Tag Archives: Family

America the Beautiful – Thoughts on the 4th of July

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”  — U. S. Constitution

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” —  First Amendment, U.S. Constitution

“Observe good faith and justice towards all nations; cultivate peace and harmony with all.” — George Washington

“This country will not be a good place for any of us to live in unless we make it a good place for all of us to live in. — Theodore Roosevelt

“True patriotism hates injustice in its own land more than anywhere else.” — Clarence Darrow

“These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman.” — Thomas Paine

“I venture to suggest that partiotism is not a short and frenzied outburst of emotion but the tranquil and steady dedication of a lifetime.” — Adali Stevenson

“No man can put a chain about the ankle of his fellow man without at last finding the other end fastened about his own neck.” — Frederick Douglass

“Where liberty dwells, there is my country.” — Benjamin Franklin

“And so, my fellow Americans: ask not what your country can do for you – ask what you can do for your country. My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man.” — John F. Kennedy

“Four score and seven years ago our fathers brought forth on this continent a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation, so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we can not dedicate — we can not consecrate — we can not hallow — this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us — that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain — that this nation, under God, shall have a new birth of freedom  — and that government of the people, by the people, for the people, shall not perish from the earth.”  — Abraham Lincoln

“There are those who look at things the way they are, and ask why… I dream of things that never were, and ask why not?” — Robert F. Kennedy

“I have a dream that one day this nation will rise up and live out the true meaning of its creed: ‘We hold these truths to be self-evident that all men are created equal.'” — Martin Luther King, Jr.

“As I would not be a slave, so I would not be a master. This expresses my idea of democracy. Whatever differs from this, to the extent of the difference, is no democracy.”  — Abraham Lincoln

“Each man must for himself alone decide what is right and what is wrong, which course is patriotic and which isn’t.  You cannot shirk this and be a man.  To decide against your conviction is to be an unqualified and excusable traitor, both to yourself and to your country, let men label you as they may.” — Mark Twain

“All tyranny needs to gain a foothold is for people of good conscience to remain silent.” — Thomas Jefferson

“Semper Fidelis (Always Faithful)” — United States Marine Corps

“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.” — Martin Luther King, Jr.

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”  — Emma Lazarus (The Statue of Liberty)

“I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.” — Thomas Jefferson

“The only sure bulwark of continuing liberty is a government strong enough to protect the interests of the people, and a people strong enough and well enough informed to maintain its sovereign control over the government.” — Franklin Delano Roosevelt

“I cannot and will not cut my conscience to fit this year’s fashions.” — Lillian Hellman

“This land is your land, this land is my land
From California to the New York Island
From the Redwood Forest to the Gulf Stream waters
This land was made for you and me.
As I went walking that ribbon of highway
I saw above me that endless skyway
I saw below me that golden valley
This land was made for you and me.
I roamed and I rambled and I followed my footsteps
To the sparkling sands of her diamond deserts
While All around me a voice was sounding
Saying this land was made for you and me.
The sun came shining, and I was strolling
And the wheat fields waving and the dust clouds rolling
As the fog was lifting, A voice was chanting,
This land was made for you and me.
This land is your land, this land is my land
From California to the New York Island
From the Redwood Forest to the Gulf Stream waters
This land was made for you and me” — Woody Guthrie

“Come and take a walk with me thru this green and growing land
Walk thru the meadows and the mountains and the sand
Walk thru the valleys and the rivers and the plains
Walk thru the sun and walk thru the rain.
Here is a land full of power and glory
Beauty that words cannot recall
Oh her power shall rest on the strength of her freedom
Her glory shall rest on us all.
From Colorado, Kansas, and the Carolinas too
Virginia and Alaska, from the old to the new
Texas and Ohio and the California shore
Tell me, who could ask for more?
Yet she’s only as rich as the poorest of her poor
Only as free as the padlocked prison door
Only as strong as our love for this land
Only as tall as we stand.”  — Phil Ochs

“My country, ’tis of thee,
Sweet land of liberty,
Of thee I sing;
Land where my fathers died,
Land of the pilgrims’ pride,
From every mountainside
Let freedom ring!”  — Samuel Francis Smith

“We shall overcome, we shall overcome
We shall overcome someday
Deep in my heart, I do believe
We shall overcome someday.
We’ll walk hand in hand, we’ll walk hand in hand
We’ll walk hand in hand someday
Deep in my heart, I do believe
We’ll walk hand in hand someday.
We shall live in peace, we shall live in peace
We shall live in peace someday
Deep in my heart, I do believe
We shall live in peace someday.
We are not afraid, we are not afraid
We shall overcome someday
Deep in my heart, I do believe
We shall overcome someday.
We shall overcome, we shall overcome
We shall overcome someday
Deep in my heart, I do believe
We shall overcome someday.”  — Adapted from Rev. Dr. Charles Albert Tindley

“God bless America, land that I love
Stand beside her and guide her
Through the night with the light from above
From the mountains
To the prairies,
To the ocean white with foam
God bless America,
My home sweet home.”  — Irving Berlin

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1031 Exchanges Between Related Parties — and Other 1031 Exchange Issues

Special rules govern 1031 exchanges between related parties, and running afoul of them can turn your tax-free exchange into a taxable sale. 

Here is an example:

Brad and Ellis are brothers. Brad lives in Dallas, Texas, where they grew up, and Ellis lives in a suburb of Boston, where he settled after law school. As a result of an inheritance from their grandparents, Brad and Ellis own several houses in Dallas as joint tenants.

They have rented these houses to tenants and divided the expenses and the profits equally between themselves. The largest of these houses is a five bedroom ranch style home sitting on 3.5 acres.

