4 ms·

What about when they realize their children and Grand children are all moving out of state? only to be seen once per year again.

almost_usual 8y ago
From what I've seen the parents stay around, the kids move out of state, eventually inherit their homes, and then either rent the homes or cash out but face a huge tax penalty. Older people have a community and time invested living in a place, it's hard to motivate them to move or want change. They would also rather their kids get their financial investment (gold) and have comfort knowing they'll be taken care of when they're gone.
- skybrian 8y ago
  Hmm, which tax penalty do you mean?
  - almost_usual 8y ago
    Capital gains. It adds up when your home is worth millions..
    - skybrian 8y ago
      Not a tax accountant, but my understanding is that the cost basis gets reset when the property is inherited. If the home was already worth millions there wouldn't be any capital gains tax on it. (There only would be if prices go up more after inheritance.) https://www.investopedia.com/ask/answers/073115/how-cost-basis-calculated-inherited-asset.asp https://www.investopedia.com/ask/answers/073115/how-cost-bas...
- nostrademons 8y ago
  Most seem to be selling their homes (or the kids are selling their homes). A majority of the open houses I've been to have been older parents selling their homes & moving to cheaper regions now that the kids are grown, or dead parents passing their homes to adult kids who sell them. Few people want to be absentee landlords in California, where tenants have all sorts of rights & protections. Don't really blame them, $2.4M for the house that your parents paid $200K for isn't bad when you can still buy that $200K house in much of the rest of the country.
  - sharadov 8y ago
    There is no sense in renting them as well, I rent a 1.6 million dollar house for $4200/month. Of course, the owner bought it for way less, but I would rather sell, take the money and invest it elsewhere and get a better return.
    - r00fus 8y ago
      It makes sense if you think that property values and rents increase over time. Also if there’s any likelihood you move back.
      - nostrademons 8y ago
        Only if you also believe that the other assets you could be investing in (stocks, bonds, sweat equity in a startup, cryptocurrency, an apartment block in Portland) won't increase over time. The money you save in interest doesn't just disappear - if you have any financial sense, you invest it in an asset that yields more than 3%/year.
- DrScump 8y ago
  They would be motivated by giving a lower rate for long term capital gains than regular income and by having their Jarvis-Gann bases transferable to all other counties (like Orop 5 would have done).

almost_usual 8y ago

From what I've seen the parents stay around, the kids move out of state, eventually inherit their homes, and then either rent the homes or cash out but face a huge tax penalty. Older people have a community and time invested living in a place, it's hard to motivate them to move or want change. They would also rather their kids get their financial investment (gold) and have comfort knowing they'll be taken care of when they're gone.

skybrian 8y ago
Hmm, which tax penalty do you mean?
- almost_usual 8y ago
  Capital gains. It adds up when your home is worth millions..
  - skybrian 8y ago
    Not a tax accountant, but my understanding is that the cost basis gets reset when the property is inherited. If the home was already worth millions there wouldn't be any capital gains tax on it. (There only would be if prices go up more after inheritance.) https://www.investopedia.com/ask/answers/073115/how-cost-basis-calculated-inherited-asset.asp https://www.investopedia.com/ask/answers/073115/how-cost-bas...
nostrademons 8y ago
Most seem to be selling their homes (or the kids are selling their homes). A majority of the open houses I've been to have been older parents selling their homes & moving to cheaper regions now that the kids are grown, or dead parents passing their homes to adult kids who sell them. Few people want to be absentee landlords in California, where tenants have all sorts of rights & protections. Don't really blame them, $2.4M for the house that your parents paid $200K for isn't bad when you can still buy that $200K house in much of the rest of the country.
- sharadov 8y ago
  There is no sense in renting them as well, I rent a 1.6 million dollar house for $4200/month. Of course, the owner bought it for way less, but I would rather sell, take the money and invest it elsewhere and get a better return.
  - r00fus 8y ago
    It makes sense if you think that property values and rents increase over time. Also if there’s any likelihood you move back.
    - nostrademons 8y ago
      Only if you also believe that the other assets you could be investing in (stocks, bonds, sweat equity in a startup, cryptocurrency, an apartment block in Portland) won't increase over time. The money you save in interest doesn't just disappear - if you have any financial sense, you invest it in an asset that yields more than 3%/year.
DrScump 8y ago
They would be motivated by giving a lower rate for long term capital gains than regular income and by having their Jarvis-Gann bases transferable to all other counties (like Orop 5 would have done).