The Death (And Resurrection) Of the Death Tax

Ding Dong the estate tax is dead! But don’t celebrate yet, Dorothy. This development is actually making things worse. Much worse.

In December, the U.S. House of Representatives voted to extend the then existing estate tax law indefinitely. This would mean that, if the Senate concurred and the President signed the bill into law, 2009’s estate tax rates – 45 percent for individual’s estates over $3.5 million and $7 million for married couples – would become permanent.

However, the Senate failed to act prior to the end of the year. As a result, the estate tax legislation that was passed during the early years of the Bush Administration continues in force. This is the law that over the years increased the size of a person’s estate that would not be subject to the estate tax from $600,000 to $3.5 million. By 2009, if your estate did not exceed $3.5 million, you would not pay any estate tax.

Also, pursuant to this law, the estate tax completely disappears in 2010, only to return with a vengeance in 2011. Next year the $3.5 million exemption level drops to $1 million, thereby exposing millions more of families to this taxation. The estate tax rate also increases from 45 percent to 55 percent.

This, due to the inaction by the Senate, is where we are today. No estate tax this year, a draconian confiscation of family assets in 2011. For a person dying in 2009 with an estate of $10 million, the estate tax would be $2.925 million. If he dies in 2010, there would be no tax. If he can hang on until 2011, Uncle Sam would claim $4.95 million dollars.


Also included in the Bush era legislation was a little provision that in 2010 ended the “step up in cost basis” for determining capital gains. For example, if years ago your grandfather purchased stock in the company that employed him for $2 per share and now the stock is worth $100 per share, and he sold the stock today, he would be liable for capital gains tax on the $98 gain for each share sold. If he was in the top tax bracket, that would be $14.70 for each share sold.

However, if prior to selling the stock, Grandpa died in 2009 and left his stock to you, your tax basis would be the value of the share at the date of his death – the “stepped-up” basis. If the value was $100 at the date of his death and you sold it for $100, there would be no increase in value from your stepped-up basis and thus no capital gains tax.

In 2010, according to the law, you would inherit Grandpa’s $2 cost basis along with the stock and be subject to the $14.70 capital gains tax when you sold the stock. As you can see, this, along with talk from the Obama administration about raising the capital gains tax rate, would be a direct assault on America’s middle class.

To be fair in my analysis, the law gives each taxpayer $1.3 million of step-up at death. This sounds like a lot, but when you start to look at the value of business assets and real estate a person has accumulated during her lifetime, it becomes apparent that this provision gives her family very little protection. It also imposes a massive record keeping burden over decades to track the step-up. A similar approach was tried in the mid 1970’s and almost immediately repealed.


By way of illustration, let’s look at the case of a single mother of two, who in the mid 1970’s started a modest retail business to help pay the bills. She bought a small shop out of which she operated the business and struggled for years to make the mortgage payments, both on her shop and her home. She finally reached a modest level of success in her business and upon her death in 2011, left it all to her two daughters.

The daughters had helped their mother in the business and wanted to continue its legacy. The value of the mother’s estate – which consisted mainly of the business building, the business assets and inventory and the family home, was $2 million. The business building had increased in value from $100,000 to $900,000 and the home from $100,000 to $500,000. The business itself had substantially increased in value and the rest of her estate comprised an IRA and some modest investments.

The daughters looked at their situation. The estate tax burden would be $550,000. There was not enough cash and liquid assets in the estate to pay it. The house would have to be sold if they wanted to continue the business. Assuming they could get full value, they would be subject to $60,000 in capital gains tax. The total tax would be $610,000 on a $2 million dollar estate.

As a result of the law, this middle class family could not continue to own and operate the family business that had become so much of their lives and had been the dream that their mother had fought and slaved to make a reality. Taxes would crush her legacy.

It was always assumed that Congress would extend the $3.5 million estate tax exemption or even permanently eliminate the estate tax. The Republican controlled Congress prior to 2008 apparently didn’t have the guts to do it and now, with Democrats controlling both Congress and the White House, and the massive government deficit, who knows what direction it will head.

What we know to be sure is, if this law remains as it is, it will devastate small family businesses, cripple the middle class and create more dependence on government. None of this is worth celebrating.

Posted in Tax | Tagged | Comments Off on The Death (And Resurrection) Of the Death Tax

Benefits of Finishing a Real Estate Course Online

The financial crisis has affected many businesses and many industries. Fortunately, there are some industries that have remained promising even during these tough times. Investing in real estate is still a good thing to do. Though the costs of some properties have gone down, there are still many other ways to make money through this. Many people think that making money through this is very hard. This is not true. There is an easy way to earn money and a person will know it by being involved in this. Before a person enters the world of it, it is important to take the time to take a real estate course online.

