Comments on: Buying a House as a Tax Shelter [in a Depreciating Market] http://livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/ Join me on my journey to achieve financial independence through dividends, passive income and investments Thu, 09 Feb 2012 20:39:20 -0800 http://wordpress.org/?v=2.8.1 hourly 1 By: mOOm http://livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/comment-page-1/#comment-258 mOOm Sat, 17 Jun 2006 19:59:00 +0000 http://www.livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/#comment-258 Yeah that's one point I disagree with Kiyosaki on. An owner occupied home is an investment. The return on investment is the cash you would have otherwise spent on rent. One of the first things we try to teach our economics students is being aware of these implicit opportunity costs and benefits. The real question is whether homes are good investments or not. I think they can be if you buy at a good price. Yeah that’s one point I disagree with Kiyosaki on. An owner occupied home is an investment. The return on investment is the cash you would have otherwise spent on rent. One of the first things we try to teach our economics students is being aware of these implicit opportunity costs and benefits. The real question is whether homes are good investments or not. I think they can be if you buy at a good price.

]]> By: Empty Spaces Inc. http://livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/comment-page-1/#comment-254 Empty Spaces Inc. Sat, 17 Jun 2006 00:58:00 +0000 http://www.livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/#comment-254 yeah, i'm in a 10% low tax bracket because of real estate deductions and funneling my gains into other entities. But for most people, that'll probably be the only investment[and the best]that they ever make, except that your home is NOT AN INVESTMENT! yeah, i’m in a 10% low tax bracket because of real estate deductions and funneling my gains into other entities. But for most people, that’ll probably be the only investment[and the best]that they ever make, except that your home is NOT AN INVESTMENT!

]]> By: mOOm http://livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/comment-page-1/#comment-252 mOOm Fri, 16 Jun 2006 20:32:00 +0000 http://www.livingoffdividends.com/2006/06/15/buying-a-house-as-a-tax-shelter-in-a-depreciating-market/#comment-252 Even the chairman of my Economics Department told me I should buy a house to get the tax break! Irrationality is everywhere. Economic theory suggests that house prices are higher than they would be if there were no tax break. So it's not like it can be cheaper to buy due to tax breaks, unless sellers all give their houses away for less than they are worth. Additionally if everyone is so irrational they will push house prices up even further. <br/><br/>The exception here is if you buy a house that is relatively cheap for someone in your tax bracket you will get a bigger deduction than the typical buyer. So there may be a benefit there.<br/><br/>With the standard deduction, AMT etc. a lot of people don't get all those tax benefits anyway. Even the chairman of my Economics Department told me I should buy a house to get the tax break! Irrationality is everywhere. Economic theory suggests that house prices are higher than they would be if there were no tax break. So it’s not like it can be cheaper to buy due to tax breaks, unless sellers all give their houses away for less than they are worth. Additionally if everyone is so irrational they will push house prices up even further.

The exception here is if you buy a house that is relatively cheap for someone in your tax bracket you will get a bigger deduction than the typical buyer. So there may be a benefit there.

With the standard deduction, AMT etc. a lot of people don’t get all those tax benefits anyway.

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