Glass Half Full
We now have a new administration
in Washington and regardless of your political leanings, there is
some good news for baby boomers - those who are retired and those
about to retire in a few years.
Taxes - One of Trump's tax
plans would have a single filer with an adjusted gross income (AGI)
of under $25,000 pay no taxes. A married couple filling jointly
could together have an AGI of under $50,000 and pay no taxes. This
would mean that seniors in low income tax brackets could possibly
be looking at tax-free income in retirement.
Revenue - Speaking of taxes,
just a 1% increase in employment would increase revenue substantially.
I love the idea of more young people contributing to the federal
budget. An increase in Social Security and Medicare revenue is good
for everyone. President Trump's focus on job growth is critical.
Protect Medicare - In total,
Obamacare raids Medicare by $716 billion from 2013 to 2022. Despite
Medicare facing a 75-year unfunded obligation of $37 trillion, Obamacare
uses the savings from the cuts in Medicare reimbursement to pay
for other provisions in Obamacare, not to help shore up Medicare's
finances. While we don't know what will replace Obamacare, let's
hope that the repeal will bring that money back to the Medicare
budget. If the reimbursement for doctors and hospitals falls any
further, we'll be driving 50 miles or more to find a Medicare facility.
Regulations - While building
regulations (permits, fees, etc.) are generally countywide or statewide,
the EPA (think environmental impact studies), is largely responsible
for the lack of sufficient new housing. Not only do we need more
home development to address a growing population, but we have a
critical shortage in senior housing (independent living, assisted
living, skilled nursing). If regulations were relaxed/removed, developers
would invest in all types of housing. I believe the new EPA leadership
will focus on making these changes.
In summary, I prefer to see that
the "glass is half full, not half empty" with regards
to the next 12 to 48 months. Stay positive.
Carry Forward Assessed
a California homeowner aged 55 or older, you have a once-in-a-lifetime
right to sell your home and carry forward its current assessed value
to a replacement residence of equal or lesser value. To qualify
to carry forward the current assessed value:
need to own and occupy the home sold as well as the replacement
homes must be eligible for the homeowner's $7,000 property tax
or your spouse must be at least 55 years old or severely and permanently
disabled on the closing date of the sale of your old home;
need to purchase (or construct) a replacement home of equal or
lesser value than the home you sold;
replacement residence must be located:
in the same county as the property sold; or
another participating county; and
purchase (or construction) of the replacement home needs to close
(or construction completed) within two years before or after closing
the sale of your old home.
When your replacement home is not
within the same county as the home you sold, the county of your
replacement property needs to be a participating county which allows
the carry-forward assessment from your prior county. Currently participating
counties include Alameda, El Dorado, Los Angeles, Orange, Riverside,
San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne and
Ventura counties (subject to change).
Only one carry-forward assessment
exemption is allowed per married couple. For example, if a married
couple takes a carry-forward assessment exemption, and one spouse
later dies, the surviving spouse may not take a carry-forward assessment
exemption even if they later remarry.
When you and a co-owner both reside
in the home and are not married, you both individually qualify for
the carry-forward assessment. However, on the sale, only one of
you may use the exemption. Thus, the co-owner who does not apply
for the exemption is precluded from any future use of the assessment
carry-forward tax relief.
The only exception is when you become
severely and permanently disabled after receiving the carry-forward
tax relief due to your age. In this case, you may use the exemption
a second time under a separate claim due to the disability.