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Dirty Deeds May Cost Homeowners Thousand$$$ & ACA, Done Your Way

In a shameful display of political gamesmanship, when our state legislature ended its session last month, one bill that did not see the light of day was SB 30. SB 30 is the bill jointly authored by Senators Ron Calderon (D) and Joel Anderson (R) and sponsored by the California Association of Realtors®. SB 30 would have granted tax relief on phantom income to thousands of California homeowners who short-sold their home this year.

SB 30 started life as a bi-partisan bill which was expected to sail through the process and be signed as an urgency measure. But along the way, the bill was hijacked. First it was linked to a bill that would have instituted a $500 million ‘fee’ on real estate transactions. Then it became a pawn to a contentious Senate race, finally to be stalled by the Democratic Legislature and extended to a 2 year bill.

As it currently stands, any California homeowner who short sold their home in 2013 will owe taxes to the state of California for the amount of forgiven debt. If you owed $300,000 on your home and sold it for $200,000, that $100,000 in ‘phantom income’ will be considered ‘regular’ income by the state of California and you will pay taxes on it to the state but not to the IRS.

There’s an outside chance the legislature can pull it together long enough to get a retroactive bill through when they convene again in January – but aggrieved homeowners need to register their comments with their local Assembly or Senate office. If they hear from enough voters they’ll eventually see the light. Maybe.
It was a shameful display or political ‘gotcha’ with California’s beleaguered homeowners squarely in the crosshairs. Whooda thunkit?

I’ve been hearing a lot about the Affordable Care Act (Obamacare) as we approach the early implementation phase. You already know about the computer ‘glitches’ and other roll-out problems but what about the program itself? For what it’s worth, here’s my take. The ACA will continue to widen the gap between them that has and them that don’t, which has escalated so dramatically the past few years. How?

1. You’ll be adding millions of currently uninsured people to the program,
2. Rather than deal with this massive shift in coverage and income, many older experienced practitioners will be retiring,
3. Current insurance providers may dramatically shrink in number/size as
4. States and/or the federal gov’t expand the role of health exchanges, meaning that
5. People who can afford individual insurance will have access to improved, timely boutique or concierge type insurance plans (this will include Congress, public employee union members with healthcare retirement benefits, and others exempted from Obamacare), while
6. The vast majority of the population will be enrolled in a healthcare exchange likely subject to longer wait times, less coverage, no assigned physician etc.
7. Costs to enroll will vary widely by state, within state or even within some cities.
8. Cost of your existing program is expected to increase, significantly in some cases.
9. Of the millions of continuing uninsured (who will pay the fine if they are caught), emergency rooms will continue to be the venue of choice, placing additional strain on an already stretched system.
10. The success of the program will be determined by enough young, healthy people who don’t need much healthcare signing up to offset the costs of insuring the millions of others who require substantial healthcare but pay reduced cost or whose costs are heavily subsidized.
11. The program will be run by the Government.

Millions more insured covered by fewer practitioners working for reduced compensation run by the government. Yep, that’ll work. Of course that’s just my opinion. I could be wrong.

Written by Gene Wunderlich, Sr. Staff Writer

Prior to his retirement in 2021, Wunderlich served on a number of local non-profits and boards. He spent the past decade as a legislative advocate for the housing and real estate industries as well as a coalition of local Chambers of Commerce advocating on behalf of small and local businesses.

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