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08-24-2012, 04:48 PM
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Reformed Know-Nothing
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Join Date: Oct 2009
Location: MoCo, MD
Posts: 25,913
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Quote:
Originally Posted by whell
No you haven't. If you buy $1000 in property, you must also pay tax on it. You then pay tax on it every year that you hold it. You then pay tax again at sale time on any gain. You're lucky if you break even.
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How about buying, renovating and flipping houses as your job (which is (or was) pretty common)? Buy something for $200K, put $50K into it and sell it for $350K six months later. Minus the realtor fees, taxes, etc., you still would have a very tidy profit. How does this differ from other forms of income?
__________________
As long as the roots are not severed, all will be well in the garden.
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08-24-2012, 04:55 PM
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Senior Member
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Join Date: Aug 2010
Location: Metro Detroit
Posts: 13,016
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Quote:
Originally Posted by finnbow
I think that taking risks isn't depressed currently. What is depressed is demand. With prospective demand for their products, entrepreneurs take risks. Without it, they don't.
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If you're hungry enough, anyone will take a risk. Demand can be created with the right product or service. This gets back to my earlier point, and to the complaints about companies sitting on cash. Why is it happening? Its not greed. Its the lack of appropriate incentive to engage in economic activity. I hear this from business owners frequently. Where there's smoke there's fire.
Last edited by whell; 08-24-2012 at 04:58 PM.
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08-24-2012, 05:01 PM
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Senior Member
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Join Date: Aug 2010
Location: Metro Detroit
Posts: 13,016
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Quote:
Originally Posted by finnbow
How about buying, renovating and flipping houses as your job (which is (or was) pretty common)? Buy something for $200K, put $50K into it and sell it for $350K six months later. Minus the realtor fees, taxes, etc., you still would have a very tidy profit. How does this differ from other forms of income?
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That "occupation" was driven by an over-inflating housing market. Given the inflation in the market, there was an opportunity. In practice, it is income, but I doubt we'll see folks pursuing this in volume anytime soon.
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08-24-2012, 05:07 PM
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Reformed Know-Nothing
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Join Date: Oct 2009
Location: MoCo, MD
Posts: 25,913
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Quote:
Originally Posted by whell
That "occupation" was driven by an over-inflating housing market. Given the inflation in the market, there was an opportunity. In practice, it is income, but I doubt we'll see folks pursuing this in volume anytime soon.
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Not really. Renovating and selling "fixer-uppers" isn't an uncommon occurrence, even today. Entire neighborhoods in big cities are still gentrified, though certainly at a slower pace than during the go-go times.
__________________
As long as the roots are not severed, all will be well in the garden.
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08-24-2012, 05:20 PM
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Area Man
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Join Date: Oct 2009
Location: The Swamp
Posts: 27,407
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Quote:
Originally Posted by finnbow
That's old thinking, Dave. It ain't that simple any more. You forgot important elements of tax-dodging, credits, hiring lobbyists to bribe politicians, creative accounting ... It's a major element of big business these days. Nobody is even capable of making sense of corporate balance sheets anymore.
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Right. The whole concept of spending $10 to save a buck then blaming the loss of $9 on someone else always was lost on me.
__________________
"When the lie is so big and the fog so thick, the Republican trick can play out again....."-------Frank Zappa
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08-24-2012, 05:47 PM
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Senior Member
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Join Date: Aug 2010
Location: Metro Detroit
Posts: 13,016
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Quote:
Originally Posted by finnbow
Not really. Renovating and selling "fixer-uppers" isn't an uncommon occurrence, even today. Entire neighborhoods in big cities are still gentrified, though certainly at a slower pace than during the go-go times.
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Um...then there's Detroit, which is my frame of reference. Not so much around here these days.
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08-24-2012, 08:39 PM
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Area Man
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Join Date: Oct 2009
Location: The Swamp
Posts: 27,407
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Quote:
Originally Posted by whell
Um...then there's Detroit, which is my frame of reference. Not so much around here these days.
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Yeah. The last time I went snooping around at recent images of Detroit, it looked like huge chunks of it are-------gone.
The same with my old stomping grounds, Youngstown, Ohio. Although it's an improvement with Y-town. Old steel mills and abandoned neighborhoods had stood vacant and delapidated for years before they finally started razing it.
I was there two years ago, and it looked much cleaner, albeit far smaller, than it was thirty years ago. In the '80s that place was, quite literally, a war zone.
Dave
__________________
"When the lie is so big and the fog so thick, the Republican trick can play out again....."-------Frank Zappa
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