The Sarah Palin Incident – Political Ends and Personal Destruction

By Francis Pennyworth, Jr.

In September of 2008, when Senator John McCain selected Alaskan Governor Sarah Palin as his running mate on the Republican Ticket, my first blush reaction was that he had literally handed the Presidency to Obama on a silver platter.  As it turned out the Palin choice actually was a colossal mistake for the Republicans.  Moreover, the firestorm it triggered truly transcended the 2008 presidential campaign.

  The Palin Family 2007

Governor Palin apparently engenders two, and only two, emotions among female voters – either fear and loathing (not necessarily in that order) or complete admiration. In the last half century, with the possible exception of Anita Bryant, I can’t recall a more polarizing female appearance on the national scene.

Before I get to the meat of the Palin controversy, it’s important to set the national stage and establish the context of the scene in which she appears. We need to recall that women in the United States have almost always been engaged in a continuous and sometimes furious running gun battle for “women’s rights” and everything that $2 phrase represents.

The women’s liberation movement, at least in a modern sense, returned to life in 1961 with the creation of the Commission on the Status of Women under President Kennedy. After a very short time this federal commission dissolved into an amorphous cloud of state level commissions.

Just as it was beginning to look as if the feminist issue had been relegated to a slow death in committee, the National Organization for Women was formed in 1966. NOW’s initial goals, enunciated at its 1967 convention, were passage of the Equal Rights Amendment (ERA) and the repeal of all abortion laws.

The abortion agenda was particularly aggressive since, by comparison, the AMA had only recently (in the same year) voted to support “therapeutic abortions” and then only under three very narrow circumstances. (1) The pregnancy represented a direct threat to the health either physical or mental of the mother, (2) The unborn fetus would be born with a mental and/or physical defect, or (3) The pregnancy was the result of rape or incest.

As we now know, ERA was doomed, but there was success with the abortion issue. In 1973, the United States Supreme Court decided the case of Roe v. Wade, (1973) 410 U.S. 113 which overturned all state and federal anti-abortion laws inconsistent with it holdings. The details of the decision are a book in and of themselves. Suffice it to say that abortion suddenly became legal, at the woman’s choice, for any reason, up to the point where the fetus becomes “viable.” At the point of viability, conditions attach to the performance of the procedure. The abortion battle was protracted, and brutal, and continues to this day.  Which is not surprising considering the involvement of organized religion.

In the 1970s and 1980s the concept of “equal pay for equal work” was expanded into the broader, more inclusive concept of “equal pay for work of equal value.” This new definition seems to have included within its ambit an attack on “glass ceilings”. Along with this new concept came a growing sense of feminine pride in achievement and a desire for professionalism in the workplace. Something I have tried to instill in both my daughter and my son.

The remainder of the 20th century and the first years of this century have been filled with a continuing struggle against glass ceilings and a resurgence of anti-abortion sentiment.

With the above context in mind, I find myself observing the explosive discourse surrounding Sarah Palin and wondering if the anger I’m hearing will rob women of their credibility and, as a result erode, their hard earned gains. It seems that Sarah Palin’s mere existence is perceived by many to be an insult.

  The Alaskan Campaigne

The one organization which has ostensibly worked the hardest for women’s rights immediately turned its back on a woman who was attempting to achieve the second highest office in the land. Per, Kim Gandy, of the National Organization for Women, that organization announced it would endorse Obama and Biden. The basis of this rejection of Governor Palin was purportedly based on Ms. Palin’s personal belief in Right to Life.

The internet, as well as the “main stream” media immediately filled with vituperative comment on the Alaskan governor’s personal life, children, husband, and practically anything else even remotely related to her (i.e. her sister’s divorce, etc., ad nauseum).

Right to Life vs. Freedom of Choice

This is a purely religious controversy, laden with unfathomable and unprovable issues. If you believe that human life begins at conception, then an abortion is the intentional termination of a human life (i.e. murder). The language sounds strong, but (setting aside a state of intellectual denial) this is what it boils down to. A crystal clear case of either “yes” or “no.” The relevant question to ask a candidate is not so much, “which belief do you hold?” Rather, it’s “will you force others who disagree with you to conform to your belief?”  The latter is a fair question which seeks to identify the ideologues.