Brad now wants to move into this house, and wants Ellis to sell him his one-half ownership so that Brad can own the house on his own. The house’s fair market value at the time of their inheritance was $600,000. Its current fair market value is $950,000.

Ellis points out to his brother that if he sells his share of the house to Brad, he will be required to pay capital gains taxes of approximately $45,000. Instead, Ellis proposes that they do a Section 1031 exchange, in which he and Brad would swap their portions of ownership of several of the properties that they own together.

Specifically, Ellis proposes that Brad exchange his joint ownership portion of two of their smaller properties with a combined current fair market value of $890,000 for the ranch house property worth $950,000 that Brad wants. Once Ellis has sole ownership of these properties, Ellis plans to remodel and sell them within the next two years.

Does Ellis’ proposal make sense?

What about the $60,000 difference in value between the property that Ellis wants to exchange in return for the ranch house?

Are there any special problems for the brothers to consider, and is there anything that they could do to avoid these problems?

The first point to recall here is that special rules apply to Section 1031 exchanges with anyone who is a “related party” to the taxpayer.

Related parties include family members, such as spouses and lineal descendants (parents and children, brothers, sisters, grandparents and grandchildren), as well as corporations, partnerships, trusts, and estates in which a related person owns more than 50 percent either directly or indirectly.

You can engage in a Section 1031 exchange with these related parties, but only if neither the relinquished property nor the replacement property is sold or otherwise disposed of within two years of the transfer.

The IRS monitors exchanges between related parties by requiring that both parties file a special tax form, Exchange Form 8824, in the year of the exchange and for the next two years.

In this example, Brad and Ellis can exchange properties, but the exchange will be treated as a taxable sale if either the relinquished property or the replacement property is sold or otherwise disposed of within two years of the transfer.

Thus, if either Brad or Ellis sells or otherwise disposes of the property involved in the exchange within two years of the transfer, the IRS will retroactively disqualify the original transaction as a Section 1031 exchange and order that capital gains taxes be paid.

Moreover, if either brother sells or disposes of the property before the two year holding period is over, the other brother will be required to pay capital gains taxes on the transaction even though he was not the party who sold or disposed of the exchanged property.

Here, if Ellis carries out his plans to remodel and sell the property he receives in the exchange within the next two years, the IRS will retroactively declare the exchange to be a taxable sale and both Ellis and Brad will be required to pay capital gains taxes.

Accordingly, Brad should consider doing the exchange only if Ellis agrees, in the written documents controlling the exchange, to a provision specifying that if either party triggers the taxation of gain within the two year holding period, the innocent party will be reimbursed for the adverse tax consequences.

In addition, a transaction to qualify as a Section 1031 exchange, both the relinquished and the replacement properties must be held for use in a trade or business, or for investment. In this example, Brad wants to move into one of the exchanged properties and use it as a personal residence.

If he does so, the property is not held for use in a trade or business, or for investment, and the transaction will not qualify as a Section 1031 exchange. Brad can move into the five bedroom ranch style home only after a prudent holding period of at least two years, during which he uses the property in a trade or business or for investment.

Brad should also be concerned about the $60,000 difference in fair market value between the property he will be giving up and the property he will receive in the exchange.

In order to use Section 1031 to avoid paying any capital gains taxes, the basic rule is to exchange up, never down.

Here, if the exchange were to go forward as Ellis proposes (that is, Brad would receive property with a fair market value of $890,000 in exchange for property with a fair market value of $950,000), then Brad will have a capital gain of $60,000 on which he will required to pay capital gains taxes.

To contact Melissa J. Fox about serving as a qualified intermediary, attorney, or broker, or for other 1031 exchange, legal, or real estate services , send an email to strategicfox@gmail.com

 

New Toy Story Ride at Disney’s California Adventure is a Blast — and David Beckham is For Real

We went to Disney’s California Adventure today to ride the newest attraction — “Toy Story Midway Mania!”

We had won an annual pass-holder contest and we got to test the ride before it officially opens for the public on June 17.

The ride is gracefully charming and fantastically fun. You’re given 3-D glasses, then seated in a double-facing car that takes you through a nostalgic world of old children’s games (including Candy Land, Barrel of Monkeys, Chinese Checkers, Old Maid, and Disney’s own old Adventureland game) and then to a series of virtual midway style “shooting galleries” hosted by 3-D characters — including Woody and Buzz Lightyear — from the Toy Story movies.

You score points by hitting virtual 3-D targets with various virtual 3-D projectiles – including darts, baseballs, and eggs – from a cannon.  Targets explode, rockets take off, balloons burst, and china plates are blasted into hundreds of flying pieces – all in stunningly realistic 3-D.

Our family rode the ride at least seven times (maybe eight) and it was great fun each time.  I think we grown-ups enjoyed it at least as much as our nine year old son.

We saw something else noteworthy at California Adventure today – soccer great and Los Angeles Galaxy captain David Beckham and his wife Victoria (“Posh Spice”) and their children.

They looked like the moms and dads that sit next to us on the T-Ball field.  Nice to see celebs dressed down and kickin’ it with the kids.  We did do a double take on Posh’s tattoo on the back of her neck just to be able to check and make sure it was her (yes it was). 

What was especially noteworthy about the Beckhams was their complete lack of pretentiousness, affectation or self-importance – no entourage, no bodyguards, no (visible) security, and no nannies. Just the Beckhams and another couple enjoying the park with their children on a beautiful Southern California day.

UPDATE:

Someone sent us a picture of the Beckhams at Disneyland later in the day, looking a bit tuckered out.