Roth IRA's 2010 Tax Laws & How it Will Help Investors

Thanks to Paul DaCosta, tonight I listened in on a conference call with Dave Owens, CEO of Entrust Freedom, one of the industry leaders in Self Directed IRA and 1031 Exchange accounts. If you aren't familiar with these and you invest in Real Estate, you better start getting your feet wet, especially if you plan to retire.

I found this starter's guide on their website: www.entrustfreedom.com/free-reports/thanks/

Dave highlighted two important changes to 2010 tax laws governing Roth IRAs

1) Starting in 2010, taxpayers with modified adjusted gross income of more than $100,000 will be allowed to convert a traditional IRA to a Roth IRA.

2) Income taxes due on the 2010 conversion can be spread over two years. So the 2010 conversion amount may be included as taxable income in 2011 and 2012 - helping to spread out the tax bite.

Taking Advantage of the 2010 Rule

Fortunately there is a way for all taxpayers - regardless of income - to take advantage of this change in the tax code:

Start Funding a Traditional IRA Right Now!

Even if you don't qualify to make Roth IRA contributions or traditional IRA contributions on a before-tax basis, you can still make after-tax contributions to a traditional IRA. If you invest in a non-deductible IRA in the tax years 2006 through 2010, then you can convert those IRAs to Roth IRAs in 2010.

Most investors shy away from making non-deductible contributions to an IRA because they are not tax deductible, the investment growth is fully taxable, and because they are subject to minimum distribution rules they offer only a minimal tax shelter. But by converting these non-deductible IRAs to Roth IRAs in 2010 many of those disadvantages disappear.

The bottom line is... and this has been on my mind a lot lately. If we are working so hard to live, what are we making all this money for? I think it's so we don't have to work so hard later when we aren't physically able. If you aren't thinking about how Real Estate can play into your retirement portfolio you should be!

Call me! I'll get you pumped up.

Dill

The Conference Board Consumer Confidence Index bounces back

NEW YORK – Aug. 25, 2009 – The Conference Board Consumer Confidence Index®, which had retreated in July, rebounded in August. The Index now stands at 54.1 (1985=100), up from 47.4 in July. The Present Situation Index increased slightly to 24.9 from 23.3 last month. The Expectations Index improved to 73.5 from 63.4 in July.

“Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend,” says Lynn Franco, director of The Conference Board Consumer Research Center. “The Present Situation Index increased slightly, mainly the result of an improvement in consumers’ assessment of the job market. The Expectations Index improved considerably and is now at its highest level since December 2007 (Index, 75.8). Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations. And, as long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”

Consumers’ assessment of current conditions improved slightly in August. Those claiming business conditions are “bad” decreased to 45.6 percent from 46.5 percent; however, those claiming conditions are “good” decreased to 8.6 percent from 8.9 percent. Consumers’ appraisal of the job market was more favorable this month. Those saying jobs are “hard to get” decreased to 45.1 percent from 48.5 percent, while those claiming jobs are “plentiful” increased to 4.2 percent from 3.7 percent.

Consumers’ short-term outlook was much improved from last month. Those expecting an improvement in business conditions over the next six months increased to 22.4 percent from 18.4 percent. Those anticipating conditions to worsen decreased to 15.8 percent from 19.0 percent.

The labor market outlook was also more upbeat. The percentage of consumers expecting more jobs in the months ahead increased to 18.4 percent from 15.5 percent, while those expecting fewer jobs decreased to 23.3 percent from 26.1 percent. The proportion of consumers expecting an increase in their incomes increased slightly to 10.6 percent from 10.1 percent.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, one of the world’s largest custom research companies. The cutoff date for August’s preliminary results was Aug. 18.

© 2009 FLORIDA ASSOCIATION OF REALTORS

FOR SALE: Fully Rented Triplex, Bradenton

New credit rating guidelines cut homeowners no slack

WASHINGTON – Aug. 20, 2009 – Facing one of the worst housing markets in memory, struggling homeowners now have another incentive to walk away from an investment gone bad.

It’s hard enough to modify terms of a home mortgage, despite the federal government’s efforts to ease those procedures for individuals desperate to hold onto their houses. Unfortunately, the “Big Three” credit bureaus – Equifax, Experian and TransUnion – have issued new guidelines that allow lenders to report new mortgage loan modifications as “partial payment status,” a designation that could lower an individual’s credit score by more than 50 points.

A loan modification doesn’t reduce the principal, but makes it easier for homeowners to repay what’s owed by reducing the interest rate and stretching the length of the original loan. Credit agencies are paid to assess credit risks, and that includes people who can’t pay their mortgages. But these are extraordinary times. Penalizing a homeowner for successfully re-negotiating a loan could have the unwanted consequence of inducing more foreclosures.

First American CoreLogic, a real estate analysis firm, says more than 15 million mortgage holders, or 32.2 percent, are “upside down” on their mortgages, meaning they’re paying more than their houses are worth. In Florida, the negative-equity picture is worse at 49 percent, and the figures are even higher in South Florida, hovering around 51.5 percent in the Miami-Fort Lauderdale area.