Rather than ask the right question, or even listen to the answer (you can find the Governor Palin’s answer on the internet) a large number of women (including the NOW organization) basically called her a traitor.

The unintended consequence to this, is the inescapable conclusion that feminists are not as interested in women’s rights as they are in their own philosophical agenda. And, any woman who disagrees with them isn’t entitled to equal rights.  (We sometimes see analogous behavior when those who demand freedom of speech refuse to let others talk.)

Governor Palin was even attacked for her decision to give birth to a special needs child with the resulting implication that the child should have been aborted. Of course, not all of this can be laid on the doorstep of the feminists. Much of the negative diatribe emanated from a left leaning press (there is of course also right-leaning press) as well as a left leaning entertainment industry (i.e. SNL).

Regardless, affirmative feminist support for the Governor was conspicuously absent.

From my outside point of view, NOW could have really racked up some points by publically defending the Governor’s right to her religious belief. It’s kind of like the ACLU defending the right of a neo Nazis to demonstrate. Equal rights actually does mean equal rights, whether you agree with the specific exercise or not.

Of course, an argument can be made that if Sarah Palin were to become President then she might have an opportunity to appoint a judge to the United States Supreme Court and shift the balance of the Court to the conservative side. That argument is a proper one, based on the information that the Governor is a conservative. Unfortunately, that argument is only being made to the extent it’s wrapped deeply within character assassination.

Contraceptives vs. Abstinence

Whether or not a women chooses to use a contraceptive or just plain abstinence is another fundamental question of religious belief. Moreover, there is a strong sentiment which suggests that the distribution of contraceptives to minors is tantamount to a societal endorsement of premarital sex. Again, the issue is intertwined with very intense religious beliefs.

Here again the law of unintended consequences lurks in the background. The fact that Governor Palin’s minor daughter was pregnant was used by female detractors as purported evidence that not only can’t the Governor control her own children, her preferred method of birth control is intrinsically flawed. These comments are totally irrelevant to the subject matter of the election and are not calculated to lead to the discovery of useful information upon which to base a vote.

The proper inquiry is – “will Palin attempt to subject others to her preferred method of birth control?” Rather than ask that question, female detractors chose to invade the privacy of a minor child and to suggest by innuendo that Palin’s beliefs are a fortiori dangerous and defective.

From the outside looking in, it appears that the objective of this criticism is character assassination rather than political discourse. For example, if the Governor’s intention was to let others find their own way on the issue, then her personal beliefs were never in issue.

As an aside, if Roe v. Wade were overturned this afternoon, abortion would not suddenly become illegal. The states would simply become free to pass their own laws on the subject.

Equal Pay For Work Of Equal Value

In order to be paid equally, for work of equal value, women must obtain a job of equal value. Interesting. This position is, at its most fundamental level, about glass ceilings. Governor Palin is a woman who has already shattered one glass ceiling, and with some help from her friends might shatter them all.

Unfortunately, the Governor’s accomplishments were buried under an avalanche of character attacks and outright falsehoods. Is it actually impossible to both applaud her for her success in the nomination and at the same time disagree with her politics? Don’t boxers (participants in a brutal full contact competition) shake hands, before they come out swinging? I don’t know about you, but whether or not I agree with her politics, I think Governor Palin’s selection as the Republican candidate for Vice President of the United States was a fabulous milestone for women.

Working Moms vs. Stay At Home (“Soccer”) Moms

One of the most deep seated prejudices against women’s liberation has quite frankly been the male perception that women belong at home with the children, and that a business investment in a woman is a waste of precious time and money, because when they get pregnant they will leave and never return. I’ve heard this sentiment expressed in many a management meeting, and it’s always said by men, with a straight face, and in complete sincerity.

We all know, the women’s movement has struggled against this virulent stereotype for decades. So guess what we heard about Governor Palin? – “She has five kids and doesn’t have time for a political career.” And, we heard that from women. We have never heard that about male candidates.

In fact, the criticism of Governor Palin descended to the level accusing her of being a poor mother because she isn’t at home caring for her family. Implicit in this tripe is the implication that Mr. Palin is ineffectual as a stay-at-home dad. How that statement could be made without any evidence boggles the mind.

