Capital Gains

Off Topic Politics & World Issues
41

[quote]countingbeans wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]pittbulll wrote:
Another senario . I buy $100,000 in cars and fix them all sell them for a $1,000,000

I buy a piece of land for $100,000 and fix it sell it for a $1,000,000

everythinhg is the same finacialy . I am curious would I pay the same taxes on both business deals and why ?[/quote]

Depends on what you do for a living. If these activities are how you make a living they are ordinary income. If you are otherwise a carpenter, you may pay capital gain rates.

I believe the car is going to be ordinary more often than not, and the land capital more often than not. But I’m making an educated guess, as each individual situation will effect the sales treatment.[/quote]

Hey Beans,

Why would a carpenter potentially pay capital gains? I guess I’m asking how you would differentiate between what would be ordinary income vs. a capital gain when the gain occurs on an investment other than on securities?[/quote]

In his examples, what you do to make a living outside those sales will determine how the gains are treated. If you developed land for a living, those gains would be ordinary. But if you and 3 buddies got together and made the investment in land and sold it 3 years later, but all worked for Ford full time, the gains would be capital (investment) gains.

[/quote]

So essentially there’s no cut and dry criteria for what is OI vs. capital gains. It comes down to a number of factors and basically what the tax court says if it goes that far. Is that fair to say?

42

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.

43

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

What would you consider enough for a modest life?

44

[quote]usmccds423 wrote:

So essentially there’s no cut and dry criteria for what is OI vs. capital gains. It comes down to a number of factors and basically what the tax court says if it goes that far. Is that fair to say? [/quote]

Pretty much. I mean you take a position as best as you see fit. If you are challenged on that postion you either win or lose.

45

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

I don’t disagree with you. But when the people buy products demand certain prices… The costs of wages have to be kept down. The company could pay the CEO less and the mail room person more, but people need to find companies that do this, and buy from them.

If consumers would purchase products from companies that have practices that are inline with what they want, they will get more companies doing what they want.

Look at apple. How many people complain about the 1% and “out sourcing jobs” while typing on an iPhone?

46

[quote]countingbeans wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

I don’t disagree with you. But when the people buy products demand certain prices… The costs of wages have to be kept down. The company could pay the CEO less and the mail room person more, but people need to find companies that do this, and buy from them.

If consumers would purchase products from companies that have practices that are inline with what they want, they will get more companies doing what they want.

Look at apple. How many people complain about the 1% and “out sourcing jobs” while typing on an iPhone?[/quote]

D’oh now you did it. Apple gonna get you.

47

[quote]countingbeans wrote:

Look at apple. How many people complain about the 1% and “out sourcing jobs” while typing on an iPhone?[/quote]

Wonderful point. I could not tell you how many iphones I saw among the idiots at OWS.

48

[quote]groo wrote:

[quote]countingbeans wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

I don’t disagree with you. But when the people buy products demand certain prices… The costs of wages have to be kept down. The company could pay the CEO less and the mail room person more, but people need to find companies that do this, and buy from them.

If consumers would purchase products from companies that have practices that are inline with what they want, they will get more companies doing what they want.

Look at apple. How many people complain about the 1% and “out sourcing jobs” while typing on an iPhone?[/quote]

D’oh now you did it. Apple gonna get you.
[/quote]

They better use google maps to find me. :wink:

49

[quote]smh23 wrote:

[quote]countingbeans wrote:

Look at apple. How many people complain about the 1% and “out sourcing jobs” while typing on an iPhone?[/quote]

Wonderful point. I could not tell you how many iphones I saw among the idiots at OWS.[/quote]

Yeah. It really comes down to us in the end. That is why I get tired of the “rich people exploit us all” and “governmetn policy, namely Reagan, has killed us” line of reasoning.

People, when thinking and working together, can make a huge difference. Regular everyday people. It is just easier to keep on keeping on and throw blame, than look at one’s self and make an effort to change, all while letting people know what and how you are doing it.

50

[quote]usmccds423 wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

What would you consider enough for a modest life? [/quote]

I honestly couldn’t come up with a general figure. For one thing, it is very geographically variable. A modest life in northwestern NY state is a hell of a lot easier to achieve than in the middle of New York City.

Where I’m from–a fairly affluent, semi-rural suburb of NYC–I’d say two parents working full time on $10/hour (or one at 20-22) is a living wage for a family of four (I found a calculator somewhere on the internet that backed this up).

51

[quote]smh23 wrote:

[quote]usmccds423 wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

What would you consider enough for a modest life? [/quote]

I honestly couldn’t come up with a general figure. For one thing, it is very geographically variable. A modest life in northwestern NY state is a hell of a lot easier to achieve than in the middle of New York City.

Where I’m from–a fairly affluent, semi-rural suburb of NYC–I’d say two parents working full time on $10/hour (or one at 20-22) is a living wage for a family of four (I found a calculator somewhere on the internet that backed this up).[/quote]

I wouldn’t think requiring two parents working full time would be any part of a living wage.

