Just a plot of, not a lot of land

Pete C · January-23rd-2009, 10:21 AM

As of this week I own my apartment free and clear; made my mortgage payoff on Tuesday. All I have is monthly co-op maintenance fees. Buying a Park Slope apartment in 1989 was one of the few wise fiscal decisions I made in life.

Jimmy Cantiello · January-23rd-2009, 10:25 AM

Congratulations! It's like getting a raise. Welcome to the club.

Monte Smith · January-23rd-2009, 10:26 AM

Congratulations, Pete. That's got to feel good.

Chris D · January-23rd-2009, 10:27 AM

And you don't even have to mow the lawn. Nicely done.

Cem · January-23rd-2009, 10:57 AM

Well done, Pete. I'm envious. Now you could work less, buy more music or travel more frequently, right? There must be other options, with which I'm not familiar...

Root Doctor · January-23rd-2009, 11:11 AM

Congratulations, Pete. Feel free to share that extra cash with those of us with time to go on our mortgages.

Pete C · January-23rd-2009, 11:17 AM

The current rate on my line of credit, which I'm not using, is 4%. Maybe I should get in debt again.

jazzy mary · January-23rd-2009, 11:26 AM

Oh my God, Pete! That's great!! Is your maintenance high? Some of the maintenance fees in co-ops are so high!

I will never own my house, I'm afraid. 30 year mortgage + an equity line of credit. Well, that's the price of divorce and a kid in college. You know why divorce is so expensive? Because it's worth it!! Ha, ha!

Thou swell, thou pretty, thou sweet, thou grand!

Pete C · January-23rd-2009, 11:28 AM

Quote:

Originally Posted by jazzy mary

Oh my God, Pete! That's great!! Is your maintenance high? Some of the maintenance fees in co-ops are so high!

Under $400.

jazzy mary · January-23rd-2009, 11:30 AM

Pretty good! I'm not sure how maintenance fees work. I understand that pays for the building upkeep etc. Do you have to pay real estate taxes? What about heat & Con-Ed? Water?

Gary Sisco · January-23rd-2009, 11:36 AM

Great, Pete.

clinthopson · January-23rd-2009, 12:01 PM

The two best financial times one can have are when the mortgage is paid off and when your kids graduate and are on their own.

Congratulations, Pete! Maybe now that you don't have that financial burden any more you can afford to eat out occasionally.

Jimmy Cantiello · January-23rd-2009, 12:03 PM

Quote:

Originally Posted by clinthopson

The two best financial times one can have are when the mortgage is paid off and when your kids graduate and are on their own.

Ya got that right, Clint. And when the kids leave the utility bills tend to ease up considerably.

Pete C · January-23rd-2009, 12:08 PM

Quote:

Originally Posted by jazzy mary

Pretty good! I'm not sure how maintenance fees work. I understand that pays for the building upkeep etc. Do you have to pay real estate taxes? What about heat & Con-Ed? Water?

RE taxes, underlying building mortgage, heat, water and upkeep are covered. Electricity is separate. Unfortunately, we don't have gas, so I have an electric oven. The tax & mortgage portion is tax deductible, and that's over 60%.

clinthopson · January-23rd-2009, 12:10 PM

Quote:

Originally Posted by Pete C

RE taxes, underlying building mortgage, heat, water and upkeep are covered. Electricity is separate. Unfortunately, we don't have gas, so I have an electric oven. The tax & mortgage portion is tax deductible, and that's over 60%.

Usually only the interest portion of the mortgage is deductible. Does the building owner break that out for you?

Tom Storer · January-23rd-2009, 12:52 PM

Congrulations, Pete! You should throw a party. Since you have all that extra cash now, you can buy me a plane ticket!

We've got five more years.

hornplayer · January-23rd-2009, 01:02 PM

Quote:

Originally Posted by Pete C

As of this week I own my apartment free and clear; made my mortgage payoff on Tuesday. All I have is monthly co-op maintenance fees. Buying a Park Slope apartment in 1989 was one of the few wise fiscal decisions I made in life.