Playing The Experience Card

The most interesting, and probably most one-sided attack on Governor Palin was the assertion that she had no relevant experience. Let’s take a look at that.

At both the state and federal levels, government in the United States is structured in three branches: (1) the Executive; (2) the Legislative; and (3) the Judicial. The Executive Branch runs the government just like a CEO runs a corporation. The Legislative Branch writes laws and oversees their efficacy (oversight). The legislature runs nothing. It is not responsible for the management of anything. It is not analogous to a CEO, CFO, COO, or any other management position. The judicial branch interprets and enforces the law written by the legislative branch and that’s all it does.

McCain, Obama, and Biden are all Senators in the Legislative Branch. They write laws (btw Senator Obama hadn’t even authored a bill) and engage in oversight. I repeat, they do not manage anything, they do not run a governmental organization, they are not responsible for operations. They are not, and none of them have ever been, in the executive branch of any government. They – have – no – executive branch – management – experience – whatsoever – period.

Governor Palin, on the other hand, did have executive branch experience at both the city and state levels (you’re right not a huge amount of it, but she does have it.). The office of the Presidency is the top office in the executive branch. The conclusion is actually inescapable! Governor Palin had more executive experience than all three of the male candidates!

Does this qualify Governor Palin to be Vice President of the United States? Not necessarily, but it does render the argument that she has no relevant governmental experience completely spurious. Women (including Hilary Clinton) should be universally enraged by what went on here. I certainly am and I’m not even of the female persuasion.

Setting The Flares For The Future

In the first paragraph of this hubpage, I suggested that the Sarah Palin issue transcends the 2008 presidential campaign. I don’t retreat from that statement and respectfully suggest that Sarah Palin represents a clash of honest competing female interests, points of views, desires, wants and needs, and just plain heart felt aspirations.

At the end of the day, it seems that the manner in which women handle the issue of Sarah Palin will in great part define how they, themselves, are treated in the future. This election gave us a rare opportunity to look behind the curtain of the feminist movement and what we see there was decided by the feminists themselves.

At another level, this election became a forum in which a new morality was allowed to run free. It was one in which people could and did say anything and do anything, so long as it served their agenda. It was not enough to disagree, it became necessary to destroy.

By Darwinian selection we are breeding an entire generation of politicians who don’t give a wit for the people they serve. They are, however, very, very good at innuendo, issue avoidance, responsibility avoidance, and of course, character assassination.

By our own complacency we have allowed “winning” to become the arbiter of morality. Wasn’t it Hitler who said, “The winners will decide what is right, and what is wrong.” This my friends is the beginning of fascism – a state where individuals with nonconforming  points of view are destroyed.

By October 2, of 2008 the debate between Governor Palin and Senator Biden was over. The week preceding the debate was filled with some pretty intense press, accusing Governor Palin of outright ineptitude. She was accused of not being able to answer simple questions, and some of the right wing conservatives actually suggested she step down.

I was personally afraid for her to stand toe-to-toe with Senator Biden, a man with more than three decades of experience who had spent the previous 12 months on the campaign trail, giving speeches, town hall meetings, and participating in debates with the democratic Presidential candidates.

Moreover, I was concerned for the Governor’s ability to fend off Senator Biden’s well known ability to become sarcastic and abrasive. I couldn’t have been more wrong. Within a few minutes it became painfully obvious that Governor Palin was no pushover. In fact, throughout the debate the Governor emanated a quiet assurance, and a definite ability to both defend herself and to attack in an orderly and effective fashion.

At the end of the day it was clearly demonstrated that Governor Palin is no easy target and that Senator Biden was wise not to believe the press descriptions of her abilities. Prior to the debate, the Senator had said in more than one interview that he wasn’t taking the Governor lightly and that it was his intention to prepare as he would for any experienced opponent. And, in so doing Senator Biden showed Governor Palin more respect than the women’s rights organizations which should have supported her right to compete and to disagree with them.

