Question for those who live in California

[dfkrug]

.... my CPA said I could not deduct the "capital loss" against my ordinary income. According to NOL rules, the deduction on a capital loss was limited to maximum $3,000 per year. Unlike the income side, where tax on gain is immediately due, on the loss side it took 17 years to slowly catch up to "realize" the entire deduction.

Yeah that $3K rule has been around a long time. You can, of course, offset any new capital gains immediately with your deferred losses. That is one of the reasons I started using tax software in the early 90s. It would transfer deferred losses (and depreciation) from prior years to the current year's tax return.

Back in '86 as I recall, new tax codes limited the losses you could take from rental properties. Some engineers I worked with back then would own and rent out a bunch or rental properties and offset all their salaries. When that changed (capped at $25K), many of them sold out and stopped being a landlord.

I rented out a couple of houses I owned here in CA back in the 80s-90s. I would never be a "housing provider" again. The rules here just make it too hard, further limiting the supply.

 

[plowhog]

I will admit "free taxpayer paid booze" to addicts is a surprise.

At first I thought this was a spoof article .... apparently not so.

San Francisco slammed for $5M a year program to give free alcohol to the homeless: ‘This isn’t working’

San Francisco runs a “managed alcohol program” for its homeless where nurses dispense controlled doses of vodka and beer to them.

nypost.com

 

[ultrarunner]

I will admit "free taxpayer paid booze" to addicts is a surprise.

At first I thought this was a spoof article .... apparently not so.

San Francisco slammed for $5M a year program to give free alcohol to the homeless: ‘This isn’t working’

San Francisco runs a “managed alcohol program” for its homeless where nurses dispense controlled doses of vodka and beer to them.

nypost.com

No… even weed deliveries as it is now “Legal” at least in some of the hotel rooms leased out during Covid.

 

[scootr]

Crazy, right?
Wondering why the homeless and illegals problems won't go away ... priceless.

 

[dfkrug]

Two rules of economics: tax something and you get less of it; subsidize it and you get more of it

 

[ultrarunner]

Cities are getting desperate...

San Francisco billing GM tens of millions in tax based on worldwide revenue Uber the theory it's doing business in SF pioneering AI taxis?

Can't make this stuff up...

https://www.reuters.com/legal/gm-sues-san-francisco-seeking-121-million-back-taxes-penalties-2023-12-27/

 

[two_bit_score]

My question-- who would buy or sell stocks, or invest in *anything* in that taxation climate? I don't get it ....

Nobody in their right mind.

 

[plowhog]

Cities are getting desperate...

The plummeting of commercial real estate values in large cities is ongoing. It will cause great economic difficulties in the near future as the loans become due.

Westfield Mall (in SF), just one property, had its value downgraded by about $1 billion dollars. I believe the property taxes no longer collected due to that writedown are about $10 million annually. Then extrapolate that to the many commercial properties "going down."

Value of Westfield San Francisco Mall Cut by $1B

Appraisal for $290M represents a 75% loss for the mostly empty shopping mall in Union Square.

therealdeal.com

 

[plowhog]

Nobody in their right mind.

LA Dodger baseball star Shohei Ohtani recently "pulled the pin" on a huge tax grenade with his new blockbuster $700 million contract. The great majority of money owed to him is deferred for 10 years.

He will be paid "only" $2 million per year for 10 years, and each year's remaining $68 million will be deferred until 2033.

Worthy of note is his presumed taxable income, while "currently" playing in CA, is a pittance compared to total compensation. With the long deferral, it is presumed he will not be playing, and will relocate out of high-tax CA before getting the lion's share of the money.

The structure of his contract has roiled the baseball markets as a complete dodge against the MLB "salary cap." I also have little doubt the CA tax collectors are gearing up their machinery to come after him to collect tax on the deferred money.

13% state income tax on $70 million / year is about $9 million / year. It will be interesting to see if the ending result is that he collects $2 million in salary but owes $9 million in taxes on it.

 

[ultrarunner]

The plummeting of commercial real estate values in large cities is ongoing. It will cause great economic difficulties in the near future as the loans become due.

Westfield Mall (in SF), just one property, had its value downgraded by about $1 billion dollars. I believe the property taxes no longer collected due to that writedown are about $10 million annually. Then extrapolate that to the many commercial properties "going down."

Value of Westfield San Francisco Mall Cut by $1B

Appraisal for $290M represents a 75% loss for the mostly empty shopping mall in Union Square.

therealdeal.com

Careful what you ask for is something I use to hear.

Falling Real Estate Values are devastating to a system dependant on stable or appreciating values.

My situation would be vastly improved if I was just outside the city limits...

Cities are desperate for revenue and some commercial property has resold at a 80 to 90% discount from purchase price less than 10 years ago.

Folks should be jumping in the market when SF office buildings can be picked up for 10 to 20 cents on the dollar... right?