I admit it, I do not see the purpose in FIREcalc

[Chuckanut]

Quote:

Originally Posted by Offgrid Organic Farmer If you purchased a property for $100k, you are not likely going to sell it for $200k. If you bought property for $100k and paid off the mortgage, then you could borrow $100k against it, and then sell the property for $100k. The IRS would see that you sold it for the same price you had paid to buy it, and there would be no taxes.

Ummm.... money is fungible.

[Another Reader]

Quote:

Originally Posted by Texas Proud I still have a suspicion that OP is not following the law as he does not seem to have paid any cap gains taxes on his properties and I am not sure if he put something down on the tax return he calculated the basis correctly.... However, he did say he was audited and was fine, but not sure when that was and did it that took into account the last 'sale' or foreclosure...

The OP appears to have rolled all his gains into this property, presumably through a series of 1031 exchanges. The value of the property dropped and all the gains evaporated. He avoided tax on the debt "forgiveness" via bankruptcy. I suspect any depreciation recapture was offset as well.

[Letj]

Quote:

Originally Posted by Texas Proud He was specific and so was I... spending to maintain a bldg is current expense... If I were you, I would get a new accountant... if someone destroyed cabinets and I had to put new ones in I would expense that as repairs, not a capital improvement.... not sure about HVAC... that would probably be capital if you put in a new one... but repairing the old one is current expense.... BTW, if you have those assets separate from the bldg then you get to expense the remaining balance when they were retired or destroyed....

The IRS rules are certainly open to interpretation. I do my own taxes. I have read the rules over and over for capital versus expenses and I have to admit I tend to take the conservative approach. Repairs for sure such as HVAC repairs are certainly expense but here’s the scenario with the cabinets. The tenants were section 8 and one of the worst we’ve seen. In a year they allowed the house the be overrun with lots and lots of roaches. I’ve never seen so many roaches in my life. The roaches infested the walls, carpets, cabinets including the base cabinets, etc and we had no choice but to throw everything out and start again. Some maintenance expense are considered capital. For example if you are doing a partial roof repair on a big apartment building, I cannot see how that would be not capital.

[HFWR]

Don’t have a dog in this hunt, but stashing a few dollars away tax-deferred for thirty years in low-cost index funds sure sounds easier than dealing with tenants, the IRS, bankruptcy court, etc.

Given my stash is primarily/mostly in stock/bond funds, FIREcalc was a useful input in my analysis of when I had “enough”.

[razztazz]

Quote:

Originally Posted by HFWR Don’t have a dog in this hunt, but stashing a few dollars away tax-deferred for thirty years in low-cost index funds sure sounds easier than dealing with tenants, the IRS, bankruptcy court, etc. Given my stash is primarily/mostly in stock/bond funds, FIREcalc was a useful input in my analysis of when I had “enough”.

In an interview Warren Buffet once related that in his early days, after having much success as an investor, everyone he knew kept telling him "Warren you should put that money into real estate." He said, "Why would I want to go into real estate when this stock market thing is so easy?"

[Offgrid Organic Farmer]

There was never an 'open enrollment' season for TSP during my Active Duty career.

[Another Reader]

Quote:

Originally Posted by Offgrid Organic Farmer There was never an 'open enrollment' season for TSP during my Active Duty career.

Did you max out your IRA's?

Spreading your money among multiple classes of assets would have probably yielded a better result overall, as long as you did not drain your IRA's to keep the apartment building.

[Offgrid Organic Farmer]

Quote:

Originally Posted by Another Reader Did you max out your IRA's? Spreading your money among multiple classes of assets would have probably yielded a better result overall, as long as you did not drain your IRA's to keep the apartment building.

No. I remained focused on the highest net gain investment I could find, to establish our farm. It worked.

[Another Reader]

Quote:

Originally Posted by Offgrid Organic Farmer No. I remained focused on the highest net gain investment I could find, to establish our farm. It worked.

You got the farm but lost everything else. I don't think you pulled all your real estate equity out to buy the farm, just some of it. If some of the equity or the money that created the equity had gone into protected retirement accounts instead of the apartment black hole, you would have ended up with more. Without the specific numbers to consider, I can't do any math to illustrate this, but I'm pretty sure this is the case, based on what you have said.

What I'm saying is your investment prejudices and what turned out to be destructive assumptions about your investment real estate left you a lot poorer than you might have have been had you been more open to other investments. I'm a numbers person. I like to see operating statements and the data to back up the assumptions underlying the operating statements. You haven't provided any numbers that support buying multi tenant properties in your area of Maine. Maybe it's a good time now to examine your prejudices and assumptions, before you again buy real estate that may not perform as you would like or need it to perform.

[Offgrid Organic Farmer]

Money is not all there is. Money will come and it will go. I achieved the goal that I wanted.

Now I have another apartment building, much larger than the last.

[COcheesehead]

Quote:

Originally Posted by Offgrid Organic Farmer Money is not all there is. Money will come and it will go. I achieved the goal that I wanted. Now I have another apartment building, much larger than the last.

Why should we believe anything you say?

[aja8888]

I think this thread is running out of gas....

[Texas Proud]

Quote:

Originally Posted by Offgrid Organic Farmer Money is not all there is. Money will come and it will go. I achieved the goal that I wanted. Now I have another apartment building, much larger than the last.

Hey, I am skeptical on some of what you put down but not on this...

Congrats on getting to the place you had envisioned when you were young... that is a successful life IMO...

[Offgrid Organic Farmer]

Quote:

Originally Posted by COcheesehead Why should we believe anything you say?

Why would I care?

You may believe anything you wish to believe.

[Milton]

[MichaelB]

https://www.youtube.com/watch?v=gBzJGckMYO4