Simple. The property he owns for rentals can easily hit 1 mil.
Lifestyles Unlimited. Texas based. Look them up. Not gat rich quick, but good cash flow. Looking into it myself.
Plank #1 of the Communist Manifesto: Abolition of private property rights.
Plank #2: A highly graduated income tax.
http://www.laissez-fairerepublic.com/TenPlanks.html
Sell a 1/2 interest for now. The rest in another tax year.
Five brick apartment buildings
The details are important and there is much misinformation here.
Anyway, simple solution, don’t sell all the buildings the same year..................................
A decent lawyer could structure things with some semi-complex documtation that would keep the income lower over what ever period of time was needed. Just like a rich person would.
...Biden plan would increase the top capital-gains tax rate to 43.4% from 23.8% for those earning over $1 million.
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One of the reasons FedGov *wants* inflation. A home purchased decades ago for $100K will be “worth” $1M with inflated worthless dollars. Then the government gets to confiscate half from the “wealthy”.
The only plus to this absurdity is that if they’re greedy and stupid enough to implement such a tax, it will collapse the R/E market, and the rest of the economy. With a bit of luck and a lot of prayer, that will wash out Biden and his puppet masters in 2024.
He should get out of it now. Given the extreme hatred commies have for landlords, high capital gains rates might be the least of his worries.
Since we are on the subject of rental properties, today is the day the deferred rent comes due. I think this is going to be quite a show.
democrats fully intend to confiscate accumulated wealth. There is no doubt about that. They will not allow anyone to call it confiscation (social media will help enforce).
They will take anything you have made or built. They will call it a tax. It will not be a tax. It will be confiscation. (Doesn’t matter if they force you to sell it to pay what they want in money. It’s still confiscation.)
The democrat party is the leading edge of the final thrust to turn this country communist (you will be forbidden to call it communist. Social media will help you comply.)
anyone that sells their home in Southern California by the ocean in in jeopardy of paying this capital gains tax rate. So much for putting any remains proceeds towards a healthy/decent retirement.
How could he possibly have known the democrats he votes for would want to raise his taxes? /s
Seems like Biden is doing this to benefit his wealthy corporate backers. Like I don’t know, Blackrock, which will find bargains on rental properties all over.
Sounds like they need to listen to Steve Martin’s advice.
Think Weimar Germany.
Am I wrong in thinking that equity cannot be achieved without a rather large degree of government sanctioned theft?
Thanks for posting, I’m a WSJ subscriber but had not seen the article. It highlights the reasons I have always avoided rental properties. I’m an advanced DIY person and often thought of getting rental units. Since I could do most maintenance tasks, I could keep costs low.
Then reality set in- you’re dealing with people and where they live. That means their problems can become your problems. It’s interesting that the article makes no mention of Covid effects on his renters abilities to pay.
Next, illiquidity of the asset. This guy has 40 tenants in one property. If he had 40 tenants across ten properties, he could sell one property per year over 10 years and lessen taxes. Even then, the liquidity of real estate is exponentially lower than money in a brokerage account.
I’ve only seen real money made in real estate when you keep tapping the growing equity and buying additional properties. Of course that leverage works both ways.
At the end of the day, I just can’t deal with people. Being a landlord is not for everyone.
If you sell the property, you would have to pay off the existing mortgage no matter what the prevailing income tax rate is. It appears the author has been overwhelmed by an abundance of numbers.