Rapid Tax, Death And Taxes

2008-03-27T03:10:00.000-07:00

Rapid Tax, Death And Taxes

In this world nothing can be said to be certain, except death and taxes? Benjamin Franklin

I, like many other good citizens from this great country of ours, left it to the very last moment to mail off this year?s tax return. As I entered the local post office and saw the long line, I once again promised myself that next year would be different. I really would make the effort to get them off before the last minute rush.

As I moved slowly towards the front of the line, I began wondering, in this day and age is this really the best system our great and wonderful leaders can come up with. After all, we now live in a world that allows a satellite miles above us to read a number plate. We can get the worldwide web on our cell phone, download TV programs that we may have missed or just want to save onto our iPods.

The original tax laws introduced in 1913 were a very simple affair. They began with tax brackets ranging from 1 to 7 percent - a far cry from today?s levels. The IRS tax codes, regulations and guidelines now have well over 9 million words. No wonder there's so much confusion. Is there truly anyone who really understands this monster. Let?s put this into some form of prospective. The Declaration of Independence has a little more than 1300 words. The Constitution which has served us well for more than 200 years comes in around 5000 words and the Holy Bible makes do with less than 800,000 words.

The Office of Management & Budget estimated in 2004 that we as a nation spent over $200 billion on compliance cost. At a time when the nations manufacturing industries, the foundation of any good economy, are all struggling against cheaper imports, shouldn?t our leaders be using that money to create ?Jobs? for their citizens. Most experts agree that $200 billion would create well over 3 million jobs, which of course creates sales of consumable goods which creates more jobs and sales taxes.

From the moment we wake up in the morning we are being hit by taxes. Everyone is at it -- turn on the light (electricity taxes), run the shower (utility taxes) and my personal favorite the telephone taxes, all 6 million of them, or that's what it seems to me every time I receive a telephone bill.

Has the time come for a simple Flat Rate Tax, something we can ALL understand. There are many countries all over the world who have used this simple to understand and cost effective way of collecting taxes to revitalize their economies. Let's just imagine for a moment what it would be like if we could complete our tax returns on one simple piece of paper. A Flat Rate Tax for individuals and a Flat Rate Tax for businesses. The same rules apply to all regardless of size of income. We all pay the same rate. Most of the successful countries have levied Flat Rate Taxes of less than 17%, with a stating level that protects the lower income groups. Could life ever be that simple again? Would our Leaders really want us to understand what they were up to? And then there's those lobbyist. Oh well, it was nice while it lasted.

Have an opinon or a question you would like me to answer, then write me!

?Your? Money Matters By Carl Hampton, Author of ?From Credit Despair To Credit

Rapid Tax, Why delay taxes with a 1031 exchange agreement

2008-03-04T23:59:00.001-08:00

Rapid Tax, Why delay taxes with a 1031 exchange agreement

Many companies and individuals enter into a 1031 exchange agreement to save money and increase value while deferring taxes until a later date. This allows the sale profits of the relinquished property to be put directly towards the purchase of the replacement property, without money being removed from this amount for tax purposes. This service comes in several forms and can save a business thousands while allowing for a more expensive property to be purchased. This can mean the difference between an okay property and an amazing property.The premise of the 1031 exchange agreement is that a property, be it real estate, manufacturing, or livestock, can be sold and "replaced" with a like kind property of equal or greater value than the original. This is to mean that a $75000 manufacturing building can be "replaced" with a $150000 dollar apartment building, with the taxes from the initial sale being deferred until the sale of the apartment building in years to follow. This example uses the two primary rules of the 1031 property exchange agreement by complying with the like kind rule, both properties are real estate, and by complying with the equal or greater value to the replacement property. The $150000 apartment building was worth more than the $75000 manufacturing building. In the 1031 exchange agreement, the taxpayer, or one in the exchange, must sell, and purchase new property within 45 days of the initial sale. This time limit can be increased if an extension is submitted before the end of the 45th day. This extension must be accompanied with a listing of all properties one is looking at and only those properties will be considered viable for the 1031 exchange agreement. The extension period is no more than 180 days beyond the initial sale date. As has been stated repeatedly, but not explained, the 1031 exchange agreement means that the taxes that would normally be garnered from the sale of the initial property is deferred until a later date. This is to mean that the entirety of the sale money from the initial property can be used to purchase a loan or property. This can save a business thousands of dollars in very little time or effort.An example of the money that a 1031 exchange agreement can save is that of the $100000 property. If this property was sold without the 1031 exchange agreement, the taxes on this property could be $35000. This would leave $65000 for a loan purchase. Provided all of the money is used as a 25% down payment, the loan could be worth $260000. Provided the typical 75% loan value to property value, $325000 in property is purchased. That same property using the 1031 exchange agreement could put $100000 down and purchase a loan of $400000. Assuming the same 75% ratio, the property could be valued at $500000, which is an increase of $175000 in values. These funds can be saved using various types of 1031 exchange agreement options, such as reverse, and delayed exchanges.

Francisco Segura owns and operates 1031 Exchange

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