Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
The plate reads 'BEATERz' but Ithink it should reads 'HATERZ'
Also, could we spend a little from the fishy treats tip jar to pay for cheap adbrite ads on Casey's site for Exurban Nation before the cost per click goes up with real companies buying in.
Does anyone know where that smokey hot pin salesman Nigey is partying tonight? I've got a VIP suite at several clubs and need a pleather boy to fetch me drinks.
But it's a forgivable error, as you don't hang out with A-listers in the way that Nigel does. As one of the little people, you have to watch them longingly from miles away, so it's not surprising you get them mixed up.
Nigel is with me!! He's busy! Get your own balding attention-deprived used-BMW driving mortgage enthusiast, bitch! Sometimes, he lets me touch his awards.
Upon perusing the vintage Casey-drivel at IAFF, it looks like out of the old-school Haterz, our very own Rob Dawg comes in on 9/22 narrowly beating out Lou Minatti. Now that's a first, murst, and a fizzurst! Although to be fair, SacRealtor also has a 9/22 comment on a different post.
How do you touch an award winning blog you stupid ho? Don't you know anything about that internet thingy? Shut up before I send you back to Arkansas to work at the Dairy Queen.
I've got a great new idea for a movie. I play a super secret foresic accountant weapons expert with mad ninja skillz who goes up against a group of corrupt subprime lenders who are out to destroy the housing market. I've signed on an award winning blogger as an onsite expert adviser.
We are also going to all the coolest parties wearing cool black pleather jackets.
I once used a set of Olympic pins to take out a bunch of punks who were holding up a convenience store. I was in a coma once and when I woke up, I had missed the 2002 Olympics and that is when I became a pin enthusiast. It sure came in handy.
Don't be an ass. I am better than all of you. After all, I sell pins AND attend A-list parties. If somebody thinks I am not worthy of the success I have achieved then I will label them a haterz.
You see, I don't differentiate those who hate from those with opinions. To me it's all the same. A bunch of blowhards with a pack mentality. I am Nigel, love me.
Nigel, you have it wrong. I am your #1 fan you know. I hate haterz. They are scum like you say. If they dare question you, my lord, I will jump all over them for you and obfuscate as much as possible.
You haterz have it all wrong. You can criticize the U.S. and the Patriot Act because that is acceptable. What is unacceptable is questioning my lord's opinion on matters involving Real Estate, pins and Casey. His word is gold and I aspire to be exactly like him. You people are scum. You sit here and criticize the one guy who has this story right. Remember this haterz: Questioning Nigel is taboo. He will own you with his rapier wit and brilliant prose.
He's right on everything. He especially was right in comparing Casey's situation with the Nazis and the holocaust.
I love you Nigel. All you should be loving him too.
On Casey's wrap-around mortgage, is he the one getting the 1098 form at the end of the year for the interest deduction? If he isn't paying the loan, then will he be eligible for the deduction? How will the Utah-buyer deduct interest paid?
The mortgage was specified as owner occupied. This means that the law will see that Casey had to have paid interest. However, he is claiming he has no income. How could he pay interest without having income? Is this not a red flag for the IRS?
Shit, I am so glad I don't do shady deals. I had so much stress doing my taxes and I still don't sleep easy, and I have not ever committed mortgage fraud.
Yep, Casey's unwrap is a CF from start to finish. The 1098 (or is it 1099-INT because he benefits?) will go to him. The lender almost surely doesn't know about the wrap.
Maybe this was the CPA emergency. His Utah buyers needed the interest deduction for their taxes and Casey needed a pro to handle the "details."
Re the wrap property. This problem you bring up is one of the main issues with "wrapped" mortgages. I imagine that the people actually paying the mortgage have asked Casey for the 1099 and claimed the deduction on their taxes.
They probably had to send some kind of note explaining why it was in Casey's name and not theirs. As long as Casey doesn't try to take the deduction as well they should be okay.
I'm not competent to speak about the tax implications on "wrapped" mortgages, but it looks awkward.
