When dreams go up in smoke
I had a great lunch last week with Billie Jean King. Okay, so I
had it with 1699 of her other closest friends as well. It was the
YWCA’s annual fundraising luncheon at San Jose McEnery Convention
Center. She had a powerful message to share with us. Her three main
themes were: Live your own truth; accept responsibility for all
your actions; and make a difference and be a champion in life. She
used one of my favorite quotes: Be the change you want to see in
the world (Ghandi). Her final comment was,
”
Dream big, and go for it!
”
When dreams go up in smoke
I had a great lunch last week with Billie Jean King. Okay, so I had it with 1699 of her other closest friends as well. It was the YWCA’s annual fundraising luncheon at San Jose McEnery Convention Center. She had a powerful message to share with us. Her three main themes were: Live your own truth; accept responsibility for all your actions; and make a difference and be a champion in life. She used one of my favorite quotes: Be the change you want to see in the world (Ghandi). Her final comment was, “Dream big, and go for it!”
It’s a good thing to feed your soul on a regular basis, whether hearing a great speaker or reading a good book. And speaking of books, since 2002 a program called Silicon Valley Reads has selected a book in February for everyone to read and discuss. Here’s a sneak preview: The 2008 selection, “The Distant Land of My Father,” by local author Bo Caldwell tells a story spanning many years across two continents. Its themes resonate with readers of all ages – family love, betrayal and reconciliation, the evolving relationship between parent and child, and (a favorite theme for me) the different ways people choose to define “home.”
The fires in Southern California have destroyed the homes of many Californians. My real estate coach, Brian Buffini, and his wife and six kids lost their home in San Diego. They had no warning, and everything but the clothes on their backs has been reduced to a smoking pile of ash. I can’t imagine that, can you? I think of my most prized possessions: the handmade book my grandmother received from American Home Department of the Kansas City Anthenaeum in 1936, the wedding album of my deceased parents, Ila’s baby pictures and first lock of hair, a pair of handmade quilts from my great aunt. I would survive the loss of them, but a piece of me would be irretrievably lost.
Over 1,600 homes were destroyed. Now, I bet you haven’t thought about this: What about the homes in escrow? What happens to a real estate deal when the real estate disappears?
Generally, in the case of an “Act of God” such as an earthquake or fire, the loss is born by the seller unless it has been otherwise spelled out in the contract. This assumes the buyer has not yet taken either possession or title. If the buyer has taken possession of the property, but the title has not been changed, the buyer must continue with the sale.
It gets a little more complicated if the property suffers damage rather than full destruction. If the contract is still in its inspection contingency timeframe, the buyer may back out. However, if the inspection contingency has been removed by the buyer, the seller has the right to repair the damage and can force the sale to continue. So picture this. You make an offer on a beautiful home in a lovely neighborhood. The fire comes through and wipes out the homes and vegetation surrounding the house you are purchasing. Only the fence between your soon-to-be home and the charred mass next to you has been damaged. The seller repairs the fence, and Voila! You have a new home. Okay, so maybe it’s not exactly the way you planned it.
There’s kind of one little twist in this. If the fire requires the seller to amend its disclosure packets to include something relevant to this particular fire, the buyer will be able to cancel the contract at that time.
A seller must always disclose major property damage in a fire, or the fact that there was a fire, when selling a property. So, for instance, if your house survived a fire, and the neighbors’ homes were all destroyed, you must disclose that fact when you sell it years later after everything is rebuilt and the landscaping has grown back.
If you’re renting and the place is destroyed the lease is terminated. The landlord can no longer get rent, though you would still owe any back rent you might have accrued.
And finally, what about the deductibility of losses? As usual, the tax codes are practically indecipherable. For business property, the loss is fully deductible. If it is not a business property, losses”are generally deductible only to the extent that the total of such losses exceeds 10 percent of the taxpayer’s adjusted gross income for the year of loss. Any loss is deductible only by a taxpayer who itemizes deductions. Each loss is subject to a $100 floor. The amount of a casualty loss is the lesser of:
– the difference between the value of the property immediately before and after the loss;
– the adjusted basis of the property immediately before the loss. (26 U.S.C. §165(c)(3) and (h).)”
Whoa, doggies! Call your CPA. And get the book “The Distant Land of My Father” by Bo Caldwell. And dream big and go for it.
Oh – and, of course, be kind to your Realtor.
