We don't have any plans this weekend. Last weekend was really busy with the train thing + boat thing. Next weekend is going to be really busy as well, plus two nights during this next work week we'll have things. So hubby and I are hoping for some down time this weekend to just relax (and do some yardwork...blech). We might have some friends over on one day this weekend, and we'll probably have my mom over at some point too. Other than that, we will hunker down, eat soup, and maybe take Miss J to the park if we're feeling especially wild.
It's 4am, and I'm awake. I've been awake since a little before 3am. You know when you get toward the end of one of your sleep cycles that occurs every once in while? Well, combine that natural lighter state of sleep with your bed partner getting up to go to the bathroom and with a coughing daughter.
Usually we close her door at night. On the weekends she tends to wake up a little after 7am, but she stays in bed until we come to get her. And since we're greedy sleepers, both my husband and I will at least sleep til 8am. One time last weekend we practically slept until 9am, and poor Miss J was still in bed and crying softly. All of her tears soaked through her bed; it was a sad, sad state. No matter how many times we tell her that she can come get us when she wakes up, she won't get out of bed herself and open her door. Until last week when we accidentally left her door open, and she ran into our room as if sharks were going to get her. So now on weekends, we decided that we'll open her door right before we go to sleep. That way she'll hopefully feel more comfortable about waking us up when she's awake, and we don't have any parent guilt about leaving her awake in her room for 2 hours while we continue to sleep. Right? Well, except that I can be a very light sleeper, and I just listened to her cough and wrestle around in her bed for 45 minutes. She finally settled down, but now I'm awake awake awake.
Here's my suggestion of the day: When you're already upside down on your house by $40,000, do NOT spend any more on home projects, particularly if you have to cash in the little money you have to do it. I'm talking to S's parents specifically here.
Here's my second suggestion of the day: Do not participate in shady business deals with parents. When parents, perhaps in the context of the previous suggestion, come to you and ask if you will buy their appreciated stock for $2 off the closing price & in return they will "gift" it to you so they can avoid paying taxes on their appreciation, run. Seriously. It's almost as bad as a Nigerian scam, but it's from parents. Why would any sane person enter into this business deal?
XYZ Stock - I checked the price; it's trading for $75 a share today. S's dad said it has had a 50% gain, so I'm assuming he bought the stock for $50.
Dad buys stock for $50 about 10 months ago. If he sells now to get money for the home remodeling project, he will owe 25% of the gain of $25 in short-term capital gains (assuming he's in the 25% tax bracket). That's $6.25/share. Instead of paying $6.25/share in taxes, he will "gift" us the stock and give us $2 off the share price. Thus, he gets out of paying the additional $4.25/share in taxes. Honestly I don't even think they are in the 25% tax bracket. They don't make much and they itemize a lot (like that mortgage their underwater on). I think it's really that they are diehard Republicans who hate paying taxes on principle & they don't get much money taken out of their pension checks for taxes, so they would have to come up with the taxes for this stock sale out of their pocket at tax time.
Now, if you're still with me on this, let's look at this business deal (aka tax shelter for S's parents) from our perspective. We pay $73 a share for a stock that we would never otherwise buy. However, because the stock was "gifted" to us (i.e., transferred to our name), we now take on the cost basis of the original owner. So even though we paid $73 a share for this stock, we have to report to the IRS when we sell it that we only paid $50/share. What does that do? That gives us a gain of $23 per share that ... drumroll ... WE have to pay taxes on. Because, as you know, Uncle Sam will inevitably tax someone. Now the assumption is that we would hold the stock until it qualifies for long-term capital gains and the associated 15% tax rate. But still... why in the world would we buy a stock for $73 that for tax purposes will be considered to be bought for $50?
The whole thing completely befuddles me. Why spend even more on your house, particularly if you're wanting to sell it soon? Why are they making their children an awful deal that's only in their own best interest? Why? Why? Why?
I'm not completely without compassion. I don't want S's parents to starve. The way they phrased this is that it is for a house project. There's no way I'm going to give them money to put toward that money sucker of a house though. They didn't phrase it as living expenses. Now the question is if the money is actually for living expenses disguised as a home renovation. They are planning a trip to the east coast soon. Hmmm...now I'm wondering if the money is really for that trip.
Business deals between family and friends should be outlawed.
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