Sohodojo Advisory Board Member
Jim Schneider
The Taxman86 Speaks...
22 June 2000
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The Home-based business movement just got a big boost; Video Streaming is in and the Gaslamp Quarter/San Diego will never be the same; Tax favored neighborhoods will win out; What is a housing allowance and is it taxable income?
1. The Vice President likes Home-based Businesses.
The word is out, the projected non-Social Security Surplus by OMB is going to be increased to $1.9T for the next 10 years, and tax cuts are in, even in the death tax arena, if it is a small business or farm; $5M will be excluded under the Vice President's NEW PLAN announced yesterday, which could include home-based businesses.
2. 31 Clubs are into a weekend Webcasting Festival.
It may not be real live outdoor music but it is available to a worldwide audience of 2M by Webcast.
The French Quarter in New Orleans or the Gaslamp Quarter in San Diego [The Casbah/San Diego is a participant] will never be the same if this catches on with weekly Webcasts from 31 Clubs.
Then there is Scifi.com for all those Buffy fans with Streaming Video animation. Or, Myplay.com where a Canadian Band went public from a garage and is now doing quite well with CD sales without a labelContent is coming sooner than later over the Internet because the market is smarter, see below.
3. The Cluetrain Manifesto is hot and getting hotter.
If you have not heard of the The Cluetrain Manifesto, you are missing something says one of our dear friends from New York, and we agree. Check out the Cluetrain site.
The Internet is making the market smarter, and tax savings will win out over the taxman. Knowledge and ideas are power these days. How long will it take the Lakers' key players to see the tax advantages of owning a historic 4,000 to 6,000 sq. ft. work/ live loft within a few blocks of the Staples Center, tax free of course, in the Los Angeles Federal Empowerment Zone They can walk to work or to one of the hundreds of home-based internet clubs that will be there sooner than later. You heard that here first.
4. Wall Street Journal says it all in their California Ed.
Housing costs in Northern California are highest in the country and key employees want to be paid to move west with "housing allowances of $20,000 per month" in some cases, and/or $1M interest free loans for down payments says yesterday's Wall Street Journal in Housing Perks Hit Rafters In Hot Real Estate Market.
What does the $1M interest free loan do for the tax deductibility of the remaining home mortgage interest? As we see it NO MORE deductions will be allowed, and thus all other mortgage payments will be made with after-tax dollars unless it is a business asset, then all interest may be tax deductible.
Where does the "$20,000 monthly housing allowance" fit in the tax free fringe world? We do not see it as tax free, unless it deals with employer provided meals and lodging under IRC Section 119. If someone sees it differently drop us a line. By the way, $50,000 to $75,000 financial planning fees for key employees seems to be the "in thing." [All these fringe benefit items are on someone's web site who tracts SEC Filings--knowledge is power, as they say.]
Jim Schneider, LL.M.
Taxman86
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