Makes you want to rip your hair out-Federal Taxes.

[Boomyal]

Just found out tonight that you are required to take the allowable depreciation on rental property whether you can use the annual deduction or not.

This of course means, when you go to sell the property, your cost basis has been lowered by the amount of depriciation forcibly taken. As such you then have to pay capitol gains on the difference between the depriciated cost basis and the sales price, while not getting any benefit from the annual depreciation.

In my case, my rental income minus expenses, create a positive profit. When that profit is added (as unearned income) to my tax form, without the depreciation figured, it makes no difference in my tax obligation.

Therefore it would stand to reason that I shouldn't take the depreciation, because in the end it will increase my capitol gains.

Wrong! I must take the depriciation even though it is wasted.

When will we wake up and demand that Washington quit messing with our well being and adopt a National Sales Tax?

Another issue that is rearing it's ugly head is the unadjusted Alternate Minimum Tax Fraud.

 

[roscoe]

Re: Makes you want to rip your hair out-Federal Taxes.

Don't know if a national sales tax is the answer.
From what I've read, a flat tax is likely to be better.

 

[Boomyal]

Re: Makes you want to rip your hair out-Federal Taxes.

Don't know if a national sales tax is the answer.
From what I've read, a flat tax is likely to be better.

That would be a Sales Tax, not a hidden, untrackable Value Added Tax.

The problem with the flat tax is that is does not get rid of the IRS and the blood sucking parasitic accounting community that we have been forced to pay untold billions of dollars to annually.

You might want to check out this link:

http://www.fairtax.org/index.aspx

 

[rwise]

Re: Makes you want to rip your hair out-Federal Taxes.

if a flat tax was done correctly it would be a good thing
1 Good by IRS (as we know it)
2 everyone pays the same rate (say 15%)
3 No deductions
4 No exemptions
5 No refunds.
6 No other taxes.
OK maybe 15% is low but you get the idea. If make only $1 during the year I would pay in $0.15. People like Bill Gates will not like this plan, they will say it is unfair to them.

 

[JB]

Re: Makes you want to rip your hair out-Federal Taxes.

Actually, rwise, I think 15% would be high if the intent is to tax everyone on all income.

I read somewhere several years ago that with a 10 Trillion dollar economy, only 5% would provide the Fed with $500 Billion in revenue from income taxes alone.

Whatever the solution may be, I think the present tax code is hopelessly complex. Even lawyers and CPAs don't agree on what it means.

I think the only way we would get a simple, straightforward code is to have a Congress totally populated with people who do not intend to ever run for any office again.

 

[rwise]

Re: Makes you want to rip your hair out-Federal Taxes.

I would be glad to take one of those jobs JB, after 6 years with those wages I could retire and live well!

 

[Vlad D Impeller]

Re: Makes you want to rip your hair out-Federal Taxes.

A 15% flat sales tax would probably raise more revenue for the big spenders in Washington DC, afterall Americans really do spend on average much more than they earn.
Just a thought.

 

[bjcsc]

Re: Makes you want to rip your hair out-Federal Taxes.

I think the only way we would get a simple, straightforward code is to have a Congress totally populated with people who do not intend to ever run for any office again.

I could not agree more. This is the key to many many seemingly hopeless and complex issues like the tax mess.

Never under any circumstance vote for an incumbent. That is the beginning.

I like the idea of a national sales tax vs. flat tax. The IRS spends more than half of what it collects just to collect it. The Officers of Charity organizations would be imprisoned if they followed suit. Businesses would be relieved from being the middlemen (employee witholdings) and instead use the same or less energy collecting and remitting the sales tax. I have thought about this a lot, and have yet to think of a problem with it...

 

[Boomyal]

Re: Makes you want to rip your hair out-Federal Taxes.

....There are many, many advantages of taxing sales as opposed to income. Watch savings rate soar, watch off shore capital come roaring in, just to name a couple of more.

 

[OldMercsRule]

Re: Makes you want to rip your hair out-Federal Taxes.

....There are many, many advantages of taxing sales as opposed to income. Watch savings rate soar, watch off shore capital come roaring in, just to name a couple of more.

[colour=green]I agree with ya here Boom. That said: there will be lots of pressure to retain a form of taxation that employs all the CPA's, Lawyers and govenment employees now employed by the IRS. If we went to a real simple consumption tax, (with some limited exemptions for basics like food and rent for the poor), it would make this country so much more competitive and productive it would amaze the world. The real big trouble is the source of political funding that the Pols will not let go of. Just think of the cost of each one of those complicated pages in the IRS code. Ya pay the ol' crook to get it in the code, (your opponents pay the other crooks to keep it out), and once it gets in somebody with the best connections gets a benifit at all of the rest of our expence. If only a little critical thinkin' would take hold out there!! My $.02 JR[/colour]

 

[stevieray]

Re: Makes you want to rip your hair out-Federal Taxes.

....There are many, many advantages of taxing sales as opposed to income. Watch savings rate soar, watch off shore capital come roaring in, just to name a couple of more.

[colour=green]I agree with ya here Boom. That said: there will be lots of pressure to retain a form of taxation that employs all the CPA's, Lawyers and govenment employees now employed by the IRS. If we went to a real simple consumption tax, (with some limited exemptions for basics like food and rent for the poor), it would make this country so much more competitive and productive it would amaze the world. The real big trouble is the source of political funding that the Pols will not let go of. Just think of the cost of each one of those complicated pages in the IRS code. Ya pay the ol' crook to get it in the code, (your opponents pay the other crooks to keep it out), and once it gets in somebody with the best connections gets a benifit at all of the rest of our expence. If only a little critical thinkin' would take hold out there!! My $.02 JR[/colour]

I am not a bandwagon-jumper, but this is one I could get on & strap-in.