At this point you might be asking yourself, “Why the history lesson?”  The answer is simple, it’s now 2013 and the “new politics” have settled in like concrete.  Winning is now accepted as sole arbiter of right and wrong.  Ideology has become a powerful god worshipped by politicians and reporters alike.  Innuendo and character assassination are the order of the day.  I offer you the gridlocks of the national debt, sequestrationboarder control, and gun control as supporting evidence.

And Governor Palin?  Well, she recently gave a speech at the annual CPAC convention and she still engenders the same reactions.  If you are a twitter user you might find hashtag Palin an interesting collection of comments.

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Hashtags Every Author Should Know

Note:  If you’re an author using Twitter, this collection of Hashtags should help you connect with other authors, readers, publishers, reviewers, editors, submission services, cover artists, etc., etc.

This list is constantly growing, so if you discover a Hashtag which should be added, leave a comment or send an email to

Remember to be sparing with the number of hashtags you use at any one time.  Three hashtags on a single tweet should cover almost anything.


rev. 3/21/2013





















#Memoir Chat

#MGLit (middle grades literature)





#PoetryMonth (April in U.S.)
















#99c (offer an eBook bargain)










#Novelines (to quote your own work)





























































#MyWANA (writer’s community created by Kirsten Lam)

#NaNoWriMo (National Novel Writing Month held every November)















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CALIFORNIA REAL ESTATE PRIMER – 1031 Tax-Deferred Exchanges

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This article is intended to be a general discussion only and should not be considered legal advice. Your use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on this article or any of its links is expressly disclaimed. This blog is not legal, accounting or tax advice, is not to be acted on as such, it may not be current, and is subject to change without notice.

What Is A 1031 Tax-Deferred Exchange?

“1031” refers to Internal Revenue Code section 1031 which details a method of transferring the equity from one real property into one or more like-kind properties without incurring the tax burden associated with the gain on the investment.

A common misconception is that a 1031 trade is tax free, but this isn’t true. 1031 exchanges are not tax exempt, they are tax deferred. Even so, if performed correctly 1031 exchanges can provide considerable benefits by allowing taxes to be paid by tomorrow’s dollars instead of today’s dollars. (Tomorrow’s dollars are usually cheaper than today’s dollars.)

A properly executed 1031 exchange can result is significant savings in terms of today’s dollars. For example, in a given exchange the potential tax burden which might be deferred is seen below: (note: the rates cited are subject to change)

15.0 % Long Term Federal Capital Gains

+ 9.2 % California State Tax

= 24.2 % Tax Deferral

Plus 25 % Federal Depreciation Recapture, and potential 26 % Federal Alternative Minimum Tax


Types of 1031 Exchanges

There are a number of different types of 1031 exchanges which are recognized:

(1) Simultaneous Exchange – When an exchange between the relinquished property and replacement property occurs concurrently.

(2) Delayed (“Starker”) Exchange – The delayed exchange is the most common of all exchanges. Once a the relinquished property is sold, the delayed exchange allows a property owner a set deadline to identify and close on the replacement property while maintaining the ability to continue deferring any capital gains. Just the calculation of the correct deadline can be a complex matter involving not only the deadlines stated in the code, but also a calculation based on the taxpayer’s filing date for the tax year in which the relinquished property is transferred.

(3) Build-To-Suit – This exchange allows the exchanger to construct a new replacement property or renovate an existing property. (Note: Renovations after the owner takes title are considered “goods and services” and will taxed as boot.)

(4) Reverse Exchange – The opposite of the delayed (Starker) exchange, a reverse exchange occurs when an investor identifies and closes on a replacement property prior to the sale of the relinquished property.


Who Can Effectuate A 1031 Exchange

A third party must act as a qualified intermediary to accommodate the exchange. (The qualified intermediary is known as an Accommodator or Facilitator.) Since the facilitator may be holding significant funds on your behalf. It behooves you to inquire about such things as errors and omissions insurance, bonding, and interest etc. Remember, you’re looking for safety, as well as, experience. It’s not unreasonable to ask for references from past clients.


1031 Exchange Requirements

(1) “Like-Kind” Exchange – To be considered “like-kind” the relinquished property and the replacement property must both comply with the definition of investment property. The general rule is that real estate is “like-kind” to all other real estate. Provided like-kind property is initially acquired and held for either business or investment purposes. (Held for productive use in a trade or business, or property that is held for investment.)

