Tax Guru – Ker$tetter Letter

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Archive for the ‘Calif’ Category

1031 Exchanges out of California

Posted by taxguru on December 9, 2013

As I discussed previously, the PRC is trying to keep tabs on real estate investors who use IRC Section 1031 to defer their profits to non-California property.

While all of the forms and procedures are not yet established, the FTB just posted this update on how this is supposed to work, effective for disposals after 12/31/2013.

 

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For 1031s out of California

Posted by taxguru on November 1, 2013

Under IRC Section 1031, it has always been allowable to defer gains from the sale of property in one state by replacing it with like kind property in another state.  However, if that replacement property is ever sold, the gain that was deferred from the first state is supposed to be reported and paid to that state.  That has pretty much been handled on the honor system for sellers to voluntarily report to the previous state.

It appears that the rulers in Sacramento don’t much trust this honor system for former investors in California property and are now instituting new requirements for those sellers to keep in touch with the FTB every year until the replacement property is sold. Because the replacement property may be exchanged for another like kind property, and on and on, this could go on for several decades. In fact with the popular “swap til you drop” technique of investing, it is possible that there will never even be a taxable sale of the replacement property.

 As explained in this article from the most recent FTB newsletter, this rule takes effect as of January 1, 2014; but they are still working out the details as to the exact forms and procedures for the annual notification filing. Since this situation applies to many of our clients, who disposed of California property and reinvested into other states, this is something that I will be dealing with for a long time to come; so I will be commenting on any interesting new developments as I learn of them.

TaxCoach Software: Finally! Plain-English Tax Planning That Builds Your Business!
 

 

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2013 California Inflation Adjustments

Posted by taxguru on August 23, 2013

Unlike the IRS, where the inflation adjustments to the tax brackets and other figures are announced before the beginning of the next year, the Calif FTB doesn’t announce theirs until the year is almost over.

They have just released their inflation adjustments for the 2013 tax rates and figures on their website, based on their calculation of the rate of inflation being 1.7% between 7/1/12 and 6/30/13.

For those comparing taxes between states, the summary at the top of this page is handy:

 

Corporate tax rates

Entity type

Tax rate
Corporations other than banks and financials 8.84%
Banks and financials 10.84%
Alternative Minimum Tax (AMT) rate 6.65%
S corporation rate 1.5%
S corporation bank and financial rate 3.5%

Individual tax rates

  • The maximum rate for individuals is 12.3%
  • The AMT rate for individuals is 7%
  • The Mental Health Services Tax Rate is 1% for taxable income in excess of $1,000,000.

 

TaxCoach Software: Are you giving your clients what they really want?

 

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Luring Tax Refugees

Posted by taxguru on February 11, 2013

This should be like shooting fish in a barrel for Gov. Perry.

Texas Trumps Governor Moonbeam. Governor Perry goes on a recruiting tour in California.

From BlogComix4(10/17/12- )

Follow-Up:  Rick Perry declares victory in California trip

 

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Posted by taxguru on February 4, 2013

From Argus Hamilton:

California demographers said Hispanics will pass whites as the state’s majority race by late this year. It’s absolutely chaotic. The headwinds from the number of Mexicans coming into California for amnesty are mixing with the tailwinds from the number of white people going out of California over tax hikes and creating funnel clouds over Interstate 15.

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Posted by taxguru on January 23, 2013

California residents, businesses consider bailing on Golden State over taxes –  It’s not just the high taxes that motivated us to leave the PRC 20 years ago. It’s also the never ending micromanagement of every part of everyone’s life by the rulers in Sacramento that was unbearable for us. 

 

Court Holds IRS Can Get Key Tax Records Even Held by Your Lawyer – As I’ve long pointed out, the basic protections we have under the Constitution are null and void when it comes to tax matters.  This is just one of dozens of examples of this.

 

 

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Taxing refugees from high-tax states?

Posted by taxguru on December 20, 2012

Will people be held prisoner inside high-tax states if they can’t or won’t pay the Exit Fees?  Desperate money hungry State rulers may just stoop this low.

 

When Will Death Spiral States Impose Taxes On Fleeing Citizens?

New tax increases in California stir debate about adding to exodus

 

From Rush Limbaugh, who was a tax refugee from New York to Florida 15 years ago, but still has to undergo audits from the New York Tax goons every year to prove that he didn’t work inside the State borders.

Death-Spiral States Eye Exit Taxes

From Blog Pix

 

 

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Calif Voters…

Posted by taxguru on November 15, 2012

From the latest episode of NewsBusted, how the country sees the voters in the PRC.

 

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Retroactive Tax Hike Approved in PRC

Posted by taxguru on November 7, 2012

California Passes Prop 30, Raises Taxes

Retroactive tax increase passes –  from Spidell

From Tax Info


Rush Limbaugh makes fun of the notion that this new tax on the evil rich will solve all of the budget problems for California.

 

Transcript of the above video.

California, Here We Come –  From today’s Rush show.

Message to Sacramento: Tax, but don’t overspend –  We all know how it ends up when DemonRats promise to cut spending in exchange for tax hikes.  They always end up breaking that promise.  It’s what did in Bush 41′s presidency, when he fell for the DemonRat lies and broke his “No New Taxes” pledge.  DemonRats have something in their DNA that compels them to raise taxes and spend like there is no tomorrow.  Expecting anything different from them is the definition of insanity.

 

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Will Calif voters raise their own taxes?

Posted by taxguru on October 4, 2012

You can see some of Governor MoonBeam’s TV ads for Prop 30 to raise taxes on the evil rich.  It must have taken several tries, but they actually are able to keep a straight face while claiming that this new tax increase will be used only for schools and fully accountable, will be kept away from Sacramento politicians and audited with the reports posted on the web. 

Anyone who knows the history of specially designated taxes and fees knows that it doesn’t take long for that money to be commingled for everything else.  Social Security and Medicare taxes are perfect examples of how politicians routinely break their promises to use certain taxes only for certain purposes.  Revenues from this new tax will end up being spent on the rulers’ idiotic programs, such as the boondoggle corrupt high speed rail that nobody wants.

 

Posted in Calif, TaxHikes | Comments Off

 
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