Examples of capital-gains tax – let’s use this as a marker in case the Trump plan goes through:
Dear Liz: We are in the lowest tax bracket. If we sell a capital gains asset worth several hundred thousand dollars, does that put us in a higher bracket and we pay 20% or do we remain in the lower bracket and pay 15%?
Answer: In the two lowest federal income tax brackets, the capital gains rate is actually zero. For a married couple filing jointly, taxable income below $18,550 in 2016 would put you in the 10% tax bracket, while income between $18,550 and $75,300 would put you in the 15% bracket. Both 10% and 15% income tax brackets pay no federal tax on long-term capital gains.
But capital gains count as income in determining your tax bracket. So a big capital gain can push you into a higher bracket, which means you would pay a higher capital gains rate.
Let’s say your normal taxable income is $75,000. You sell an asset with a $25,000 capital gain. Now you’re in the 25% tax bracket with taxable income between $75,300 and $151,900, which means your long-term capital gains rate will be 15%.
High-income taxpayers – those with taxable income above $466,950 – are in the 39.6 percent federal tax bracket, and pay a 20 percent long-term capital gains rate at the federal level, plus a 3.8% tax (in support of the Affordable Care Act for taxpayers with adjusted gross incomes over $250,000 for married couples and $200,000 for singles). The surtax is applied to the lesser of the taxpayer’s net investment income or the amounts over those limits.
It means a taxpayer at the highest federal tax bracket could pay as much as 37.1 percent — 23.8 percent federal plus 13.3 percent state — on a long-term capital gain in California.
There may be ways to alleviate or spread out the tax hit. You could sell losing investments to offset some or all of the gain. Another option for some assets is to sell a portion at a time over several years, or use an installment sale. A tax pro can walk you through your options.
Wood in general is a beautiful, evocative natural material, and when it’s saved from a landfill and reused, it has even more character, history, and sustainability.
Reclaimed wood can be recovered from a wide variety of sources, but it most frequently comes from timber framing and decking used in old barns, factories, and warehouses. Some tell-tale signs of reclaimed wood include nail holes, manufacturer stamps, and markings.
Other unique qualities, like variation and depth of color or unusual patterning, can be a result of it being stored in vessels like wine barrels, beer casks, and other containers. Additionally, reclaimed timber is usually cut from strong, mature trees (unlike the younger, weaker trees used today for lumber), and is less prone to splitting. Because of these aspects, many designers choose to use reclaimed wood rather than virgin timber in their projects.
Here, we take a look at eight different projects that incorporate reclaimed wood in distinct ways:
It’s the time of year when we see some price adjustments by agents who have tried everything else, to no avail. But how much do you need to reduce the price to cause a sale?
Ideally, it needs to be enough to cause buyers who have already seen the house to come back – that’s how you know for sure that the new price is working.
But have you noticed that every price reduction is advertised as ‘Huge’?
Price-Reduction Guide:
‘Huge’ = 10% or more reduction in price.
The minimum effective reduction = 5% reduction.
Typical reduction = 1% to 2%.
Fake reduction = moving the value-range goalposts.
Buyers are already thinking of knocking off more than 1% or 2%, and to be effective, a price reduction needs to create some real urgency in the buyers – to make them think that if they don’t react immediately, somebody else might beat them to it. The 1% or 2% reductions aren’t enough to create any extra urgency, and as a result, are just throwing money away.
In addition, a new, lower list price will be cross-referenced by the buyers with the days-on-market. They expect at least one decent price reduction per month to keep them interested.
Want it to work? Lower your price by an amount that makes you cringe!
“While it’s encouraging that statewide home sales improved both monthly and annually, the year-over-year sales rate is losing steam, reflecting the persistent shortage of homes for sale and an easing of concern over a surge in mortgage rates,” said C.A.R. President Geoff McIntosh. “Additionally, for the areas that have been affected by the recent wildfires, we anticipate sales will pull back in those regions as damages are assessed and replacement efforts are coordinated.”
