Posted on 12/19/2012 2:43:21 AM PST by plsjr
So the assumption by the IRS then is that everyone *should* be renting. That they are living in their own house provides them with “income” in the form of money they *didn’t* have to pay in rent. By the same token, if they can conclude that you would shell out more to use public transportation than to own your own car, you’d owe tax on the difference there as well, and any other behavior that might cost you less than what the IRS thinks you should be doing.
So this is on the books, the FED is just not enforcing it - but it could - later down the road?
Nice...
So, If I watch the movie Star Wars and like it - the FED has already made the assumption that I might possibly built a Aluminum Falcon and start space exploration - and therefore, I should be taxed for possible transportation of two droids, an old man, and young boy who may or may not have something to do with bringing down the Empire?
Did I get that right?
The ‘Imputed Tax’ scenario. It was projected this was coming under 0bama. Hold on to your shorts; Bubba is coming.
The code includes an "exemption" from tax on the "additional imputed income".
They could drop the exclusion and we'd be paying taxes on money we don't actually recieve as income.
At least that's the way I read it assuming that is actually what the tax code says.
Go another step and apply that same thinking to work you do for yourself. Mow your own grass, pay yourself a prevailing wage for the time spent and declare the income.
Then again, the passage on the tax is not sourced in this article.
So the assumption by the IRS then is that everyone *should* be renting.
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You haven’t been paying attention ... The gov’t owns about 95% of the mortgages through FNM and FRE , they are the “man behind the curtain” that is pushing all the foreclosures through despite knowing that their ownership has been lost in the securitization process... They are also selling HUGE blocks of stolen homes to investor groups to be used as rentals ..
So the assumption by the IRS then is that everyone *should* be renting.
We never own our own land, we rent it from the “king” that is government.
Next on the list should be the market value of “marital relations”, since at least a few married people get that benefit without paying the retail price. Will they require activity reporting or just assess imputed income based on average rates?
Well I guess we’re entitled to “impute” depreciation and to write off repair costs, then. Sweet!
Thanks, Washington!
so... if I don't rent from Fred, I make $1000 per month, but if I don't rent from Joe, I make $1500 per month?
Tell you what - I'll not rent from Vinnie in New Yawk - then I'll make $4000 a month!
Woohoo, we’ll all be rich. /s
Don’t say that too loud or they’ll be asking you to pay taxes on the $4K/Mth.
Later
Notice that you do not currently get to deduct depreciation, or operating expenses (power, gas, sewer, water, paint, mowing, trimming, mortgage, trash removal) from your income.
Let's say Congress went totally nuts and decided to go after imputed income from owning a home ~ they'd set the initial value of the property at whatever it is on the market today ~ and the net rental income would be determined the regular way ~ gross rental income less deductable expenses and depreciation.
For about 99% of the individually owned SFDs, condos and trailers in America you'd be showing a loss! Actually, every time a large scale analyis of the situation has been attempted by anyone, they come up with a negative number.
Many people imagine their home value, as it increases over the years due to inflation, surrounding higher quality growth, and all the good stuff, is a serious personal profit center but it's not.
Notice that you do not currently get to deduct depreciation, or operating expenses (power, gas, sewer, water, paint, mowing, trimming, mortgage, trash removal) from your income.
Let's say Congress went totally nuts and decided to go after imputed income from owning a home ~ they'd set the initial value of the property at whatever it is on the market today ~ and the net rental income would be determined the regular way ~ gross rental income less deductable expenses and depreciation.
For about 99% of the individually owned SFDs, condos and trailers in America you'd be showing a loss! Actually, every time a large scale analyis of the situation has been attempted by anyone, they come up with a negative number.
Many people imagine their home value, as it increases over the years due to inflation, surrounding higher quality growth, and all the good stuff, is a serious personal profit center but it's not.
If the Federal government ever began taxing this kind of "imputed income," smart homeowners would simply do what some of my associated have done: transfer the ownership of the home to a limited-liability corporation owned by the homeowner*, pay rent to the corporation, and have the corporation legitimately deduct every penny of repairs, insurance, etc. on the home when computing its "income."
The IRS would end up collecting less revenue in that situation than under the current scenario.
* One particularly creative guy I know has his entire family listed as shareholders in the limited-liability company that owns his home. They make a point of holding their annual shareholders' meeting in Orlando every spring ... and deduct most of the cost of their annual Disney vacation as a "business expense."
Real estate in the city is pretty expensive. In some municipalities, even the parking space you own has a high dollar value.
I wonder what the value of a 6x6 square of sidewalk or alley is in the city. Lots of imputed income on the homeless.
they’d set the initial value of the property at whatever it is on the market today ~Wrong. They’d set the value at what a similar abode WOULD rent for something, THEY deem is realistic. For instance, My 25,000 sq. ft. home would be deemed to be rentable for $4000 per month. I pay $785 a month for my payment which includes insurance, property taxes and school taxes as well as fire hydrant taxes and street light taxes. I may not deduct the taxes towards the value. They say, (the gov.’t) Your rent is $4000 a month, so you need to report 48,000 a year minus your principal ($195 a month) and pay taxes on that.
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