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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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 Posted: Wed Sep 19, 2007 2:24 am GMT Post subject: Re: Response to Admin - Tax Clarification |
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| Anonymous wrote: |
You mortgage interest deducations are NOT limited once your income exceeds $150K. It MAY be limited. This is called the alternative minimum tax (AMT). |
No, I'm not referring to the AMT. I just triple checked the Schedule A instructions, and the mortgage interest deduction definitely looks like one of the things that is limited on Schedule A if your income exceeds $150K, even without the AMT. Check out the worksheet for Line 28 at the bottom of page A-7 in the instructions for TY 2006 Schedule A:
http://www.irs.gov/pub/irs-pdf/i1040sa.pdf
As an example, say that your mortgage interest for the year was $15K and that you had no other deductions. If your income were say $100K, your total deduction would be $15K. However, if your income were $200,500 (to make the math easy), your deduction would be $14K. I did the match quickly, so it's possible that's a little off, but I do think that demonstrates that there is a reduction imposed by that worksheet.
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Wed Sep 19, 2007 4:03 pm GMT Post subject: |
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When I was doing my crude models at the beginning of my house search back in 2004 (bought Sept. 1 2006), I found that certain things demanded more attention than others. I didn't align my resources appropriately in every case.
Back in 2004, I think that prices slipped away a bit because of the dillution that the lower rates played. I mean, with a shrinking supply of homes in a buyers market, if you find a decent home what's an extra $80 or $100 bucks a month; I mean do you want to lose the first house you've seen in months that you like over that?
In 2005 it was like death by a thousand papercuts. All those little increases across the board had reached a limit. Interest rates started to go up to levels that get noticed toward the end of the summer.
In 2006 certain costs kept going up steeply. The Mud Lot, (parking by the Moakley Courthouse) went from $7 to now $10. Commuter Rail Zone 1 went from $90 to $135. Heating Oil skyrocketed, Gas, everything. Businesses were all about finding out what the market "beared". It was about squeezing your head in a vice until blood squirted out of your head.
In 2007 prices of things still on the rise, buyers on the sidelines waiting for someone to tell them that they are safe to go back in the water. Calculated risk-takers are running their models to see how things play out. First time in several years, interest rates go down. We did absorb some foreign bubbles like foreign investors because the dollar was weaker and some financial folks that made out due to the big jump in equities at the end of 2006. So, air from bubbles in other asset classes helped keep housing up. The redistribution of wealth due to the Bush Policies (winners and losers) starts to manifest in the housing supply distribution and the array of values.
After looking at the details of the numbers what are some of the line items that you wouldn't expect to be a material consideration that actually are? Or is it that plus a combination of death by a thousand papercuts?
I wonder with the volatility, if young folks want to keep their options open and not lock themselves into a particular location, even though Boston is pretty diverse. |
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BK- former Owner
Guest
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| Posted: Wed Sep 19, 2007 5:28 pm GMT Post subject: How about the costs to Repair a home in a Inflationary World |
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Folks have made mention that Rents may go up in the future and those with a Mortgage have an advantage because they have locked in their monthly payment.
Isn't this an over simplification that is not considering the added expenses of owning a home vs. Renting.
Rents rise because the cost of Property taxes, repairing property, and replacing appliances is rising. The Home owner does not escape paying these costs - these are the hidden costs of owning that new home owners quickly discover. No amount of preaching can get a future home owner to see the hidden costs/work of owning a home.
How much will it cost to replace an asphalt shingle roof in 5 years from today - if oil is above $100? How much will it cost to paint your home in 5 years if infaltion rages on.
The Renter merely pays a portion of these up keep costs on a monthly basis. The renter benefits from "NO Time" spent from his/her schedule fixing or repairing home or finding reliable contractors.
I've owned and I now rent. There are intangibles that I miss about owning a home - but, at todays Home prices I am not convinced that it is Wise to be stuck with a Mortgage while the biggest Credit Bubble in the history of the USA is deflating.
Of course, I could be wrong! |
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Mike
Joined: 01 Nov 2006
Posts: 28
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| Posted: Wed Sep 19, 2007 5:30 pm GMT Post subject: |
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| john p wrote: |
I wonder with the volatility, if young folks want to keep their options open and not lock themselves into a particular location, even though Boston is pretty diverse. |
You mean a particular location within the Boston area, or if they are willing to move to another part of the nation? After a lot of pondering, I think my family and I are Atlanta-bound. The privilege of living in this state doesn't justify the cost of housing. I saw your home on zillow -- a house like that could be easily bought for $300-400k in a comparable suburb of Atlanta with property taxes of around $3500. The extra $200k mortgage (at 6%) and $3000 of property taxes costs you an extra $850/month for 30 years. If you throw that extra cash into an investment account, you will end up with an extra $850k for retirement after 30 years assuming 6% interest or close to $1.3 million assuming 8% interest, or better yet nearly $2 million assuming 10% annual returns. Now I ask myself, is living in Boston really worth an extra $2 million down the road compared to living in Atlanta? Of course everyone's situation is different, but I just can't think of any good reasons to stay when I realize my nest egg is already set up for me just by moving to a city w/a lower cost of housing. |
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Wed Sep 19, 2007 6:13 pm GMT Post subject: |
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I'm rooted here with family and friends and professionaly in the local industry; love the ocean, cranberry bogs, foliage, skiing, restaurants, North End Feasts....and I love the local sports teams.