We’ve discussed how fewer homes for sale could be the sole cause for a drop in sales. Can we learn something by comparing the change in sales count to the change in inventory!
Rich shows San Diego County inventory down 2% MoM, and down 16% YoY:
San Diego County sales down 16.7% MoM, and down 4.3% YoY:
Here are the ratios in an easier-to-read comparison:
Type
Month-over-Month
Year-over-Year
SD Inventory
-2%
-16%
SD Sales
-17%
-4%
A year ago we were in a presidential election cycle – I’m not sure data from that era means much today. But a 17% drop in September sales from August when inventory only fell 2% is probably worth noting.
The 2% inventory drop didn’t change the selection much, but with 17% fewer sales, it means that the homes for sale must not be as appealing as before.
San Diego’s region-wide bid for Amazon‘s second headquarters was sent off Wednesday, one day before the online retailing giant’s deadline, according to the San Diego Regional Economic Development Corp.
The competition for the headquarters is pitting municipalities large and small against each other for a piece of Amazon’s very substantial pie. The company plans to spend more than $5 billion on what it calls HQ2, which would provide 50,000 new high-paying jobs and support thousands of construction and other related positions.
The EDC submission, set to arrive Thursday, proposes four sites — Chula Vista, downtown, Mission Valley and Otay Mesa.
Amazon could also partner with the city in its ongoing plans to bring a four-year university to the city.
“We have the best proposal for Amazon,” said Chula Vista Mayor Mary Casillas Salas. “We can provide eight million square feet of space in a continuous greenfield development and Amazon can embrace our unmatched quality of life in master planned communities with housing for all income levels, biking and hiking trails, recreational activities and an incredible climate.”
Amazon already has a large presence in San Diego after leasing more than 100,000 square feet of office space in University City. But the region faces stiff competition in the bidding war with numerous other cities offering land and tax incentives.
We lost another all-timer today, Gord Downie, 53, lead singer of The Tragically Hip. He started the band with high-school friends from Kingston, Canada, made great music for 34 years, and died yesterday of brain cancer in his hometown, which is the way it should be.
He went on tour last year – it had to be incredible for all involved to play this last show after 34 years, knowing that your lead singer was on his way out:
This start-up has the right ingredients, but their auctions do have a reserve amount and no buyer-agent commissions, which cuts out other agents. They say “No Double Ending’, but when the buyers are unrepresented it puts the listing agent in an agency position – if the buyers ask a question, and the agent replies, an agency relationship has been created.
Every start-up wants to beat out realtors, and think that the consumers will trust their faceless, unproven venture instead:
TORONTO, Oct. 18, 2017 — There is a new way to buy and sell real estate in Ontario. With today’s official launch of On The Block Realty, the uncertain and often frustrating process of trying to navigate the home market has taken an innovative step forward. This brand new real estate brokerage based in Toronto, has opened its doors to the public, offering new unique approaches to the industry.
Chief among these advancements is the development of a cutting edge online auction platform that is aimed at bringing much needed transparency to buyers and sellers. The home buying process has been protected by silent bids in many situations, leaving buyers confused about what price to pay, and sellers concerned that some buyers may not have offered their best price. Inspired by the successful practice of real estate auctions in countries like Australia and the UK, this new system offers an exciting alternative for sellers who want to be certain they have maximized every bid from prospective buyers. It also ensures that every buyer has an equal opportunity to buy without any secrecy guarding the process.
“This isn’t about changing or fixing anything, it’s about evolving,” says CEO Daniel Steinfeld. He adds, “People deserve a choice when they make the biggest financial decision of their life. They also deserve clarity about every aspect of the transaction. We provide that.”
While the auction platform is the most distinguishing feature of this premium brokerage, there are several other features that the company believes will set it apart from the traditional brokerages in Ontario.
There is a ‘No Double Ending’ policy that ensures both sides of a transaction are never represented by the same Realtor. President and Broker of Record Katie Steinfeld says, “It is impossible to fathom that people with perfectly opposite financial objectives could have their best interest adequately represented by the same person.” She continues, “This is especially so when that individual stands to make more money by being on both sides of the transaction.” While the Ontario government and real estate industry have diverted from the point of protecting the consumer’s best interest, On The Block has done what makes the most sense – disallow the concept from their business model.
