- 2 Buildings in Pineway Business Park in Northwest Houston Sold [Realty News Report]
- Austin-Based PPA Group Buys Citation North Apartment Homes in North Houston [Houston Chronicle]
- Houston Rate of New-Home Sales On Par with the National Average, Finds Meyers Research [Houston Chronicle]
- Sneak Peek Inside StreetLights Residential’s 17-Story Apartment Project The Ivy [HBJ]
- How Much You Need To Make To Live Comfortably in Houston [Culturemap]
- The Creek Group Opens Fifth Concept, Piggy’s Kitchen & Bar, in River Oaks Area [HBJ]
- Cherry Pie Hospitality To Debut New Seafood Restaurant Star Fish Any Day Now in the Heights [Culturemap; previously on Swamplot]
- Just How Much Money Do Bernadine’s and Hunky Dory Owe? [Houston Press; previously on Swamplot]
- State Senate Approves Bill To Prohibit Bans on Short-Term Rentals in Texas Cities [Texas Tribune; previously on Swamplot]
Photo of Jerry’s Artarama: Ruben S. via Swamplot Flickr Pool
The comments on that Texas Tribune article are beyond asinine. Banning local regulations against short-term rentals is NOT “big government” at work. Big government = the addition of regulations, NOT their nullification. Who cares what level (federal, state, local) imposes restrictive regulations – they still represent big government. This bill is a stand for property rights, and a repudiation of the tyranny of the majority that has taken hold in many cities across Texas. And to those who claim the Airbnb lobby is paying these guys off – then surely the hotel lobby is paying off their opponents?
The Treadsack bankruptcy story is baffling. If they owe $700k in federal taxes, they must have made money, or at least the IRS thinks they did. Let’s say their tax rate was 30%. In order to generate a 700k tax bill, it means they made $2.3 million in taxable income (or the IRS thought they made that much). If they made $2.3 million, where did that cash go? Clearly not to taxes… and if they had expenses (rent, payroll, construction costs) then surely they would have set them off against revenue and claimed a lower taxable income…. Did they really make $2.3mm and then distribute all the cash to the owners, without paying taxes? Can’t see how their lenders would be happy about that. Or, is the IRS just wrong about how much this group made? It doesn’t add up.
Re: Bill To Prohibit Bans on Short-Term Rentals
This is the (Not So Great) State of Texas telling local communities what they can or cannot do in their own jurisdictions …. how is that a Republican ideal? I thought they were all about freeing up the will of the people …. perhaps they are OK with lying about that when an action supports their own political bias?
How about local Blue Laws like the one that banned alcohol in the Heights? State laws say that, with the proper State permit, alcohol can be sold anywhere in Texas … shouldn’t similar Blue Laws be banned throughout the state? With this new Senate bill it suggests that if something is legal in Texas then it should be legal anywhere in the state. If it enacted perhaps a class action lawsuit is in order to free us from local control of our local communitities …..
https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html – Saw this the other day…. may give a bit more perspective to the Texas Tribune article
@K, if I had to guess, I’d say IRS assumed that number and since the company is filing bankruptcy and it will all be wiped out anyway, there’s no point in arguing it for them. No restautant makes that much money, not even the most successful ones in Houston.
K- I suspect they made a lot more than 2.3 mil and had to pay a huge amount to people who aren’t listed as creditors. Your just seeing the people that didn’t get paid.
Given the amount of the alleged robbing Peter to pay Paul, I wonder whether the Treadsack IRS lien includes pocketing employee income tax withholding and big penalties arising therefrom.
Re: Treadsack, often the federal tax liability is money withheld from employee paychecks and remitted to the US Treasury. It’s not unusual for cash-strapped employers to defer those liabilities. The kicker, however, is that the officers of the company responsible are considered “trustees” for the government and face personal liability for these debts, often causing personal bankruptcy as well. Also, tax liabilities have priority over many other types of claims in bankruptcy and are non-dischargeable as against individuals. The takeaway – don’t stiff Uncle Sam.
Grant- Most of the ultra-biased Texas Tribune editorials, thinly disguised as news articles, are asinine.
I came on here to make the point that Toby’s article makes. The state law simply cock-blocks hotel industry lobbyists from attempt at imposing barriers to entry — and it closes off one vector by way of which corruption at a local level is enabled. This and other laws like it are very much needed.
Also, commonsense is correct. When it lacks pertinent information, the IRS will assume the worst-possible case and generate ridiculous tax bills. Without knowledge of the particulars, it is dangerous to work from that data to come to any conclusions at all, whatsoever.
Treadsack also apparently not remitting enough sales tax revenue if the state comptroller puts in a claim. Don’t stiff Uncle Tex.
WR: Like Grant said, the state telling local governments you can’t limit what people do is not ‘big government’. I understand your feeling of irony in that most small government types want more local government control. But if a local government tried to, say, outlaw gay marriage and the state said ‘no’, I wouldn’t see a ‘big government’ contradiction.
re: Tredsack, I can believe the IRS claimed they make way more than they really did.
Hell, if you buy a house to flip for $100k, put in $50k, and sell it for $180k, the title company sends the IRS a 1099 that says “FYI, Cody just made $180k!”.
What? I did? No. It’s just our dumbass tax system makes unpaid IRS agents out of everyone. So now you get to say “Whoa, wait a minute. I didn’t ‘make’ $180k. I bought it for $100k, put in $50k, so really only made $30k.”. Oh, and before you do that they’ll want to know who you paid that $50k to, did you 1099 them like a good little unpaid tax collector? If not, and you simply gave someone money in exchange for materials and labor (as it should be), get ready for a beating.
I don’t know who these Treadsack people are. They might be slimballs but I’ll almost always default to not believe what the IRS says about what someone owes because I get to see how they operate first hand. If you’re not a generic W2 earner, you spend a great deal of time defining what ‘income’ is.
If no return is filed, the IRS will impute a revenue number and assume zero deductible expenses. The deductible expenses can be claimed upon filing of the return. Likewise, until the IRS learns the cost basis of a home flip, the presumption is zero. I’m no fan of the blood-sucking IRS, but this is my understanding of its methodology.
@Cody, the 1099’s have to work that way. The title company has no idea how much you paid for the property, or how much you put into improvements. The only thing they know is how much you received for the sale, and that’s what they report. If you owned the property through a corporation, the payer is not required to send a 1099(there are exceptions, read the IRS manual). It’s still up to you to have evidence for the amounts you paid out on the house.
As far as I know, you do not lose a deduction for not filing a 1099, but the IRS tries that all the time. You might get hit with a $100 penalty per 1099 you didn’t file, though. Plus, if you paid a corporation, you do not have to file a 1099 for that payee.
Ross: I know the title company doesn’t know what I paid. My point is the title company shouldn’t be involved with the IRS at all. If I buy a house for X, sell for Y, I’ll claim the Y-X as income.
Or, if our tax system breaks if we don’t have everyone playing the role of unpaid IRS agent, then let’s change it. Make it a simple consumption tax. The efforts put forth to collect taxes is way way too high.
@ Cody: Oh, damn. Here you’ve gone and advocated for a federal consumption tax on the internet. A dogpile of ignorant one-dimensional comments is sure to follow.
@Cody, without the 1099’s, lots of folks wouldn’t report their income accurately, which costs honest folks more. And, it could be worse. I am looking at a project at work for our Mexico office, where all of the invoices have to be sent to the government, along with all of your ledger transactions. It’s going to be interesting.