Affordable housing on Kahala Ave?

[TuNnL]

Re: Affordable housing on Kahala Ave?

In my opinion, any (as yet theoretical) tax implications pale in comparison to the clear violations of the Fair Housing Act inherent in his selection process based upon race and familial status. I can't believe Kawamoto has the stones to continue to blow that issue off...

Stones ’aint got nothing to do with it. This is a game of chicken - the ultimate publicity stunt for a man once scorned by the media. Now he is dictating the storyline. The question is - who will be the sacrificial lamb to call his bluff? Will that man/woman be a pawn for Kawamoto Inc. to bear the banner of controversy for the sake of one man’s audacity?

As you were. This is in issue destined to come to a head. He’s playing the race card to test the political waters for some future project.

[1stwahine]

Re: Affordable housing on Kahala Ave?

Obviously, this issue is going to continue to overshadow this thread, so before we continue down this road, let’s balance it out with how Kawamoto is answering the naysayers:

Still the feisty and eccentric developer not afraid to fire back at his critics!

So TuNnL, Do you believe him? Do you think he can pull it OFF? I guess we shall obviously see.

Auntie Lynn

[poinographer]

Re: Affordable housing on Kahala Ave?

Stones ’aint got nothing to do with it. This is a game of chicken - the ultimate publicity stunt for a man once scorned by the media. Now he is dictating the storyline. The question is - who will be the sacrificial lamb to call his bluff? Will that man/woman be a pawn for Kawamoto Inc. to bear the banner of controversy for the sake of one man’s audacity?

I'm confused by the ill-defined characters in this scenario. Do you mean "sacrificial lamb" in the sense of a person who is chosen as a tenant, or a person who is not chosen and files a FHA complaint?

[Beachboy]

Re: Affordable housing on Kahala Ave?

Sounds like his decaying properties are already lowering property values... and now he's just looking elsewhere for people willing to live in them as they continue to fall into disrepair.

BINGO!!!! That's what the jerk does. He drives down neighborhoods,then buys them up! I don't understand why most don't see that too? He has no intentions of helping out the local people. This is just a ploy to help himself.

[GeckoGeek]

Re: Affordable housing on Kahala Ave?

Example of a tax free (to the recipient) "gift": Your parents, in wanting to reduce their tax liability and to qualify for Medicaid (so they don't have to pay $8k/mo to live in a nursing home that accepts Medicaid patients if they have not "spent down" their assets to an acceptable amount), can give you as of 2006, $12,000 per parent per year and you, as the recipient, bear no tax consequences whatsoever. They still pay taxes on that amount (but at a probably at a reduced rate) but you don't pay anything. This is actually something everyone who has elderly parents who still have a substantial estate might want to tell their parents about, if their parents don't already know this.

To take the last issue first, yes, there are also trusts they can set up that will help transfer the property on their death without having to go though probate or hefty inheritance taxes. It can also be set up so they are no longer the trustee if they become seriously ill so that their medical bills won't drain their estate. Take a look at "Revocable trusts".

Anyway, Yes, your example is correct. However, if the parents give a gift of a investment property, the income from that property becomes taxable. Also if instead of the gift of the property, the gift is the income from that property, it's still taxable. So what is this arrangement?

As I said before, I think this is going to take a tax lawyer. It comes down to how is this transaction classified.

[GeckoGeek]

Re: Affordable housing on Kahala Ave?

So as long as Kawamoto rents to a family of five, he's scott free.
$12,000 annual gift tax exemption * 5 family members = $60,000 exemption

Maybe. I think for that to work all 5 names would have to be on the rental agreement. There may also be issues if there are minors.

And anyway, if they tried to enforce taxing these folks, it'd be a publicity nightmare. They want to avoid that kind of bad press right now.

True, but they can't just ignore it. It would set a bad precedent. They've somehow got to justify not seeing it as a taxable transaction.

[GeckoGeek]

Re: Affordable housing on Kahala Ave?

BINGO!!!! That's what the jerk does. He drives down neighborhoods,then buys them up! I don't understand why most don't see that too? He has no intentions of helping out the local people. This is just a ploy to help himself.

Hmmmm. Crazy as a fox, huh? Interesting theory. Time will tell. If he fills these houses with some "party hardies" that could we what's going on. He did say it needed to be "more fun". As long as these people don't do things blatantly criminal, it would be hard of the neighborhood to do anything about them.

[1stwahine]

Re: Affordable housing on Kahala Ave?

"Wishful thinking!" Everytime I read this thread I always have Iz's 78 Hawai'i Song in my head. http://mentoh.byethost31.com/hawaii78.html

"If just for a day our king and queen Would visit all these islands and saw everything How would they feel about the changes of our land"

How would they feel if they saw their people many whom are now Homeless and Hungry? How would they feel that a Foreigner like Mr. Kawamoto keeps purchasing prime land not to better the islands but to profit from it?

How sad.

"Tears would come from each others eyes As they would stop to realize That our people are in great great danger now How, would they feel, could their smiles be content, then cry..."

"Cry for the gods, cry for the people
Cry for the land that was taken away
And then yet you'll find, Hawai'i "

Chorus
Ua mau, ke ea o ka aina, i ka pono, o Hawai'i
Ua mau, ke ea o ka aina, i ka pono, o Hawai'i

Auntie Lynn

[TuNnL]

Re: Affordable housing on Kahala Ave?

I'm confused by the ill-defined characters in this scenario. Do you mean "sacrificial lamb" in the sense of a person who is chosen as a tenant, or a person who is not chosen and files a FHA complaint?

