This might make you feel better about US taxes.

[VegasBella]

To clarify this is on the portion of income above 200k.. not the entire 200k.

This makes a difference.

And don't forget , the taxes have to pay for the universal health coverage in Canada.

Given that my current insurance costs are more than my mortgage here in the US for what I consider to be sub-par health care, I would welcome higher taxes in exchange for universal health coverage. (Not to mention the other reasons I favor universal health coverage.) Our mortgage is about $600/month and our insurance is about $700/month.

Here my 3200 sq. ft. house on a normal lot is headed towards 3 million. If we sold it capital gains tax, realtor fees, etc. would kill us. With Apple Computer spaceship campus being built our houses will do nothing but go up. Worth so much but can't afford to sell.

Ummmm, the fact that there even would be capital gains to tax suggests that you COULD "afford to sell." Just reinvest the gains into something else and avoid that tax. You can also negotiate your realtor fees down. Personally, I've only sold two properties but I negotiated the realtor fees on both. Finding a buyer is the tricky part in your equation. The real issue is that the market for homes worth 3 million is pretty small. That, and it sounds like you really like your home and don't want to sell.

 

[Icc5]

3 million small market

This makes a difference.



Given that my current insurance costs are more than my mortgage here in the US for what I consider to be sub-par health care, I would welcome higher taxes in exchange for universal health coverage. (Not to mention the other reasons I favor universal health coverage.) Our mortgage is about $600/month and our insurance is about $700/month.



Ummmm, the fact that there even would be capital gains to tax suggests that you COULD "afford to sell." Just reinvest the gains into something else and avoid that tax. You can also negotiate your realtor fees down. Personally, I've only sold two properties but I negotiated the realtor fees on both. Finding a buyer is the tricky part in your equation. The real issue is that the market for homes worth 3 million is pretty small. That, and it sounds like you really like your home and don't want to sell.

Funny you say that. Yes, we are staying because still have most of family in the area. Houses here are so easy to sell it's unreal. The last one on our street sold again before even making it to open house about $300,000 above asking and houses will only keep selling faster and higher as Apple finishes it's spaceship like campus. We would be living the good life if it wasn't for traffic.

 

[VacationForever]

Actually, that would be $480k mortgage. But first of all, what parent is going to give $120k to a child to buy a house? At best, a rich parent might loan $120k but then child still has a $600k debt to pay.

Why would parents not help their child with the down payment? You lost me there.

 

[SMHarman]

This makes a difference.



Given that my current insurance costs are more than my mortgage here in the US for what I consider to be sub-par health care, I would welcome higher taxes in exchange for universal health coverage. (Not to mention the other reasons I favor universal health coverage.) Our mortgage is about $600/month and our insurance is about $700/month.



Ummmm, the fact that there even would be capital gains to tax suggests that you COULD "afford to sell." Just reinvest the gains into something else and avoid that tax. You can also negotiate your realtor fees down. Personally, I've only sold two properties but I negotiated the realtor fees on both. Finding a buyer is the tricky part in your equation. The real issue is that the market for homes worth 3 million is pretty small. That, and it sounds like you really like your home and don't want to sell.

And in the rest of the civilised world healthcare costs on the end user fall in retirement (with usage increasing)

In the US you need a huge retirement income to pay those healthcare premiums and property taxes.

 

[friedshrimp]

Given that my current insurance costs are more than my mortgage here in the US for what I consider to be sub-par health care, I would welcome higher taxes in exchange for universal health coverage. (Not to mention the other reasons I favor universal health coverage.) Our mortgage is about $600/month and our insurance is about $700/month.

So what you are saying is you would be happy with other Americans subsidizing your health insurance.

 

[friedshrimp]

Why would parents not help their child with the down payment? You lost me there.

An adult child should be responsible for their own housing and not expecting others to take care of them. I bought my own house with no help (never expected help never asked for help) and my kids know when they buy a house it will be by their own sweat as well.

So just where did I lose you?

 

[klpca]

Just reinvest the gains into something else and avoid that tax.

Here is the relevant part of an article about taxability of personal residence sales:

EXCLUSION REQUIREMENTS
IRC section 121 allows a taxpayer to exclude up to $250,000 ($500,000 for certain taxpayers who file a joint return) of the gain from the sale (or exchange) of property owned and used as a principal residence for at least two of the five years before the sale. A taxpayer can claim the full exclusion only once every two years. A reduced exclusion is available to anyone who does not meet these requirements because of a change in place of employment, health or certain unforeseen circumstances. Unlike under former law, the gain on the sale of a house is now permanently excluded, rather than deferred, and a taxpayer doesn’t have to purchase a replacement home to exclude the gain. - See more at: http://www.journalofaccountancy.com...mesalegainexclusion.html#sthash.7bcUb5vq.dpuf

Not picking on you, just wanted to get the current law into the discussion.

