Question for those who live in California

[dfkrug]

.... my CPA said I could not deduct the "capital loss" against my ordinary income. According to NOL rules, the deduction on a capital loss was limited to maximum $3,000 per year. Unlike the income side, where tax on gain is immediately due, on the loss side it took 17 years to slowly catch up to "realize" the entire deduction.

Yeah that $3K rule has been around a long time. You can, of course, offset any new capital gains immediately with your deferred losses. That is one of the reasons I started using tax software in the early 90s. It would transfer deferred losses (and depreciation) from prior years to the current year's tax return.

Back in '86 as I recall, new tax codes limited the losses you could take from rental properties. Some engineers I worked with back then would own and rent out a bunch or rental properties and offset all their salaries. When that changed (capped at $25K), many of them sold out and stopped being a landlord.

I rented out a couple of houses I owned here in CA back in the 80s-90s. I would never be a "housing provider" again. The rules here just make it too hard, further limiting the supply.

 

[plowhog]

I will admit "free taxpayer paid booze" to addicts is a surprise.

At first I thought this was a spoof article .... apparently not so.

San Francisco slammed for $5M a year program to give free alcohol to the homeless: ‘This isn’t working’

San Francisco runs a “managed alcohol program” for its homeless where nurses dispense controlled doses of vodka and beer to them.

nypost.com

 

[ultrarunner]

I will admit "free taxpayer paid booze" to addicts is a surprise.

At first I thought this was a spoof article .... apparently not so.

San Francisco slammed for $5M a year program to give free alcohol to the homeless: ‘This isn’t working’

San Francisco runs a “managed alcohol program” for its homeless where nurses dispense controlled doses of vodka and beer to them.

nypost.com

No… even weed deliveries as it is now “Legal” at least in some of the hotel rooms leased out during Covid.

 

[scootr]

Crazy, right?
Wondering why the homeless and illegals problems won't go away ... priceless.

 

[dfkrug]

Two rules of economics: tax something and you get less of it; subsidize it and you get more of it

 

[ultrarunner]

Cities are getting desperate...

San Francisco billing GM tens of millions in tax based on worldwide revenue Uber the theory it's doing business in SF pioneering AI taxis?

Can't make this stuff up...

https://www.reuters.com/legal/gm-sues-san-francisco-seeking-121-million-back-taxes-penalties-2023-12-27/

 

[two_bit_score]

My question-- who would buy or sell stocks, or invest in *anything* in that taxation climate? I don't get it ....

Nobody in their right mind.

 

[plowhog]

Cities are getting desperate...

The plummeting of commercial real estate values in large cities is ongoing. It will cause great economic difficulties in the near future as the loans become due.

Westfield Mall (in SF), just one property, had its value downgraded by about $1 billion dollars. I believe the property taxes no longer collected due to that writedown are about $10 million annually. Then extrapolate that to the many commercial properties "going down."

San Francisco Centre’s value falls $1B after Brookfield, Westfield default

Appraisal for $290M represents a 75% loss for the mostly empty shopping mall in Union Square.

therealdeal.com

 

[plowhog]

Nobody in their right mind.

LA Dodger baseball star Shohei Ohtani recently "pulled the pin" on a huge tax grenade with his new blockbuster $700 million contract. The great majority of money owed to him is deferred for 10 years.

He will be paid "only" $2 million per year for 10 years, and each year's remaining $68 million will be deferred until 2033.

Worthy of note is his presumed taxable income, while "currently" playing in CA, is a pittance compared to total compensation. With the long deferral, it is presumed he will not be playing, and will relocate out of high-tax CA before getting the lion's share of the money.

The structure of his contract has roiled the baseball markets as a complete dodge against the MLB "salary cap." I also have little doubt the CA tax collectors are gearing up their machinery to come after him to collect tax on the deferred money.

13% state income tax on $70 million / year is about $9 million / year. It will be interesting to see if the ending result is that he collects $2 million in salary but owes $9 million in taxes on it.

 

[ultrarunner]

The plummeting of commercial real estate values in large cities is ongoing. It will cause great economic difficulties in the near future as the loans become due.

Westfield Mall (in SF), just one property, had its value downgraded by about $1 billion dollars. I believe the property taxes no longer collected due to that writedown are about $10 million annually. Then extrapolate that to the many commercial properties "going down."

San Francisco Centre’s value falls $1B after Brookfield, Westfield default

Appraisal for $290M represents a 75% loss for the mostly empty shopping mall in Union Square.

therealdeal.com

Careful what you ask for is something I use to hear.

Falling Real Estate Values are devastating to a system dependant on stable or appreciating values.

My situation would be vastly improved if I was just outside the city limits...

Cities are desperate for revenue and some commercial property has resold at a 80 to 90% discount from purchase price less than 10 years ago.

