My tale of two rich men, us and taxes on real estate

My uncle Gramps was the husband of my dad’s sister, Marion, who owned the Tot and Teen shop in Mt. Morris.  Nice guy, but I didn’t spend a lot of time with him. My fondest memory of him was winter 1963 or 1964, when he helped me with my taxes. I think I’d brought all the records home (to my parents) for Dad to help. Gramps came over and showed me how, with our duplex rental property, we would owe no taxes on the income. I found it stunning then, and even now, that by listing all our expenses and claiming something new to my vocabulary, depreciation, we owed nothing. The tax laws are made for the rich by the rich, but occasionally the little guy gets a boost.

President Trump, whom the New York Times is trying to smear without the word illegal appearing anywhere in the story,  created jobs, he provided services, and he took advantage of all the “loopholes.” So did Jeff Bezos, the richest man on the planet, who owes no income taxes at all, and who coincidentally owns the Washington Post, also a Trump hater.

I once asked my mother why my uncle was called Gramps, since at that time he may have been 40 something and had no grandchildren, and she said she didn’t know but that was his nickname at Mt. Morris College where my parents and he met (my aunt would have been in high school so I assume they met later).

I hated being a landlord. We met some really nice tenants and with some we have stayed friends. But it only takes one or two bad ones to make you resolve to never do it again. But that duplex, purchased in 1962, for $14,000, put us on a financial footing that blesses us to this day. We took a mortgage for $10,000 and Dad held the second mortgage. The rent, as I recall was $70/month and that covered the mortgage and  the utilities—so we essentially were living rent free. We sold it on land contract in 1967 when we moved to Columbus, and that payment covered our car loan and the mortgage. When the new owner paid off the loan a few years later, someone at the bank discovered an error in our favor, and as I recall we had a nice settlement.

Owning and living in your own home does nothing for your own wealth, but owning real estate and renting it or using it for some other investment does. My father always said the cost of your home always had to include what the down payment and improvements could have earned doing something else.

Marion and Gramps