It was a sixty minute drive to Stockton over the worst section of California freeway EVER, not helping my mood in the least. They have been working on replacing a two mile section here for well over five years .... and it's STILL not done.
Lucky for me, traffic wasn't TOO bad and I actually remembered where his office was. I tried to double check on my phone, but the battery was again dead as a doornail. This battery problem came from the last update I installed, which I'm sure was meant to disable the phone so I would buy a new one. Can you tell what kind of mood I was in??
At any rate, we went over all the paperwork and crunched the numbers. Over the years that I lived on that ranch property, we had to pay a ridiculous amount of taxes, including inheritance taxes upon the death of my grandfather. That and the bad cattle market, threw us into bankruptcy, although there was no such thing back then. I guess the only thing we are assured of is death and taxes!!
When inherited from my parents, it was the same nonsense .... taxes up to wahzoo!!! In all the years I owned it, I've never made a dime. Every cent I made went into repairs until my brother (yes I have a brother of sorts) insisted I move out and the place be sold. My attorney said I had no choice in the matter. Since I couldn't afford to buy him out, I had to put off my retirement for several years and find the home I live in now, but the ranch never sold.
With renters in place, I wasn't able to collect enough rent to repair the roof ($18,000) or the rotten window sills from over watering ($7,000), not to mention repairs on the septic system and well. It was a BIG drain on my bank account.
Now the government is taking a huge chunk of the money I made from the sale. On April 15, I will owe $57,000 in taxes, about a third of what I made. And by the way, that income will increase my medicare and supplemental insurance so high that my social security check will be cut in half. The plan was to pay off my current home, but that isn't going to happen.
On the way home, God decided to incite me even more by throwing up a 20 mile traffic jam where I drove 25 mph or less for well over an hour. I just turned my radio up full blast and tried to ignore everything going on around me!!
In an effort to keep myself occupied, I spent the next hour at home making another wonderful Miss Terry pizza, which came out much better this time. Eating pizza at 8:00 at night isn't exactly the best thing to do, but there's nothing like a pepperoni stomach ache to keep your mind off your problems.
Today I'm trying to wrangle up some help to move my heavy sewing room cabinet to another wall. I'm pretty self sufficient, but this move requires help. Maybe I can bribe them with a little pizza and beer!! I'll have to check the couch for change!!
They've been working (sorta) for 30 years. When I drove to Sac in the '90's we called 99 from Manteca to French Camp "blood alley", looks like they got that part pretty well done, the rest to Stockton sucks.
ReplyDeleteI remember that well Tom ... Blood Alley is now a four lane freeway, although slow at times. There are repairs going on from the end at I-5 all the way past Stockton. You're right ... it sucks!!
DeleteOk, lets try some logic here. Renting the farm and loosing money affected those tax returns in those years You were loosing the money on the rental. Either you had a loss that sheltered (saved you taxes) some of your earnings from wages or from retirement. You also depreciated the buildings while they were being rented. Those activities didn't affect your 2015 return except that the depreciation taken in those years was phantom. The property wasn't going down in value, it was going up. You also have two partners with their hand in your pocket. We call them involuntary partners, because they aren't doing anything constructive, they just suck, what they feel is their "fair share" out of the transaction. Whatever was you inherited basis in the farm was your cost. Your accountant added your closing costs to sell the farm to that amount. The difference between that adjusted cost basis and the sticker price that you sold it for is your true gain. That is taxed by Uncle Sam ie., Congress, at 15% or 20%, plus other extra fees to help Medicare and you might have to pay an extra 3.9% tax. Then because they let you depreciate the building that was going up in value (they call it Section 150 Unrecaptured gain)(aka phantom gain) gets taxed at up to 25% plus potentially the 3.9% tax. This is just the feds. Then California says what about me and tacks on their piece. The problem is really that when you deposited the proceeds into your account, you also deposited the fed and state piece. Now you know what their piece is and you get to pay up and settle up. I hope a little logic helps smooth the emotional pain. Additionally, they don't get those taxes from you next year so your taxes and your Medicare premiums will go back to normal, whatever that is. I hope this helps. Jim M
ReplyDeleteMostly you are right Jim. I basically went in the hole every year, but most expenses were written off over 20 years, meaning I had to report income instead. Depreciation never resulted in a refund, just that I didn't have to pay more than the 33% I pay in from my retirement. Medicare, sure to get their piece, only looks at the income, not the actual expenses. For example when I sold a very small rental for a $100,000 loss a couple years ago, they surcharged me based on the total sale. When I pulled money from an investment account, they surcharged me based on the total withdrawn. If little old me has to pay THAT much in taxes, can you imagine how much the government sucks out of this country every year? If I was guaranteed the money would go to Veterans or our military, I would be much happier about it.
DeleteI had a similar problem with my Medicare Tax, that they wanted to take out more money every month for a year. They told me after a year they would readjust my deductions. Call the Social Security office and explain they this is a one time income, they should cancel the extra money they are going to take. If you don't understand what I said, I can explain it in more detail.
ReplyDeleteI tried Ray ... they said it was income, regardless whether all the expenses were taken out or not. Whether one time or every year, they surcharge me for that year, basically for a service I never use. When the final expenses are written off, do they give me a refund or a credit for the next year? No, they do not. But I appreciate you providing the information!!!
DeleteI think having a. Pizza sounds better
ReplyDeleteI think you are right!!! LOL
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