Prospective buyers without representation can still fully participate in a purchase or bidding process, but will not have a client relationship with On The Block – and if they choose to purchase without representation, there is no additional commission payable by either the buyer or the seller. “Buyers are entitled to an understanding of how commissions work. Just because it is widely positioned that the sellers ‘pay’ commissions, that cost is directly coming out of the sale proceeds, and ultimately a cost to the buyer,” Mrs. Steinfeld explains. On The Block’s Transparent Commission Policy explains that buyers should only pay for the service they receive, and so purchasing without representation shouldn’t cost them the extra 2.5% that often get baked into the purchase price.
Beyond the increase in transparency, the company provides a first of its kind ‘all inclusive’ approach to selling a home. One of the most unique included features is that homeowners are given a week in a partner hotel during the selling process to take away the stresses of cleaning and constant vacating that come with showings of the property. This is in addition to perks including professional photography, home inspections, and one of a kind custom signage for every property. “We are trying to sell a home, not ourselves,” Mr. Steinfeld says. “The high end signage is the largest legally allowed, and it is completely focused on the property it is trying to sell, not the brokerage or the name of the sales representative.”
Interested sellers are invited to use the platform at an introductory rate that includes all the bells and whistles, but costs less than half of what traditional Realtors charge.
It has been well documented that the real estate market could use a new approach. Perhaps this is the big change everyone has been waiting for.
About On The Block
On The Block is a premium real estate brokerage and auction house offering prospective home sellers the option to sell by auction or traditionally. As platforms like Uber and Airbnb have disrupted their spaces, On The Block is positioned to challenge a real estate process that for too long hasn’t seen significant change. With home prices continuing to fluctuate widely, and affordability diminishing, it’s more important than ever to give people some choice and power in the biggest selling and purchasing decisions of their lives.
Hat tip to daytrip for sending this in – the price is now down to $699,000:
Homes near this Chapel Drive neighborhood fetch about $1.5 million, and Crowell priced this property as such. She figures it will cost $300,000 to stabilize the hill that got washed away during February’s rains, $250,000 to fully upgrade the 2,385-square-foot home and leave $100,000 left over for profit. “That’s the going price in this neighborhood,” she said. “The house is still near the best schools.”
The couple selling the house is in their 90s and were forced to move out of the home they’ve lived in since 1968 this winter. While the property underneath the home is shaky, Crowell said the four-bedroom, three-bathroom home is in really good shape.”
As of Monday, Crowell said she had at least 10 inquiries on the home. She said she felt supremely confident she’d sell it — and soon. But she fully recognized that anywhere else in the country, a Realtor who asked for nearly $1 million for a home sitting precariously on a landslide and “you’d be nuts.”
Reader hema-mendowondered about the mega-gap between the NSDCC median list price, and median sales price for the last 30 days:
I don’t get it. Why is the spread so wide?
It is a bit alarming to see more than a million-dollar gap between the two:
NSDCC median list price: $2,300,000
NSDCC median sales price, last 30 days: $1,245,300
Half of the current listings – and 83% of the sales – are under $2,300,000! None of the supply-and-demand economics seem to apply to the high-end sellers and their agents – they are happy to sit and wait……for something.
Most probably think it just takes time before the right young couple with 2.2 kids comes along some day. But the numbers are daunting.
A median list price means we have 402 houses listed over $2,300,000, and there were 41 sales of the same over the last 30 days – let’s call it a 10-month supply. But it’s been this way for years, and no one seems to mind.
This is what happens when virtually everyone on the market is an elective seller, and is loaded with equity. Once a house hits the open market, the ego takes over because now the sellers’ family and friends know the price. Unless the reason for selling is one of the Big Three (death, divorce, or job transfer), the seller’s ego insists on defending that price, even though nobody has looked at their home for weeks or months.
Waiting is much easier on the ego than having to dump on price.
