I’m thinking about investing in stocks and bonds but I don’t know the first step to take in investing in one. Do I go through a broker? How do I find one? How do I find one that won’t jip me out of money?

If you own a property which you are planning to sell, be sure to consult a tax advisor or get informed about tax law before doing so. Many real estate agents also know the subtleties of property selling and taxation. Several small points can make the difference between having to pay capital gains tax or not.

Capital gains is something that not many of us worry about because we only have the one home which is often only sold in order to buy another property. Usually the next property will cost more money and will be a like-kind property so the question of capital gains tax never arises.

However, until now, there has been a little known tax clause which had taxed the most unsuspecting of people with capital gains. These people are newly widowed women, who suddenly find that they will now be taxed as a single woman. On top of losing a spouse, they also had to worry about losing a large chunk of their assets in the form of money from the sale of their family home.

When a home is sold, it has usually been the property of joint owners (most commonly husband and wife) and each owner is allowed to claim $250,000. This means that, for tax purposes, the average couple can exclude up to $500,000 of gain - provided that they have used the house as a principal residence for a cumulative two of the previous five years.

In most cases, being able to ‘write off’ a $500,000 profit margin means most of us are not concerned with capital gains tax.

But what happens when a spouse suddenly dies? The capital gains or the profit allowed on the sale of the house is now only one person’s allowance of $250,000. If you and your husband were married in the 1940s and lived all your life in the same house, then death of one of the spouses would incur heavy taxes on the sale of the property.

The IRS has just stepped in to change this situation, but with all the mortgage rate controversy, it has slipped by almost unnoticed.

Until now, the only way to qualify for the full $500,000 capital gains allowance was to sell your home in the same year in which your spouse died. In other words, it would be the last year that you could file a tax return as a married person, so it would be the last year that any taxation could be applied to the married -deceased- spouse.

Apart from the shock of losing a spouse and thinking about selling your home all in the same time period - what happens if your spouse dies in November? You have one month to get your act together!

Theoretically, most husbands or wives inherit their spouse’s share of the property at what is called a ’stepped-up’ tax basis, but now that the IRS has introduced new legislation for the spousal death situation, everyone can breathe more easily.

The new change in the law, introduced at the end of 2007, now gives surviving spouses a full two years to claim the “double” allowance of $500,00 on capital gains, even though, by law, they are now single.

Source: Capital gains tax on your property

When selling your property in Spain you may be subject to a Capital Gains Tax (CGT). This tax is on any profit the Spanish government perceives that you have made, which even in the present climate is an issue that many have to watch out for. Currently the rate is set at 18% and can make a serious dent in anyone earnings.

A quick example:

You buy a property for 150,000 Euros

2 years later you sell for 250,000 Euros.

By these basic figures, you have made 100,000 Euros and the government is going to claim 18,000 Euros leaving you with 82,000 Euros.

Well this is wrong!

First you need to calculate your REAL costs of your property.

When you bought at 150,000 you also had to pay a range of costs including 7% transfer tax, stamp duty, legal fees, etc… which to make my life easier will say came to a clean 10% of the purchase price. You now include the money you have spent on the property including the attractive furniture package on offer for only 10,000 Euros that your partner saw and let us not forget the new kitchen for 6,000 Euros!

Now 2 years down the line you intend to sell the property with all the furniture, etc…

Now when calculating your ‘profit’ on the property the figures look a bit different.

Sales price: 250,000

minus the 150,000

minus the 10% (15,000)

minus the furniture 10,000

minus the kitchen 6,000

total costs 181,000

leaving you with a gross profit of 69,000 Euros

with the government claiming 12,420 Euros

which means you net 56,580 Euros

So where am I going with all this. Well quite simple really, although the first example seems to show a nicer figure on what you made on the property, the second includes the real costs on the property. In both cases you made the same money except in the second by including the real costs you were able to lower the figure the government perceived as your profit and thus actually saved 5,580 Euros.

And this is only the start, NEARLY EVERYTHING you have had done to the property, if backed up with invoices, can be treated as cost and can be set against the perceived profit. Tiling the roof, new doors, air-conditioning, light fittings, etc…. This is especially the case for those of you who have had the property for many years and have at one stage or another modernized your home.

For those who have not had the hindsight of saving your invoices, another option would be to come to an agreement with the buyer and set a price for all that is being left. Maybe if the agreed purchase price is 250,000, agreeing that the furniture, fittings, etc… have a value of say 20,000 Euros. That way on the title deeds it is stated that the property is being purchased for 230,000 with 20,000 for everything being left. This would benefit both parties by lowering both the buyer and vendors taxes slightly.

With the way the market is, I thought anything that can help you squeeze a bit more out your sale would be helpful. But remember this is just my guide, as always seek the assistance of your gestor or lawyer to see how else you can make some savings.

Regards

Andrew Belles

Costa del Sol property

The word Investment is very commonly used nowadays. But to understand it accurately you should know that Investment is an act or contract that obtains or increases enduring economic links with an existing institution or one that has to be formed.

Everyone knows that in todays era Investment is important. But, how do you know the correct Investment moves that could be right for your personal needs and goals.

The concept of Investment

A good Investment can be a well-coordinated suit and sports jacket for some or may be buying a piece of land or may mean anything to any person. But Investment is a term with several closely related meanings in finance and economics, related to saving or deferring consumption.