There is a line item on 1040 Schedule A for interest paid on a seller-financed mortgage, and a line item on Schedule B for interest received on same. Technically, that's probably what a wrap is, since if they stopped paying the mortgage it would be Casey who would have to foreclose on them, and not the bank. That would imply that Casey has to declare the interest as income even if the whole thing is handled through an "escrow company" that conveys the buyer's payments directly to the bank. He would then balance out this income by deducting the interest paid to the bank. Doesn't sound so bad until you smack into the AMT (probably not a problem for Casey with almost no on-the-books income, but killer for most wrap sellers).
But I'd bet anything that Casey's wrap tries to slide around this, because he is too lazy to do the paperwork needed each year for the buyers to deduct the interest. I'll just hope for the buyers' sake that the IRS does not double-check the deduction, because relying on Casey to handle his end properly is a recipe for disaster.
Er, just to clarify my earlier comment, the wrap buyers would claim the deduction for "seller-financed mortgage". Casey would declare income for seller-financed mortgage, and deduct for interest paid from form 1098.
In order to claim the deduction for interest paid, the buyers would have to list Casey's name, "identifying number" (Social Security number in his case), and address. If (when) Casey fails to declare this as income, hilarity ensues.
Not asleep here. Your analysis seems correct to me. I had not thought about the AMT implications before.
In addition to the original question about the mortgage stating "owner occupied", that will have no bearing on the IRS analysis. They only care that the income and the deductions match up. His mortgage fraud doesn't concern them.
He also has a problem with the lender via his "wrapping" of the mortgage. This is a violation of the Due on Sale clause which puts him in default on the mortgage and gives the lender the option to call the loan should they wish. They usually don't as long as they're getting paid but with Casey's notoriety you never know.
What I really don't get is how you figure capital gains on a wrap. I started, then repeatedly re-edited a comment playing out the scenarios and it is just a mess.
In Casey's transaction, he actually bought the house for a lower figure than the loan amount, and kept the difference as *sweet* cash back. Since the house was "sold" for approximately the outstanding loan amount, Casey keeps the original cash-back. So, is that a capital gain, or income? When is it considered to take place? If the wrap fails and the seller goes back on the hook for the whole loan amount, how is that handled?
Unfortunately, Casey's wrap will probably answer none of these questions unless it results in an IRS investigation.
I'd treat the interest income as income offset by equal interest payments but risking AMT exemptions and the wrap itself as a delayed sale that isn't closed so he won't owe cap gains but he will.
I'm not hugely familiar wih UT lending procedures, but some things are fairly universal. It's been said that the Utah proprty is a wrap, which would indicate a wrap-around mortgage instead of an AITD, which would be used if the underlying loan was a deed of trust.
There was also some mention of a note being due in 6 months, rather than the 12 months that was agreed upon.
So, KC sold the property and held a note that probably covers the loans from when he purchased the property.
Nothing really unusual with that, the interest isn't taxable as it has to be paid to the underlying lender.
What is potentially interesting is that his note may have been at a greater rate of interest, and a higher amount than the underlying loans. In such a case, he would owe taxes on the difference between his note's interest rate and the underlying loan interest rate.
If his loan to the buyer was greater than the payoff to the underlying lender(s), that could account for his "good things are coming" attitude, assuming the potential sale closes.
Hard to say exactly what's going on, I can't find the property either by name or address search. Someone have an alternate name/address that can be looked at?
What is all this talk about real estate and taxes? Borrrrrrrring. The only wrapping I do is when my legs wrap around some hunky balding guy like my pleather wearing pin salesman. That's Hot!
I tried to find the house in the property records but there is nothing under the address listed on IAFF. I was interested to see if a NOD had been posted since Casey mentioned the note possibly being due in February sometime as opposed to August.
I found an article that describes tax aspects of seller financing from 1983(!), when that was popular due to high interest rates. http://query.nytimes.com/gst/fullpage.html?res=9F03E4DF163BF933A05752C0A965948260&sec=&spon=&pagewanted=print The article only gives an example where the underlying first mortgage is legally assumed by the buyer, rather than being wrapped. But it does show how capital gain is figured, as an installment sale.
And Paris, I agree, this tax talk is boring. What are you up to later? I know it's hard to compete with an award-winning blogger and Olympic pin salesman, but remember, Once You Go Troll, You'll Split Every... on second thought, never mind the saying. Bring your sister too.
