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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]He’s just considering proposing that for people making over a $1 million the capital gains tax rate is the same as a the ordinary income rate.

It’s a way to avoid all the ridiculous games like the carried interest loophole that lets hedge fund managers making $50 million pay tax at a lower rate than w-2 employees making $200k. [/quote]

But it should be higher, make it 1.5 mil or 1.75. [b]These low numbers hurt the average millionaire man the most. [/b]A property owner that has two or three rentals will get totally screwed. This really hits hard for families trying to build generational wealth. [/quote]

FTFY

How utterly cruel, they want to hurt the average man with 3-4 properties earning over $1M/year! Poor guy, how are his great great great grandchildren going to survive?
[/quote]

No not per year, it’s likely just once, when they liquidated the asset. It’s not salary. So everything they worked for, and paid off is basically useless.  If you have a mortgage that you’ve paid off then go to sell and pay almost 50% in tax then it doesn’t make sense numbers wise. The interest paid on the mortgage and the tax on gains plus the income from the rents make this a losing endeavor.  Why not just pass a law saying CEO’s have to be compensated in salary and cash bonuses and limit the stock they can get? Why go for a cash grab disguised as sticking it to the man. Be smarter.[/quote]

This is me. Bought a house in 04 for $575k which was an obscene amount of money to me.  The house was in a bad area and was more than I felt comfortable paying but, I took a chance. Lived in the house for 7 years, during that time I got married so household income doubled and savings increased. In 2011 with two kids entering school needed a house in better school district. Mortgage rates were low so rolled outstanding balance into new mortgage and set up an LLC and rented the house out for a decent amount and hoped to hold it as our retirement investment (sell and use proceeds for retirement) Today, the house is worth just over  1 million dollars. While we are not poor we most certainly are not thought of as the target audience for this new tax.  If we sell the house for $1 million then $440,000.  We would walk away with $560,000, this is less than we bought the house for 20 years ago.  This is complete craziness. [/quote]

How would it impact you at all? Selling your primary residence you are exempt on the first $500,000. After which you pay 20% on the margin above 500,000. You would pay not capital gains.

Biden’s plans is a combination of raising the top margin income rate to 39.6 and a net investor income rate increase of 1.2 above $400,000. You would need to have an income of over 1,000,000 plus investment income of $400,000. If you meet that standard your would be taxed at 46%. Now if you had $400,000 income and 1,000,000 investment income you would roughly paid 28%.

If you want to have lower taxes we need to tax cap gain as income.[/quote]

Selling a rental not primary residence [/quote]
You’re welcome to move into your rental for two years to take advantage of the current tax break. I have four rentals and that’s what I plan to do. Also I will have decades of profit from the tenants paying rent, so I would not consider myself “screwed” at any point.[/quote]

Moving into your rental doesn’t allow you to avoid paying taxes on the sale entirely. Depreciation recapture still needs to be paid. If your CPA is telling you otherwise you need to hire someone that actually understands taxes. [/quote]

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