My salary would be a lot less there (in my field), but for the most part, you're right, I'd get much more for my money.
So do you think the folks in Georgia will be retiring here in 25 years? Who knows right?
My mental rebuttal to your post reminds me of a friend of mine's old high school soccer team's motto:
"We're short,... but we're slow". |
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john p
Joined: 10 Mar 2006
Posts: 1820
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Wed Sep 19, 2007 6:54 pm GMT Post subject: |
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john p
Joined: 10 Mar 2006
Posts: 1820
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Guest
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| Posted: Wed Sep 19, 2007 11:48 pm GMT Post subject: Taxes redoux |
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Admin -
I must conceed that you are right. It also appears, however, that this provision of the tax code is being phased out. There is already a 1/3 reduction, but that will go to 2/3 next year and will completely gone by 2009....
The limitation is also pretty small and maxes out at taking away 20% of your total itemized deductions... If you're doing well enough to have this happen, you probably don't need to worry about it...
The thing that really sucks about this is how they treat single people and married people the same. Another example of a married penalty. If someone is unmarried and owns a home with their partner, they can potentially take 20% more deductions than a married couple in the exact same situation.... |
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Mike
Joined: 01 Nov 2006
Posts: 28
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| Posted: Thu Sep 20, 2007 3:28 am GMT Post subject: |
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| john p wrote: | I'm rooted here with family and friends and professionaly in the local industry; love the ocean, cranberry bogs, foliage, skiing, restaurants, North End Feasts....and I love the local sports teams.
My salary would be a lot less there (in my field), but for the most part, you're right, I'd get much more for my money.
So do you think the folks in Georgia will be retiring here in 25 years? Who knows right?
My mental rebuttal to your post reminds me of a friend of mine's old high school soccer team's motto:
"We're short,... but we're slow". |
I'm not trying to argue or say everyone should move away -- I'm just saying for me, it's worth it. I have no family here and no close friends (moved here 2 yrs ago, had a kid and haven't left the house much since then!). If I was rooted here and could afford to stay, I would definitely do that. Moving away is a definite option for some of the young families who aren't making 6 figures though. For me, I chose Atlanta because that's where I met my wife and we still have friends and family there. I guess we're leaving for similar reasons that you're staying.
No, I think you need to get yours examined  Oakwood is nothing like Newton, and those houses aren't even comparable. If you want comparable houses (note: size and age), then you'd have to start looking at houses over $750k in Newton:
http://homes.realtor.com/ ...truncated...
Anyway, if you want a town more comparable to Halifax you could look in a town like Cumming, GA. Liberal zoning in GA is making this small town lose its charm fast though. All the land between Cumming and Atlanta have already been gobbled up by developers, ugh.
Editor's Note: This post was edited to abbreviate URLs which were widening the page due to the way that the forum software lays out posts. No other changes have been made, and the URLs still point to the original destinations - only their displays have been shortened. |
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Mike
Joined: 01 Nov 2006
Posts: 28
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| Posted: Thu Sep 20, 2007 3:32 am GMT Post subject: |
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I'm gonna have to check out some of these places before I leave! I still haven't met anyone here except for transplants like myself, so no one knows anything cool to do around here. |
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Thu Sep 20, 2007 2:07 pm GMT Post subject: |
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Hey man, if you want to come by and drink some Jack Daniels on the back porch with the bulldog and the cat; your more than welcome; you know where I'm at. Like Karl the Greenskeeper said in the Movie Caddyshack, "Hey, even if you just need someone to just get weird"
The next door neighbor is selling their house so you can check that out.
I spent much of my bachelorhood sitting at bars talking to old Boston guys and hearing stories about Ted Williams, good fishing spots, places to get ribs and steak tips. At the Three Yolk Diner in Revere, I met an Angel Flight's pilot (wow top shelf type of guy). I met this other guy who won an award for bravery for backing his truck up to block traffic and protect a State Trooper out on 495 in Middleboro. Lots of good folk here, as I'm sure you'll find in Atlanta. I always wanted to do a bed and breakfast at an old plantation down south near Savannah. I hear St. Patrick's Day is great in Savannah. I guess when you hear Drop Kick Murphy's; if you think that stuff resonates; you're a Bostonian and it's hard to leave.
Wherever you go, my advise is to be able to locate at least 5 Barbeque smokers within a ten mile radius of wherever you live in the first 6 months. If you can do that; the rest will be cream cheese. |
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Thu Sep 20, 2007 8:32 pm GMT Post subject: |
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How to hunt by Carl Spackler:
I have to laugh because I've often asked myself my foe, my enemy, is an animal. In order to conquer him I have to think like an animal and whenever possible to look like one. I've got to get inside this dude's pelt and crawl around for a few days. Who is the gopher's ally? His friend? The harmless squirrel and the friendly rabbit. I'm going to use you guys to do my dirty work for me. |
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john p
Joined: 10 Mar 2006
Posts: 1820
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| Posted: Thu Sep 20, 2007 8:34 pm GMT Post subject: |
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Carl Spackler goes on to say:
Hello? Anybody home? Hello, Mr. Gopher! It's me, Mr. Squirrel. Just a harmless squirrel. Not a plastic explosive or anything. Nothing to be worried about. I'm just here to make your last hours on earth as peaceful as possible. Don't mind this. This is doctor's orders. You don't mind if I just pop in there for a few laughs? That's right. Or in the words of Jean-Paul Sartre: "Au revoir, gopher." This is going to be sweet. |
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