News Scrapbook 1985

San Diego, CA (S n Diego Co.) Evening Tribune (Cir D. 127,454)

San Diego, CA (San Diego Co.) Dally Transcript (Cir. 0 . 7,415)

:~"~'~?~ ~~an

t roversial that it probably will not

Also worried about tht•se deduc- lions is the Department of Housing and Urban Development, because it said they will reduce incentives to invest in low-income housing. "I can't predict who's nght at this point," Snyder said. "It will have an impact and those that do put up the investment will have to charge higher rents to get profits because of the few tax write offs." Snyder said the tax proposals are ''It's fascinating," he noted. "The proposals reflect everything everyone's values and - "Some people sell a building at an artificial price and an artificial- ly low interest rate for ~ore capital gain for the seller and reduc d in- terest income, a higher deprecia- tion write-off and lower interest payments for lhe buy<·r," he said. "The department really zeroed in wide-reaching. priorities." Yet, some of these proposals are due to real estate abuoers. "I feel it will have an impact, but not as badly as they say," Snyd,•r said. "They also get lower tux rates, but the situation won't be Bu mess investments will not be too badly hit, according to Snyder. Tht•y include property used in the business, such as a building. widgets," Snyder aid. "If you went out and got investors.to build it and lease it back to you, you'll get higher rents because of the few tax Snyder questions whether or not the increase in rents will be infla- "The proposed tax laws certainly are not simpler," he concluded. "In the changes were more significant and now you have to state a minimum interest and can't set the interest where you please when you sell. This will lead in- 1984 Another result could be shared appreciation on equity participa- lion mortgages, popular already. Under this deal banks get a share in a building for lending at better" "You don't buy money. You U$e it to make to make it breaks proposed." tionary. vestors back to the banks for loans." on that.,. The department is proposing that investors have to be "at risk" to get the depreciation wrile-offs on investment real ••state. That means investors have lo sign the mortgages.

AY 6 1

...

pass.

AY 6 1

•

Another investment to be hard hit if the proposals go thorough is vacation housing, where a person owns a vacation home, lives in it part of the year and either rents it or lets it sit the rest of the time. deduction on a vacation home," he predicted. "Right now you can deduct up to $5,000 on all your debt interest, including credit cards and personal debts. Under the pro- po.·als, that vacation home mor- tgage interest will be included in He added that the department wants to treat a vacation home like "You may lose your interest the amount." "You can't depreciate it unless you rent it and if the home is fi. Th us, vacat10n homes will receive no special interest deduc- tions but be classified under the Under the area of inv stment real estate, the 1985 tax proposal will discourage investors slightly because the Department of the Treasury does; not like people in- vesting for tax advantages only, "People who buy buildings to rent for tax shelters produce little taxable income but take lot of deductions," Snyder said. "Even though you only invested $100,000 in a $1 million building, you could write off all the cost and eventual- ly, the government got mad." Presently a building's deprecia- tion can be written ofT over 18 years. The proposal is to extend the write-off period to 33 or 34 years, which cuts the depreciation per year to 3 percent rather than twice "They're proposing it for all in- vestments, not just real estate," he vestment mortgage interest. Pres- ently if you pay interest on an ,n vestment mortgage you can deduct it all. Now the department wants to reduce that deduction by the rate of inflation that year. In addi- tion, a lender would be taxed on the reduced rate. For example, if a per- son pays 12 percent interest in a 4 percent inflation year, he would get an 8 percent deduction and the lender would only be taxed on the 8 "The department thinks this will cut interest rates because fewer people will borrow money and there will be more money to loan," Snyder said. "They say the tax rates are also going to decrease. The plan is still very controver- sial." Snyder said that even with lower tax rates the investment incentive(.. would be reduced with the lower y depreciation and interest deduc- percent. nanced," he said. regular debt deduction . according to Snyder. that now. said Snyder feels the reasoning behind the longer depreciation write-off period Treasury claims is because the inflation has curbed. Another proposal affects in a consumption item, such as a watch.

