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Jewish World Review Dec. 8, 1999 /29 Kislev, 5760

Bruce Williams

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How do we minimize house-sale gain? -- DEAR BRUCE: My husband and I bought a house in California in 1987 and lived there until 1994. We then bought a larger home, which we now live in, and we rent out our first home. We would like to sell both properties and buy a new house using the equity from both. The difference between the present market value and original purchase price is about $100,000. We can substantiate about $20,000 in improvements. Is there any way to minimize the gain? -- J.S. Camarillo, Calif.

DEAR J.S.: You failed to give me a breakdown of where these monies were earned. The monies on your rental property will be taxed at no more than 20 percent, depending upon your income. Any profits from the sale of your home that you are currently living in and have for the last two years will be tax-free up to $500,000 per couple. You gave up this right on your first home when you converted it to a rental unit. DEAR BRUCE: My husband and his sister disagree about how their little trucking company should be run, so he's agreed to sell out. The assets, less liabilities, equal between $100,000 and $150,000. They take very small salaries, plus health insurance. -- N.V. Warsaw, Wisconsin

DEAR N.V.: Aside from the hard assets, it doesn't seem to me that the company is worth very much. If they are only taking small salaries, what they have done, in effect, is bought a job. Your husband might be better served by taking half of the asset value (putting that at $75,000) and occupying himself with more favorable pursuits.

DEAR BRUCE: We are from a family of seven. We co-own a large and quite valuable piece of commercial property. The value seems to go up monthly, making us near millionaires. We can't seem to make a decision on how it should be sold or when. Everyone wants the money, but no one wants to make the decision. I propose that we have a public auction that is widely advertised with our attorney participating. What can you tell me about the merits of this type of approach? -- J.M. Knoxville, Tenn.

DEAR J.M.: Properly conducted by a well-known, reputable auctioneer, this may be a very good way for you to dispose of the property. You may want to break the property up into parcels or just leave it and sell it as a whole. There should be a "knock down" price, which means a minimum price that you will accept. A good auctioneer can frequently get more for your property than you would through listing agreements. This is another danger of leaving undivided property to several people -- it only takes one to upset the apple cart.

Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).


12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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