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Entries in residential real estate (2)

Monday
Nov272017

The Tax Reform Bills: Home Ownership, Purchases & Sales

Tax Law Certified SpecialistCalifornia Bar Certified Specialist in Tax Law

by Michael Hackman

818.907.3279

 

Congressional efforts to enact tax reform are now in the home stretch. While there is no assurance that any legislation will be enacted, or what the form of a final bill would look like, it is likely that something will pass and be signed by the President. And it is almost certain that some of the basic rules with respect to taxation of home ownership will change.

Through the years, the Government has tried to use tax policy to encourage home ownership. First time buyers would weigh the deductible costs of owning a home with the costs of non-deductible rent. That all may change.

The Administration is dead set on reducing taxes on corporations and owners of pass through entities to 20 percent or something very close to it, and among other things is financing those reductions with reduction or elimination of most itemized personal deductions.

Changes with Respect to the Home You Own

Currently, homeowners can deduct their property tax. The House bill would allow a deduction for property taxes, but only up to $10,000. The proposed legislation in the Senate would eliminate deductions for all state and local taxes, including property taxes.

There would be no new limitations on deductions for existing home mortgage interest (presently limited to interest on $1 million of mortgage indebtedness plus another $100,000 of home equity indebtedness). However, under the Senate legislation, the category of home equity indebtedness would be eliminated.

If You Want to Purchase a Home

The limitations discussed above on property taxes would be in effect. For example, if you purchase a California home for about $800,000 you would have property taxes above $10,000 and could not deduct the excess (this assumes that there is no exemption you can qualify for).

If the House bill passes, you could only deduct interest on a loan of $500,000 to assist you in purchasing the home. The present Senate discussions would maintain the $1 million limit.

If You Want to Sell Your House

Because of the limits discussed above, your pool of buyers may be substantially reduced. The number of interested buyers would be necessarily reduced by of the deduction limits.

The ability to avoid some tax on a home sale would be substantially curtailed. In addition, under present law the first $250,000 ($500,000 for most married taxpayers) of the gain on sale of a home was not taxed, so long as you had lived in and owned the home for two years (out of the last five). The House bill and the legislation in the Senate would increase that to five years (out of the last eight).

Taxes on sales of houses would remain subject to capital gains taxes. The 3.8 percent “Obamacare” tax on certain investment income would also apply. The 3.8 percent tax would have been eliminated (though not necessarily immediately) in the proposed healthcare legislation, but those proposals did not pass.

The Future

This legislation may not pass before year-end. But the Trump administration is pining for a significant legislative victory and should continue to pursue tax changes next year, and home ownership will again be a convenient target.

 

Michael Hackman is the Chair of both our Tax, and Trust & Estate Planning Practice Groups.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

Wednesday
Aug102016

Pokemon Go Away: Monsters Creating Nuisance Problems

Business LitigationReal Estate Litigation Attorney

 

by Nicholas Kanter
818-907-3289

 

This game has been all the rage since July. Engadget reports over 100 million downloads of Pokemon Go, racking up $10 million each day in revenue for game makers Niantic, The Pokemon Company and Nintendo. It’s a beast. And pretty profitable, despite the legal questions that keep popping up in, for example:

  1. Employment

  2. Pokemon Go Nuisance Law
  3. Family Law

  4. Privacy

  5. Personal Injury

Most players will attempt a bit of care when hunting monsters, and won’t usually play at work, abandon their children or cross streets blindly to net an Augmented Reality (or AR, a real-world environment that has been digitally augmented or enhanced) creature. We hope.

However, there’s a growing legal concern surrounding this game even for people who haven’t downloaded Pokemon Go yet – that of nuisance issues.

The game works using a cell phone’s camera, GPS and gyroscope technology. Game developers programmed “Pokestops” and “Pokemon gyms” into geographical locations – a player who downloaded the app will be able to detect these locations and then be lured into attempting to capture AR monsters and monster-catching weaponry by swiping at their mobile screens at these Pokestops, or take on other players at the gyms.

A homeowner in New Jersey recently filed a class action lawsuit in California against the game’s developers. In the lawsuit, Jeffrey Marder claims Pokemon Go developers

  1. Programmed many of the stops and gyms on or near private property;  

  2. These stops and gyms were created without the property owner’s permission; and that

  3. Trespassers are inhibiting the owners’ enjoyment and use of their properties, constituting nuisances.

Marder cites several other property owners facing nuisance problems because of the game, including a Massachusetts homeowner who tweeted his experiences of living at an unauthorized Pokemon gym. Three days after the games release, Boon Sheridan counted over 30 people approaching his property on foot, not to mention a marked increase in vehicular traffic – all in the name of the game.

The actual number of members of the class action is as yet unknown. But what are the chances of Marder succeeding?

Monsters in the Yard: Pokemon Go Spawning Nightmares for Homeowners, Businesses

Property owners may bring common law trespassing suits against individuals who set foot on private property without permission, or they may file public nuisance claims similar to Marder’s suit above. 

Another example of a public nuisance claim would be the City of Irwindale’s lawsuit (now dropped) against the makers of Sriracha hot sauce, Huy Fong Foods Inc. The city claimed the sauce’s odor irritated residents’ eyes, noses and throats. One Irwindale family claimed a need to move a birthday party indoors because of fumes –affecting that family’s enjoyment and use of property.

In any case, private and commercial property owners have the right to protect their holdings, and their enjoyment of such holdings.

For business owners and governments that own or manage properties, whether they be coffee shops or landmarks like the Washington D.C. Holocaust Museum, there is a duty to keep environments safe for visitors. Businesses and tourist sites may be covered by a commercial general liability policy – but that doesn’t mean property owners or managers should turn a blind eye to potentially escalating problems caused by AR games like Pokemon Go.

Homeowners can always pursue individual trespassers, but that could become costly and time-consuming when so many encroach on a property. And neighbors close to a Pokestop or gym may have their own beefs because of increased vehicular and foot traffic.

Whether a private or commercial property owner, there are some alternatives to suing the game makers or Pokemon Go players: 

  1. Submit a Pokemon Go request form. The form can be used whether you want to add a stop or gym to a property, or remove one. No word yet on how effective this method may be, but if things do come to a litigation phase, proof of a request, or repeated requests, may help your case.


  2. Post signage. No trespassing signs may deter many players, and liability may be greater for a trespasser that ignores an explicit warning.


  3. Enlist help from local governments. Increased traffic of any kind can congest roads and hinder access for emergency and utility services. Convincing city officials to help could carry more leverage.

 

Nicholas Kanter is a Real Estate and Business Litigation attorney. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

LEWITT HACKMAN | 16633 Ventura Boulevard, Eleventh Floor, Encino, California 91436-1865 | 818.990.2120