It will take me a while to get that image out of my head.Originally Posted by bae
It will take me a while to get that image out of my head.
Talk about blending two things that totally don't go together, did anyone see the Meet the Press segment on Sunday where Michael Moore and Glenn Beck agreed with each other on Donald Trump? It was actually very interesting to see Michael Moore talk about why Trump was going to win and then have Glenn Beck do everything in his power to NOT ADMIT to agreeing with Moore while totally agreeing with him.
Smoothie, indeed!
"Do any human beings ever realize life while they live it--every, every minute?" Emily Webb, Our Town
www.silententry.wordpress.com
Well, yes and no. I'm not sure what you would change about the loss carry forward rule. If you lose $100 in June and make $90 in July people don't seem to get worked up over saying that is no taxable income. If you lose $100 in December and make $90 in January why should the result be any different?
The part that is more controversial is the ability of real estate professionals to use depreciation to offset other income. That may have contributed to the $15 million loss on his form, but probably not much to the $900 MM. In most businesses you can setoff depreciation against other income, that isn't the issue. It's that in RE business a lot of the investment is passive, so ordinary people get caught up in limitations that prevent the offset of depreciation from those investments against other income, but there is a special out for real estate professionals that let's them take it.
As someone who owns a fair bit of real estate, and makes use of depreciation, it is not exactly a tax dodge. Depreciation is real. And if it turns out it isn't, you still end up paying the tax man later when excess depreciation is recaptured. You can dodge and swerve for a while of course, but sooner or later the IRS gets its cut.
Everyone can take depreciation against the the income from the property. The rule some have a beef with is real estate professionals being able to take it against other income. You probably can meet the test easier than most of us. I don't have 750 hours a year for it and couldn't keep it under the time spent on other jobs etc. Nor can most people, which is why some have an issue with it.
I could, but don't bother, because I oddly have enough income from the properties that I don't need to use the depreciation to whitewash *other* income. I don't mind that "real estate professionals" can do so though.
May I query why there is not a time limitation on how long one may carry forward from a loss this year? I know in farming in Canada, we can carry forward a loss of income from one year due to weather etc., only or a limited number of years. We used it one year when we had the perfect crop of wheat, a continuous rain right before harvest with high temps that caused the grains of wheat to develop fusarium. It had no marketable value, didn't even pay for the combining or trucking. We could carry that loss forward but it had limits. I vaguely remember it might have been 3 years. Excellent crops for the following few years did not trigger any tax liability as a result.
As Cicero said, “Gratitude is not only the greatest of virtues, but the parent of all the others.”
I think the rule, as it applies to this topic, is that a loss can be carried over for 15 years and also applied to 3 years prior to the loss. That's where the speculation of Trump not paying taxes for 18 years comes into play.
"Things should be made as simple as possible, but not one bit simpler." ~ Albert Einstein
It's now 2 and 20 but I think it was 15 back then.
https://www.irs.gov/publications/p536/ar02.html
One of the sillier aspects of this kerfuffle is that despite the lugubrious tears shed for those "tens of millions of working families" neither Mrs. Clinton nor the Times have demurred from tax avoidance strategies when it served their interests.
http://spectator.org/hypocrisy-alert...voiding-taxes/
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