over 55






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 Value

If you're 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:

  • You need to own and occupy the home sold as well as the replacement home;
  • Both homes must be eligible for the homeowner's $7,000 property tax exemption;
  • You 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;
  • You need to purchase (or construct) a replacement home of equal or lesser value than the home you sold;
  • The replacement residence must be located:
    • in the same county as the property sold; or
    • within another participating county; and
  • The 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.



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