1031-121 EXCHANGE

Under Section 121, you can sell your primary residence and exclude from taxable income up to $250,000 (single taxpayers) or $500,000 (married taxpayers filing jointly) in capital gains

A 1031-121 exchange allows the owner of, for example, an expensive house to use one benefit to exclude part of the gain from tax and the other to defer tax on the rest. And the gain excluded — up to $250,000 for a single homeowner and $500,000 for a couple — can be added to the "basis" of the new house, reducing the potential tax if it is sold.

The new break doesn’t apply to all homeowners, only to those who have home offices, or those who convert their house — or a portion of it ? into a rental. The deferral applies only to the portion of the house used for commercial purposes.  In general, you must use part of the home "exclusively and regularly" as your principal place of business, or exclusively and regularly as a place to meet or deal with patients, clients or customers in the normal course of work — or for rental use. if you are an employee, your business use must be for your employer’s convenience, not yours.

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            Making Sure You Qualify Qualifications

Avoiding Capital Gains on Your Primary Residence- 1031-121 EXCHANGE

The death of a spouse is a dramatic event, emotionally and financially. Fortunately, the Social Security widow benefit paid to surviving spouse’s takes some of the financial sting away. Learn more about the Social Security Survivor’s Benefit.

Social Security Widow Benefit

Wondering how to open a Roth IRA? The process is easy , once you have determined your eligibility and made the important choice of custodian. While there is no age limit on opening a Roth, there are income level requirements . for a single individual , that is $120,000 annually in income. Contributions to the Roth top out at $5000 per year, with the catch-up exception for individuals 50 years old or more , who are allowed an extra annual $1000 contribution. one benefit of the Roth IRA is that you can continue contributing to the account indefinitely, as opposed to traditional IRAs that require contributions to cease and require distribution to begin at age 70 ½. Your selection of custodian is very important. The custodian holds and manages the IRA for the owner, and there are a number of potential custodians you can choose among . Banks can hold the account, but may not have available the investment options and continuing education the investor needs . Brokerage houses normally specialize in a package of stocks and mutual funds as investment vehicles. self Directed IRA custodians offer traditional investments including stocks, bonds and mutual funds, and some non-traditional opportunities including precious metals and real estate. Research all the variables to determine which custodian most comfortably compliments your investment style, and which will provide the most reliable service. all custodians charge fees for their services, so familiarize yourself with the chosen custodian’s fee schedule. once you’ve done your homework establishing your eligibility and decided on the custodian, the biggest challenges on how to open a Roth IRA are behind you. The new custodian provides you with forms to fill out and return. Your paperwork is processed and you will be given an account number, and are ready to fund your Roth IRA, either by check or by electronic deposit. you then inform the custodian on your investment choices. The road to retirement just got smoother now that you know how to open a Roth IRA.

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How To Open a Roth IRA – Checking Qualification

As the Baby Boomer generation ages, the government has been spurred into creating incentive based seclusion vehicles. The Roth Ira is one of the best.

A Roth Ira is a form of individual seclusion account that is available in the United States. The Roth Ira was enacted into law in 1996 through the tube of collective Law 105-38. it was named for Senator William V. Roth Jr. Of Delaware who was the chief sponsor of the legislative exertion that resulted in the tube of the law. The Roth Ira differs from original Iras in several prominent matters.

Home Seasonings

The main divergence between the Roth Ira and a original Ira is that contributions to the account are taxed before they are put into the account and not when they are removed. The original Ira allows the owner to defer his tax promulgation until seclusion and the Roth Ira allows the owner to pay his taxes at the time of contributions and withdraw them after seclusion without tax liability.

To understand the difference, one must predict his staggering revenue level. If a man is earning more in his pre-retirement years, it is to his benefit to enjoy the tax breaks at that time. If his staggering revenue will drop significantly after retirement, his tax bracket will be low enough to make the tax payments at this time easier to handle. many habitancy are just the opposite. they anticipate that they will have investment revenue that will be quite high after retirement. If this revenue exceeds the quarterly earned revenue while the pre-retirement period, the Roth Ira is the great choice.

A Roth Ira must be seasoned for the funds in it to be excellent for tax-free withdrawals. The seasoning period is commonly five years. The account owner is allowed to withdraw up to the total amount of his contributions at any time with no penalty or tax. There are several extra circumstances that allow distributions of the revenue prior to the age of 59 and a half. one such circumstance is the buy of a principle residence for the owner, their spouse, lineal ancestors, or descendents. up to ,000 of excellent revenue may be withdrawn for this purpose.

