Posted by: Frank | 01/25/2012

Capital Gains & Americans

If ever there was proof of the difference between the “Right & Left” the issue of “Capital Gains Tax” is a fantastic talking point! I, for one, think part of the problem is Education. MANY people don’t realize just how much these three words can affect them if they EVER own a home and choose to sell it.  If you have no clue on what they are about, feel free to check THIS link:

http://www.irs.gov/newsroom/article/0,,id=106799,00.html

The people on the Left, and others, want to slap all investors with a higher tax rate on Capital Gains, taxing it the same as normal income or in some cases, higher. They (the uneducated) obviously have never been involved with investments where Capital Gains Tax plays a part in their lives, either positive or negative. To make it simple to those that have never been involved with this Tax, I will just talk about a families biggest lifetime investment – their home.

On one of the Blogs i frequent they have people ranting about the fact that people who invest aren’t paying enough Taxes and quote a left-wing Billionaire crying about the fact that he pays less taxes than his secretary.
My response to all of them – do you have ANY brains? If that idiot wants to pay more taxes why doesn’t he just do it? WHY – Because he is a LEFT WING NUT trying to prove a point! Tell him to shut up and write a check for 35% of his NET worth and see have fast he starts to back track.
My statement on the subject stands – if you have NEVER had the opportunity to take the risk, invest YOUR hard-earned cash with the chance for a dubious return somewhere down the road. Then OBVIOUSLY YOU KNOW NOTHING about investing and the detrimental effect of capital Gains Tax on your future!
Today my wife and I have a Comfortable retirement in large part BECAUSE of OUR investments including several rentals – we bought homes using credit cards (not likely you could do that today), a briefcase full of collectibles, a good credit rating and our signature – fixed them up, rented them and later sold them, making $$ on EVERY transaction. We were able to avoid Capital Gains Taxes because there are some small things about the system that even small investors can take advantage of.
To the left-wing nuts and the Dems, the GOVERNMENT didn’t do a thing to help us with these investments, they supplied no cash, took no risks, didn’t help us fix up the place or find renters! They didn’t get stuck with the bills when a renter skipped or trashed YOUR investment. They didn’t do a thing except eagerly await the time when we would sell our property and pay their stupid TAX!  Why should we or anyone like us that had the spunk to make our own way have to pay more taxes ON OUR OWN INVESTMENTS when so many aren’t paying anything!
The ONE thing that saved us – and many other property investors is the 1031 Exchange the IRS allows us:
“A 1031 exchange  allows an owner of investment property to defer capital gain taxes by exchanging one property for another”
This can only be done with a rental property. If you sell YOUR HOME and make a profit YOU WILL PAY CAPITAL GAINS unless:
“The Taxpayer Relief Act changed this.   A single homeowner can now exempt $250,000 in capital gains from the sale of a principal residence ($500,000 for a married couple or ‘certain taxpayers’ filing a joint return) providing only that the homeowner had occupied that home as a principal residence for two of the five years preceding the sale.  And this can be done over and over again ‘ as long as a sale does not occur more than once every two years. ”
It’s YOUR ONLY HOPE unless the Dems and the Left Wing have their way!

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