Examples of “like-kind” exchanges include:

Raw land for commercial property

Residential rental for tenants in common interest

Single-family rental for multi-family rental

(Note: The qualified intermediary or facilitator and/or your accountant or tax attorney must be consulted to be sure the exchange will qualify.  For example, a partnership may exchange property for other property of “like-Kind”, but IRC section 1031(a)(2)(D) specifically prohibits exchanges of partnership interests.  The reason is partnership interests are considered to by personal property which isn’t “like-kind” property with real estate. )

(2) The replacement property or properties must be of equal or greater value than the relinquished property.

(3) The Exchanger must reinvest all net equity in the replacement properties.

(4) The exchange must result in equal or greater debt.

(5) Retain a Qualified Intermediary (Facilitator) – To effect a 1031 exchange and defer the capital gains liability due, you must not take possession of the proceeds from a sale.

(6) 45-Day Rule – The exchanger must identify the potential replacement property or properties within the first 45 days of the 180 exchange period. Once you have closed your relinquished property and placed your proceeds with your Accommodator, the 45 day clock starts ticking to identify a replacement property.

(7) 180-Day Rule – The Exchanger must acquire the replacement property or properties either within 180 days or the date when the Exchanger must file the tax return (including extensions) for the year of the transfer of the relinquished property, whichever occurs first.

You may choose among 3 types of identifications:

3 Property Rule (most common): The Exchanger may identify up to three properties of any value.

200% Rule: The Exchanger may identify more than properties if the total fair market value of what is identified does not exceed 200% of the fair market value of the relinquished property.

95% Exception: If the Exchanger identifies properties in excess of Rule 1 and Rule 2, then the Exchanger must acquire 95% of the value of all properties identified.

Important Notes:

There is no extension of deadlines for Saturdays, Sundays or Holidays.

The time limits begin to run on the day the Exchanger transfers the relinquished property to the buyer.

The “Date of Transfer” will be the date of recording or transfer of the benefits and burdens of ownership, whichever occurs first.

As you can see, sections 1031 Tax Deferred Exchanges are not for the faint hearted. Not only are the rules less than clear they are subject to change. So, remember, always consult the appropriate, legal, tax and financial advisors and retain the services of an experienced facilitator.

This article is intended as an overview only, and should not be construed as legal, financial, or tax advice. Consult your legal and/or tax professional.


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By Francis Pennyworth, Jr.

In the world of politics Sequestration refers to the process of automatically employing mandatory spending cuts in the federal budget if some stated event occurs.  The automatic triggering of mandatory budget cuts is usually related to the either the annual cost of running the government,  the amount of revenue produced by the government, or some other equally relevant event.

The scary thing about sequestration is that it usually involves an indiscriminate, across the board reduction in spending by some stated amount or percentage.  Not that it helps much, there are some exemptions and/or special rules applicable to the present sequestration.

When you think about it, the whole sequester concept smacks of a heavy handed method of controlling Congress.  Kind of like forcing someone to commit suicide if they fail to live a healthy life.  Rather drastic to say the least.  Sequestration also assumes facts not in evidence,  namely that Congress has some degree of desire to negotiate a meeting of the minds.  An assumption which doesn’t work with the current Congress in which the left and right are widely separated and there is no apparent middle ground.

So how did the current sequester come to be?  Whose brain child was it?  And, how did it get passed and who the devil is responsible?

It seems to have all started with the  Budget Control Act of 2011 under which a Congressional Debt Supercommittee was created.  That supercommittee was made up of an equal number of members from both parties of the House and the Senate.  Once formed,  this supercommittee was charged with the responsibility of cutting $1.5 Trillion from the federal budget (good luck there).

A failure to agree to at least $1.2 Trillion in cuts over the next 10 years would, under the Budget Control Act of 2011, trigger automatic budget cuts according to some defined rules (i.e. the sequestration).

Of course, the Supercommittee recessed permanently in November of 2011 without reaching an agreement.  What a surprise!  This predictable failure to reach an agreement triggered sequestration budget cuts of $1.2 Trillion  to be spread out between January 2013 and October 2021.