The Roth Ira is free from the mandatory distribution requirement after the age of 70 and a half. This can be a big benefit over the original Ira for habitancy who are enjoying astronomical revenue in their Ira. they can continue these revenue tax free in the Roth Ira and not be forced to withdraw the funds. There are disadvantages and advantages to the Roth Ira when compared to other Ira types. A full understanding of how the assorted plans work and a financial plan that anticipates your potential earning history is the key to production the literal, selection of which plan is best for you.

Introducing the Roth Ira

Spirits USA

Home Seasonings | Blog | Introducing the Roth Ira

Last week I was speaking with an old acquaintance (we grew up on the same street) over a pint of Guinness about the direction of the market. He has been managing money for some time and I believe that it can be good to listen to another professional?s insight. if there is at least one thing you learn and can apply for the benefit of a client from a meeting, lecture, and seminar then your time is well spent. Especially if it only takes an hour out of your day. unfortunately, neither of us could devise a way where we could guarantee our clients 12% returns over the next 20 years. I did, however, bring up possibly the best way for someone to make sure their retirement is comfortable: eat a balanced diet, exercise regularly, and do jigsaw puzzles.

At first my friend looked strangely at me. I then explained to him that if a retiree can stay healthy they will greatly reduce the risk of outliving their assets. People in the financial services industry have always attempted to make sure that their clients have the biggest nest egg on that magic date of retirement. Being physically and mentally ready for retirement is just as important. Yes, it is still essential to save as much as possible for retirement. there will be other expenses during retirement besides healthcare, e.g. traveling, utilities, new cars, food, spoiling grandkids etc.

If a client is having difficulties with their cash flow I look at where the largest expenditures are. This is where spending may be pared back. according to the Bureau of Labor Statistics, people 65 and older spend approximately 12.7% of their income on healthcare. After housing expenses, this is by far the largest expenditure for this age group. if some type of assisted living or nursing home care is required then you can imagine the costs will be much greater. This percentage is expected to become larger since healthcare expenses have greatly outpaced general inflation. When doing projections for clients I use an 8% inflation rate for healthcare versus 3% for general inflation. Some reports show the future percentage of healthcare expenditures will reach 30% of income. This could wreck havoc on any size nest egg.
I realize that eating a balanced diet, exercising regularly, and doing jigsaw puzzles will not guarantee that your body and mind will remain sharp throughout your life. Genetics, unforeseeable accidents, and many other factors contribute to your well being. But if you can increase the odds of reducing your future healthcare cost in retirement then it may be financially beneficial to eat some vegetables, take a walk, and spend a little time on a puzzle. in case you think I want you to live blandly, don?t forget the benefits of drinking a glass of red wine or beer a day. I recommend a Guinness.

The Best Retirement Plan?

Life Insurance – When will I need it in life?

Contrary to what most people think, you only really need to get life insurance when you are in your late twenties. Usually that is the time when you have children and a spouse. Lifer insurance is only needed when you have dependents. Dependents are people who depend on you and would suffer financially if you were to pass away. These include kids, aging parents, and dependent spouses or siblings.

Life Insurance – what kind is best for me?

There are several different types of life insurance. The most common ones are term life, whole life and universal life. Universal and whole life insurance policies only benefit the broker who sells you it. They only benefit the broker who sells you them is because he gets a big compensation for it. They are simply to pricey and a waste of hard earned money. The best policy to get is a term policy. Term life insurance is not permanent because you buy them for a certain number of years that is necessary to take care of those who need it. For example, if your dependents are children and you have a 5-year-old child, a 20-year level term policy will get your kid through the age of 25. By then, they’ll be independent by then and you’ll no longer need life insurance.

Life Insurance – how much should I get?

Life insurance is supposed to replace your income if you were to pass away so your dependents won’t be faced with a financial burden. There are different ways to determine the amount that is right for you. one way is to multiply your yearly income by twenty. whatever way is used, make sure it determines how much insurance you will need to generate that income if the whole payout was simply put in a savings account at a bank. By doing so, the payment will generate interest and therefore be the income for your family.

Life Insurance and Estate Planning

I don’t give individual and specific investment and financial advice because I’m not a certified financial advisor or planner. what is do is estate plan for people. I have extensive knowledge of the different financial instruments that my clients have and how best to own, move and arrange them to best suit their needs. one of the most important things to remember is that the beneficiary designation of your life insurance is very essential. if it is a large policy, for tax reasons, you might want a trust set up as the beneficiary, instead of someone in your family.

