income/gains?

@CareCPA

So nice to see you contributing to other people's health care so they can sit around all day watching TV while eating GMO food.

 

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[SteveO]

was it 3.8%

I would assume so. He stated that it was around 4%.

 

[SteveO]

So nice to see you contributing to other people's health care so they can sit around all day watching TV while eating GMO food.

As an employer, we have been paying 80% of our employee's healthcare insurance costs if they are on our plan. We can no longer do that as rates continue to skyrocket. I thought that we were already doing our part here.

 

[GlobalWealth]

Bobby can smell these types of posts.

I have a #taxationistheft notification alarm

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[MJ DeMarco]

about 80K to the affordable care act....

Might be worth it to hold on until after the elections. The two AZ cockroaches representing this state are holding up the OCare repeal (or replace) and both of them have tenuous holds on their office.

Oshitty-care is on its last legs so a new law, a repeal, or a restructure might instantly mean an 80K savings for you. I mean let's be serious, I don't care how "rich" one can be, or how comfy they feel, that's a lot of bread.

 

[SteveO]

Might be worth it to hold on until after the elections. The two AZ cockroaches representing this state are holding up the OCare repeal (or replace) and both of them have tenuous holds on their office.

Oshitty-care is on its last legs so a new law, a repeal, or a restructure might instantly mean an 80K savings for you.

After going through the list, I am not going to sell. The cost is too high. My thoughts were to cash out on the high side and wait for opportunities. Not enough money left after fees and taxes to make sense of it.

 

[MJ DeMarco]

Oshitty-care

FYI for someone not living in Arizona... an O'care plan on the government marketplace is about $3,000/mo for a family of 5. If your household income is $100K/year (50k each spouse), more than half of your taxable income would go to health insurance. In other words, one parent is just working for health insurance, not only that, the health insurance is utter crap with $10K deductibles thrown in.

My thoughts were to cash out on the high side and wait for opportunities.

Tax reform could be great news for you. If cap-gains drop to 15, and the 3.8 is removed, the "hold and see" approach could reap some unusual dividends for you, not withstanding any appreciation in the waiting game. If any reform happens (still doubt anything will, when it comes to gubbermint) it should buoy the market further at its high levels.

Same thing goes for anyone thinking about selling their business. A sale at old rates could be $800K/more in taxes if something happens. (Assuming $10M sale.)

 

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[TStrike]

That's wild.

I'm holding all my assets until I hear more news about the tax deal. Even my overvalued assets.

No sense in paying an ungodly rate now when it's only an unrighteous rate in 2 months...

On a related note, I believe I saw a Buffett quote somewhere that even he was holding until tax news came out.

Still sucks for you to hold because it's too expensive to sell. Sorry to hear that.

 

[SteveO]

Tax reform could be great news for you. If cap-gains drop to 15, and the 3.8 is removed, the "hold and see" approach could reap some unusual dividends for you, not withstanding any appreciation in the waiting game. If any reform happens (still doubt anything will, when it comes to gubbermint) it should buoy the market further at its high levels.

Agreed. There are a number of variables in this situation. I was looking to pay off the golf course and house loan, and pocket enough cash for other investments.

The other option that is available is to refinance the shops and pay off the other loans. It is possible to get non-recourse in our current environment. Max the loan on one property to take the others completely off the bank liability with no recourse in the case of a down market.

 

[SteveO]

Still sucks for you to hold because it's too expensive to sell. Sorry to hear that.

Hahahaha. I appreciate the sentiment. It is not possible to feel like anything sucks when there are options. A victim I am not!

 

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[CareCPA]

Never heard of this unless it's the 3.8% on investment income/gains?

@CareCPA

So nice to see you contributing to other people's health care so they can sit around all day watching TV while eating GMO food.

Looks like I'm already late to the party, but yes, sounds like the 3.8% surcharge on investment income.
If you don't need the cash, I'd hold and wait too. With politics in their current state, I'd be surprised if something didn't come through to benefit those with long term gains.

