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Showing posts from December, 2014

Homeowner Tax Benefits

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There are many reasons for wanting to have a home of your own like a place to raise your family, share with friends and feel safe and secure.  While investment opportunities rank high for most people based on the fact that homeowners’ net worth is over forty times higher than that of renters, so do the tax benefits that reduce tax liability. Taxpayers who have owned and used a home for at least two out of the last five years, can exclude a maximum of $250,000 of gain as a single taxpayer and up to $500,000 of gain for married taxpayers filing jointly. If the gain on a principal residence exceeds the allowed exclusion, the balance is taxed at the lower long-term capital gains rate rather than the marginal tax rate of the homeowner. Homeowners can deduct the interest paid on up to $1,000,000 of acquisition debt used to buy, build or improve their first or second home.  They may also deduct the interest on up to $100,000 over acquisition debt that is a recorded lien on thei…

ICE Can Save Lives

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Everyone knows that ice can make a drink cool or reduce swelling, but if you put it on your cell phone, it might just save your life. The concept is simple.  Make a contact record in your address book with the name “ICE”, which stands for In Case of Emergency.  In the note section of the record, you would list your name, blood type and medical conditions along with prescriptions and physicians.  You’d also list the people and their phone numbers that can be contacted in case of an emergency. Several years ago, a British first responder came up with the idea when his emergency unit responded to a call where the victim was unable to communicate due to illness or trauma.  The victim’s wallet didn’t indicate specific persons to be notified in an emergency.  The fireman went through his cell phone to try to identify a relative and wasn’t successful. That’s when he came up with the idea of a universal entry into the address book for ICE where the necessary parties and special inform…

Don't Consider Appreciation or Tax Savings

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Appreciation and tax savings are legitimate contributors to an overall rate of return on rental real estate but what if you didn’t consider them at all.  If you only looked at one or two, very conservative measurements, you might decide to invest especially knowing that there are more benefits that will accrue to your investment.If we bought a property for cash, collected the rent and paid the expenses, the amount left would be called Net Operating Income.  In the example below, if would generate $7,200 a year which would be a 7.02% cash on cash rate of return which is considerably higher than the current 10 year treasury rate of around 2.3%. If we place a mortgage on that property, the rate of return actually increases due to leverage.  After the principal and interest are paid, the net operating income obviously decreases but the cash on cash rate of return increases to 9.10% because the borrowed funds means less cash invested. Another contribution to the investment’s rate of ret…

Being a Good Neighbor

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A good neighbor might be characterized as someone who’ll look after your home when you’re out of town by picking up your mail and watering your plants.  You’d most likely reciprocate for anyone who’d be so generous toward you.In some cases, you might only be able to name one or two of your neighbors who would step up to that level of service.   Wouldn’t it be nice if more people on your street would be happy to make that offer? The solution may just start with being a better neighbor first.  The following suggestions go a long way to improving your neighborhood and making new friends at the same time. Meet your neighbors and exchange phone numbers and email addresses.  Agree with each other that you’ll let them know if you see something strange going on at their home. Slow down when driving through the neighborhood; it will make it safer and everyone will appreciate it. Control your dog: keep it on a leash; pick up after it; don’t let it bark too much. Don’t park in front …

Holiday Tree Safety

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Fresh holiday trees are beautiful, smell great and really add to the spirit of the season.  Following some proven safety tips might help you avoid a disaster and keep the Grinch away. Select a tree with fresh green needles that don’t fall off when touched or when the trunk is tapped on the ground. When trees are cut too early, they have a greater risk of drying out and can become more dangerous especially with electrical lights. Cut 1” to 2” off the base of the tree before placing it in the stand to facilitate it drawing water to the limbs and quills. Trees require water similar to cut flowers or they’ll dry out. Tree stands should hold at least one gallon of water and it should be checked every day.  A six foot tree could use up to a gallon of water every two days. Position the tree a minimum of three feet or further from heat source like fireplaces, space heaters, heat vents or candles.  Do not allow the tree to block an exit. Lights should be labeled f…