Keep in mind that if you name your children as the beneficiaries, minors cannot inherit money total. Small children, such as a 10-year old child, aren’t likely to hang onto that money and use it for essential purposes. When speaking with a financial advisor about buying life insurance, speak with an estate planning attorney as well. For estate tax purposes, for example, sometimes it is better to have life insurance bought a certain way by either your spouse or a trust, then to buy and insure yourself. When you consider buying life insurance, if you don’t already have a will and estate plan, consult with an estate planning attorney and have everything set up all at once. It’ll save you and your family a lot of heartache and distress down the road.

Four Top Questions You Need to Answer Before Buying Life Insurance

After weeks of scouring documents on county programs and services and sitting through two full-day budget workshops, the solution to the county’s money woes seems clear: We need to cut the cost of providing services.

That’s a concept that seems to have eluded the county’s largest employee bargaining unit, Service Employees International Union 1021. Since this recession began in 2007, SEIU members have — in accordance with their contract — received 3 percent cost-of-living adjustments each year, all the while claiming they will make salary and benefit concessions if management goes first.

Well, management has gone first, second, third and fourth, giving up the same pair of 3 percent cost-of-living adjustments, absorbing 3 percent in retirement contributions, establishing a second-tier retirement plan and, most recently, increasing its share of health insurance. That’s beyond the cut in pay that came with the Board of Supervisors’ elimination of the Management Incentive Program (which was SEIU’s first condition to concession bargaining).

As of this writing, SEIU is not at the bargaining table. The statewide SEIU leadership has been bargaining with the governor and announced last week that it will accept the same 2-percent-at-age-60 retirement formula the county has been proposing locally. clearly, we need our local SEIU leaders to step up, accept the realities and finally take our economic crisis and fiscal challenges seriously.

The Board of Supervisors is

taking it seriously. The correctional supervisors have come on board. We recently imposed a contract on the correctional officers’ bargaining unit that reduced the county’s pick-up of the employee’s share of retirement, aligned cost-of-living adjustments to the actual inflation rate, reduced health benefit costs, and initiated a second-tier retirement for new employees. The deputy sheriffs, attorneys and mid-managers came on board last year, agreeing to temporary give-backs while permanent solutions are explored.

The board has set a target of reducing one-third of this year’s projected $18 million county General Fund structural deficit. That means cutting $6 million in ongoing expenses before June 30, 2011, and $12 million over the next two years — assuming revenue holds steady.

Without employee concessions, the board will be forced to cut or eliminate programs that translate to as many as 180 jobs lost, with more to come.

The services the county provides are people-intensive, and demand for them increases when economic times get tough. The board prepared for tough times by putting money away in reserves, but that’s a finite resource. Investments are also being made to expand the use of technology to enhance efficiencies and employee productivity. Unfortunately, those efforts will offset only personnel reductions already made or attempt to keep pace with future growth.

The board is not losing sight of the need to help grow the tax-generating, private-sector economy and put people back to work. Proposed investments by enXco and NextEra to expand their green energy footprint in Solano County are a start, and we know there’s more to come.

On Oct. 26, we have directed our staff to present the ugly options required to reduce our ongoing expenses without employee concessions. That means union leaders should be at the bargaining table now to give us alternatives that will better serve Solano and its residents — alternatives that don’t sacrifice the very people they claim to serve.

The author, a Vacaville resident, represents District 5 on the Solano County Board of Supervisors.

<a href="http://www.thereporter.com/opinion/ci_16303051tag:news.google.com,2005:cluster=http://www.thereporter.com/opinion/ci_16303051Sun, 10 Oct 2010 08:15:55 GMT 00:00″>Supervisors have no choice without SEIU at bargaining table

which should you use? That depends on the benefits you want to get and your current and projected tax brackets.

The younger you are, the better the Roth IRA appears. If you start early, the Roth allows more years of tax-free accumulations. the younger you are, presumably, the better the chances you are in a lower bracket, therefore reducing the benefit of its deduction with the traditional IRA.

Alternatively, if you are older and in a higher bracket, the better the traditional IRA looks. Additional elements that must be examined or projected are the yields you expect to earn, whether you want to make contributions after age 70.5 and the marginal bracket you expect to be in when the dollars are withdrawn.

