One advantage to living in Texas

13 Pros and Cons of Living in Texas | Roadway Moving

16 Pros and Cons of Living in Texas (2023 Updated)

35 Pros and Cons of Living in Texas (Get Facts Not Fluff Now) - Dividends Diversify

 

Capital gains was throttled back for federal tremendously. Adding to the desire to cash in. A couple also gets 500k tax free, Calif follows along with that. Yes they will possibly owe Fed and Calif tax. Tax has to be paid to have a country or state. Some states don’t have income tax. It’s free stuff in those. Not really. Some convert their property to rental income and do a 1031 exchange. Then move in the new one after first renting it. Then the kids inherit the property at market value and all that deferred gain is history. What a country, free stuff everywhere.

 

Yes they would .... & they're really really going to need it - because the thing is - a lot of gain is simply to offset inflation - similar to Fiat money sitting in an annuity, or stocks, or the bank. Imagine over 5 years you have 30% deflation/inflation - so your $500K savings/home is adjusted to $750K - so your cash/out is a $150K gain. Between CA's 8% mid-rate (highest is 12%) & fed's 15% mid rate (highest is 20%) on capital gains .... you owe the man 23% of that $150K.
ie - $34K. So now you're appreciation isn't really appreciating because the government took part of it that it created in the first place just so they could strip away some of your assets to pay for a lot of things that many people would never want to pay for.
LoL
On top of the 5 figures you paid to have a moving company to help you escape homeless feces encampments & get you the heck out of dodge?
Yes you can pay $1,000s to offset a lot of gain through 'improvements' & clever CPA tactics & other means - which in & of their self, are offsets to those gains. That's a good thing because the average person is going to pay 6% on the sale & buy ... & yup - that too is a write off.

Arguably the #'s above are just illustrative of how the man is going to get his pound of Flesh ..... that too may very well MOSTLY be because they borked up the dollar's purchasing power in the 1st place.
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The last 1031 we did was $1,200 - some 5yrs ago. Actually it was a hybrid of a 1031 due to total loss of the improvements. renters burned the place down (heavy drinking and smoking) just south of Nashville.

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You 'forgot' to include the primary residence capital gain exclusion of $250k for singles, $500k for married couples on their federal taxes. Some sources are showing me the same exclusions for California taxes. So for your particular example of 5-year home appreciation in California, the capital gains tax is exactly $0.

We've owned our home for 34 years. While it has appreciated very nicely, if sold now, its taxable capital gain (after adjusting cost basis to reflect several capital improvements) would still be $0. So I am having a very difficult time feeling sympathetic to complaints elsewhere about large capital gains tax bills on homes owned for a fraction of that time. They should count their blessings for having bought in a neighborhood that appreciated faster than average.

Yes, I am dealing with substantial capital gains taxes on our lifetime of savings and investment growth. That is the price of having the success to enable early retirement. One and two generations earlier, the marginal taxes rates were even higher, on everything, not just capital gains.

As we figured out earlier in this forum, the only meaningful currency that has lost less value over the long them than the U.S. dollar, is the Swiss Franc. The Euro has been approximately the same as our dollar, but has existed less than a quarter century. Everything else has under-performed the $US dollar.

A month ago, we were traveling mostly in Chile, but spent several days in Argentina. The Argentines are suffering severe inflation, and some businesses offered huge discounts for paying in greenbacks instead of credit cards or their pesos. We received a 60% discount for a nice dinner by paying with green instead of yellow, and that owner was the most appreciative of our entire trip. Yesterday, their new President (elected in a run-off just after we left) slashed their currency value by more than 50%:
Argentina sharply devalues its currency and cuts subsidies as part of shock economic measures | AP News

 

i looked through the first one, the cons were enough to stop me in my tracks

 

We lived in San Antonio for 5 years then in San Angelo (West Texas) for another 5....we LOVE Texas but it does take getting used to that heat...whether it's a "dry heat" or not! Getting windows tinted dark helps and we also had to keep oven mitts in the car to be able to touch the steering wheel when the sun baked it to a zillion degrees.
We are loving the Colorado 4-seasons but not fans of our crazy-high taxes (on EVERYTHING) from our liberal, tax-and-spend Democrats in Denver who want to turn us into a mini-California. We used to be a red state but the mass-exodus from our west coast states turned us purple and now blue.

