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View Diary: Shocker: Huge Companies Cost U.S. Billions Exploiting Tax Break Designed For Farmers Swapping Horses (86 comments)

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  •  The probem is that it means you can't swap (2+ / 0-)
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    Ian Reifowitz, marina

    assets that aren't doing well for ones that are.  When I say moved, I mean she swapped the properties in the Bay Area for ones in Tuscon.  She's actually moved back to the Bay Area.

    The issue is of course that property values in the Bay Area increased faster than rents, which meant as a practical matter than if she ever refinanced, which she had to once, there'd be no more income for her from the properties as the rents no longer covered more than the financing.  Thus, her income would have droppped to close to zero and in some instances the properties gone underwater, such that forclosure would be inevitable.  Believe me, we looked long and hard at this, and if she'd not been able to do this kind of swap, she would pretty much would have nothing by now.  In any event, without the swap, she'd be locked into the particular properties in perpetuity.  Bear in mind also that the same would be true for your stocks, etc thta once you buy them, then the arithmatic for moving to better investments becomes much more difficult.  Since this is how many (most) people save for retirement, there would be pretty significant and far reaching consequences to any such move.

    Long story short, it's a much more complicated than it looks at first blush.

    Hay hombres que luchan un dia, y son buenos Hay otros que luchan un año, y son mejores Hay quienes luchan muchos años, y son muy buenos. Pero hay los que luchan toda la vida. Esos son los imprescendibles.

    by Mindful Nature on Mon Jan 07, 2013 at 09:29:27 AM PST

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