There is a ticking tax bomb that will hit 16 million Americans this year. The problem with this tax is that typical tax planning doesn’t work. It has its own rules. This sneaky tax is called Alternative Minimum Tax (AMT). The problem is that it’s a complicated tax to calculate and even harder to try to explain, so most tax advisors aren’t talking about it. But, here’s a statistic that everyone should be talking about: This year over 16 million taxpayers will be subject to it. And, in just a few more years, 30 million taxpayers will be, unless Congress does something to combat it.

One of the huge benefits of owning real estate investment property is the paper loss you can legitimately generate as you can continue to put money in your pocket from the investments. In other words, you’ve got cash flow and yet still have a legal tax loss. Stay tuned to this column for more information on how that is possible or visit my website at taxloopholes.com for free tax strategies you can use right now. The tax breaks are there for real estate investors, but are limited as your income goes higher. But, that’s where being a real estate professional comes into play. As a real estate agent, you qualify as a real estate professional in the IRS’s eyes and that means you can take an unlimited amount of loss against your income, no matter how much the income is. (more…)

search for : ticking tax bomb, Alternative Minimum Tax, AMT, taxpayers, real estate investment property, real estate investors

4.7 + / - acre tract located on the Blue Ridge Parkway, Ashe / Alleghany County line. Over 600 feet of water frontage on Peak Creek, a North Carolina stocked trout stream.

Property has a restaurant that seats 50, includes some kitchen equipment, needs renovation. Upstairs has a newly remodeled, two bedroom, two bath suite, complete with kitchen and fireplace, washer and dryer. Also included is a 12 unit motel and office which needs renovation. The property is situated perfectly for an R.V. park and campground with sites along the river. (more…)

Linda Falcone, a Eugene-based RE/MAX Realtor who began her career in Phoenix 24 years ago, remembers when her life was ruled by a tyrannical pager. It would beep, and she would dash to the nearest phone - usually a phone booth where she would have to stand in stifling 100-degree heat. “It seems like the Stone Ages now,” she said Falcone said she was so relieved when mobile phones were introduced that she was the 11th person in Phoenix to buy one back in 1981. The bulky device was mounted on the floor of her car and cost $1,500, plus more than $1 a minute. These days Falcone routinely communicates with clients via cell phone and e-mail, and relies on a range of other gadgets, including a Palm Pilot and digital camera.

Buyers, too, are flocking to the Internet, to view listings and photos of houses for sale. Finding the right house, however, is only a small part of the overall buying process, said Bob Percy, principal broker at John L. Scott real estate, a Eugene realty. “There’s a lot that comes after you find a house that isn’t affected by technology,” he said, including making an offer, negotiating with the seller, overseeing inspections and closing the sale. Even though buyers are doing more of their own legwork online, most still hire a real estate agent, according to a recent survey by the California Association of Realtors. Nearly all (97 percent) of traditional buyers hired an agent; and 83 percent of Internet buyers hired an agent, the survey found. (more…)

search for : RE/MAX Realtor, mobile phone, cell phone, e-mail, Palm Pilot, digital camera, Internet

‘I’m remodeling a place I plan to sell, but I’m worried that the housing market might go bust before I finish. Should I sell it as is?’

Aside from getting info about whether selling prices have been trending up or down, you’ll want to ask local agents whether the inventory of unsold homes increasing, the number of weeks listings spend on the market before selling is on the rise and whether sellers are having to make price cuts and other concessions to sell.

Maybe your research will find that your area is doing just fine. But given recent trends and the fact that interest rates have crept up substantially over the past year - which makes homes less affordable and, therefore, a harder sell - I think that your instinct to sell your rental sooner rather than later is right on. Procrastinating may simply mean getting a lower price.

That said, you don’t want to rush it to market before the renovation is complete. If potential buyers see a property that looks like a construction site, two things may happen…. (more…)

search for : housing market, construction

With the real estate market slower than anytime in the last three years, more realty agents and loan brokers are looking for customers in segments often forgotten by the mainstream real estate industry — minority communities. “For the longest time it wasn’t quite popular to be a minority,'’ said Hilda Ramirez, a director of the Santa Clara County Association of Realtors and co-founder of the Hispanic Association of Realtors and Affiliates. “But suddenly corporate America has awakened and it’s the hottest ticket in town.”

Nationally, 58 percent of Asians, 48 percent of Hispanics and 46 percent of blacks own their homes, compared with 74 percent of whites, according to 2004 data from the U.S. Census Bureau. But 60 percent of first-time U.S. home buyers in the next decade will come from these “underserved” communities, said Maria Valentin, diversity marketing director for First American Title Company, which hosted the conference. (more…)

search for : real estate market, realty agents and loan brokers, Hispanic Association of Realtors and Affiliates

Southport is in Brunswick, one of the nation’s 100 fastest-growing counties. Its population jumped from 73,000 to almost 90,000 during the previous five-year period and will soon explode if the state of North Carolina gets its wish. The state government recently bought 600 acres of farmland on the outskirts of Southport with the intention of building one of the largest seaports on the East Coast. The state is predicting that the port will create thousands of jobs and be an enormous economic boon to the Carolina coast. Meanwhile, meteorologists warn that the area — as well as the rest of the southern half of the Eastern Seaboard and the Gulf Coast — faces a growing risk of being hit by a storm packing the wallop of Katrina.