The Budget Control Act of 2011 was signed into law by President Barack Obama on August 2, 2011 who, at the time, didn’t seem to be too worried about it.  And, in all fairness, neither did the Republicans.  In fact Speaker of the House, John Boehner, didn’t seem to be bothered by the sequestration until after the fact when he began to voice concerns about its affect on the defense budget.  A day late and a dollar short wouldn’t you say?

To make matters even stranger, President Obama, would later call the sequester a “meat cleaver” approach to the deficit which would jeopardize military readiness.  And, at the same time President Obama denied responsibility for the sequestration, the Republicans claimed that it was the President’s idea!

Really?  Is this the twilight zone?  Are we supposed to think sequester just crept into the Budget Control Act of 2011 like an undocumented immigrant?  Maybe it’s the fault of Senate Majority Leader Harry Reid (D) Nevada?  Could be!  After all he’s the guy who, back in the summer of 2011, listened to President Obama’s top aids who brought him the idea.

Wait a second!  If it was White House aids who suggested the sequestration to Speaker Reid, where did they get the idea?  They’re not supposed to sua sponte make up ideas on their own, are they?  Well we know one thing for certain (I think), these mysterious unnamed aids don’t work for the Republicans.

Maybe the answer is simple.  Bob Woodward’s book was just wrong about who met with Speaker Reid and what they said.  You’ll just have to buy your own copy of “The Price of Politics” and decide for yourself.

Lest I forget, here’s a thought for all of you conspiracy theorists.  Maybe the sequester actually was the Administration’s idea.  An idea quietly proffered with the knowledge of two things.  (1.) Sequestration would be immensely unpopular; and (2.) The Supercommittee didn’t have a bat’s chance of coming to a consensus.  Then at the 12th hour, when there would be no practical way to avoid the cuts, the Administration would launch it’s “meat clever” attack and blame the upcoming disaster on the recalcitrant ideologues in the right wing of the Republican party.

Result?  Much needed budget cuts actually happen and all of the voter displeasure falls upon the  Republicans for not agreeing to a less painful haircut.  Could it be possible?  Bob Woodward sure believes his version of the story is the correct one.  But no it all sounds like something that could only happen in Chicago or some other such rough and tumble place.  Too bad, we’ll probably never know all of the facts.

Ok, enough terpsichore.  Let’s back out of the weeds and take a look at the big picture.  This isn’t rocket science!  We spend more than we have and even 100% taxation of the wealthy won’t get us out of the problem.  Given the simplicity of the problem I think we can conclude that Congress is filled with overpaid elected officials who don’t seem to have enough sense to come in out of the rain.

So what’s the take away from all of this?  How does one explain the current fiasco?  I’m afraid I can’t.  No matter whose idea sequestration originally was, both parties ultimately agreed to it.  To put a fine point on it – Congress is  broken and I personally doubt it can be fixed.

It might actually be time to vote them all out and start over again.  Too bad we have to wait until the midterm elections.

I’d like to make some suggestions.  Maybe we should have some minimum educational requirements for admission to the federal congress.  The same goes for the Presidency.  For example, we should require a college degree in some relevant subject matter – like maybe Business or Finance?  Law degrees shouldn’t count.  I’ve got one of those degrees and it’s worthless when it comes to the nuts and bolts of management, finance, banking, and/or economics.  For purposes of understanding the economy, a B.A. degree in Business Administration is far more valuable than a Juris Doctorate.  Shouldn’t these guys at least know the difference between Keynesian and supply-side economics, as well as the history of what has and hasn’t worked.  Otherwise, aren’t we going to make the same stupid mistakes over and over again.

In addition to a minimum relevant education shouldn’t there be some some minimum real life job experience requirements related to the desired position?  Maybe state legislative experience should be required before someone runs for a seat in the federal Congress.  As for the Presidency, it’s a management position and we should require actual management experience.  Possibly Mid Cap or larger corporate management experience and/or experience as a state governor.

If you owned a business grossing a billion dollars a year, would you hire a person to run it who had no previous management experience whatsoever?  If you had the opportunity to establish the rules of the environment in which your business would operate, would you hire a rule maker who didn’t have a working knowledge of finance and macro economics.  How do you think Bill Gates, Oprah, Warren Buffett, Larry Page or Sergey Brin would answer these questions?  When placed in its proper perspective it makes you wonder what we’re doing.

