Displaying items by tag: new york

(New York)

Ever since the Republican tax package was passed, along with its limitation on SALT deductions, there has been a lot of speculation that there might be a mass exodus of wealthy northeasterners to no-tax states like Florida. However, in practice that does not seem to be materializing. Financial advisors in New York and California say many clients are considering relocating, but in reality few are. A quote from Bloomberg explains why: “Wealth managers and tax lawyers say many of their (New York) clients are staying put after hearing about the scrupulous records they would have to keep to show they’ve really uprooted their lives and severed ties with their former states … and that it’s not as easy as just spending a few more days a month in a Florida vacation home”.

FINSUM: It is a very big lifestyle change to uproot one’s life in your 50s and 60s and move thousands of miles away purely for financial reasons. We suspect that there will only be a trickle here rather than a flood.

(New York)

There have been a lot articles and discussion lately about the new cap on so-called SALT deductions (state and local taxes). Much of this conversation has been centered around wealthy New Yorkers and others in the northeast considering moving their primary residences to low-tax states like Florida. Well, if anecdotal evidence is worth anything, the conversation is just that, talk. The reason why? New York’s onerous tax collection department dives into credit card records, confirms doctor’s appointments, and does door to door checks to make sure you have really uprooted your life and left the state. Evidently, after speaking with the financial advisors and lawyers, many residents have decided to forget about moving, saying it is just too big a disruption.

FINSUM: This makes sense given how rigorous the tax inspectors are. Further, New York is probably going to find a way around this lack of SALT very soon, so it is not worth uprooting.

(New York)

The New York State Department of Taxation and Finance has just formally opened an investigation into Trump’s charity activities. The state accuses the Donald J. Trump Foundation of violating state tax laws regarding campaign financing, self-dealing, and illegally coordinating with the presidential campaign. The state seeks to dissolve the foundation in addition to other measures. The investigation may turn criminal, in which case it could widen in scope to include much of Trump’s personal financial affairs, including his tax returns.

FINSUM: Hard to know how broad this could extend, but it seems like it will certainly intersect with Mueller’s investigation. It could prove a big headache for the president.

(New York)

If we were to tell you that median sales price per square foot was down 18% from a year ago in New York City, would that make you worry about the real estate market? Well, that is exactly what has happened, all alongside sales volume hitting its lowest level in six years in the Big Apple. The developments have brokers and real estate developers worried there, but perhaps the whole country should be paying attention. New York has experienced a great deal of new apartment inventory over the last few years as developers have pushed through many new projects, all of which seems to have conspired to oversupply the market.

FINSUM: The boom in real estate since the Crisis was always urban-driven, and so the downfall may be an urban-led one too. New York’s real estate woes are not unique, so we would not be shocked to see prime urban property fall in value across the country, especially with mortgage rates on the rise.

(Washington)

Advisors need to pay very close attention to what states are doing on taxes. As might have been expected, states with high taxes are working hard to come up with solutions that protect their residents from the higher payouts trying to be imposed by the federal government. The new tax package limits state and local deductions (“SALT”) to just $10,000, which means much higher tax bills for residents of higher tax states. While New York is preparing to sue the federal government over the changes, California has already come up with what looks like a good solution. Residents of the state can simply donate to the “California Excellence Fund” instead pf paying taxes, as such a charitable gift is deductible in the new federal package.

FINSUM: New York may also use the same plan as California is using. All the states seem likely to do this. What a big waste of time and energy because of a silly rule.