Probably off topic, but I find it so odd when working middle class, especially working poor defend, deflect, and explain away with mental gymnastics why the rich do what they do and how we should be thankful that in their infinite wisdom and kindness, they employ us plebs. It's like they cheer for the rich to remain uber rich, and regular folk should just be happy to live paycheck to paycheck driving a crappy car, living in a crappy apartment, and driving on crappy pothole filled roads.
How about we close tax loopholes, legal or otherwise, and have the uber rich pay their fair share? If we did that, we could probably lower taxes for people making less than $150k a year, and eliminate taxes for people making less than $50k a year. Perhaps have an overall happier society as a side benefit?
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A lot of commercial real estate (like Trump Tower.. cough, cough...) is on leased land (called a ground lease), so pretty much the entire value can be depreciated. Plus the lease costs can be deducted from income.
Ok, so in that case the entire value of the investment is in the building (assuming you don’t hold the ground lease). I don’t see the issue in depreciating the entire value. Buildings are depreciable for a reason. They eventually need to be replaced. You can argue the rate of depreciation is too high, perhaps.
Ok, so in that case the entire value of the investment is in the building (assuming you don’t hold the ground lease). I don’t see the issue in depreciating the entire value. Buildings are depreciable for a reason. They eventually need to be replaced. You can argue the rate of depreciation is too high, perhaps.
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Except the buildings are actually appreciating in value in the entire time regardless of whether the building needs to be replaced, and buildings are hardly ever 'replaced' and instead are simply maintained with periodic renovations.
Multi-tenant buildings as an example are often notorious for maintaining the absolute bare minimum, while appreciating the value of the building for the owner. On top of that the owners will also lobby the government to approve a 'rent' increase, and then use that to justify property upgrades.
It also makes little sense to me how the depreciation rate works considering the owner can also expense almost every single thing he wants while 'operating' that building and write it off.
The whole thing is a corrupt sham and needs to be completely overhauled.
Except the buildings are actually appreciating in value in the entire time regardless of whether the building needs to be replaced, and buildings are hardly ever 'replaced' and instead are simply maintained with periodic renovations.
Multi-tenant buildings as an example are often notorious for maintaining the absolute bare minimum, while appreciating the value of the building for the owner. On top of that the owners will also lobby the government to approve a 'rent' increase, and then use that to justify property upgrades.
It also makes little sense to me how the depreciation rate works considering the owner can also expense almost every single thing he wants while 'operating' that building and write it off.
The whole thing is a corrupt sham and needs to be completely overhauled.
You are assuming that the building is appreciating, which is not necessarily the case. I’m not suggesting it’s perfect, but generally there is a reason that you can depreciate buildings.
In Canada, buildings can be depreciated at 4%, 5% or 10%, depending on the structure.
I just think the is far bigger issues with the tax system than the depreciation buildings.
You are assuming that the building is appreciating, which is not necessarily the case. I’m not suggesting it’s perfect, but generally there is a reason that you can depreciate buildings.
In Canada, buildings can be depreciated at 4%, 5% or 10%, depending on the structure.
I just think the is far bigger issues with the tax system than the depreciation buildings.
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For the most part real estate holdings, especially commercial will appreciate in value over 10 year periods.
Also, if someone is going after this kind of investment specifically for the deprecation benefits, they are more than likely not going to be buying real estate holdings in areas where there is a chance the building won't actually appreciate over the term of their ownership.
I agree there are much bigger issues with the tax code, but this one annoys me the most because it has no tangible benefit, and allows for massive manipulation, especially if someone is already rich.
Probably off topic, but I find it so odd when working middle class, especially working poor defend, deflect, and explain away with mental gymnastics why the rich do what they do and how we should be thankful that in their infinite wisdom and kindness, they employ us plebs. It's like they cheer for the rich to remain uber rich, and regular folk should just be happy to live paycheck to paycheck driving a crappy car, living in a crappy apartment, and driving on crappy pothole filled roads.