An asset is typically purchased, or similarly a deposit is made in a bank, in hopes of getting a future return or interest from it. Literally, the word Investment means the action of putting something in to somewhere else.

The most important exception for the purpose of investment is the acquisition of interest in land, which is governed by both statutory and customary law. The judiciary that comprises both the lower courts and the superior court.

The major difference within the use of the term investment in economics and finance is that economists are known usually as referring to a real Investment. Case in point a machine or a house but financial economists typically refer to a financial asset money that is put into a bank or the market which can then be new to buy a real asset.

The world of Investment can seem to be mind-boggling for a beginning investor and the amount of information required to be consumed can appear daunting. So how does one decide what kind of security to invest in?

Considering the point, would you choose stocks, bonds or some combination of investments? Or could you invest in mutual funds? How do you choose a particular fund, stock or bond? How do you assess the risk to your money? Well! Seems confusing right.

Undoubtedly, the most commonly new Investment service is buying and selling stocks. Since only licensed brokers are allowed to trade stocks, an individual who wants to buy or sell a stock is required to work through a broker.

Individual brokers work for financial services companies known as brokerage houses. In general for Investment purposes, there are two main types of brokerages, the most commonly known full service broker and the more recently developed discount broker.

Since prices of things are rising, doesn’t it make sense to enjoy now rather than save and consume later when we will obtain less for the same money?

Yes, if we are going to keep money under the carpet.

No, if we are going to do proper Investment and the rate of interest is higher than inflation rate. So if inflation is 5% and we obtain 8% return, the money successfully grows 3%. Hence a year later, we will enjoy more than what we would enjoy in most cases, if you or someone that understands and has expert knowledge spent now.

This is the concept of delayed gratification a type of Investment thought of for the future.

Usually taxes are the biggest expense. But you could also watch out for loads in mutual funds, any fee you pay to your Investment advisor, subscription to Investment magazines, demat your Investment account charges.

In most cases, if you or someone that understands and has expert knowledge are investing one lakh a year and its most important to understand if you are paying 5000 as a fee to your advisor and its much more important to understand if you are successfully paying 5% entry load, your chances of this portfolio beating a well diversified AAP, compliant portfolio over the long term is almost nil.

What could you prefer: Rs 10,000 right now or Rs 10,000 five years from now?

Common sense tells us that we could take Rs 10,000 today because we know that there is a sure time value of money. The Rs 10,000 received now provides us with a better chance to put it to work immediately and earn a sure return on it.

A single rupee today is worth more than a single rupee Investment a few years down the line. Given this, households that have surplus funds highlight within the form of savings want to have Investment in those funds so that the value of the funds over the years does not go down.

There are various forms of Investment at the availability of people. These include real assets like a house, an auto, a television, or financial assets like stocks in companies, bonds, units of funds, et cetera.

Traditionally, term deposits in banks, post office savings schemes, bonds and common stocks are the most accessible forms of Investment available to the investors. Term deposits, post office savings schemes and bonds give a fixed return over a period of time.

Investors would usually want their Investment in an asset, which gives them maximum return on their Investment. However, life is not as simple as that. Different assets come with different risk profiles. So choose correctly.

i was thinking of entering the stock market world and start investing, i have to admit that i am young and only in high school, but i have such an attraction to the stock market. i plan to use the money to save up and help pay my tuition for college. Ive been reading about stocks and researching but i need help in going into it.

How could i start ? What could i do as of now to help me invest properly, and what tips could you give me once ive started ?

thanks in advance.

Pretend I want to put a building in a place and need to issue stocks and bonds can an investment bank help me do it? What kind of credit or credentials would I need to get it?

Budgets aren’t fun and they aren’t sexy. They are, however, completely necessary. Cheryl Porier, AKA Miss Download, takes a look at BankTree Personal Finance and loves how easy, intuitive and relatively painless it can be to track money coming in and money going out. A Internet video by butterscotch.com.

For many people, taking the plunge into investing can be a daunting experience. They may have little investment knowledge or limited funds. Joining or starting an investment club is a great way to learn about investing in stock or real estate. Investment clubs enable members to pool their money for joint investment so you don’t need to have massive capital to start investing.

Finding an online investment club

There are many online investment clubs available. To start with, choose an investment club that fits your investing style and interests. Do you want to invest in stock or real estate? If you are a male (or female), do you prefer to join an all-men (or all-women) or mixed investment club?

Finding a good fit is important for an online investment club. Keep in mind what your main objective is for joining a club. If you are new to investing and need support and knowledge, be sure to choose a club that offers lots of hand-holding for its members.

Another important feature of an online investment club is the forum or discussion board. It allows members to communicate with each other since they don’t meet face to face. They can ask and answer questions. Newbies can learn a lot from others who are more knowledgeable and experienced. People from all over the world can join an online investment club. Distance is not a problem as the internet has made it possible for them to stay connected.

Choose a long established online investment club that is in line with your approach to investing. You should contact the club directly if you have any questions. Enquire about its past and current investment performance.

Finding an offline (or local) investment club

For people who have time to socialize, they may prefer to join a local investment club. These clubs are similar to online clubs except that members meet locally, typically once a month, to discuss and evaluate what stocks to invest.

The meetings incorporate educational talks on various investing subjects. You have the opportunity to hear investment experts speak and share their experience