There are many benefits of taking an online course. First, it is more convenient on the part of a person. He or she would no longer need to spend too much time learning the important things about this. An online course would be a lot shorter, yet it is more effective than other resources. Second, it is significantly cheaper than buying books that contain the same information. It is very important though to check all the online courses available. Some might cost more than others. Nevertheless, what is more important is that it is useful and informational.

A real estate course online equips a beginner with everything he or she needs to know about this properties. Contrary to what some people think, making money out of it entails them to invest a lot of money. They do not know that there is an easy way to make money without investing a single cent and without exerting too much effort. This is why an online real estate course is very important. It will give a person information on the different ways to make money.

One of the better ways to earn huge amounts through this is to market a home. If a person knows the different ways to advertise a property, it would be very easy to sell a home. For instance, instead of marketing a property all by yourself, it would be better to go to an auctioneer. Of course, there is a need to look for an auctioneer that could offer good terms. Once the house is sold, the person will get a part of the money. This is not just any amount, but it is also a very good amount.

Being a huge success is easy in the industry. However, just like any other investment, one has to be very ready and needs to make sure that he or she is familiar with the way things work in the business. Since there are different ways to earn money, it would really help if a person would know the different strategies to become rich through real estate. Beginners often commit several mistakes because of their lack of knowledge. This should not happen to anyone. All it takes to prevent this from happening is to take a real estate course online.

Posted in Real Estate | Tagged | Comments Off on Benefits of Finishing a Real Estate Course Online

Network Marketing – Do I Have What it Takes to Start a Network Marketing Business?

Have you been contacted by someone that has the coolest new thing that they say you need to see and they invite you to come over to their home or check something out on the internet? Has a networker tried to sell you something?

I love it! If you said no, you do not fall for them because they are all scams, let me tell you that is two lies! Are there scams out there? YES, but there are also legitimate businesses too! Now, your saying ok, this guy wants me to get into something, and the answer is no! The reason I said you have been sold on something by a network marketer, let me show you exactly why I know you have. Maybe you even were a network marketer and you did not even think about it. Actually, if you have to think about network marketing, then you are not working with the right things.

Today, I was talking to some college students here in the heart of Texas. Most of the people I talked with said they could tell a network marketer from miles away and would never buy something they were pitching. I told them, they were good, because, I rarely spot them. So we continued to talk about the economy and how corporations need to open up more job openings to reduce the unemployment statistics. We talked about the health care system and how the government wants to have a national health care plan. Now, this is where I wanted to teach the students not to be negative about something they may not fully understand. It was along morning of our meeting and I was hungry. So I said, “Let us break for lunch, where did everyone want to go?”. I got a couple of normal responses to fast food and some of the national chain restaurants. I decided to slide a little lesson in at this time. I told everyone that my wife and I had tried out a new Italian restaurant that just opened, the prices were reasonable, maybe $7 for lunch including a beverage. I added in that my wife loved the stuffed mushrooms and Canneloni. I told them I loved the Stromboli and since I loved spicy food, I had them add Jalapenos into it and it was awesome. I told them that the deserts were also to die for. So we talked a bit more of other options and I told them, we do not have to all go to the same place! So there were 30 of us and 16 people went with me to the Italian restaurant, and the other 14 went to a Thai restaurant that a young lady suggested.

We got back after lunch and we were beginning to start our discussion back on network marketers. I asked everyone that had said that they could spot network marketers, I asked when the last time they were sold on a network marketing opportunity or at least been invited to look into a business by someone. The students were all saying it was weeks and some months. Now, I told everyone that they are walking with blinders on or they really could not tell a networker from an average Joe. Now I had their attention! I said they were marketed to in the last hour several times over.

Who were the marketers?

  1. Everyone that gave an opinion on where to eat
  2. The waiter or waitress with all the options as they sat at the table
  3. They were marketed to by my suggestions of what I liked at the italian restaurant

A network marketer is only sharing information with you to solve a Need, Want or Desire! Notice that you never saw a word in here that a network marketer is to get you into their business! Now, if you are a business owner and you are trying to increase you income, sure you need to get those people into your business. Caution when reading this, because I am not saying to be a business partner or investor in your business! At our lunch, did I bring someone into my business? No! But the day I went into the restaurant, they enrolled me into their business as a network marketer, but I would not have to pay them to be able to do it, and second, I would also not be paid for working as their network marketer! So, as a lesson to them and a lesson to my readers of my articles, everyone is a network marketer, for the good and the bad! Let me show you how I could be a network marketer for the bad. Now, our city has public health services check out restaurants to make sure they are good and clean. They get a report card rating. What If when I was at the restaurant I saw the rating and it was a C- or a D? Upon seeing that, I told my wife let us go somewhere else, and the next day when someone said they saw the restaurant was open and asked if anyone wanted to try it out? I would instantly say No we do not want to go there, it is dirty and the restaurant has a bad rating by public health services. Did I boost the business for the restaurant? No, In fact, probably triggered a few more negative network marketers on the business.