Congrats! It couldn't have come at a better time, economically. No more wondering how you're going to come up with the cash for the mortgage.

I have a long time to go before that day.

Pete C · January-23rd-2009, 01:53 PM

Quote:

Originally Posted by clinthopson

Usually only the interest portion of the mortgage is deductible. Does the building owner break that out for you?

I get a statement annually broken down by mortgage interest and taxes. The building owner is the sum of the apartment owners. The accountant does the breakdown.

claude · January-23rd-2009, 02:11 PM

Quote:

Originally Posted by clinthopson

Usually only the interest portion of the mortgage is deductible. Does the building owner break that out for you?

I always thought that was an interesting tax provision. It basically rewards carrying a mortgage. We don' have mortgage interest deductibility (unless the property is used in a business) but any capital gains on a principle residence are tax exempt.

Congrats on being mortgage free Pete, must be nice.

Pete C · January-23rd-2009, 02:16 PM

Quote:

Originally Posted by claude

I always thought that was an interesting tax provision. It basically rewards carrying a mortgage.

Or encourages home ownership.

groover · January-23rd-2009, 02:36 PM

Quote:

Originally Posted by claude

I always thought that was an interesting tax provision. It basically rewards carrying a mortgage. We don' have mortgage interest deductibility (unless the property is used in a business) but any capital gains on a principle residence are tax exempt.

In the U.S., Claude, realized capital gains on the sale of a principal residence are tax-exempt as long as they are applied to the purchase of a replacement property, or at least this was true last time I checked. There is a one-time exemption allowed for senior citizens trading down.

Congrats, Pete!

clinthopson · January-23rd-2009, 02:40 PM

I think a certain amount of the income from selling a primary residence is exempt if certain conditions are met. I haven't looked it up in a long time but I kind of remember at least five year residence in the property is required and something like $500K profit is exempt.

rollhead · January-23rd-2009, 02:43 PM

Pete! Congratulations!

groover · January-23rd-2009, 02:44 PM

Is that California or Federal tax law, Clint?

I was taxed by Pennsylvania on the difference between purchase and sale price of the first house I sold in 1994, but not on the second in 2002.

Pete C · January-23rd-2009, 02:47 PM

Quote:

Originally Posted by groover

I was taxed by Pennsylvania on the difference between purchase and sale price of the first house I sold in 1994, but not on the second in 2002.

I think the tax statutes changed in the interim.

groover · January-23rd-2009, 03:10 PM

I suspect you're rght, Pete, though I'm not highly motivated to trouble the PA revenue dept. for a confirmation. I think they're in line with Federal law now.

Gary Sisco · January-23rd-2009, 05:23 PM

We took a large capital loss when we sold the VT farm. I have to ask our accountant if there's any break in their for that. We won't have an accountant after this year. Won't need one. EZ form time.

We own our new place outright. So, so long as we keep the taxes covered, we have a roof. No landlord, no mortgage, no desire to ever again have either one.

You did well, Pete, pulling that off in NYC.

Pete C · January-23rd-2009, 05:33 PM

Quote:

Originally Posted by Gary Sisco

We took a large capital loss when we sold the VT farm. I have to ask our accountant if there's any break in their for that.

If it was just a home, apparently not. Was there a business involved?

from:

http://www.irs.gov/taxtopics/tc409.html

Almost everything you own and use for personal or investment purposes is a capital asset. Examples are your home, household furnishings, and stocks or bonds held in your personal account. When you sell a capital asset, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. If you received the asset as a gift or inheritance, refer to Topic 703 for information about your basis. You have a capital gain if you sell the asset for more than your basis. You have a capital loss if you sell the asset for less than your basis. Losses from the sale of personal–use property, such as your home or car, are not deductible.

Gary Sisco · January-23rd-2009, 06:39 PM

Great.

Well, at least we had no capital gain to pay on.

GoodSpeak · January-23rd-2009, 06:46 PM

When's the mortgage burning party?

Congrats, Pete!