 

[klpca]

Why would parents not help their child with the down payment? You lost me there.

An adult child should be responsible for their own housing and not expecting others to take care of them. I bought my own house with no help (never expected help never asked for help) and my kids know when they buy a house it will be by their own sweat as well.

So just where did I lose you?

Not everyone chooses to spend their money the same way.

We won't be helping out kids much. We just can't afford it because we have three kids and real estate is expensive. My grandfather loaned us money to buy our first house, recorded a second on the house after the sale was complete, and we paid him back within two years. He also charged us the going interest rate at the time (12% ) but it was the boost that we needed and we have never forgotten that. I expect that we may do something similar for our kids, but there is no one-size-fits-all when it comes to money. Hence all the debates on taxes.

 

[DeniseM]

An adult child should be responsible for their own housing and not expecting others to take care of them. I bought my own house with no help (never expected help never asked for help) and my kids know when they buy a house it will be by their own sweat as well.

So just where did I lose you?

This is your OPINION - not a universal norm.

Also, in the area where you live, I believe that it's a lot less expensive to buy a starter home - that makes a difference.

I recently helped my daughter with the down payment on her first home in California. I told her it was an advance on her inheritance.

Sent from my BNTV400 using Tapatalk

 

[friedshrimp]

This is your OPINION - not a universal norm.

Also, in the area where you live I believe that its a lot less expensive to buy a starter home - that makes a difference.

Sent from my BNTV400 using Tapatalk

Did I state anywhere that it was a universal FACT? Did I not state "should"? The cost of a home is immaterial (IMO since this seems to be so important to you). In most places where houses are expensive, wages are higher as well. But better yet, not helping my children (and again, IMO, others not helping their children) teaches them to be responsible financially speaking....and that IS a fact.

 

[DeniseM]

Friedshrimp - again, this is your opinion. Which you are welcome to share, as long as you do so in a courteous manner, in accordance with the TUG posting rules.

Sent from my BNTV400 using Tapatalk

 

[silentg]

I disagree, my SIL a veteran in Iraq and my daughter found a house they loved. The Loan Companies made them jump thru hoops. My Husband and I loaned them the Money to buy the house. Once they did they refinanced at a better rate, and paid us back in
Full.

 

[VegasBella]

So what you are saying is you would be happy with other Americans subsidizing your health insurance.

No, not really. I'd happily pay that much or more in raised taxes if healthcare were actually universal. I'd like it to be more standardized. That's a pet peeve of mine, discussed in other threads. Also, I'd like to know that the poor people I interact with aren't ignoring serious symptoms of illness due to financial reasons - particularly if those illnesses are communicable.

 

[vacationhopeful]

..... people I interact with aren't ignoring serious symptoms of illness due to financial reasons - particularly if those illnesses are communicable.

NOT just POOR people ignoring their health ... WHO wants to admit to being sick with a MAJOR health issue ...

re: Charlie Sheen?

 

[VegasBella]

NOT just POOR people ignoring their health ... WHO wants to admit to being sick with a MAJOR health issue ...

re: Charlie Sheen?

Obviously there are people who avoid seeking medical treatment for a number of reasons: shame, worry, they're busy, religion, etc. But I'm talking about the ones who avoid going to the DR because they can't afford it.

 

[VacationForever]

An adult child should be responsible for their own housing and not expecting others to take care of them. I bought my own house with no help (never expected help never asked for help) and my kids know when they buy a house it will be by their own sweat as well.

So just where did I lose you?

When parents are comfortable or well to do enough, and the responsible hardworking adult child does not make enough to not have to stress over money, then there is nothing wrong or I would say more strongly based on my own value system, should help the child out of love. Your parents did not help you and your kids know that you won't help them, and that is well and good for you. But that is not necessarily the norm. It does not make a child less financially responsible when parents offer them financial help.

My estate planning includes ensuring that my adult child will not live in poverty - have roof over head and a small income stream. He is expected to continue to work. We live in a large home now and have a retirement home elsewhere and when we retire, we will downsize the current residence to a smaller home that he will be financially responsible for the upkeep and maintenance while we move out of state. He is one of the most responsible adults I have known and helping him out financially does not make him any less responsible.

