Luxury Clues

Who is your choice for Inman's Most Influential Person in Real Estate?

Greetings,

I have a special request. Bernice has been nominated as one of the most 100 most influential people in real estate. The voting is open through this Friday. If you would like to vote for her (or someone else on the list) please visit

http://www.inman.com/news/2010/10/27/peoples-choice-real-estates-most-influential

Thanks for your support and Happy Thanksgiving!

Sincerely

Shane Bowlin

General Manager, RealEstateCoach.com

Luxury Real Estate Clients and Investors--Here Come the Tax Increases

 If your clients are thinking about investing in or selling a luxury property, the new changes in the tax laws are going to make investing much less profitable than it has been in the past. 

If you or your clients are single and earn over $200,000 or are a couple who earns over $250,000, the new Medicare tax on investment income will increase your capital gains tax and your taxes on stock dividends from 15 percent to 24 percent. That is a whopping 60 percent increase over the current levels. 

The Bush tax cuts will be ending at the end of 2010. For anyone who is selling a luxury single family residence where they will net more than the $500,000 that they can legally keep from the sale, 2010 or 2011 is probably the best time to sell. The reason is that the Capital gains taxes will increase from 15 percent in 2010 to 20 percent in 2011. (That's a 33 percent increase in the tax rate.)

Additional Medicare taxes that will kick in in 2013 include an extra 0.9 percent of any W-2 income plus 3.8 percent on investment income. 

For savvy investors and luxury homeowners, there is another option, especially for those who own multiple luxury residences. The current laws allow owners to keep $500,000 in profits (for couples, $250,000 for singles) from the sale of their primary residences. One strategy is to change primary residences every two two years, holding it long enough to qualify for the $500,000 tax free exemption.  

Another strategy, provided they don't change the laws, is to rent out these properties and then do a series of 1031 exchanges that allow you to defer your taxes to a later date. If you're of the opinion that the electorate will force Congress to repeal the current legislation, then the delay tactic may be a wise choice. On the other hand, it you believe these tax increases are here to stay, getting rid of your excess inventory now may be a wise idea.

Posted by Bernice Ross, RealEstateCoachRadio.com--Just named "New and Notable" by iTunes! Check it out--it only takes 5 minutes a day to get the best training and ideas from the best speakers in the industry. 

Realtors(R) Fight Back--Potential Loss of Independent Contractor Status

One of the most cherished aspects of being a real estate professional is our status as independent contractors. Fafie Moore of Realty Executives who also just finished her term as only the sixth woman in history to be President of the Las Vegas Chamber of Commerce, just sent me the following information about a law Congress is considering that would essentially destroy independent contractor status. Here's what Fafie forwarded to me:

From the Las Vegas Chamber:

 

I spoke with NFIB today and got an answer on how independent contractors are eligible to count toward the majority needed for card check authorization.  Their labor attorneys say that the way the provisions of EFCA were written, it allows for ANY person working for an employer to organize.  There are no definitions of what constitutes and "employee," therefore allowing independent contractors to organize, since they technically work for the employer.  The part of EFCA that opens this up to independent contracts is:

 

SEC. 2. STREAMLINING UNION CERTIFICATION.

(a) In General- Section 9(c) of the National Labor Relations Act (29 U.S.C. 159(c)) is amended by adding at the end the following:

`(6) Notwithstanding any other provision of this section, whenever a petition shall have been filed by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a majority of employees in a unit appropriate for the purposes of collective bargaining wish to be represented by an individual or labor organization for such purposes, the Board shall investigate the petition. If the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative and that no other individual or labor organization is currently certified or recognized as the exclusive representative of any of the employees in the unit, the Board shall not direct an election but shall certify the individual or labor organization as the representative described in subsection (a).

I asked if Real Estate Brokers, or owners of Real Estate businesses, ought to be concerned and the answer was "YES." 

 

Also, there will be an attempt made in Congress this year to tighten the regulations governing how employers may classify their employees as "independent contracts."  The law (I did not get a name or bill #) will make it nearly impossible for employers to classify someone as an independent contractor. 

 

If you have any questions, you can forward them to Ann Fegley or Fafie Moore of the Las Vegas Chamber of Commerce.

Posted by Bernice Ross, www.RealEstateCoach.com, the home of the hottest new book and game in the Real Estate Industry, Real Estate Dough