If the North Carolina International Port planned for Southport is ever built, the federal government will spend hundreds of millions of tax dollars on dredging and maintaining a channel deep enough for massive cargo ships. The port would also require federal money to extend rail lines and upgrade roads. All this to build a gigantic port 10 miles from the ruins of the first North Carolina seaport, which was abandoned 230 years ago when settlers decided that the place was too susceptible to storms and pirates. They moved upriver to Wilmington, 28 miles inland, where the state’s largest port still operates. (more…)

search for : Southport is in Brunswick, Eastern Seaboard, Gulf Coast, Katrina, North Carolina International Port

A successful homeowner association meetings takes thought, creativity, advance planning and funding. Too many scramble to cobble together this important event — with mediocre results. Few show up and the numbers fall short of the quorum requirements. This doesn’t need to happen. Just think what you can accomplish at this important event:

Lay Out the Welcome Mat. Make the attendees feel welcome and comfortable. Make sure there is adequate heat or air conditioning. Plan periodic breaks if the meeting is long. It will allow the participants to socialize and refresh their perspective on the business at hand. Let Them Eat Cake. Serve food and beverages following the meeting so there is a reason to conclude the business meeting and to encourage attendees to stick around. This is a positive way to end the meeting and leave a good taste in their mouths (literally!). Draw for a Prize. Make returning proxies and attending the meeting fun by including a drawing for, say, a Dinner for Two certificate. Add the names of those that return proxies and also those that actually attend the meeting. That way, those that return their proxy get two chances to win if they show up. Either way, you’ve encouraged members to help satisfy quorum requirements. (more…)

search for : homeowner association meeting

Soaring real-estate prices has helped to feed the popularity of a complex tax-savings technique called a “private annuity trust.” The strategy is being promoted as a way for investors to defer hefty capital-gains taxes on the sale of highly appreciated assets — especially real estate — and save on estate taxes, while also generating a stream of income. The trusts are being widely marketed not just by tax lawyers and accountants, but also by investment advisers and insurance agents — who may also stand to gain big fees by managing trust investments — and real-estate brokers, who hope that the strategy might help clinch property sales and attract listings.

The growing popularity of private annuity trusts, however, has sparked heated debate among tax advisers, with skeptics saying that some arrangements might be too aggressive under allowable tax rules and might not generate all the tax benefits some promoters claim. Some tax lawyers have published articles or created Web sites criticizing the trusts, with titles such as “Private Annuity Trusts: The Numbers Don’t Support the Hype.” Moreover, the Internal Revenue Service has been scrutinizing a growing number of private annuity trust transactions, and though it has not banned the practice, the agency says it has seen numerous cases that it feels do not pass muster. (more…)

search for : private annuity trust, capital-gains tax, real estate, estate tax, Internal Revenue Service

African-Americans and Latinos are 30 percent more likely to receive higher rates for home loans than white borrowers despite similar credit scores and risk factors, according to a study published Wednesday by The Center for Responsible Lending. The Center for Responsible Lending’s study found that African-Americans and Latinos face different levels of pricing disparities when compared with white borrowers. African-Americans were more at risk when the subprime mortgages included a prepayment penalty. African-American borrowers were 31 percent more likely to receive a higher rate on a subprime fixed home mortgage while they were 15 percent to 16 percent more likely to pay more to take out an adjustable rate mortgage.

African-Americans also faced pricing disparities when it came to refinancing their existing homes. Two-thirds of refinancing loans include prepayment penalties, putting African-Americans at a significant disadvantage to their white counterparts. The study found that lenders tended to offer African-American borrowers 34 percent higher rates on fixed-rate refinance loans and 17 percent higher on ARM refinance loans. The latest study follows in the wake of a Federal Reserve report last September that analyzed 2004 data provided by the Home Mortgage Disclosure Act (HMDA) and highlighted alleged discriminatory practices by around 200 lenders, including 100 banks. The study sparked outrage among minority advocates and propelled increased scrutiny of mortgage lenders by government agencies, such as the Department of Housing and Urban Development.
(more…)

search for : African-Americans and Latinos, The Center for Responsible Lending, Home Mortgage Disclosure Act, Department of Housing and Urban Development

USA Today reports that the National Association of Realtors is forecasting a 5.3 percent increase in rents this year, which is about double last year’s increase. The paper reports it would be the largest increase in rents since 2000, when the Internet boom and a white hot job market sent lots of young adults out of college looking for places to live. The last six years have seen a boom in new home construction, though, along with low mortgage rates, which helped many former renters move into their own homes, and helped keep rent increases more modest.

Rising rents is one of the factors in the higher-than-expected jump in consumer prices in the April reading from the Labor Department. In addition to making home purchases less affordable, the recent housing boom led many investors to convert apartment buildings to condominiums to try to cash in on the rise in real estate prices. One out of three apartment buildings sold last year were converted into condos for sale, the paper reports, and that took 191,400 apartments off the market, according to the Realtors. In addition, the newspaper reports the number of new apartment buildings under construction is down this year. (more…)

search for : National Association of Realtors, Internet, new home construction, real estate prices, apartment