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  #161  
Old 08-24-2012, 04:48 PM
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No you haven't. If you buy $1000 in property, you must also pay tax on it. You then pay tax on it every year that you hold it. You then pay tax again at sale time on any gain. You're lucky if you break even.
How about buying, renovating and flipping houses as your job (which is (or was) pretty common)? Buy something for $200K, put $50K into it and sell it for $350K six months later. Minus the realtor fees, taxes, etc., you still would have a very tidy profit. How does this differ from other forms of income?
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  #162  
Old 08-24-2012, 04:55 PM
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I think that taking risks isn't depressed currently. What is depressed is demand. With prospective demand for their products, entrepreneurs take risks. Without it, they don't.
If you're hungry enough, anyone will take a risk. Demand can be created with the right product or service. This gets back to my earlier point, and to the complaints about companies sitting on cash. Why is it happening? Its not greed. Its the lack of appropriate incentive to engage in economic activity. I hear this from business owners frequently. Where there's smoke there's fire.

Last edited by whell; 08-24-2012 at 04:58 PM.
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  #163  
Old 08-24-2012, 05:01 PM
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How about buying, renovating and flipping houses as your job (which is (or was) pretty common)? Buy something for $200K, put $50K into it and sell it for $350K six months later. Minus the realtor fees, taxes, etc., you still would have a very tidy profit. How does this differ from other forms of income?
That "occupation" was driven by an over-inflating housing market. Given the inflation in the market, there was an opportunity. In practice, it is income, but I doubt we'll see folks pursuing this in volume anytime soon.
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  #164  
Old 08-24-2012, 05:07 PM
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That "occupation" was driven by an over-inflating housing market. Given the inflation in the market, there was an opportunity. In practice, it is income, but I doubt we'll see folks pursuing this in volume anytime soon.
Not really. Renovating and selling "fixer-uppers" isn't an uncommon occurrence, even today. Entire neighborhoods in big cities are still gentrified, though certainly at a slower pace than during the go-go times.
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  #165  
Old 08-24-2012, 05:20 PM
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That's old thinking, Dave. It ain't that simple any more. You forgot important elements of tax-dodging, credits, hiring lobbyists to bribe politicians, creative accounting ... It's a major element of big business these days. Nobody is even capable of making sense of corporate balance sheets anymore.
Right. The whole concept of spending $10 to save a buck then blaming the loss of $9 on someone else always was lost on me.
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  #166  
Old 08-24-2012, 05:47 PM
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Not really. Renovating and selling "fixer-uppers" isn't an uncommon occurrence, even today. Entire neighborhoods in big cities are still gentrified, though certainly at a slower pace than during the go-go times.
Um...then there's Detroit, which is my frame of reference. Not so much around here these days.
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  #167  
Old 08-24-2012, 08:39 PM
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Um...then there's Detroit, which is my frame of reference. Not so much around here these days.
Yeah. The last time I went snooping around at recent images of Detroit, it looked like huge chunks of it are-------gone.

The same with my old stomping grounds, Youngstown, Ohio. Although it's an improvement with Y-town. Old steel mills and abandoned neighborhoods had stood vacant and delapidated for years before they finally started razing it.

I was there two years ago, and it looked much cleaner, albeit far smaller, than it was thirty years ago. In the '80s that place was, quite literally, a war zone.

Dave
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