Folks should be jumping in the market when SF office buildings can be picked up for 10 to 20 cents on the dollar... right?

 

[ultrarunner]

But then you have this

 

[scootr]

Thinking About going out for lunch but probably just eat at home, I'm running low on ammunition

 

[two_bit_score]

The plummeting of commercial real estate values in large cities is ongoing. It will cause great economic difficulties in the near future as the loans become due.

Westfield Mall (in SF), just one property, had its value downgraded by about $1 billion dollars. I believe the property taxes no longer collected due to that writedown are about $10 million annually. Then extrapolate that to the many commercial properties "going down."

San Francisco Centre’s value falls $1B after Brookfield, Westfield default

Appraisal for $290M represents a 75% loss for the mostly empty shopping mall in Union Square.

therealdeal.com

Fort Worth's tallest building sells for just $12.3M at auction in stunning price drop

The tallest building in Fort Worth, Texas, has been bought by a bank for $12.3 million, three years after it sold $137.5 million. Burnett Plaza has 40 stories and is 567 feet tall.

www.foxbusiness.com

 

[Hay Dude]

The worst part about that is that many banks are heavily leveraged in commercial real estate. Once that commercial real estate collapses, the banks collapse

 

[plowhog]

Falling Real Estate Values are devastating to a system dependant on stable or appreciating values.

Here we go again. Tahoe region will have "vacancy tax" on the ballot soon.

The proponents are arguing those who have vacation homes don't visit often enough, don't spend money on local businesses, and on and on. Yet if you have been to Tahoe in summertime, you know the vehicle traffic overwhelms the road system in many areas. Not to mention the infrastructure is sized for the current demand. The unquenchable quest for more tax collection continues.

The model for this new tax is Berkeley, CA-- which has a $3,000 first year penalty if a property is not 100% owner occupied. Then $6,000 the next year. Q- why not just have the housing authority declare an emergency, seize the private property, and put it under government control? Has owning a vacation cabin gone from the American dream to its nightmare equivalent of fending off local governments?

Here is my prediction: if all of the housing in Tahoe became occupied full time, there would be massive traffic problems all year around, and infrastructure problems with delivery of water, power, and processing of sewage. And all these newly created crises would require the same solution: further government taxation to handle and solve!

Tahoe is an absolutely beautiful part of the country, unlike no other. It already has crowing problems that detract from this. A long battle has been underway to reverse the impressive visibility in Lake Tahoe's water-- which has been declining for decades due to development.

I can't imaging ruining it with a significant boost in population.

Tahoe Vacancy Tax will be placed on November 2024 ballot

According to the 2022 census, 44% of homes in South Lake Tahoe sit vacant the majority of the year

www.kcra.com

 

[ultrarunner]

No end to schemes attacking the purse.

SL Tahoe with the 180 day occupancy rule AND prohibiting short term rentals except on motel row is devastating...

Our retired neighbor of modest means owns a 2 bedroom home with a tiny studio which now might be called ADR?

He lives full time in the studio and supplemented his social security renting out air b and b the home.

Great guy, mid 70's, fully licensed and placarded and inspected and a neighborhood jewel because he is always there.

Zero complaints with 25 years in and the short term rental ban hit him hard... a gut punch.

Now he can either rent long term or pay exorbitant fee if vacant...

He says Tahoe will only be for the rich and subsidized... the retired on modest income home owners can't afford to stay...

 

[plowhog]

Tahoe will only be for the rich and subsidized...

If they pass that I expect property values to decline. How could they not?

In CA, you can petition to lower your property tax bill if you can present evidence of a decline in value. I wonder if the County has pondered receiving thousands of such requests all at once?

Hmmm what would thousands of property tax reductions do to the budget?

 

[ultrarunner]

If they pass that I expect property values to decline. How could they not?

In CA, you can petition to lower your property tax bill if you can present evidence of a decline in value. I wonder if the County has pondered receiving thousands of such requests all at once?

Hmmm what would thousands of property tax reductions do to the budget?

Some longtime owners won't see a value decline over their base but more recent surely will.

 

[ultrarunner]

Thinking About going out for lunch but probably just eat at home, I'm running low on ammunition

Just saw a Prius with this bumper sticker.

DONT LAUGH IM SAVING GAS TO BUY GUNS AND AMMO

 

[plowhog]

No end to schemes attacking the purse.

New road tolls for Sacramento, CA approved by a California commission.

Although it is a paid-toll lane, there is already a clamor for "equity" of tolled road usage ... here we go again.

California commission approved new I-80 toll lanes. Could you be charged $1 per mile?

A Yolo County official said lanes similar to those approved on I-80 charge drivers $1 per mile.

www.yahoo.com