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War On Wealth Series – Taxes


Taxes, taxes, taxes, we are taxed on everything. You paid a “whop” for the house, didn’t include escrows in your closing costs so you were able to come to the closing table with less money and now that $5,000 annual on that $400,000 purchase price is making you teeter on the edge of financial catastrophe, and you have no idea where the next payment is going to come from. So you ask, if my house in this market is worth half as much, why does my not follow suit? HA! Welcome to the new economy. As I told you before, we are fighting a “War On Wealth” like never before. Money is scarce all around us. Cities, Counties, States, and our entire Country is thinking of new and creative ways to pay their bills on “YOUR BACK”! Even if you had included the taxes in your escrow, imagine what $200 of that $416.67 a month (In Sacramento County) would do going into your investment account earning 6% interest compounding annually. In 10 years you would have $16,765.97. In 15 years, $29,607.03. What if you took the almost $17,000 in 10 years and leveraged it on a small rental property with positive cash flow, then sold it 10 years later for a nice gain. At that point you could take that money and put it into some asset protected, capital gains protected trust for maximum leverage. Wow! The possibilities are endless. Imagine if you instead paid $2 million for the house with a monthly of $2,083.33 (in Sacramento County), and you could put a $1,000 per month into that same investment account. In 10 years you would have $167,659.71, in 15 years $296,070.34. But I guess it’s really moot, because its all allocated to the “Tax Man” who is just going to foolishly waste your tax dollars and misappropriate as much as possible for good measure.

Don’t Despair

Luckily there are provisions in your county to remedy the situation. Every county is a little different, but here are the 9 basic steps that you are going to have to take to get your tax bill reduced.

Get A Copy Of The Local Procedures To For A Reduced From The Local Tax Assessor’s office And To Have Your Taxes Reduced

Whatever you do, do not rely on your county tax assessor’s office to automatically reduce your taxes whether or not your state has a homestead exemption. And if the home is not your personal residence, none of these exemptions apply anyway.

Get A Printout Of All Tax Assessments Of All The Property Within Three Blocks Of Your Home

You can get this from your ’s office, but make sure that you go armed with specific addresses of properties that match or are similar to yours.

Get Specific About the Examples Of Similar Properties To Prove Your Case

Choose from 6-10 properties to show as specific examples of similar properties that are assessed lower than yours.If your state has a cap by which the tax can increase in any one year, it is crucial that you double and triple check the dates of original purchase by the owners. What you are looking for is similar tenure of ownership. The more similar, the better your case. If the property is an investment property (rented out), you will want to show properties that are rented in the same area, your expenses (including management costs even if you do not take those expenses), and what you end up with at year’s end. Also, be sure to deduct the annual tax, insurance, interest on the mortgage, and everything else that qualifies as a management or operational expense.

Take A Picture Of Each Property You Plan To Show As A Similar Property

Don’t worry about taking the best picture. What you are trying to do is downgrade value not sale your house for top dollar, get it!

Make Sure At Least One Of The Similar Properties Included Was Sold In The past year

Obviously, you do not want to do this is if the position is not in your favor. If it is favorable, make sure to include the sales price. In this case, what you are looking for is a property that sold for less than your tax appraisal.

Get Realistic Estimates From At Least Two Or More Local Real EState Agents In Your Area

The goal here is to show what your property could quickly sell for. This only makes sense if the numbers obtained represent a relative reduction in value over past years or the ratio of the usual tax appraisal to market value is favorable. The trick is to illustrate by comparing sales of similar properties in your area that the norm of the tax appraisal in your area is a certain percent of the market value. For example, if you can show that the norm of the tax appraisal in your area is 70% of the market value, then a market value of $300,000 would suggest that a realistic tax appraisal should be around $210,ooo ($300,000 x 70%). If your tax appraisal is substantially greater than that, this would be a positive case for a reduction.

Present It Like A Pro

Type it, type it, type it. Put together a neat and professional presentation. If you do not have the ability to type it, type it anyway. Remember these are just mere humans reviewing this data. put it in a professional folder and make sure that you give them the required copies plus another one for good measure.

Tell Them The Number you Are Looking For

Don’t just leave it to them to arbitrarily choose a number. Tell them the appraisal you expect and make sure that you prove your case with your presentation.

Of course, you can forget all of the above steps and hire a tax-reduction firm to handle the necessary paperwork to petition to have your taxes reduced. However, I have laid out a clear cut strategy for you do it your self, and if you are new to the world of “Total Asset Optimization” this would be good habit training on how you should be looking at all of your finances for maximum synergistic Wealth Accumulation. And No one says you can not repeat this same process year after year.

Be sure to register at our blog http://leonsblog.leonwilliams.me so you do not miss any of our postings. Below is a list of posting so far in this “War On Wealth” Series. Buckle up your seat belt and hold on s you are going to get the education of your life.


Other Posts In This Series are:

War On Wealth – A Primer (Introduction)
The Accidental Philanthropist; but Uncle Sam! How Many Times Can You Tax The Same @#$% dollar?
How Not To Turn $20 Into A $75,000 Disaster
Maximizing The “Bank Of You Concept”; Setting Up Your Own Private Bank
Life Insurance As An Estate Planning Tool
Private Retirement Plans Vs. Employer Sponsored Retirement Plan Options
Special Valuations For Intra-Family Transfers, Gift Taxes And Lifetime Transfers
Why You Should Start A Personal Business?
Advantages And Disadvantages Of Investing In Annuities
How Owning Real Estate Can Help Me Save Taxes
How To Reduce Your Real Estate Taxes
Annuities, How They Work And Their Tax Advantages
The Three Proactive Strategies Of Asset Protection
Trusts – A Basic Foundation

Webinar Opportunity – Minimize Taxes, Empower your Retirement, etc..

We have a webinar on Wednesday from 12:00pm-1:00pm called: “Isn’t It Time You Became Wealthy”, in which we will teach how to minimize taxes, how to make money even in a down market, and how to empower your retirement. Register for the webinar by going to http://becomewealthy.info/leon/Webinars.html

Leon C. Williams
Financial Strategist
LUCA Financial Services
leon@lucafinancial.com
blog: http://leonsblog.leonwilliams.me
Online Business Card: http://bizcard.leonwilliams.me

Other Articles and Blogs To Read Are:

http://www.ctj.org/blog/
http://ronideutch.blogspot.com
http://www.trulia.com/blog/larry_sarlo/2009/02/how_to_reduce_real_estat
http://www.blogcatalog.com/blogs/the-property-tax-blog.html
http://www.blogcatalog.com/blogs/valueappeal-property-tax-appeal-blog.html
http://www.reducepropertytaxesnow.com/

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Filed under: estate planning • Financial Services • Real Estate • War On Wealth • WOW Income Growth • WOW Taxes • WOW Wealth Preservation

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