There are no simple answers. Every brokerage account out there has computer programs that will find you an “answer” based on your assumptions. I have even found different answers with the same input, depending on when the computer assumes the money in invested. Pen your own numbers and relax – your decision is between the better of two strategies, both of which are winners!

Converting a traditional IRA to a Roth IRA

Should you convert your traditional IRA into a Roth IRA and change from tax deferral to tax-free accumulations? the answer here also depends on a number of factors.

You can roll all or part of a traditional IRA into a Roth IRA at any time, even if you have started to take withdrawals, as long as your modified adjusted gross income doesn’t exceed $100,000. Note the changes made by the Tax Increase Prevention and Reconciliation Act of 2005, passed in 2006, on page 141. however, when you do, you owe income tax on the money you move, If you made the rollover in 1998, you spread that extra income, and tax, over four years. If you find you exceed the $100000 limit, you can reverse the transfer up to the due date of your return plus extensions.

Your first consideration should be where you get the money to pay the tax on the rollover. It can’t come from the regular IRA or there will be a premature distribution with a penalty because those dollars are not going into the Roth.

Once you have funded your rollover, the considerations are the same as between a traditional and Roth IRA – your age and years to retirement, your bracket now and at retirement, do you want to contribute after age 70%, and will this impact on the tax ability of your Social Security. (Traditional IRAs require annual distributions which could increase the tax ability of your Social Security receipts. you don’t have to ever take money out of your Roth although your beneficiaries are subject to minimum distribution rules.) the big difference over, reducing your liquidity for future investments. Again, all of the major brokerage and mutual fund houses offer computer programs which will give you an “answer,” based on the assumptions you input.

Traditional Ira V/s Roth Ira

Sometimes buying a new business isn’t what you’re looking to do. There’s a lot to go through and even more to figure out. however, you can also buy companies that are in trouble and make them into something better. this may seem difficult, but with enough investors, it can become quite the venture.

Private equity is pretty much when you invest in a company with very little money, or that is going bankrupt. you now own a piece of it and are responsible for it. on the other hand, you also have the potential to make the business sink or swim. this means that you are also responsible for repaying any loans you and the other investors take out for the benefit of the business.

You can take something that was previously failing and make it into a better company than it was before. however, to do this, you need adequate private equity funding.

But also keep in mind that this isn’t a one person venture. you need help financially and to have other investors willing to help you along with enough funding to completely renovate and fix the business you are investing in.

There are several ways to come across enough money in order to do so. one way is loans.

Loans are pretty easy to come by, if you have the qualifications and are sure that you will be able to pay back the loans at a later date. this is not always the case. Sometimes the business you are trying to fix stays in the hole and you can’t do much to fix that. Then you are left with money to pay back that has already gone down the toilet.

Then there are grants. Grants usually don’t have to be paid back and are a great way of getting the private equity funding needed to invest. however, you have to be able to show what your plans are for the business, along with your co-owners to be. It’s not easy, but it’s possible. Keep in mind that there are quite a few ways of getting grants, including privately and from the government.

However, there are also certain websites that can both get you the grants you need for private equity funding, and to find ventures to invest in.

On these sites, you may find several people looking for investors to help bring their business back to the top. They will have a plan, what they are intending to do, and the amount that they need in order to make the business grow. These sites also have certain regulations that help both you and the people looking for investors. For example, if there isn’t enough money to help the venture or meet their goal, your money is returned to you so that there isn’t any pressure to complete the project and you didn’t invest just for nothing. this keeps things simple and friendly between both parties and allows you to attempt other ventures instead of being locked in for one that might fail.

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If you’re a full-time employee, chances are health insurance is one of the benefits available to you. If you choose to take advantage of this benefit, you probably understand that it can be a pretty important benefit to have. While you still pay a portion of the premium, it is usually much less than you would have to pay on your own since your employer typically splits the cost.

But what happens when you lose your job or decide to retire before Medicare kicks in? For many people, this can be a big problem. Most people will have the following options to consider:

• Enroll in your spouse’s plan if married.
• Utilize COBRA coverage.
• Find an individual health plan.
• Seek early-retiree coverage if available.

Find out more about what you can do in order to keep health coverage in the event you lose your job or retire early.

Health Insurance Options After Termination originally appeared on About.com Financial Planning on Saturday, may 8th, 2010 at 08:54:47.

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Health Insurance Options After Termination