So, lesson to be learned is that we all are network marketers! Some network marketer have businesses and they market at same time. Personally, I will share with you that most of the MLM and Network Marketing companies will tell you I am wrong, and my approach would not work, but I will share with you that it does. I have done it in three separate businesses and I will continue to do it. If you are network marketing to people, and maybe I owned the restaurant…. was I looking for the students to open other restaurants in the area? No, I was getting them into the business to become a customer and to eat. As I said, I do not own the restaurant, but I would be doing my best to insure those people were happy as customers so they could go out and network market my business.

So Can You Be A Network Marketer?

The answer is YES! Anyone can be, but I will caution you, some men and some women have the outgoing spouses and sometimes they can not get a word in. It is that the spouse that is outgoing is a stronger networker that may not care what the person they are talking about thinks of them for their recommendations. They will say what they feel and will not care how others receive the information.

Now, if your already in a networking business and you are struggling, do not think that you are a bad network marketer. The question really should be, are you passionate about the products and services? If not, you are in the wrong business. Find something that makes someone money and you love and go for it. There are thousands of companies out there, select one for you!

Now, some people love the products, but the issue is they do not have enough people to talk to about it. THAT IS A LIE. There are thousands of people that would love your product, but you care too much on what the others think! Get training on how to add hundreds into your business.

Posted in Markets | Tagged | Comments Off on Network Marketing – Do I Have What it Takes to Start a Network Marketing Business?

Get Approved For A Personal Loan Even With Bad Credit

There are many companies who specialize in personal loans for people with bad credit. If you have had a bankruptcy, a repossession, or other negative factors on your credit report, the bad marks will probably not be an obstacle for you getting approved for a bad credit personal loan. These loans come two flavors — secured and unsecured. Understand though, these bad credit personal loans will carry interest rates higher than the standard rates because of the risk involved with lending to customers with poor credit histories.

Your Unsecured Bad Credit Personal Loan

As noted, personal loans can be unsecured loans. No collateral, such as real estate, stocks and bonds, even a late model car, is required to secure the loan. With minimal documentation an unsecured loan is approved based on employment and a valid checking account with direct deposit. No formal closing is necessary, since there is no property is involved. The process is very vast. Once the application is completed and the loan is approved, the cash can be in the bank account of the borrower within 24 hours.

Your Secured Bad Credit Personal Loan

Secured loans require a bit more processing. Whoever is borrowing must have real value property that is equal to or exceeding the sum of the loan. For instance, a home, other real estate, a business, stocks and bonds, even a late model car may be accepted as collateral. A home, other real estate, a business, or other property with equity, are often eligible for a home equity line of credit, often called a HELOC. You would be given a slice of the equity value of the property. However, some lenders allow home owners to exceed the value. A good thing about a HELOC is that interest rates are lower, much like a revolving line of credit. For late model cars, the loan is based on the value of the car. If you have bad credit this is a good way to get cash fast. However, if payments are missed, the car will be repossessed.

Your Unsecured Pay Day Bad Credit Personal Loan

Another way to get cash fast for bad credit borrowers is the pay day loan. You have probably heard rumors about pay day lenders charging usurious interest rates for these loans. The annual interest rates are high and the sums of money received are small. But, these lenders are regulated in over thirty states and these loans have become a handy way for folks with financial emergencies to get their hands on quick cash. The regulations have capped annual fees and interest rates are capped and vary from state to state. You can get these loans very quickly and very easily. But, the loan must be paid by the following pay day, usually within fourteen days. However, the bad credit borrower can extend the terms to 30 days, but additional fees may be incurred.

Your Qualifications for a Bed Credit Personal Loan

Before you go shopping for your loan, have this documentation, even if you are applying for a loan on line. These documents are usually sent the lender via fax or scan. You will need:

– Two government issued identification document, such as a passport, a driving license, state identification card, etc.

– Steady job, the lender likes to see that you have been working steadily for three to six months. This can be proved via pay stubs or direct deposit statements.

– Decent salary, the lender wants to know that you have enough money left over to make your payments after you pay off your usual monthly obligations.

– Valid checking account with direct deposit, this can be proven with bank statements and account numbers.

– Proof of residence, the lender needs to know where you live. This can be proven with a utility bill.

Once you get through with these formalities, you should have your much-needed cash in your bank account, often within 24 hours, maybe sooner.

Posted in Loans | Tagged | Comments Off on Get Approved For A Personal Loan Even With Bad Credit