CALIFORNIA REAL ESTATE PRIMER – Reduce Your California Property Tax

036 (572 x 428)


This article is intended to be a general discussion only and should not be considered legal advice. Your use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on this article or any of its links is expressly disclaimed. This blog is not legal, accounting or tax advice, is not to be acted on as such, it may not be current, and is subject to change without notice.

Reduce Your California Property Taxes

If you’re a home owner in California it may have occurred to you that your home is worth less now than the day you purchased it. If so, the next thought which will occur to you is why the devil are you paying property tax based on a market value which doesn’t exist any more?

Well, if you live in California you might be able to find some relief in something called an Informal Assessment Review.

California Revenue and Taxation Code

You might want to take a look at Section 51 of the California Revenue and Taxation Code. This particular code section provides that the assessed value of any real property (located in California) shall not exceed that property’s market value on the January 1 lien date.

This means that if your property’s market value on January 1 is less than its assessed value, as it appeared on the previous annual assessment roll, then you may be entitled to an assessment review!

So if your home’s market value has fallen below what you paid for the property it may be worth your while to obtain a form called a “Request For Informal Assessment Review,” from your county assessor’s office. In Orange County the Assessor’s phone number is (714) 834-2727.

If you do not agree with the roll value resulting from the informal review, you may file an Assessment Appeal form with the Office of the Clerk of the Board of Supervisors from July 2 through September 15. Assessment appeal forms can be obtained from your local library, the internet, or at the Clerk of the Board, Hall of Administration, 333 W. Santa Ana Blvd., Room 101, Santa Ana, CA 92701, (714) 834-2331.

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CALIFORNIA REAL ESTATE PRIMER – Transfer Your Property Tax Base Year To Your New Home

036 (572 x 428)


This article is intended to be a general discussion only and should not be considered legal advice. Your use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on this article or any of its links is expressly disclaimed. This blog is not legal, accounting or tax advice, is not to be acted on as such, it may not be current, and is subject to change without notice.


Transfer Your Property Tax Base Year Value New Home

Have you ever thought to yourself, “Gee it would be nice to sell the old house and get into a nice new one, but if I do I’ll have to pay property tax on the new purchase price.” Well, goods news. That may not necessarily be the case. If you meet the qualifications, California Propositions 13, 60 and 90 might just solve your dilemma.

 Proposition 13

Under Proposition 13 the value of a home, for property tax purposes, is reassessed to the new market level (the new purchase price) whenever a change in ownership occurs. This usually results in higher property taxes. (It is possible to get an informal assessment review and reduce your property tax basis, but that’s another story.)

 Proposition 60

Proposition 60 allows a transfer of base-year value of the principal residence sold of a senior citizen (55 and older) to a replacement dwelling of equal or lesser value within the same county.

Proposition 90

Proposition 90, enacted in California in November of 1988, provides an avenue for property tax relief to owners 55, and older, who sell their principal residence and purchase a replacement home of equal or lesser value in another county.

The County Assessors will require a copy of the tax bill from the other county and a copy of the applicant’s birth certificate to be included with the application. Also include a copy of the grant deed for the new purchase and a copy of the closing statements of both sale and purchase.


The seller of the original residence, or a spouse residing with the seller, must be at least 55 years of age, as of the date that the original property is transferred.

The replacement property must be of equal or lesser “current market value” than the original.

The tax base year of the original property cannot be transferred to the replacement dwelling until the original property is sold.

The replacement property must be purchased or newly constructed within two years (before or after) of the sale of the original property.

The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.

This is a one-time only filing. Proposition 60/90 relief cannot be granted if the claimant, or spouse, was granted relief in the past.

Proposition 60/90 relief includes, but is not limited to: single family residences, condominiums, units in planned unit developments, cooperative housing, corporation units or lots, community apartment units, mobile homes subject to local real property tax, and owner’s living premises which are a portion of a larger structure.

The taxpayer is not eligible for the tax relief until they actually own AND occupy and the replacement dwelling as their principle residence.

