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Technology Stocks : Intel Corporation (INTC)
INTC 40.350.0%10:58 AM EST
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To: Road Walker who wrote (168078)7/12/2002 10:51:22 PM
From: Jim McMannis  Read Replies (1) of 186894
 
RE:"I'm curious how you can make money "flipping" real estate. Assuming this is a real estate bubble, don't most all properties appreciate at about the same rate? So when you sell at an inflated price, you "flip" to a property that has an inflated cost. Why bother to "flip" at all, just let your current property go up in price. Right?

1. Build a house. Live in it. Sell in one year. Pocket up to $250k tax free if married, $125k if single. Hold 2 years $500k exemption married and $250k single.
2. Buy a house. Of course real estate always goes up <G>. Or Fix one up. Or just get a good deal or get in on the ground floor of a development (famous Florida trick).
Same as above...the tax break is prorated.
Not to mention mortgage interest rate deductions, tax free exchanges, conversion of residential to rental and vice versa...other tax breaks and tricks.

Of course this is turning into a pyramid scheme. I wouldn't want to be the last one in. But who knows how much further it can go. One difference with stocks however is that homes are lived in, tangible, realitively illiquid.

Contrast that with stocks...
1. Few if any tax breaks. Dividends taxed as ordinary income. Capital gains tax of 20%, 18% if hold over 5 years.
2. The property is not tangable. Run by a bunch of perceived crooks.
3. Unscrupulous Analysts. CFPs told you to buy for the long run. Mutual Funds restricted the number of your trades.

Owners in stocks have been sent to the back of the bus.

Jim
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