Both. But more so, the person filing the FHA complaint. Unless you’re a juvenile, the veil of anonymity is a thin one indeed.

[poinographer]

Re: Affordable housing on Kahala Ave?

So you're saying that people will be too afraid to file a FHA complaint?

Hmmm. Think again. There has been no shortage of people filing lawsuits against Kamehemeha Schools, OHA, etc. I reckon one of them will step up, and/or a disgruntled would-be tenant.

[Miulang]

Re: Affordable housing on Kahala Ave?

So you're saying that people will be too afraid to file a FHA complaint?

Hmmm. Think again. There has been no shortage of people filing lawsuits against Kamehemeha Schools, OHA, etc. I reckon one of them will step up, and/or a disgruntled would-be tenant.

And I know just the legal team who would LOVE to represent that person! (the same guys who are representing the caucasian kid in the KSBE case).

Miulang

[TuNnL]

Re: Affordable housing on Kahala Ave?

So you're saying that people will be too afraid to file a FHA complaint?

Not at all, poinographer. I was hardly suggesting fear on the complainant’s part. But certainly, he or she will have a target on their shirt. At least Brayden Mohica-Cummings claimed to have hanai lineage. And he was a cute little keiki.

[damontucker]

Re: Affordable housing on Kahala Ave?

Not at all, poinographer. I was hardly suggesting fear on the complainant’s part. But certainly, he or she will have a target on their shirt. At least Brayden Mohica-Cummings claimed to have hanai lineage. And he was a cute little keiki.

Why would they have a target on there back as it seems many in the Hawaiian community do not support what this man is trying to do.

It seems there is more opposition to what Kawamoto is doing in the Hawaiian community then for it... I think the person that brought suit against him would be different then the KSBE case... as most of the people in the state seemed to be against allowing the student into Kam.

I wouldn't be suprised if it was a Hawaiian that brought suit against him on grounds that he didn't have enough quantum

[craigwatanabe]

Re: Affordable housing on Kahala Ave?

Okay going back to the gift part, I assume that the difference between the fair rental amount and the actual rental amount is what's at issue here right?

As a landlord, you can rent for whatever amount you deem desireable. Take for example a couple with an adult child who isn't a dependent but lives there for free. Technically that child is living there but not paying rent. Are you gonna tax him for "benefits"? No way.

So you say he's family...okay, lets say Manoa is travelling to the Big Island and he's gonna stay at my house for a month ( ) for free because I'm such a nice guy , is the IRS gonna tax him for the benefit of living at my place based on fair rental or hotel book prices? NO WAY!

President Clinton tried once to tax company benefits such as company paid parking spaces and that got shot down in Congress really fast.

In Kawamoto's position, he can rent for whatever he wants. He's really the winner here because first he doesn't need the rental income from these properties, and two his rental income would be so low it would hardly make a blip on his taxable liability.

Regarding his three year rental contracts...that's impressive! Most rental contracts only span one year, some as low as 6-months and the worst is month to month. Living cheap in Kahala for three years is a pretty good rental agreement even if you gotta move out at the end of that term.

So let's look at the benefits of renting low:

1) lower income so less tax consequence

hmmm I was going on to number 2 but I couldn't see anymore benefits why other than charity.

That's gotta be the reason why he's renting so low...charity. Is there any tax break for renting to indiginent people? If so then the difference between what he's renting for and the fair rental amount would be tax deductable.

Is it possible he's making these renters charitable institutiions and writing off the difference as a charitable deduction? Hmmmm

[Miulang]

Re: Affordable housing on Kahala Ave?

Okay going back to the gift part, I assume that the difference between the fair rental amount and the actual rental amount is what's at issue here right?

As a landlord, you can rent for whatever amount you deem desireable. Take for example a couple with an adult child who isn't a dependent but lives there for free. Technically that child is living there but not paying rent. Are you gonna tax him for "benefits"? No way.

So you say he's family...okay, lets say Manoa is travelling to the Big Island and he's gonna stay at my house for a month ( ) for free because I'm such a nice guy , is the IRS gonna tax him for the benefit of living at my place based on fair rental or hotel book prices? NO WAY!

President Clinton tried once to tax company benefits such as company paid parking spaces and that got shot down in Congress really fast.

In Kawamoto's position, he can rent for whatever he wants. He's really the winner here because first he doesn't need the rental income from these properties, and two his rental income would be so low it would hardly make a blip on his taxable liability.

Regarding his three year rental contracts...that's impressive! Most rental contracts only span one year, some as low as 6-months and the worst is month to month. Living cheap in Kahala for three years is a pretty good rental agreement even if you gotta move out at the end of that term.

So let's look at the benefits of renting low:

1) lower income so less tax consequence

hmmm I was going on to number 2 but I couldn't see anymore benefits why other than charity.

That's gotta be the reason why he's renting so low...charity. Is there any tax break for renting to indiginent people? If so then the difference between what he's renting for and the fair rental amount would be tax deductable.

Is it possible he's making these renters charitable institutiions and writing off the difference as a charitable deduction? Hmmmm

Individuals can't be "charities" under the strict interpretation of the IRS laws. They would have to incorporate as a 501(c)3 in order to have the donor to gain any kind of tax writeoff on that "gift" and as far as I know, Kawamoto doesn't have a foundation set up either for himself or for his tenants.

I got a #2 reason, Craig: HE'S WHACKO!

Miulang