Though the original title of this piece was “Real Estate Trumps Taxes,” I want to make it very clear that this is an article about real estate investing.
True, it is inspired by reporting that Donald Trump may not have paid taxes for the past eighteen years due to close to a billion dollars of real estate losses. That said, this is about how even small investors can avoid or minimize taxes and is not meant in any way as a political piece to suggest that Trump may be slightly disingenuous when it comes to his comments on people who don’t pay any taxes…
No, this is an article specifically about the way real estate is treated by tax regulations which allow well advised investors to put money in the bank by offsetting gains with losses (some of which only exist on paper). And I want to share with you some real estate investment secrets that don’t require you to attend Krull University. Continue reading
Posted in Investment, Real Estate, Real Estate 101
Tagged 1031 exchange, deductions, depreciation, donald, humor, investing, Investment, mortgage interest, property, real estate, taxes, trump
Coming to a Real Estate Deal Near You
There was a movie out a few years ago that had giant robots battling each other for… well, I have no idea because I didn’t see the movie.
That said, the imagery of giant robots came to mind when I read this bloomberg.com piece about one giant developer (Alegem) taking on an even “gianter” developer (Wanda Group) over the rights to build huge residential towers in Beverly Hills. Though no buildings have been knocked down in in this fierce struggle, millions of lobbying and political advertising dollars have been spent on the next battlefield — a ballot measure that can make or break either project, which will be voted on by the residents of Beverly Hills. Continue reading
Take any basic accounting class, or go to Vegas for the weekend, and you’ll soon get the concept that financial losses are bad. Which is why you might scratch your head when I tell you that some of my most successful property investment clients ask me to find them properties that will show a loss.
I was recently discussing this concept with a colleague, when he smiled knowingly and said, “I get it, your client’s getting divorced and wants to hide some money.” After assuring him that this wasn’t some film noir-style fraud scheme, I explained that my client was talking about “paper losses.” The quizzical tilt of his head told me that I had some ‘splaining to do. Continue reading
Somehow, I never get to be the Top Hat.
I have clients who want to own investment properties. And even though they may own several personal and vacation homes, the idea of putting all of their property investment eggs in one building basket is counter to their successful track record of spreading the risk across different assets.
Regarding real estate, individual investors generally think of the three most common property holdings: office buildings, shopping centers and apartment buildings. And the easiest of these investments to manage and understand is the apartment building — people pay rent, you subtract your expenses and voilà, there’s your net taxable income. (The CPA then works his/her magic by factoring in mortgage interest and depreciation deductions, but that’s something for the next day.)
Posted in Investment, Los Angeles, New York, Real Estate, Real Estate 101
Tagged commerical, homes, housing, investing, Investment, los angeles, prices, real estate, Spencer Krull
Enjoying my morning coffee and LA Times, NY Style.
I never thought the Treasury Department’s thresholds for reporting the people behind cash purchases of residential real estate would make me face my bi-Coastal allegiances.
Having grown up in New York, and having lived in Los Angeles for more than half of my life, I’m conflicted. I read the New York Times (electronic edition) every day. I also read the Los Angeles Times (print edition), which, jonesing for a NY experience, I fold in the manner I learned in fourth grade so as to more easily read it on the subway. [That this was taught to me in school as part of the curriculum says volumes about the veneration of The Times. But I digress…]
I identify as a New Yorker, especially when it comes to claiming unparalleled authority on topics such as bagels and pizza. Even more so, I wear the mantle of having grown up in Manhattan with unwarranted snobbery over those from Long Island or New Jersey ― unwarranted as I was simply lucky to have parents cool enough to live in the city, and did not attain that rank of my own merits. Continue reading
Posted in Investment, Los Angeles, New York, Real Estate
Tagged Beverly Hills, FinCEN, homes, housing, los angeles, money laundering, real estate, Spencer Krull, Teles Properties, west LA
Even more lights are slated to join the DTLA skyline.
LA is a city with an identity crisis, mainly because it has more identities than “Sybil.” The “city” part of LA is the downtown area that reached its glory days in the 20s and 30s, hit a decline in the post war years, laid fallow for about 50 years and began its renaissance starting in the late 90s. For what’s supposed to be the economic hub of the city, people can go their whole lives without setting foot in downtown (and truthfully, they’re missing out, but that’s a topic for another day).
Downtown has had a huge residential population boom, going from approximately 14,000 denizens to more than 50,000 over the past 15 years. The tipping point was the introduction of a name brand supermarket that allowed people who always thought it would be cool to live downtown, but were wary of the inconvenience of not being able to get the emergency carton of milk for their Sunday morning coffee, to feel more comfortable. As more units came on line (either through new construction, or the redevelopment of iconic buildings) restaurants, stores, clubs and even a Soul Cycle followed. Suddenly, downtown was a viable place to live. It may also be a victim of its own success. Continue reading
Posted in Brooklyn, Investment, Los Angeles, New York, Real Estate
Tagged Brooklyn, housing, los angeles, New York, prices, real estate, Spencer Krull
Property advisor firm JLL has issued a report stating 75% of international real estate investments are made in transparent marketplaces. It took me a re-read of the headline to realize that they were not saying that 75% of real estate markets are transparent, but rather that 75% of real estate investment was in those markets.
On it’s face, it’s not much to report — of course investors prefer markets in which the fundamentals are clear, rather than risking funds in obfuscating markets that feel like the 3-card monte table on the corner of 39th and Eighth. [And why is it that I can never find the queen “and take home the green?” Does anyone actually win at that game?] Continue reading