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Real Estate

Has success overpriced O.C.? Big Orange Index shows 6 years of growth, but some indicators are down, hinting at trouble ahead

Has success overpriced O.C.? Big Orange Index shows 6 years of growth, but some indicators are down, hinting at trouble ahead

As reported in the OC Register, Success does come with a price tag. Orange County’s economy begins 2016 on a six-year winning streak. But the extended upswing is creating challenges that may limit the local business climate’s advance. My Big Orange Index, a compilation of three dozen benchmarks of local economic performance, hit a new record […]

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A bad appraisal: How buyer and seller can compromise

A bad appraisal: How buyer and seller can compromise

As reported in the OC Register, Commercial real estate appraisals are required if you are financing a purchase through a lender – conventional or otherwise. The possible exception might be an owner-financed purchase. In that case, the owner becomes the bank and may not require an appraisal. An appraisal is a lender’s way of “hedging their […]

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IRS Reviews Consequences of Foreclosures Involving Nonrecourse or Recourse Debt

IRS Reviews Consequences of Foreclosures Involving Nonrecourse or Recourse Debt

IRS recently issued an Audit Techniques Guide (ATG) on foreclosure, a complex topic that has swamped practitioners and IRS alike in recent years due to the extended fallout from the subprime mortgage crisis. One of the many topics of interest is the foreclosure of properties with nonrecourse or recourse mortgages. This article reviews the ATG’s […]

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Don’t Buy a Home as an Investment – After Costs, It Typically Doesn’t Yield Much

Don’t Buy a Home as an Investment – After Costs, It Typically Doesn’t Yield Much

Don’t Buy a Home as an Investment – After Costs, It Typically Doesn’t Yield Much; Think of It as a Place to Live, as reported in the WS Journal. This year, I sold one apartment and bought another. It was a reminder that the words “home” and “investment” don’t belong in the same sentence. Don’t […]

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Is a Private Mortgage Right for You?

Is a Private Mortgage Right for You?

Is a Private Mortgage Right for You? – It’s a Way for the Borrower to Cut Costs, but the Lender Takes Big Risks, as reported in the WS Journal. It’s tough to find certificates of deposit that pay 2% a year. But if you’re a bank lending to 30-year fixed-rate mortgage borrowers, you can earn […]

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New Programs Could Help Home Buyers – Fannie, Freddie Aim to Aid First-Time and Low-Income Buyers

New Programs Could Help Home Buyers – Fannie, Freddie Aim to Aid First-Time and Low-Income Buyers

New Programs Could Help Home Buyers – Fannie, Freddie Aim to Aid First-Time and Low-Income Buyers, as reported in the WS Journal. Mortgage-finance companies Fannie Mae and Freddie Mac provided details of new low-down-payment mortgage programs that could reduce costs for first-time and lower-income home buyers. The mortgage-finance companies and their regulator, the Federal Housing […]

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IRS-approved spinoff of telecom assets highlights expansive approach to REIT form

IRS-approved spinoff of telecom assets highlights expansive approach to REIT form

Real estate investment trusts (REITs) have long been considered tax-favored vehicles for promoting investment in real estate, in that they basically escape entity-level taxation and are required to pay out 90% or more of their income to shareholders. However, there appears to be a growing trend for certain companies that don’t fall cleanly within the […]

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Separate activity treatment doesn’t affect passive loss real estate professional test

Separate activity treatment doesn’t affect passive loss real estate professional test

Chief Counsel Advice 201427016 In Chief Counsel Advice (CCA), IRS has concluded that a taxpayer’s failure to make the election under Reg. § 1.469-9(g) to treat all rental real estate activities as one activity doesn’t affect the application of the passive activity loss (PAL) real estate professional test. Background. Under the PAL rules, losses from […]

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Reluctant sale didn’t qualify for involuntary conversion treatment

Reluctant sale didn’t qualify for involuntary conversion treatment

Peters, (DC MO 6/11/2014) 113 AFTR 2d ¶ 2014-926. A district court has held that taxpayers who entered into a contract to sell property, changed their mind about the sale, and then were ordered by a court to go through with sale, did not engage in an involuntary conversion under Code Sec. 1033. It also […]

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Court holds land sale triggered ordinary income, not capital gain