Sign me up!

 

[tommays]

Re: Makes you want to rip your hair out-Federal Taxes.

A great example is my daughter working her way through school

She made about 7800 dollars and she is ending up oweing about 575 dollars state and fed :devil:

The kid down the street goes for FREE on my tax dime because there income level is low enough

Tommays

 

[Boomyal]

Re: Makes you want to rip your hair out-Federal Taxes.

I really recommend that ya'll look through this website thoroughly.

www.fairtax.org/index.aspx

I am going to also get this book and read it thru. It's been on top of the best sellers list for a little while.

http://www.amazon.com/gp/product/00...f=pd_bbs_2/102-8721387-7781765?_encoding=UTF8

 

[bjcsc]

Re: Makes you want to rip your hair out-Federal Taxes.

OMR: I agree with you in all you said however I do not think food (or anything) should be exempt from the tax. While I do not believe in subsidized housing, that is of limited relevance as I think a federal sales tax should only be collected on things that current sales taxes are (rent, service, etc. are not among them). The goal here would be for everyone to be on par, not to provide more exceptions and handouts to Joe Slacker - "poor' or not...enough with the middle class burden...

 

[OldMercsRule]

Re: Makes you want to rip your hair out-Federal Taxes.

OMR: I agree with you in all you said however I do not think food (or anything) should be exempt from the tax. While I do not believe in subsidized housing, that is of limited relevance as I think a federal sales tax should only be collected on things that current sales taxes are (rent, service, etc. are not among them). The goal here would be for everyone to be on par, not to provide more exceptions and handouts to Joe Slacker - "poor' or not...enough with the middle class burden...

Hey Bjcsc, As a Cornservative: I do concede the fact that you have a valid point. I also will admit that I'm in the, (nearly Washington State sales tax exempt, [nearly as ol' Joe Stalin does make me pay B & O tax on revenue not profits: OUCH]), food business. That said, if you can look past my own selfishness for a minute: the poor do spend a large percentage of their funds on food, while the rest of us the percentage of our budget is much smaller. Making food tax exempt would benifit all of us, and some of the very poor: a great deal! My $.02. JR

 

[Boomyal]

Re: Makes you want to rip your hair out-Federal Taxes.

OMR: I agree with you in all you said however I do not think food (or anything) should be exempt from the tax. While I do not believe in subsidized housing, that is of limited relevance as I think a federal sales tax should only be collected on things that current sales taxes are (rent, service, etc. are not among them). The goal here would be for everyone to be on par, not to provide more exceptions and handouts to Joe Slacker - "poor' or not...enough with the middle class burden...

Hey Bjcsc, As a Cornservative: I do concede the fact that you have a valid point. I also will admit that I'm in the, (nearly Washington State sales tax exempt, [nearly as ol' Joe Stalin does make me pay B & O tax on revenue not profits: OUCH]), food business. That said, if you can look past my own selfishness for a minute: the poor do spend a large percentage of their funds on food, while the rest of us the percentage of our budget is much smaller. Making food tax exempt would benifit all of us, and some of the very poor: a great deal! My $.02. JR

Read the link I posted. They deal with this very same issue.

http://www.fairtax.org/index.aspx

[colour=RED]******LINK REPAIRED******[/colour]

 

[OldMercsRule]

Re: Makes you want to rip your hair out-Federal Taxes.

OMR: I agree with you in all you said however I do not think food (or anything) should be exempt from the tax. While I do not believe in subsidized housing, that is of limited relevance as I think a federal sales tax should only be collected on things that current sales taxes are (rent, service, etc. are not among them). The goal here would be for everyone to be on par, not to provide more exceptions and handouts to Joe Slacker - "poor' or not...enough with the middle class burden...

Hey Bjcsc, As a Cornservative: I do concede the fact that you have a valid point. I also will admit that I'm in the, (nearly Washington State sales tax exempt, [nearly as ol' Joe Stalin does make me pay B & O tax on revenue not profits: OUCH]), food business. That said, if you can look past my own selfishness for a minute: the poor do spend a large percentage of their funds on food, while the rest of us the percentage of our budget is much smaller. Making food tax exempt would benifit all of us, and some of the very poor: a great deal! My $.02. JR

Read the link I posted. They deal with this very same issue.

www.fairtax.org

That linc would not work for me, but many of the fair tax proposals I have looked at in the past did propose exempting food for the reasons I stated above.

 

[stevieray]

Re: Makes you want to rip your hair out-Federal Taxes.

JR - Take off the "/index.aspx" and that'll get you to the home page. Pretty interesting stuff there.

 

[OldMercsRule]

Re: Makes you want to rip your hair out-Federal Taxes.

I just googled it, as it still would not work after I modified it with the edit. It does have a rebate formula for necessities, (which would add a little complexity but I just skimmed it). JR.

 

[bruceb58]

Re: Makes you want to rip your hair out-Federal Taxes.

Boomyal,

Getting back to the original post...Are you saying that your adjusted gross income is low enough to not be taxed? The reason I ask is that would be the only reason you would not want to take the depreciation deduction...if you had a choice of course. I am also assuming that you have been depreciating your house in previous years.