Bay Area Real Estate Trends

There is a rumor going around that, instead of selling your primary residence now, you can rent it out for nine months first, declare it an investment property, and then deduct the entire capital loss from your income on your taxes.

The funny part is that if we did eliminate the mortgage interest deduction and prices fell 20 percent, new buyers would need a smaller mortgage, and we’d all pay less in property taxes. So does this deduction really help homeowners? Or does it primarily benefit lenders and tax collectors? I believe it’s the later.

Imagine the perpetual loan, a loan that no matter what you do, you can never pay off. To help conceptualize the idea, think of it as a perpetual interest-only loan in which you are forbidden to completely pay off principal.

As preposterous as that deal may sound, it is highly likely you are in one.

John Burns makes frequent trips to Washington, and he has been involved in the meetings and negotiations on this issue. If he is worried about what congress might do, there is genuine reason for concern. It appears the commission may make a recommendation to reduce the deduction limit.

The American people are willing to sacrifice as part of a shared effort at righting our budgetary path, but they are not prepared to be sacrificial lambs led to the ‘benefits and promises slaughterhouse’ while the Wall Street Banker Pigs gorge on trillions in stealth FED and FDIC bailouts, ZIRP giveaways and a record $144 billion in bonuses – an amount equivalent to the 49th largest GDP in the world – $144 billion in bonuses being paid by criminally insolvent banks that are only still operating due to a Wall Street financed K-Street lobbying tsunami that forced FASB to change the accounting rules that now allow these same insolvent institutions of usury and arrogance to apply Faustian valuations to complete shit assets all over their lying, godforsaken, Enron resembling, off-balanced, imbalanced, bs-balanced, sheets.

Nothing of any importance has changed. The engine of Empire is lugging a bit as the load increases, but the Empire’s army of high-caste technocrats are hard at work, securing their perquisites and fat paychecks by keeping the sprawling global machine running.