Court holds land sale triggered ordinary income, not capital gain

Frederic Allen v. U.S., (DC CA 05/28/14) 113 AFTR 2d ¶2014-873. A district court has held that taxpayers received ordinary income, not capital gain, for a payment they received under an agreement to sell land executed years earlier and subsequently modified. Facts. Fredric Allen (Allen) and his wife, Phyllis Allen, brought an action in district […]

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10 things home inspectors won’t tell you

10 things home inspectors won’t tell you

10 things home inspectors won’t tell you, as reported in the WS Journal. 1. The house is fine, but I could make it look bad. As the housing market recovers, more buyers and sellers are getting reintroduced to one of the most nerve-racking rituals in real estate: the home inspection. An inspection, which usually occurs […]

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Tax Court – Mortgage-related dispute kept foreclosure from being passive activity disposition

Tax Court – Mortgage-related dispute kept foreclosure from being passive activity disposition

Herwig, TC Memo 2014-95. The Tax Court has ruled that where taxpayer’s limited liability company’s (LLC’s) passive activity consisted of the ownership of two rental properties, those properties were foreclosed upon by the lender and sold at foreclosure sales, but there were pending counterclaims between taxpayer and the lender with respect to deficiency judgments on […]

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Court of Appeals affirms: façade easement in historic district had no value

Court of Appeals affirms: façade easement in historic district had no value

Scheidelman, (CA 2 6/18/2014) 113 AFTR 2d ¶ 2014-952. The Court of Appeals for the Second Circuit has affirmed the Tax Court’s decision that a taxpayer wasn’t entitled to a charitable deduction for a façade easement because the easement had no value. The Court found that, given the nature of the property at issue and […]

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Court unravels property swap scheme and denies homebuyer credit

Court unravels property swap scheme and denies homebuyer credit

In Kevin D. Moreland v. John Koskinen, (DC AL 04/17/2014) 113 AFTR 2d ¶ 2014-741, a district court has denied an individual’s claim (on a joint return) to a first-time homebuyer credit finding, in effect, that he acquired the property from his mother in violation of the rule denying the credit for acquisitions from related […]

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How to improve your home’s appeal

How to improve your home’s appeal

As reported in the OC Register, “How to improve your home’s appeal,” The question every Orange County homeseller should ask today is, “How can I make my house appeal to more buyers?” Unlike last spring, when there were so few houses for sale that buyers barely paid attention to how one was decorated before writing […]

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Tax Court: trust can qualify for real estate professional exception to PAL rules

Tax Court: trust can qualify for real estate professional exception to PAL rules

In Frank Aragona Trust, (2014) 142 TC No. 9142 TC No. 9, the Tax Court has determined that a trust that owned real estate properties and engaged in other real estate activities qualified for the Code Sec. 469(c)(7) exception for real estate professionals and thus wasn’t subject to the passive activity loss (PAL) limitations. In […]

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Underwater homeowners could face extra tax burden in 2014

Underwater homeowners could face extra tax burden in 2014

Underwater homeowners could face extra tax burden in 2014 – A law that spared people who owe more than their homes are worth from being saddled with extra taxes when their banks provide mortgage relief is expiring next week, as reported in the news.  Congress hasn’t extended it. Underwater homeowners often try to negotiate with […]

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O.C. housing supply takes a late dip

O.C. housing supply takes a late dip

As reported in the OC Register, O.C. housing supply takes a late dip – a tiny dip in Orange County’s housing supply this month – three-tenths of 1 percent – actually represents a milestone. It was the first drop in the local market’s supply of homes for sale since mid-March, Steve Thomas of ReportsOnHousing said […]

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Key federal tax aid for homeowners in danger of expiration

Key federal tax aid for homeowners in danger of expiration

As reported in the LA Times, Key federal tax aid for homeowners in danger of expiration – Congress carved out a special exception for owner-occupied housing for five years, and that exception was later extended through Dec. 31. What happens if it expires? WASHINGTON — Haven’t we seen this movie before? On Capitol Hill for […]

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Don’t look for changes to housing tax breaks soon

Don’t look for changes to housing tax breaks soon

As reported in the news of the LA Times, Don’t look for changes to housing tax breaks soon. Here’s a side effect of the 16-day federal shutdown and debt ceiling crisis that could prove popular among tax-sensitive homeowners: The stalemate removed even the remotest possibility that Congress could undertake fundamental tax changes curtailing housing breaks […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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