How about we close tax loopholes, legal or otherwise, and have the uber rich pay their fair share? If we did that, we could probably lower taxes for people making less than $150k a year, and eliminate taxes for people making less than $50k a year. Perhaps have an overall happier society as a side benefit?
“America is the wealthiest nation on Earth, but its people are mainly poor, and poor Americans are urged to hate themselves. It is in fact a crime for an American to be poor, even though America is a nation of poor. Every other nation has folk traditions of men who were poor but extremely wise and virtuous, and therefore more estimable than anyone with power and gold. No such tales are told by American poor. They mock themselves and glorify their betters.
[...]
Americans, like human beings everywhere, believe many things that are obviously untrue... Their most destructive untruth is that it is very easy for any American to make money. They will not acknowledge how in fact hard money is to come by, and, therefore, those who have no money blame and blame and blame themselves. This inward blame has been a treasure for the rich and powerful, who have had to do less for their poor, publicly and privately, than any other ruling class since, say, Napoleonic times."
- Kurt Vonnegut, Slaughterhouse-Five
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Lol to be honest, I would not be completely surprised if this debate was abruptly canceled midway through because of some crazy #### Trump says or does.
I could see him just walking out and not giving a ####.
Or maybe someone rushes the stage and punches the #### out of his orange face. Would be a national hero!
I read the NYT articles, but I'm not particularly well versed in taxes. Am I understanding the below correctly? That in exchange for not making changes to a heritage property, he received a $21 million dollar tax credit? How does that work exactly?
Quote:
In allowing business expenses to be deducted, the I.R.S. requires that they be “ordinary and necessary,” a loosely defined standard often interpreted generously by business owners.
Perhaps Mr. Trump’s most generous interpretation of the business expense write-off is his treatment of the Seven Springs estate in Westchester County, N.Y.
Seven Springs is a throwback to another era. The main house, built in 1919 by Eugene I. Meyer Jr., the onetime head of the Federal Reserve who bought The Washington Post in 1933, sits on more than 200 acres of lush, almost untouched land just an hour’s drive north of New York City.
“The mansion is 50,000 square feet, has three pools, carriage houses, and is surrounded by nature preserves,” according to The Trump Organization website.
Mr. Trump had big plans when he bought the property in 1996 — a golf course, a clubhouse and 15 private homes. But residents of surrounding towns thwarted his ambitions, arguing that development would draw too much traffic and risk polluting the drinking water.
Mr. Trump instead found a way to reap tax benefits from the estate. He took advantage of what is known as a conservation easement. In 2015, he signed a deal with a land conservancy, agreeing not to develop most of the property. In exchange, he claimed a $21.1 million charitable tax deduction.
The tax records reveal another way Seven Springs has generated substantial tax savings. In 2014, Mr. Trump classified the estate as an investment property, as distinct from a personal residence. Since then, he has written off $2.2 million in property taxes as a business expense — even as his 2017 tax law allowed individuals to write off only $10,000 in property taxes a year.
Courts have held that to treat residences as businesses for tax purposes, owners must show that they have “an actual and honest objective of making a profit,” typically by making substantial efforts to rent the property and eventually generating income.
Whether or not Seven Springs fits those criteria, the Trumps have described the property somewhat differently.
In 2014, Eric Trump told Forbes that “this is really our compound.” Growing up, he and his brother Donald Jr. spent many summers there, riding all-terrain vehicles and fishing on a nearby lake. At one point, the brothers took up residence in a carriage house on the property. “It was home base for us for a long, long time,” Eric told Forbes.
And the Trump Organization website still describes Seven Springs as a “retreat for the Trump family.”
Mr. Garten, the Trump Organization lawyer, did not respond to a question about the Seven Springs write-off.
The Seven Springs conservation-easement deduction is one of four that Mr. Trump has claimed over the years. While his use of these deductions is widely known, his tax records show that they represent the lion’s share of his charitable giving — about $119.3 million of roughly $130 million in personal and corporate charitable contributions reported to the I.R.S.
