(New York)

The IRS just ended the best loophole in town for high income residents of high tax states like New York, California, Connecticut, New Jersey and Washington DC. Many high tax states had been working a loophole where residents could categorize their tax payments as charity donations, allowing them to deduct it from their taxes. However, the IRS has now closed that loophole effective today, meaning there is no way around the $10,000 SALT deduction limit.

FINSUM: It is no surprise home sales in the northeast are plummeting, as this is a serious economic issue for retaining the wealthy, and even upper middle class.

(Los Angeles)

The saga of the Tesla buyout is finally over after three agonizing weeks. Musk announced Friday that Tesla had put its plans to go private permanently on hold. The Wall Street Journal has run a long article chronicling the internal decision-making process, but ultimately Musk and the board decided it as not an optimal decision, not least because keeping small investors on board wouldn’t have been an option and Tesla would have had to bring on competitors as investors. The stock dropped on the news.

FINSUM: If what we read is correct, Musk did not want Volkswagen to be an investor in the company. That, combined with the Saudis backing away, seems to have been a big part of staying public.

(New York)

Even if you aren’t thinking about it yet, the president is. In an interview yesterday, President Trump said that the stock market would crash if he were impeached. No one can be sure, but history suggests it would have little impact on the market. In the two previous cases in recent memory—Nixon and Clinton—the market behaved differently, falling sharply in the 12 months prior to Nixon’s impeachment, and rising before Clinton’s. JP Morgan’s best guess is that an impeachment wouldn’t be enough to derail the markets and economy itself.

FINSUM: Another interesting argument is that Trump wouldn’t ever be impeached until the market headed south, as that has happened in both of the previous instances (there was a brief but steep correction before Clinton’s impeachment). Nonetheless, we really don’t think Trump will be impeached.

(New York)

Morgan Stanley disclosed this week that it has upped its holdings in two small stocks to above 5%. While one can get a lot of info (however biased) from equity research divisions, there is nothing like seeing what banks are actually buying themselves. In this case, the two stocks are Electronics for Imaging, and Turtle Beach. The former is a digital imaging firm whose shares have been rising this year, and the latter is a gaming headset maker who shares have risen 15x this year, but is still only worth $392m.

FINSUM: Gaming headsets seem like a good growth area at the moment, but are probably outside the skillset of most investors to judge.

(New York)

While some New Yorkers prepaid their property taxes last year in an effort to offset the decline of SALT deductions this year, others weren’t so proactive. Now that Washington has blocked states’ ability to work a loophole around classifying taxes as charitable giving, residents of high tax states may have a small window of opportunity—just 4 days—to avoid full taxes. The new regulations will take effect on August 27th, which means residents have until then to donate to the tax-charity funds which have been established.

FINSUM: Such last minute payments could be challenged after the fact, but considering the effective date of the new regulations, they seem like they would go through.