It is essential that you call the co-operating County in question, to verify that they are currently accepting the value transfer under Proposition 90, and what their requirements are. If you have any questions, the property tax office in Sacramento for all counties in California may be reached at (916) 445-4982.

Alameda (415) 272-3755 Ventura (805) 654-2181 Santa Clara (408) 299-4347 Kern (805) 861-2311 Modoc (916) 233-3939 San Diego (619) 531-5507 Los Angeles (213) 974-3101 Orange (714) 834-2746 San Mateo (415) 363-4500

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CALIFORNIA REAL ESTATE PRIMER – Preserve Your Prop 13 Base Year Value For Your Children



This article is intended to be a general discussion only and should not be considered legal advice. Your use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on this article or any of its links is expressly disclaimed. This blog is not legal, accounting or tax advice, is not to be acted on as such, it may not be current, and is subject to change without notice.

Preserve Your California Prop 13 Base Year Value For Your Children And Grandchildren

In June of 1978, Proposition 13 passed in California and established base years for all real estate properties in the state. For people who owned property before March 1, 1975 the base year was established as of that date. Thereafter, as properties changed ownership the value at the time of the transfer was adopted as the new base year.

On average, property values have increased over time and each new buyer who acquires real estate in California understands they may have to pay more for property taxes than the previous owner.

So far, so good, except children and grandchildren who inherited real property were treated as new owners because by law the inheritance was considered a change in ownership causing the parents/grandparents lower base year value to disappear. As a result, the property tax could jump to 2 or 3 times its previous level.  This type of uannounced tax increase could be quite a surprise to the new owners.

The unintended result was a dampening effect on the continuing family ownership of real estate in California.  Children and/or Grandchildren inheriting the property many times found themselves unable to pay the new property taxes and as a result were forced to sell the property.

To counter this effect, Propositions 58 and 193 were passed in November of 1986 and March of 1996, respectively. The details of these laws can be found in Section 63.1 of the Revenue & Taxation Code.

In general, transfers of real property between parents and children and vice versa, as well as transfers from grandparents to grandchildren are excluded from reassessment. Note that transfers from grandchildren to grandparents are not excluded, and in the case of transfers from grandparents to grandchild, the parents of the grandchild must be deceased as of the date of purchase or transfer.

“Children” are considered to be the natural children, stepchildren, sons-in-law and daughters-in-law, and children adopted before the age of 18. The same requirements apply to grandchildren, step-grandchildren, and grandchildren-in-law.

Principal residences are excluded from reassessment, as well as, an additional $1,000,000 of the seller’s or decedent’s other real property. An exception to the principal residence exclusion exists for grandchildren who have previously received a principal resident (possibly from their parents). In such a case the grandparent’s principal residence will be treated at “other real property” and will be subject to the $1,000,000 limitation.

The $1,000,000 limitation is determined by the assessed value of the property immediately before transfer. The sales price or actual “current market value” does not affect the $1,000,000 limit. This limit is cummulative and once exceeded all later transfers will be reassessed except for the principal residence.

Happily, the $1,000,000 exclusion is a separate limit for each parent giving the community property of married parents a $2,000,000 limit. For grandchildren, the limit would be $1,000,000 from the father’s side (including grandparents) and $1,000,000 from the mother’s side (including grandparents).

The value of professional estate planning becomes obvious when it is realized that transfers by sale, gift, devise or inheritance all may qualify for the exclusion. Moreover, transfers to individuals and from trusts to individuals and from individuals to trusts may also qualify for the exclusion.

It falls to the person receiving the property to file a claim with the appropriate Assessor’s office within three years of the date of transfer and before any transfer to a third party or within six months after the date of mailing of a Notice of Assessed Value Change resulting from the transfer of the property, whichever is later. There are some exceptions to these deadlines. Once the claim is filed, the Assessor will determine if the transaction qualifies.

Any transfers you are planning should also be carefully considered in light of the relevant federal estate and gift tax laws, as well as the relevant state property tax laws.  Consult your tax advisor.

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voice: 949-887-1625

fax: 866-764-6325

DRE #00792478

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OC Property Management & Sales, Inc.

DRE Lic# 01886215

voice: 949-505-3838

fax: 866-764-6325