Two of those deductions — at Seven Springs and at the Trump National Golf Club in Los Angeles — are the focus of an investigation by the New York attorney general, who is examining whether the appraisals on the land, and therefore the tax deductions, were inflated.
Probably off topic, but I find it so odd when working middle class, especially working poor defend, deflect, and explain away with mental gymnastics why the rich do what they do and how we should be thankful that in their infinite wisdom and kindness, they employ us plebs. It's like they cheer for the rich to remain uber rich, and regular folk should just be happy to live paycheck to paycheck driving a crappy car, living in a crappy apartment, and driving on crappy pothole filled roads.
How about we close tax loopholes, legal or otherwise, and have the uber rich pay their fair share? If we did that, we could probably lower taxes for people making less than $150k a year, and eliminate taxes for people making less than $50k a year. Perhaps have an overall happier society as a side benefit?
They believe in the trickle down and are brainwashed by socialism.
And nobody wants to close those loopholes because the dream is the be rich and one day exploit those loopholes yourself.
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They believe in the trickle down and are brainwashed by socialism.
And nobody wants to close those loopholes because the dream is the be rich and one day exploit those loopholes yourself.
You mean capitalism? But yes. This is the clearest reason why people vote against their own interest to protect the rich. It’s a distortion of the “American dream” as in “I need to protect the wealthy because they give me so much, and one day, I will wealthy like them.” But it’s a sad reality, as the wealthy give the middle class very very little, the middle class gives everything to them, and upward financial mobility to that extent is more or less a myth.
You get rich by inheriting wealth, in most cases. Middle class fools will never understand that, and the few that do, live like their low income for years in hopes that one day, when their old, their savings and investments may become worth enough not for them to enjoy it (no, they’ll likely die living a middle class life) but so their children might.
I read the NYT articles, but I'm not particularly well versed in taxes. Am I understanding the below correctly? That in exchange for not making changes to a heritage property, he received a $21 million dollar tax credit? How does that work exactly?
In exchange for making a deal to conserve the land he received a $21 million dollar tax credit. And to be clear you can't just make a couple 'changes' to a property and get the tax credit.
The conservation easement clause requires the land owner to actually invest in conserving the land. I.E. one way it is used is if a multi-generational ranch is running into land tax issues that can easily bankrupt a ranch that has thousands of acres but cannot generate enough income to pay the land taxes, they can conserve a part of their ranch, and maintain a wildlife refuge such as an elk habitat. There are certain stipulations that need to be met, but it is often easily accomplished and the land owners are more than well versed in how to conserve the land.
Something like this is very common and when a lot of the multi-generational ranches are eventually sold it is often in combination with a conservation or wildlife protection area. Those conservation areas are then combined with federally protected land and create a big holding meant to protect and preserve that area and the wildlife in it.
Almost 75% of the ranches for sale in the US right now have a conservation easement as part of the agreement and it is a great way to help maintain and protect the land.
Of course that means rich people like Trump, Ted Turner, John Malone, Jeff Bezos, Irving Family and others will all be taking advantage of this as well and are buying up land like crazy.
And from what I understand, though I'm not 100% sure, I believe real estate write offs from one holding can be used to to help depreciate the assets in another holding and vice versa.
So in theory the conservation easement is a great idea, and has created millions of acres that are well kept, protected wildlife refuges, but it has also come with its share of consequences.
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You mean capitalism? But yes. This is the clearest reason why people vote against their own interest to protect the rich. It’s a distortion of the “American dream” as in “I need to protect the wealthy because they give me so much, and one day, I will wealthy like them.” But it’s a sad reality, as the wealthy give the middle class very very little, the middle class gives everything to them, and upward financial mobility to that extent is more or less a myth.
You get rich by inheriting wealth, in most cases. Middle class fools will never understand that, and the few that do, live like their low income for years in hopes that one day, when their old, their savings and investments may become worth enough not for them to enjoy it (no, they’ll likely die living a middle class life) but so their children might.