53 comments:
FIRST!
As always, I never mind Stephanie being on top ;)
I'll bow to Steph's firstiness any day of the week!
darn. still a looser.
Bubba don't like it when da tailpipe all stretched out like that.
I thought that was a Hatermobile, but soon realized it ain't near cool enough. Here's Homey's Wheels:
http://www.flickr.com/photos/7744541@N05/464287180/
Hmmm, on the other hand Bubba duz like the "thumpa thumpa." Thanks Stanley.
Ogg keep weel in cave, not cave in weel.
Ogg also not keep tailpipe uncovered in public and Ogg careful not drop soap when wheelwashing.
How many clowns can fit in the Homey-mobile?
Snowflakes are tied across the front bumper "deer in the headlights" style.
Jeez, not a single snigger or guffaw or LOL. Tough crowd.
The plate reads 'BEATERz' but Ithink it should reads 'HATERZ'
Also, could we spend a little from the fishy treats tip jar to pay for cheap adbrite ads on Casey's site for Exurban Nation before the cost per click goes up with real companies buying in.
itsallgood!
da homey mobile looks like it has rolling rims as well!
bob dawg, prison jokes about casey? sounds like someone cut a nice check to their uncles sam and ahnold, and is in a snarky mood. :-)
As for tenderloin, he best remember that when his cell mate says "Ben Dover" he's probably not introducing himself....
Casey should know better than to level us Haterz™ bored and unattended to for long periods of time!
Google under images "fliptard". Appears our gracious host is cornering the market!
sounds like someone cut a nice check to their uncles sam and ahnold
Nice check? Nice check!?! I coulda paid for "wet time" in an SR-71 and still bought and run the Hummer for a year.
Also, could we spend a little from the fishy treats tip jar to pay for cheap adbrite ads on Casey's site for Exurban Nation
This would be a nice measure of Casey's desperation, given that he has to approve adverts before they run...
I still vote against giving him *any* financial support, though. Tough love, people: let the addict hit bottom.
(And I'll admit to a *snork* at "stretched out tailpipe". Dawg, you're a bad, bad man.)
Realtard™ also floats EN to the top of a google.
As does "snowflake galina" and dozens of others.
I told y'all peeps earlier about being firshizzle mursizzle! Fo sho itz better dan the plain whitebread vanizzle y'all use.
Does anyone know where that smokey hot pin salesman Nigey is partying tonight? I've got a VIP suite at several clubs and need a pleather boy to fetch me drinks.
...And we all know that Paris Hilton has no problem with "going bald."
Nah, that's Britney Spears.
But it's a forgivable error, as you don't hang out with A-listers in the way that Nigel does. As one of the little people, you have to watch them longingly from miles away, so it's not surprising you get them mixed up.
Nigel is with me!! He's busy! Get your own balding attention-deprived used-BMW driving mortgage enthusiast, bitch! Sometimes, he lets me touch his awards.
Upon perusing the vintage Casey-drivel at IAFF, it looks like out of the old-school Haterz, our very own Rob Dawg comes in on 9/22 narrowly beating out Lou Minatti. Now that's a first, murst, and a fizzurst! Although to be fair, SacRealtor also has a 9/22 comment on a different post.
How do you touch an award winning blog you stupid ho? Don't you know anything about that internet thingy? Shut up before I send you back to Arkansas to work at the Dairy Queen.
Nigey knows who's really on the A-list.
Oh and btw, Nicole, eat a sandwich, you skinny ho.
Nigey would have been an excellent choice to co-star with me in 'Mean Girls'.
I've got a great new idea for a movie. I play a super secret foresic accountant weapons expert with mad ninja skillz who goes up against a group of corrupt subprime lenders who are out to destroy the housing market. I've signed on an award winning blogger as an onsite expert adviser.
We are also going to all the coolest parties wearing cool black pleather jackets.
Forensic I meant. Typing is not my forte, killing bad guys is. Oh yea, and Olympic pins are a hobby of mine.
I play a super secret foresic accountant weapons expert with mad ninja skillz
Hey, that's me!
I modeled my new look after Nigey. I saw him once at a VIP party and I knew that was the look I had been searching for.