Now, thanks to the credit-rating agencies and an indifferent government bureaucracy of financial regulators, there will be homeowners who will unnecessarily become credit risks. While a loan modification provides a better outcome than a short sale, foreclosure or bankruptcy, punishing homeowners who work with their lenders is counterproductive.

Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla. Distributed by McClatchy-Tribune Information Services.

HUD moves away from ‘ownership society’

WASHINGTON – Aug. 17, 2009 – The Obama administration is moving away from encouraging low-income Americans to buy homes, instead spending $4.25 billion on new rental units, officials say.

The White House decision to pump the federal stimulus funds into the Department of Housing and Urban Development’s low-rise rental apartment program is a clear ideological break with the administration of former President George W. Bush, whose policies of making mortgages available to low-income home buyers fell victim to the mortgage crisis, The Boston Globe reported Sunday.

The collapse of the for-sale housing market has left many low-income people holding mortgages they can no longer afford, becoming victims of skyrocketing foreclosure rates, and has led HUD to reassess the Bush-era goals of an “ownership society,” the Globe said.

“We’re trying to have a balanced policy,” Carol Galante, HUD’s assistant secretary for multifamily housing, told the newspaper, adding that the agency will also be using the stimulus funds to buy foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.

Conservative critics, however, told the Globe that rent payments in some cases can be more expensive than mortgages for low-income residents.

Copyright © 2009 by United Press International.

Understanding the $8,000 Tax Credit

First Time Home Buyer? If you haven't bought a house in 3 years you are considered FTB. Read everything you need to know here:
www.floridarealtors.org/AboutFar/homebuyercenter/upload/firsttimehomebuyer.pdf

Most importantly to qualify transaction MUST CLOSE by November 30, 2009 If you are getting a loan, plan for 45 days from contract to closing. Mortgage closings are taking longer and longer, don't wait till the last minute to find a house, you may miss the deadline!

Start looking!
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Marketing 101: Is Social Media a Fad?

The Social Media Revolution: Statistics From Socialnomics show Social Media isn’t a fad anymore, it's bigger than you think

Is Social Media the biggest shift since the Industrial Revolution? We are definitely in the Generation Now and you have to be oblivious to believe that Social Media is not the new precedent in marketing.



The powers of Social Media below…enjoy!

• By 2010 Gen Y will outnumber Baby Boomers….96% of them have joined a social network

• Social Media has overtaken porn as the #1 activity on the Web

• 1 out of 8 couples married in the U.S. last year met via social media

• Years to Reach 50 millions Users: Radio (38 Years), TV (13 Years), Internet (4 Years), iPod (3 Years)…Facebook added 100 million users in less than 9 months…iPhone applications hit 1 billion in 9 months.

• If Facebook were a country it would be the world’s 4th largest between the United States and Indonesia

• Yet, some sources say China’s QZone is larger with over 300 million using their services (Facebook’s ban in China plays into this)

• comScore indicates that Russia has the most engage social media audience with visitors spending 6.6 hours and viewing 1,307 pages per visitor per month – Vkontakte.ru is the #1 social network

• 2009 US Department of Education study revealed that on average, online students out performed those receiving face-to-face instruction

• 1 in 6 higher education students are enrolled in online curriculum

• % of companies using LinkedIn as a primary tool to find employees….80%

• The fastest growing segment on Facebook is 55-65 year-old females

• Ashton Kutcher and Ellen Degeneres have more Twitter followers than the entire populations of Ireland, Norway and Panama

• 80% of Twitter usage is on mobile devices…people update anywhere, anytime…imagine what that means for bad customer experiences?

• Generation Y and Z consider e-mail passé…In 2009 Boston College stopped distributing e-mail addresses to incoming freshmen

• What happens in Vegas stays on YouTube, Flickr, Twitter, Facebook…

• The #2 largest search engine in the world is YouTube

• Wikipedia has over 13 million articles…some studies show it’s more accurate than Encyclopedia Britannica…78% of these articles are non-English

• There are over 200,000,000 Blogs

• 54% = Number of bloggers who post content or tweet daily

• Because of the speed in which social media enables communication, word of mouth now becomes world of mouth

• If you were paid a $1 for every time an article was posted on Wikipedia you would earn $156.23 per hour

• Facebook USERS translated the site from English to Spanish via a Wiki in less than 4 weeks and cost Facebook $0

• 25% of search results for the World’s Top 20 largest brands are links to user-generated content

• 34% of bloggers post opinions about products & brands

• People care more about how their social graph ranks products and services more than how Google ranks them

• 78% of consumers trust peer recommendations

• Only 14% trust advertisements

• Only 18% of traditional TV campaigns generate a positive ROI

• 90% of people that can TiVo ads do

• Hulu has grown from 63 million total streams in April 2008 to 373 million in April 2009

• 25% of Americans in the past month said they watched a short video…on their phone

• According to Jeff Bezos 35% of book sales on Amazon are for the Kindle when available

• 24 of the 25 largest newspapers are experiencing record declines in circulation because we no longer search for the news, the news finds us.

• In the near future we will no longer search for products and services they will find us via social media

• More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook…daily.

• Successful companies in social media act more like Dale Carnegie and less like David Ogilvy Listening first, selling second

• Successful companies in social media act more like party planners, aggregators, and content providers than traditional advertiser