Don't Forget About The Little Guy
The Emergency Economic Stabilization Act of 2008 (a.k.a. the $700 Billion Bailout Bill) has so dominated the news lately that we have forgotten about its little sibling-The Housing and Economic Recovery Act of 2008 passed in July (a.k.a. the $300 Billion Subprime Crisis Bill). These two bills already authorize the expenditure of $1 trillion, so the more we know about them the better. The Sub-prime Crisis Bill in many ways more directly affects the pocketbooks of homeowners and real estate investors. As with all congressional efforts to address immediate issues, lawmakers took this opportunity to settle old scores, appease lobbyists and pander to constituents. Of particular note is the modification of Section 121 of the Internal Revenue Code. Section 121 is the exclusion of capitals gain tax on the sale of your primary residence ($250,000 if you are single, $500,000 for married couples). A popular strategy was to use Section 121 in conjunction with 1031 tax deferred exchanges for investment properties. Although there are numerous versions of this strategy that eliminate hundreds of thousands of dollars in capital gains tax, the basic idea was to avoid capital gains tax by moving into a rental home two years prior to selling it and benefit from Section 121 or move out of a property that was formerly a primary residence and convert it into a rental. Beginning January 1, 2009, property owners trying to convert a rental property into a primary residence will loose tax advantages in proportion to the number of years they owned the property as a rental.
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Laughs Online
Outraged Lehman Bros. employees stage a protest by
blockading the entrance to the bank's headquarters ....
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What's the big idea?
Paper or Plastic 
As I was paying for my groceries at Ralph's, the bagger told me that store sales were up by 80% because people are not eating out as much these days. The weak economy is forcing people to rediscover home cooking. I have to say first of all that I am impressed that the bagger is up to speed on the gross revenue for that Ralph's location − long way from 'paper or plastic.' But then I thought about whether spending a little more time at home cooking with the family is necessarily a bad thing. I think part of the reason prosperity so often correlates with going out is because we rely more on being entertained by professionals than entertaining each other. Progress means specialization right? So, I suppose it is only natural that in an advanced society we have outsourced the responsibility of family entertainment. Nevertheless, it seems to me there are certain skills that are worth preserving.
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Sincerely,
Kwame J. Granderson
Equinaire
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