 

[am1]

Parents paying for the down payment for their kids is a good way to shelter money from future taxes. Regardless of anyone gets paid back with or without interest. Every parent has to make this decision themselves based on their own situation.

 

[VacationForever]

Parents paying for the down payment for their kids is a good way to shelter money from future taxes. Regardless of anyone gets paid back with or without interest. Every parent has to make this decision themselves based on their own situation.

I don't believe this to be true outside of the maximum tax exempt 14K per person rule and payment for medical insurance. Anything more than that has to be reported in the income tax returns of the giver.

 

[SMHarman]

Parents paying for the down payment for their kids is a good way to shelter money from future taxes. Regardless of anyone gets paid back with or without interest. Every parent has to make this decision themselves based on their own situation.

Indeed. A left pocket right pocket form of repayment can often make sense. It is repaid end everyone's eyes. Accessible for the parent if needed but has been dropped down a generation for estate taxes.

 

[SMHarman]

I don't believe this to be true outside of the maximum tax exempt 14K per person rule and payment for medical insurance. Anything more than that has to be reported in the income tax returns of the giver.

That is per Individual so $28 if child ans spouse. Gift to the grandkids and keep adding those $14k.

Also a lump sum of say $140k in down payment can be forgiven at $14k a year. Just takes the right paperwork

 

[klpca]

That is per Individual so $28 if child ans spouse. Gift to the grandkids and keep adding those $14k.

Also a lump sum of say $140k in down payment can be forgiven at $14k a year. Just takes the right paperwork

And double the 14k for individual and spouse giving to child/child's spouse. Lots of planning opportunities.

 

[John Cummings]

I'm certainly no tax expert, but I've surely paid my fair share of taxes associated with occupied primary residences in several different U.S. states over the years.
AFAIK, no "expenses for the upkeep of their home" (i.e., primary residence) in the U.S. are in any way federal income tax deductible. Only upon later sale do improvement expenditures figure into computation of "basis" and the sale-associated capital gains tax maybe due after the sale; that's it, to my knowledge.

What exactly might you believe to be otherwise here?

P.S. Perhaps you refer to potential U.S. tax credits for certain eligible energy-related improvements? (such as solar panels, to cite one specific example). These are not "upkeep" expenses. Also, unless extended by federal legislation, those U.S. tax credits for solar installation are currently slated to disappear at the end of CY 2016.

The major difference is that the interest on your mortgage is tax deductible in the US and is not deductible in Canada.

 

[John Cummings]

In the US you need a huge retirement income to pay those healthcare premiums and property taxes.

That is not true if you are 65. I have fantastic healthcare with no co-pays, deductibles. My Medicare Advantage plan is available to all seniors in Southern California and it includes dental insurance, drug coverage, etc. and all I pay is the standard $104 payment for Medicare Part B.

I was in the hospital 3 times in 2014 and 2015 and my insurance paid $100,000 at absolutely no cost to me.

My sister lives in BC and her healthcare is not nearly as good as mine.

 

[John Cummings]

This is your OPINION - not a universal norm.

Also, in the area where you live, I believe that it's a lot less expensive to buy a starter home - that makes a difference.

I recently helped my daughter with the down payment on her first home in California. I told her it was an advance on her inheritance.

Sent from my BNTV400 using Tapatalk

I agree with Denise. Many parents help their kids with purchasing homes. We helped our son and his family. We are glad to help them if we can.

 

[SMHarman]

That is not true if you are 65. I have fantastic healthcare with no co-pays, deductibles. My Medicare Advantage plan is available to all seniors in Southern California and it includes dental insurance, drug coverage, etc. and all I pay is the standard $104 payment for Medicare Part B.

I was in the hospital 3 times in 2014 and 2015 and my insurance paid $100,000 at absolutely no cost to me.

My sister lives in BC and her healthcare is not nearly as good as mine.

From another forum I participate in...

Since I was just researching something else, here's some costs from a retired person's perspective for 2014 plus Medicare Part D using 2015 premium (single coverage):

$1259 Medicare Part B premium
$1922 Medicare Part B supplemental coverage
$674 Dental premium
$480 Medicare Part D premium
-----------
$4335

That's a fair amount in premiums to pay in retirement. Add double that Or more in property taxes and that's a sizeable chunk of change on fixed expenses.

And if we are using personal experiences not data. My father in the UK is on a Leukemia treatment that runs to $150,000 in pills and has never paid a penny in 'medical premiums' his entire life.