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Team Investment’s Tanya Marchiol on the impact of fiscal cliff on the housing market for America’s upper class.
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He said that the rich are cashing out all kinds of people are cashing out assets which you've gone all in value to take advantage of lower tax rate this year.
How about selling mentions luxury homes on the doing that.
Joining us now is -- mafia -- trauma team investments a frequent real estate guy that follows on Varney and company -- -- -- Is my basic premise right.
All rich not a -- just rich people.
But people to make a lot of money in the housing market selling it now so that -- -- paid -- lower capital gains tax rate.
No not necessarily -- personal you have to understand real -- is the case by case situation.
So to go to your point yes there are some situations where people are selling hot I have several large companies who have bought bulk packages hundreds of homes.
That they really do need to get rid of before the end of the year.
To avoid that tax -- However when we're talking about a single family home and the wealthy they understand several things that just maybe the general public doesn't.
And this is why it is so important have a good real estate professional and a great accountants.
-- -- -- Talkback massive amounts of I don't yeah yeah a couple of no listen here you go because this is what people don't understand about real estate.
One its leverage a ball.
So first of all the wealthy probably have their primary and secondary home and in a trust and it's not going anywhere it's going to be -- passed down through generations.
Secondly if it's not and they need to do something with -- its leverage about where they could go out and buy other things put money and other places.
And really you never need to take a gain on real estate it's a situation where you could go out create a lot of cash flow.
And leverage that to the hell would you want to make a lot of money with that.
Money -- look I I take your point and I think you -- correctly identifying a different market here.
If you've invested in real estate you -- a whole bunch of property purely as an investment.
I think it would make sense to sell this year to get -- -- capital gains tax rate but if you're an individual.
And is just your own private council may be a second house that's a separate case -- -- and that's the case that you'll make it.
That's not way you sell to avoid -- capital gains tax that goes up next year right.
Right ended their personal family home after remember that you get a tax break of 500000 dollars right off the back.
So and there's a big difference when you talk about investment real estate.
Between ordinary income and capital gains so you are rental income is going to be taxed as ordinary income but remember you have a lot of things -- right up against that.
Your capital gains is when you sell and that's what could potentially go -- -- however -- you don't need to take a profit on your realistic.
You're you're you're the only person who can can vote for three and a half minutes interview into a three and a half minute commercial you do so well and -- really -- Thanks for joining us I know it's only -- you -- -- appreciate being with us thanks on --