But whatever, 20k a year I wouldn’t call any part of a living wage for a full time worker.

52

[quote]groo wrote:

[quote]smh23 wrote:

[quote]usmccds423 wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

What would you consider enough for a modest life? [/quote]

I honestly couldn’t come up with a general figure. For one thing, it is very geographically variable. A modest life in northwestern NY state is a hell of a lot easier to achieve than in the middle of New York City.

Where I’m from–a fairly affluent, semi-rural suburb of NYC–I’d say two parents working full time on $10/hour (or one at 20-22) is a living wage for a family of four (I found a calculator somewhere on the internet that backed this up).[/quote]

I wouldn’t think requiring two parents working full time would be any part of a living wage.

But whatever, 20k a year I wouldn’t call any part of a living wage for a full time worker.

[/quote]

Eh, depends on how you think of “living” wage. Survival is different from comfort.

But that is a fairly low estimate. Let’s call it $25/hour, full-time, for a family of four in an NYC suburb.

MIT says that’s about right: Living Wage Calculator - Living Wage Calculation for Westchester County, New York

53

[quote]groo wrote:

[quote]smh23 wrote:

[quote]usmccds423 wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

What would you consider enough for a modest life? [/quote]

I honestly couldn’t come up with a general figure. For one thing, it is very geographically variable. A modest life in northwestern NY state is a hell of a lot easier to achieve than in the middle of New York City.

Where I’m from–a fairly affluent, semi-rural suburb of NYC–I’d say two parents working full time on $10/hour (or one at 20-22) is a living wage for a family of four (I found a calculator somewhere on the internet that backed this up).[/quote]

I wouldn’t think requiring two parents working full time would be any part of a living wage.

But whatever, 20k a year I wouldn’t call any part of a living wage for a full time worker.

[/quote]

Eh, depends on how you think of “living” wage. Survival is different from comfort.

But that is a fairly low estimate. Let’s call it $25/hour, full-time, for a family of four in an NYC suburb.

MIT says that’s about right: Living Wage Calculator - Living Wage Calculation for Westchester County, New York

54

[quote]smh23 wrote:

[quote]usmccds423 wrote:

[quote]smh23 wrote:

[quote]countingbeans wrote:
We can’t just have some base line national income thresehold that no worker can make less than.

The world needs ditch diggers too, and in some ways just as much (if not more in some cases) than it needs CEO’s. Doesn’t mean the ditch digger should get paid as much as the CEO.
[/quote]

Certainly not. But, if we in fact need ditch diggers “in some ways just as much” as we need CEO’s, we should probably accept the fact that they’ll need to be paid a living wage. Not $100K, but certainly enough to live a modest life off of. There are a number of reasons for this, not least of which being that the people who dig the ditches at Pepsi’s headquarters buy Pepsi with their disposable income.[/quote]

What would you consider enough for a modest life? [/quote]

I honestly couldn’t come up with a general figure. For one thing, it is very geographically variable. A modest life in northwestern NY state is a hell of a lot easier to achieve than in the middle of New York City.

Where I’m from–a fairly affluent, semi-rural suburb of NYC–I’d say two parents working full time on $10/hour (or one at 20-22) is a living wage for a family of four (I found a calculator somewhere on the internet that backed this up).[/quote]

My position, I guess you could call it, is basically what you first said. It’s dependent on an infinite number of variables. Where you live, if you have kids, price of rent, etc… my point mainly is that there’s about a 0% chance that what I consider, you consider, and everyone else considers modest living is going to be the same.

For example, I’ve done toy drives for Christmas in the past where I’ve helped deliver toys to less fortunate families. Upon walking into their homes (modest homes IMO), I see a big screen TV, Cable, DVDs, etc… How can you afford what I call luxuries, but not Christmas gifts for your kids? I personally would be ashamed of this fact, but at the end of the day those people could have afforded Christmas if they made better decisions. No matter how hard you try people are selfish and typically spend money when and on things they shoudn’t.

My biggest issue with the standard of living debate is that for some reason those that earn a small wage are considered poor when children starve to death in other countries. I just don’t see a good enough reason to ensure a minimum (modest) living standard for those capable of earning it themselves. People incapable of earning a living is a completely different ball game.

Responsibility has lost meaning in America, which has resulted in this “I deserve to give everything” attitude. Sometimes you’ve gotta eat Roman Noodles instead of Sirloin. That’s life.

55

To make a point a bit more clear. I believe there is no reason you can’t start on $7.50Hr and eventually make 30K-40K a year. Luck may be a factor in the short term, but in the big picture I believe hard work and yes sacrifice allow everyone an opportunity to earn a “modest” living.

56

[quote]usmccds423 wrote:
To make a point a bit more clear. I believe there is no reason you can’t start on $7.50Hr and eventually make 30K-40K a year. Luck may be a factor in the short term, but in the big picture I believe hard work and yes sacrifice allow everyone an opportunity to earn a “modest” living. [/quote]

I agree with you but will go beyond that. I have a friend who never went to College. Instead my friend kept his part time job that he had at Burger King. After he graduated High School he went to work full time for them. After several years he was so good that they made him a Manager of one of their stores. He had to relocate an hour away but he did it. After several more years of working 50-60 hours a week they made him a Supervisor. And the last time I checked in with him he was making over 100-k per year with Burger King!