I once used a set of Olympic pins to take out a bunch of punks who were holding up a convenience store. I was in a coma once and when I woke up, I had missed the 2002 Olympics and that is when I became a pin enthusiast. It sure came in handy.
Hey! I was there first!
Nigel is mine, bitch!
I wasn't talking about her head Miguel.
I know - I realized a fraction of a second after clicking 'Publish'.
And I should have known that you'd be far more familiar with A-list celebs than even the mighty (and award-winning) Nigel...
How on earth did we get to bald cameltoes?
Miguel,
Don't be an ass. I am better than all of you. After all, I sell pins AND attend A-list parties. If somebody thinks I am not worthy of the success I have achieved then I will label them a haterz.
You see, I don't differentiate those who hate from those with opinions. To me it's all the same. A bunch of blowhards with a pack mentality. I am Nigel, love me.
NEWSFLASH!...This just in from London:
Homey Busted
How on earth did we get to bald cameltoes?
Mayhaps promiscuous dromedaries contract alopecia.?
Nigel, you have it wrong. I am your #1 fan you know. I hate haterz. They are scum like you say. If they dare question you, my lord, I will jump all over them for you and obfuscate as much as possible.
You haterz have it all wrong. You can criticize the U.S. and the Patriot Act because that is acceptable. What is unacceptable is questioning my lord's opinion on matters involving Real Estate, pins and Casey. His word is gold and I aspire to be exactly like him. You people are scum. You sit here and criticize the one guy who has this story right. Remember this haterz: Questioning Nigel is taboo. He will own you with his rapier wit and brilliant prose.
He's right on everything. He especially was right in comparing Casey's situation with the Nazis and the holocaust.
I love you Nigel. All you should be loving him too.
Can I ask you guys an RE question?
On Casey's wrap-around mortgage, is he the one getting the 1098 form at the end of the year for the interest deduction? If he isn't paying the loan, then will he be eligible for the deduction? How will the Utah-buyer deduct interest paid?
The mortgage was specified as owner occupied. This means that the law will see that Casey had to have paid interest. However, he is claiming he has no income. How could he pay interest without having income? Is this not a red flag for the IRS?
Shit, I am so glad I don't do shady deals. I had so much stress doing my taxes and I still don't sleep easy, and I have not ever committed mortgage fraud.
Yep, Casey's unwrap is a CF from start to finish. The 1098 (or is it 1099-INT because he benefits?) will go to him. The lender almost surely doesn't know about the wrap.
Maybe this was the CPA emergency. His Utah buyers needed the interest deduction for their taxes and Casey needed a pro to handle the "details."
Casey's breezy "Good morning! It feels great to be an early riser (again)!" comment reminded me of how well he did on this last time:
30 day challenge to build an early riser habit in December (very marginal success).
and his early riser link reminds me of this comedy gold:
The early-riser habit will allow me to get extra work done this month in stopping foreclosure and finding creative solutions to pay off all my debt.
[...]
Mr. Foreclosure and Mr. Debt, watch out! Successful early rising real estate investor is coming to get ya!
Messrs. Foreclosure and Debt seem to be winning so far. And say hello to their friends: Messrs. Blip, Judgement, and Enforcement.
Re the wrap property. This problem you bring up is one of the main issues with "wrapped" mortgages. I imagine that the people actually paying the mortgage have asked Casey for the 1099 and claimed the deduction on their taxes.
They probably had to send some kind of note explaining why it was in Casey's name and not theirs. As long as Casey doesn't try to take the deduction as well they should be okay.
The problem is they have to rely on Casey.
Antbody wanna see KC driving behind THIS vdubs?
HOT VW
I'm not competent to speak about the tax implications on "wrapped" mortgages, but it looks awkward.
There is a line item on 1040 Schedule A for interest paid on a seller-financed mortgage, and a line item on Schedule B for interest received on same.
Technically, that's probably what a wrap is, since if they stopped paying the mortgage it would be Casey who would have to foreclose on them, and not the bank.