 

"The Schedule A deduction for state and local taxes (SALT) used to be unlimited. These include income taxes (or general sales taxes), real estate, and personal property taxes. With the passage of the TCJA, the SALT deduction is now limited to $10,000 ($5,000 if married and filing separately).25"

Internal Revenue Service. "With New SALT Limit, IRS Explains Tax Treatment of State and Local Tax Refunds."

"This can be a real problem for people in states with high income or property taxes, such as New York and California.26"

The changes were made so that if your state is one that is a high tax state you are not going to get out of paying your fair share of Federal Taxes - and yes the states of New York and California screamed bloody murder over this change. Chuck Schumer said it was Un-American!

Chuck Schumer SALT Deduction-Cap Repeal: Tax Bailout for Rich Liberals | National Review
"Senate majority leader Chuck Schumer claims to be a progressive Democrat and champion of the working class, but he’s pulling every string he can right now to ensure that a tax cut for rich liberals makes it into President Biden’s infrastructure legislation."

Democrats Face Moment Of Truth: Will They Give Millionaires A Tax Cut? | HuffPost Latest News

Most millionaires could get tax cut under House Dems' tax plan - POLITICO

Column: Hypocrisy of Build Back Better giving rich a tax cut - Los Angeles Times (latimes.com)

SALT Deduction That Benefits the Rich Divides Democrats - The New York Times (nytimes.com)

Democrats vote for millionaires tax cut - Washington Times

 

... and Texas is among the highest property tax states.

 

What was the sales tax comparison?

States have to get revenue from somewhere. They can either get it from income or expenditure. If you spend less than your income, you prefer expenditure (sales tax). If you spend more, then you will be all for income.

And of course everyone hates taxes and doesn't want to pay any of them.

"Don't tax me, don't tax thee, tax the man behind the tree."

Said as one who got a modest tax increase approved by a POA's homeowners.

 

Which of the cons didn't you like in particular? The positives really do outweigh the rest providing if moving there you already have established careers and/or income coming in. Was it the guns and the weather?

 

That's why I tried to widen the example beyond realty. fine - instead of over 5 years drop the example down to 12-18 months so as to make short-term gain apply.

The point is so much taxation occurs on deflated dollars .... it's like citizens take it in the shorts because of inflation/ deflation ..... then they get taxed when you just try to break even - dollar value-wise. Sorry I didn't articulate that point well enough.
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Without looking again, yes, those were two big ones

 

Wait a minute millionaires and billionaires don’t care about 10,000 to 80,000 that much. They depreciate and expense business and real estate so they pay no income tax at all in many cases.
A middle class couple with average income and maybe a nicer home, easily go over the 10k cap. They care a lot. I go over it. Even lower middle class folks can go over it.
It was another way for the very rich led by Golden Boy to get the middle class to pay more taxes so they themselves could pay less with the other, massive for them, tax cuts. Remember GB announced to a group of wealthy, I just made you all a lot richer. Including himself.
Another mischaracterization of the facts to hide what is really going on.

 

Column: Hypocrisy of Build Back Better giving rich a tax cut - Los Angeles Times (latimes.com)

Democrats vote for millionaires tax cut - Washington Times

"The measure would have allowed a bigger deduction on federal income tax returns for residents in high-tax states, but more than half of the savings would have gone to families earning more than $1 million a year, according to Congress’ tax scorekeeper."

 

.... and this - fellow readers is called a tangent
(among the many)

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Well we left in 2000 so hard to compare currently. We did have a 3-bedroom, 2 1/2 bath house built in San Angelo in 1995 that cost $65,000. Here, we had a house built in 2003 and cost $250,000 (now worth around $600K). I just looked up the old home in San Angelo and it's worth $209,000.

 

You're right. I pledge to end my part in the tangent and not post anymore about the political end of this thread.

 

Is it inflation or deflation that you're talking about here? They both affect people, but differently; the people who fare the worst under one are in circumstances different from those who fare the worst under the other.

 

I thought taxation was to fund the Slavic and Israeli wars..maybe I was wrong.