.Jllf~n ••

P C 8

I r 1888

q/lm's

p C B

/ r

/~XX

arnes no es/ :2:f77

/ USD's Lester Snyder Comments President's Tax Plan Believed In Jeopardy By Adr.irrf faiNs the SanDtt·toDa,J> Tra1U<"ript ,raffw . 1 . st ~te and local tax deduction, n er mclud1 th The effects on real estate . ng e property tax deduc- ve,;tment will range from tin- lion. They respond that your tax bad to very bad, but never bet:' so ~ates are being lowered, but you'll That i. the opinion Universi;; of ose ~ome_ money and there will be San p1ego tax law profess'orl:ester ev;~e::S incentive to own." B. Snyder, director of th USO are plenty of benefits now Graduate '!"ax Program ande d"t donfithe sale of a home, including e 1 or e erred ga b t th • of Tht> Journal of Rt•a/ E~tate Tax- lo be m,. u at is not going nt1on, on the effects of the D . rt S d the case if the proposals pass, epa · ny er said ment of Trea ury' proposed real "If I b . estat tax law change for this fi 11 ·t ty$8a0 house at $50,000 and year. ,e 1 a ,000 and buy another The tux bill is on haky ground, one at $80,000, I won't pay a tax on 8 d the_$30,000 at all now," he ex- ccor mg to Snyder, becau~e many 1 real_ e tat organ1zat1ons, In· P amed. "You defer the date of cludmg the N ttional A oc1ation of recko_ning until the money is not in Realtors, are heavily lobbying in a residence. Generally. if someone Wa h1ngton. A ccond Treasu over 55 buys a home and sells it tud} i comm' out oon. they don't pay a gain tax up t~ $125,000 nyder d1 cu cd four major • Th are s of propo d tax chang . . · e gain on the sale of a home clud ng horn ownership, bu i~~: ls con idered capital gain currently reul e late, vacatwn homes and ~nd the rate of tax cannot exceed inve tm nt re,tl e late 2 0 perc nt of the gain." ln all area buyer 111cent1ve will Under the Treasury proposal the be reduced, ht• ay 'und adds that 55 age benefit will probably be ban~ muy get In on more com allowed, but the rate of tax and mcric 11111v( Im nts. capital gain differential will d change. ny •r believe that 1I the pro- po a_ls pa through tho Congress, "They say the $80,000 sale price th _1ncent1ve to buy 11 home will doe n't represent all real money d_1m1nish sli •htlj • and the incen becau e of inflation, and they want t1ve to rent will grow, bringing the to elunmate the difference between two end do er together capital gain rat_es and regular gain, "The mtere t deduction will be plus put on an mdex for inflation '' preserVl'd, as far as the proposals he explained. "The departme~t go now," he aid, "On a mortgage fe~ls the difference between capital you·u only be ahle to deduct the gam and ordinary mcome tax per umo~nt ,n your rat bracket, and a centages should be eliminated and maximum of 35 percent on the you hould pay up to 50 percent, as dollar. u nd er regular income gain tax." "Th , I He noted that t 1s i~ so con ey re a O going to elimmate (Continued o Page 2B)

•

lower interest rates.

"We all need real estate and we

may have

to share the costs,"

Snyder said. "It is going to change

some habits."

Snyder has been involved in tax matters 27 years, teaching at the University of Connecticut Law School and working in the US. Justice Department's Tax Division as a professor 1n residence. He received his J.D. from Boston Uni- versity and his LL.M. from Colum- bia Y,niversity Law School. /

• Mary Cumming of Kearny Mesa and Debra Peder dotter of Ocean 8 a h were a\\arded $1000 scholar- ships bv the American Business Worn n' Assoc1ahon. San Diego Chapter. Cummings 1~ attending La Jolla Academy of Advertising and Art and Pedersdott r is in her second year at Universll of an... Diego School of Law.

Los Angeles , CA (Los Angeles Co.) Times (San Diego Ed.)

(0. 50,010) (S. 55,573) AY

San Diego, CA (San Diego Co.) Daily Transcript (Cir. D. 7,000)

San Diego, CA (San Diego Co.) Daily Transcript (Cir. D. 7,000)

985

.Jlllm'•

P c. B

1,, 1888

~~~.Abroad w,nfam i5lck~'s fund-raising expertise has him in demand for speeches and seminars around the country. But he is something of an international travel novice, having never ventured any farther than southern Canada or northern Mexi- co. That will change m 10 days, as Pickett flies to Nigeria for two weeks to instruct that country's educators on how to raise money. There may be a conflict of phi- losophies, however. Private universities are outlawed in Nigeria, and Pickett is vice president of university relations at the quite pnvate University of San Diego, where he I'!'"~ increased annual fund raising from $1 million when he started in 1979 to more than $6 million last year.

~7

19

.

•.Jl//,m . be cily's Internationul Affairs Board has five new members: Sara Finn, director of public relations at tiSD, Gj,ona Ma. a Lu J~lla bus~- n sswoman; Bill Lofft, vice pre 1- dent of the World Trade Assn.; Rudolph Riis, a local contractor; and Dana Herbst of 2_a~ia Fin1t. ~7_/ * • • 1/" '1 P C B I , / 888 "'

Jl/(('1'1,1

P C 8

I

1888

/ USD Law School Dean And ~arded By Bar

University of San Diego School of Law, has been gwen a San Diego County Bar Association award for outstanding service to legal educa- tion. Krantz, dean since 1981, helped create the Law Center at t he college to provide legal services to the community. / *** _/ _

•