Company’s are starving for good people. As more get used to having things handed to them more opportunities are created for people like my friend.

In America you can still be just about anything that you want to be if you work hard and smart enough!

Obama has not wrecked that yet…four more may do it however.

57

[quote]ZEB wrote:

[quote]usmccds423 wrote:
To make a point a bit more clear. I believe there is no reason you can’t start on $7.50Hr and eventually make 30K-40K a year. Luck may be a factor in the short term, but in the big picture I believe hard work and yes sacrifice allow everyone an opportunity to earn a “modest” living. [/quote]

I agree with you but will go beyond that. I have a friend who never went to College. Instead my friend kept his part time job that he had at Burger King. After he graduated High School he went to work full time for them. After several years he was so good that they made him a Manager of one of their stores. He had to relocate an hour away but he did it. After several more years of working 50-60 hours a week they made him a Supervisor. And the last time I checked in with him he was making over 100-k per year with Burger King!

Company’s are starving for good people. As more get used to having things handed to them more opportunities are created for people like my friend.

In America you can still be just about anything that you want to be if you work hard and smart enough!

Obama has not wrecked that yet…four more may do it however.[/quote]

I know a couple of people like that too. My best friend from childhood got fucked by circumstance at every turn. His parents ended up as unemployed addicts and he was on his own by 17, working for close to minimum wage at a supermarket. Now he is the manager of an at & t store…he is not rich and he probably will not be, but he has a car and an apartment and he earned all of it the old fashioned way.

58

[quote]ZEB wrote:

[quote]usmccds423 wrote:
To make a point a bit more clear. I believe there is no reason you can’t start on $7.50Hr and eventually make 30K-40K a year. Luck may be a factor in the short term, but in the big picture I believe hard work and yes sacrifice allow everyone an opportunity to earn a “modest” living. [/quote]

I agree with you but will go beyond that. I have a friend who never went to College. Instead my friend kept his part time job that he had at Burger King. After he graduated High School he went to work full time for them. After several years he was so good that they made him a Manager of one of their stores. He had to relocate an hour away but he did it. After several more years of working 50-60 hours a week they made him a Supervisor. And the last time I checked in with him he was making over 100-k per year with Burger King!

Company’s are starving for good people. As more get used to having things handed to them more opportunities are created for people like my friend.

In America you can still be just about anything that you want to be if you work hard and smart enough!

Obama has not wrecked that yet…four more may do it however.[/quote]

I know a couple of people like that too. My best friend from childhood got fucked by circumstance at every turn. His parents ended up as unemployed addicts and he was on his own by 17, working for close to minimum wage at a supermarket. Now he is the manager of an at & t store…he is not rich and he probably will not be, but he has a car and an apartment and he earned all of it the old fashioned way.

59

[quote]countingbeans wrote:

[quote]pittbulll wrote:
Another senario . I buy $100,000 in cars and fix them all sell them for a $1,000,000

I buy a piece of land for $100,000 and fix it sell it for a $1,000,000

everythinhg is the same finacialy . I am curious would I pay the same taxes on both business deals and why ?[/quote]

Depends on what you do for a living. If these activities are how you make a living they are ordinary income. If you are otherwise a carpenter, you may pay capital gain rates.

I believe the car is going to be ordinary more often than not, and the land capital more often than not. But I’m making an educated guess, as each individual situation will effect the sales treatment.[/quote]

let’s say they are both carpenters and let’s throw in a day trader (who is a carpenter as well) that makes 900 thousand profits day trading

60

[quote]countingbeans wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]pittbulll wrote:
Another senario . I buy $100,000 in cars and fix them all sell them for a $1,000,000

I buy a piece of land for $100,000 and fix it sell it for a $1,000,000

everythinhg is the same finacialy . I am curious would I pay the same taxes on both business deals and why ?[/quote]

Depends on what you do for a living. If these activities are how you make a living they are ordinary income. If you are otherwise a carpenter, you may pay capital gain rates.

I believe the car is going to be ordinary more often than not, and the land capital more often than not. But I’m making an educated guess, as each individual situation will effect the sales treatment.[/quote]

Hey Beans,

Why would a carpenter potentially pay capital gains? I guess I’m asking how you would differentiate between what would be ordinary income vs. a capital gain when the gain occurs on an investment other than on securities?[/quote]

In his examples, what you do to make a living outside those sales will determine how the gains are treated. If you developed land for a living, those gains would be ordinary. But if you and 3 buddies got together and made the investment in land and sold it 3 years later, but all worked for Ford full time, the gains would be capital (investment) gains.

[/quote]

not true , I am a carpenter and have bought many properties and I deduct my wages from the profit line . And pay capital gains on the profit. Why should it be different if it were cars ?