Many people equate home ownership with financial success and the American Dream. It’s something most of us in the United States grow up thinking, and it’s something most of us believe we should do. But, owning a home isn’t for everyone, and depending on where you live it could be difficult to achieve. Owning a home isn’t necessarily a good investment either. (more…)
A lot goes into planning a great trip – choosing flights and hotels, making sure you have all the necessities, finding a house sitter, etc. Personally, I’m never able to relax and enjoy the trip until I’m on the flight to my destination. I’m always worried something might go wrong, and some unforeseen circumstance may force me to cancel all or part of the trip.
By the time you get to the airport, you’ve usually spent a good chunk of money that’s not refundable. If you have to cancel last minute, you miss out on the trip you’ve been looking forward to for months, and you lose the money you spent so far. (more…)
While we hope it never happens, break-ins to our homes do occur. I returned home this summer to find my home was burglarized. This article shares what we learned from this unfortunate experience and ways to improve your home security and insurance coverage.
If you return home and see evidence of a break-in:
1. Contact the police! They’ll ask if the burglar is still in your home. If you’re not sure whether the thieves have left your property, wait until the police arrive to enter your home. Our first instinct is to rush into the home to check on things, but remember that it’s much more difficult to recover from physical harm than from the loss of belongings and property damage. Note: If you do walk through your home to see what’s been stolen or damaged before the police arrive, don’t move anything because the police need to see all the evidence. (more…)
Before traveling, it’s a good idea to figure out what your health insurance covers in case you have to make an unplanned visit to the hospital. Also, if you rent a car while traveling, the rental agency will ask if you want to buy rental car insurance, so it’s good to know whether you need it. Understanding how and where your health and auto insurance extend when out of town is important, especially if you want to avoid being on the hook for a big bill. First things first, though – make sure you travel with your healthcare insurance card for you and your family members, and bring proof of auto coverage. (more…)
As Wealth Advisors, we provide advice on all aspects of your financial situation, and we work with a network of carefully selected professionals in taxes, estate planning and insurance to devise appropriate solutions that will help you achieve your goals. This article is a collaboration between Merriman Advisor Chris Waclawik and Amy Deforeest, personal risk advisor at Willis Towers Watson, who is one such member of our professional network team.
Many of us set our home and auto insurance when we initially purchase it, and then we forget about it. Unfortunately, we may not realize we’ve made a mistake until it’s too late. (more…)
Many families hold on to and rent out their former residences with the goal of moving back in the future. Some plan to move back into the rental full-time for at least two years prior to selling to take advantage of the gain exclusion of $500,000 ($250,000 if single), which can wipe out all or most of the gain on the property. This was allowed at one time, but that’s not quite the case anymore.
One of the benefits of having a rental is the ability to claim depreciation on the property, which allows you to offset rental income that would otherwise be taxed as ordinary income. The depreciation you take reduces your basis in the property, potentially resulting in more capital gains when you ultimately sell the property. If you sell the property for a gain, the amount up to the depreciation you took is taxed at the maximum recapture rate of 25%. Any remaining gains are taxed at the lower long-term capital gains rate.
When the Property Sells for a Loss
If you sell your home for a loss, whether it’s currently a rental or is now your primary residence, you aren’t subject to depreciation recapture or other gains taxes. Due to depreciation decreasing your cost basis in the property each year until it reaches zero, it’s more common that sales of former rental homes result in gains. (more…)