That would imply that Casey has to declare the interest as income even if the whole thing is handled through an "escrow company" that conveys the buyer's payments directly to the bank. He would then balance out this income by deducting the interest paid to the bank. Doesn't sound so bad until you smack into the AMT (probably not a problem for Casey with almost no on-the-books income, but killer for most wrap sellers).
But I'd bet anything that Casey's wrap tries to slide around this, because he is too lazy to do the paperwork needed each year for the buyers to deduct the interest.
I'll just hope for the buyers' sake that the IRS does not double-check the deduction, because relying on Casey to handle his end properly is a recipe for disaster.
Er, just to clarify my earlier comment, the wrap buyers would claim the deduction for "seller-financed mortgage". Casey would declare income for seller-financed mortgage, and deduct for interest paid from form 1098.
In order to claim the deduction for interest paid, the buyers would have to list Casey's name, "identifying number" (Social Security number in his case), and address. If (when) Casey fails to declare this as income, hilarity ensues.
Have I put everyone to sleep yet?
Not asleep here. Your analysis seems correct to me. I had not thought about the AMT implications before.
In addition to the original question about the mortgage stating "owner occupied", that will have no bearing on the IRS analysis. They only care that the income and the deductions match up. His mortgage fraud doesn't concern them.
He also has a problem with the lender via his "wrapping" of the mortgage. This is a violation of the Due on Sale clause which puts him in default on the mortgage and gives the lender the option to call the loan should they wish. They usually don't as long as they're getting paid but with Casey's notoriety you never know.
What I really don't get is how you figure capital gains on a wrap.
I started, then repeatedly re-edited a comment playing out the scenarios and it is just a mess.
In Casey's transaction, he actually bought the house for a lower figure than the loan amount, and kept the difference as *sweet* cash back. Since the house was "sold" for approximately the outstanding loan amount, Casey keeps the original cash-back. So, is that a capital gain, or income? When is it considered to take place? If the wrap fails and the seller goes back on the hook for the whole loan amount, how is that handled?
Unfortunately, Casey's wrap will probably answer none of these questions unless it results in an IRS investigation.
I'd treat the interest income as income offset by equal interest payments but risking AMT exemptions and the wrap itself as a delayed sale that isn't closed so he won't owe cap gains but he will.
I'm not hugely familiar wih UT lending procedures, but some things are fairly universal. It's been said that the Utah proprty is a wrap, which would indicate a wrap-around mortgage instead of an AITD, which would be used if the underlying loan was a deed of trust.
There was also some mention of a note being due in 6 months, rather than the 12 months that was agreed upon.
So, KC sold the property and held a note that probably covers the loans from when he purchased the property.
Nothing really unusual with that, the interest isn't taxable as it has to be paid to the underlying lender.
What is potentially interesting is that his note may have been at a greater rate of interest, and a higher amount than the underlying loans. In such a case, he would owe taxes on the difference between his note's interest rate and the underlying loan interest rate.
If his loan to the buyer was greater than the payoff to the underlying lender(s), that could account for his "good things are coming" attitude, assuming the potential sale closes.
Hard to say exactly what's going on, I can't find the property either by name or address search. Someone have an alternate name/address that can be looked at?
What is all this talk about real estate and taxes? Borrrrrrrring. The only wrapping I do is when my legs wrap around some hunky balding guy like my pleather wearing pin salesman. That's Hot!
I tried to find the house in the property records but there is nothing under the address listed on IAFF. I was interested to see if a NOD had been posted since Casey mentioned the note possibly being due in February sometime as opposed to August.
I found an article that describes tax aspects of seller financing from 1983(!), when that was popular due to high interest rates.
http://query.nytimes.com/gst/fullpage.html?res=9F03E4DF163BF933A05752C0A965948260&sec=&spon=&pagewanted=print
The article only gives an example where the underlying first mortgage is legally assumed by the buyer, rather than being wrapped. But it does show how capital gain is figured, as an installment sale.
And Paris, I agree, this tax talk is boring. What are you up to later?
I know it's hard to compete with an award-winning blogger and Olympic pin salesman, but remember, Once You Go Troll, You'll Split Every...
on second thought, never mind the saying. Bring your sister too.
@Adam, IIRC, there was some confusion over the exact street address of the UT wrapped/unwrapped property.
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