 

[MJ DeMarco]

Thanks for sharing Steve as it's a good reminder that we all really need to be aware of tax policy when making business decisions.

It reminds me of the tax situation I had years ago...

1) Continue making six-figures monthly but be taxed 39% on it. (And from an asset I thought had declining value).
2) Or sell my business, make one big lump sum (accelerate the earnings to present value vs future value) and be taxed 20% on it.

When taking into account the "future value" of earnings, taxes, and the business outlook, it turned out to be the best decisions I ever made.

 

[JAJT]

YI for someone not living in Arizona... an O'care plan on the government marketplace is about $3,000/mo for a family of 5.

My good god. That's an insane amount. That's like an entire middle class person's monthly salary!

This made me want to look up what us Canadians pay (through taxes, obviously) and it looks like a family of 4 costs us something like $11k per year. Far higher than I thought it was up here (admittedly most Canadians, myself included, don't tend to notice it as a cost of living) but still significantly less than 3k per month.

How does any normal working family afford that?

 

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[SteveO]

Thanks for sharing Steve as it's a good reminder that we all really need to be aware of tax policy when making business decisions.

It reminds me of the tax situation I had years ago...

1) Continue making six-figures monthly but be taxed 39% on it. (And from an asset I thought had declining value).
2) Or sell my business, make one big lump sum (accelerate the earnings to present value vs future value) and be taxed 20% on it.

When taking into account the "future value" of earnings, taxes, and the business outlook, it turned out to be the best decisions I ever made.

Agreed. It also allowed you peace of mind and the ability to look at other options!

Thanks

 

[Under-Dog]

FYI for someone not living in Arizona... an O'care plan on the government marketplace is about $3,000/mo for a family of 5. If your household income is $100K/year (50k each spouse), more than half of your taxable income would go to health insurance. In other words, one parent is just working for health insurance, not only that, the health insurance is utter crap with $10K deductibles thrown in.

It continues to worsen every year... The benefits are horrible, you'd be surprised how many things are not covered under plans. Unfortunately, health care is so complex many people do not understand what they are signing up for. With deductibles up to $13k and $50 office visit copays.

How does any normal working family afford that?

Many don't. Some qualify for government assistance to help cover the charge but our President just did away with that in these last days. A lot go without insurance and pay the penalty come tax time.

My parents for example are on O'care, my mother is retired and my father clears roughly $45k. Yet their monthly premiums are almost $1k. With an $8k out of pocket maximum.

 

[sparechange]

Trump making America great again, proud to be a snow Mexican up north!

 

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[socaldude]

Another reason why dual-citizenship isn't a bad idea.

When the government does something stupid and destroys an entire industry, you can have more options.

 

[ZCP]

We got lucky, renewal rates only up 10%. A couple of local companies got 100% increases. Not sure how they will continue to offer health benefits.

We used to pay 90%. After 12 years we are now going to pass this 10% on.

Am guessing it changes a few votes.

 

[ZF Lee]

@CareCPA

So nice to see you contributing to other people's health care so they can sit around all day watching TV while eating GMO food.

Best politically incorrect post of the day

 

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[mwp]

I'm on Obamacare in Southern CA...$350ish per month for a "gold" plan. Frankly it is some pretty shitty insurance--few doctors take it and months-long waiting lists for appointments. Zero tax breaks here. For comparison, I pay about $80/month for fairly decent international insurance when I'm not in the USA ($5MM cap).

I spoke to my doctor last night and he told me that many of his associates are actually firing patients in mass (for petty things like missing an appointment or being late) due to the large influx of people into the system as a result of Obamacare. Apparently they've figured out that this is a good opportunity to get new patients that don't miss appointments...

 

[SteveO]

I spoke to my doctor last night and he told me that many of his associates are actually firing patients in mass (for petty things like missing an appointment or being late)

The doctors still need to pay for staff and other overhead while losing the income from the missed appointments. Being late jacks up the times for the people with subsequent appointments. I don't see these as petty.