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December 2, 2019 By Dr. Ken Rich

Get Cash for Unsaleable Land

Get Cash for Unsaleable Land

First let’s define Unsaleable Land. There are lots of reasons for unsaleable land but they boil down to the following categories:

  1. Land Locked – you can’t get to it to use it for any productive reason. It may be remote. It may be restricted by CC&Rs or Building Codes. In fact, sometimes government or political groups make it impossible to use it.
  2. Undevelopable – The ground is not stable. Utilities can not be brought to it. Building materials can’t be brought in.
  3. Social development has taken a different route. The interstate went through a different valley.

I lived in a rural area and saw all of these in action. Property two miles up a creek that was designated as a road but only accessible by 4 wheel trucks driving between the banks of the creek. For $590 a man bought .347 yards of land at a county land auction that was what remained after the interstate was built. It was literally 1/3 of a square yard that the state didn’t want since it complicated their smooth property line at the end of an off ramp. Several politicians and local big wigs got burned after grabbing land where the new interstate was to go only to find it went through a different valley.

How do you cash out of unsaleable land? By donating it. The IRS says any real estate can be valued at $5,000 or what was originally paid for it (whichever is less) when it’s donated without any appraisal. Their policy is to accept that evaluation without question. A higher amount requires a licensed appraisal.

But wait! The Land is worthless!! The IRS doesn’t care. After all, they are a business and the law states what they do.

Their first step is to decide if it meets their minimal limit of $1,000 in unpaid taxes. If you’re in a 22% tax bracket the $5,000 deduction got you $1,100 tax reduction – YES, Failure to pay proper estimated tax. Next they decide what the penalty is. It’s based on Multiply line 14 by 0.03603. $1,100 x 0.03603 = $39.63. Now honestly, do you think the IRS will actively hunt down such a pittance when there are much bigger fish to fry?

If you found this informative, please share it with others.

By Dr. Ken Rich Filed Under: Donations, Real Estate Tagged With: donation, process, real estate

December 2, 2019 By Dr. Ken Rich

Cash Out on a Worthless Mortgage

Cash Out on a Worthless Mortgage

The right date is critical in many things. Here we are talking about the filing date on a real estate transaction – a mortgage donation.

Here’s the situation. You own a junior (2nd, 3rd, etc.) mortgage on a real estate property you sold. The buyer has fallen on hard times. The first mortgage holder (probably a bank) has filed foreclosure action and a court date is set. To make it worse, the property is worthless and broken down. In other words, your worthless mortgage will be gone soon with no cash out for you.

Here’s your options:

  1. Do nothing and on the court date you get nothing for your worthless mortgage except the opportunity to write it off as a bad debt.
  2. Bid enough to pay off all the underlying mortgages so you end up buying the property.
  3. Sell the mortgage to someone else.
  4. Donate the mortgage to a charity.

Here’s the consequences of your above choices.

  1. Write it off as a bad debt. The IRS limits you to a maximum of $3,000 per year until the total is written off. Each year you write it off your actual refund is based on your then current tax bracket. In other words, if it’s a $60,000 worthless mortgage it will take 20 years to cash it out. If you’re in a high tax bracket, that’s okay. But if you retire and drop to a lower tax bracket you get far less cash out for a worthless mortgage.
  2. You end up paying cash to take back title to a property you can only lose money on.
  3. Great if you can find someone, but not likely.
  4. The IRS rule says between 20% and 50% of your adjusted gross income can be a donation deduction. That means if you make more than $15,000 (= $3,000 / 20%) you get a higher write off and finish it much earlier.

Let’s put some numbers and time to the choices. If you earn less than $84,000 your tax bracket is 22%. Up to $160,000 is only 2% more.

  1. $3,000 x 22% = $660 refund each year for 20 years x 20 years = $13,200 total at the end of 20 years.
  2. Not a good choice.
  3. Will anyone actually pay you for a mortgage already in foreclosure?
  4. $84,000 annual income x 20% = $16,800 you can write off each year. $16,800 x 22% = $3,696 refund the first year. Again in years 2, 3, and 4. Your sped up the process to cash out of a worthless mortgage.

Victims Relief, Inc. doesn’t have any magic way to convert a worthless mortgage into cash, We do charge a $1,000 processing fee so in the end you get all your refund within 4 years instead of 20 years minus the $1,000.

Is the cost worth the speed of return? You be the judge.

If you found this informative, please share it with others.

By Dr. Ken Rich Filed Under: Donations, Real Estate Tagged With: donation, process, real estate

December 2, 2019 By Dr. Ken Rich

How to Exit Your Timeshare FAST

How to Exit Your Timeshare – FAST

First, let’s consider your timeshare. If it’s a premium resort like Disney, Wyndham, Marriott, Hyatt, Hilton, Four Seasons, or any other high demand name brand type of resort you can sell it with minimal trouble and get a decent offer. Think Rolls Royce versus a Toyota. If not, read on.

There are really only four ways to exit your timeshare. Consider these when you ask how to exit your timeshare FAST

Sell it – In all its various forms, this is the least likely of success and hardest to accomplish. Whether it’s paying a listing service on the Internet, using a Realtor to sell it, using $1 on eBay, or tracking down all the “for sale” websites, it’s time consuming, difficult, and generally unproductive.

Give it away – this is harder than you may think. Very few resorts will take back their timeshare. Few people want to take on a “forever” obligation, even if it’s free up front. This does include donation to some organization willing to accept it. Unfortunately, most charities don’t accept title, they have you hold it while they try to sell it and get the proceeds. They have the same trouble you have selling it and usually only take those they KNOW they can sell quickly. Make sure you know what their plan is.

Let it foreclose – The simplest and easiest but usually the longest (years). Unfortunately, it negatively affects your credit and you receive lots of bills, calls, collection letters, etc. in the process. This is definitely NOT how to exit your timeshare fast.

Legal action – This is sometimes the most expensive, takes about a year or more, but leaves it to an attorney you hire to get it done.

In most cases it is going to cost you money to get rid of your timeshare. The questions become, how fast and how much. Dig a little deeper into any plan and make your best choice. Victims Relief, Inc. guarantees you to exit your timeshare fast within 90 days or 100% your money back.

If you found this informative, please share it with others.

By Dr. Ken Rich Filed Under: Donations, Timeshares Tagged With: donation, get rid of it, process, timeshares

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