The nation’s deficits and outlays have hit post-World War II highs thanks to tax cuts under President Donald Trump, but Democratic presidential nominee Joe Biden is proposing adding to that, at least in the near term, with a $5.4 trillion spending plan. The former vice president’s proposals include new investment in universal pre-K, tuition-free community DAYTONA BEACH, Fla., Sept. 14, 2020 (GLOBE NEWSWIRE) — Alpine Income Property Trust, Inc. (NYSE: PINE) (the “Company”) announced the acquisition of eight single-tenant net-leased retail income properties located in New York and Ohio and leased to Dollar General, as well as the acquisition of one net-leased As the virus spread in the U.S, millions of displaced Americans turned to trading. Some became active enough to qualify for trader tax status (TTS) benefits. However, will the IRS deny TTS to Covid-19 traders if they only carry on a trading business during the pandemic for a short time? The traditional approaches to retirement planning are longer covering all expenses in nest egg years. So what can retirees do? Thankfully, there are alternative investments that provide steady, higher-rate income streams to replace dwindling bond yields. A stay-the-course investing resolve is not enough, writes investment expert David Aston. You also need to ensure you have sufficient ability to take o… To ensure the completeness and integrity of the automated asset classification (classification of advances/investments as NPA/NPI and their upgradation), provisioning calculation, and income recognition processes, banks are advised to put in place/upgrade their systems to conform to the following guidelines latest by 30 June 2021.
The nation’s deficits and outlays have hit post-World War II highs thanks to tax cuts under President Donald Trump, but Democratic presidential nominee Joe Biden is proposing adding to that, at least in the near term, with a $5.4 trillion spending plan.
The former vice president’s proposals include new investment in universal pre-K, tuition-free community college classes and clean energy — a slate that reflects priorities that emerged across the field in the Democratic primary.
Though Biden’s proposals are far smaller than those offered by his progressive former rivals for the nomination, Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, they still amount to the largest policy package in decades, according to an analysis released Monday by the Penn Wharton Budget Model.
It is more than twice the size of Hillary Clinton’s plan in 2016, though that doesn’t account for inflation or the pandemic.
Penn Wharton found that Biden’s platform would raise $3.4 trillion in new tax revenue between fiscal 2021 and 2030 while increasing spending by $5.4 trillion. Almost 80% of the increase in taxes would hit the top 1% of earners.
This would increase the federal debt by 0.1% and shrink the economy by 0.4% in 2030, after taking into account macroeconomics and Americans’ improved health effects.
By 2050, however, the federal debt would fall by 6.1%, while the economy would increase by 0.8%. This is partly because some of Biden’s spending proposals ramp down after the first decade and partly because his package would increase worker productivity.
Biden calls for spending $1.9 trillion on education over the decade, including universal pre-K, increased funding for schools with many low-income students and two years of tuition-free community college. He would shell out $1.6 trillion for infrastructure and research and development, including on water, high-speed rail and municipal transit and on clean energy and artificial intelligence.
Biden also would broaden access to Medicare and Affordable Care Act coverage and expand long-term elder care, which would cost $352 billion.
“They have a lot of spending, but they are spending it on things that will actually help people in the long run — education, health care, infrastructure,” said Richard Prisinzano, the model’s director of policy analysis. “The types of spending they did make workers more productive and lead to growth in the economy in the out years.”
Biden’s tax plan calls for covering some of the spending by repealing elements of the 2017 Republican tax law that benefited high-income filers and increasing other levies on the wealthy. He would also raise the tax rates on corporations and foreign profits.
This would raise taxes by $3.4 trillion, not including macroeconomic effects. Just who would be hit with a bigger tax bill has become an issue in the campaign. Penn Wharton found that households with annual adjusted gross incomes of $400,000 or less would see an average decrease in after-tax income of 0.9%, mainly as an indirect result of the corporate tax hike. But those earning more than $400,000 would see a cut of 17.7% in after tax-income.
The Biden campaign took issue with several points in the analysis, primarily that it did not include several middle-class tax credits and that the former vice president’s corporate tax increase will lead to higher taxes on workers. (The study referred to after-tax income, not taxes.)
“Biden is committed to paying for the ongoing cost of his bold agenda in the long run by making sure big corporations and the wealthiest Americans pay their fair share — with no one making under $400,000 seeing an increase in their taxes,” said Michael Gwin, the campaign’s deputy rapid response director.
Biden’s plan comes as federal spending is projected to hit 32% of the gross domestic product in 2020, about 50% larger than last year and the highest percentage since 1945, according to the Congressional Budget Office. This is mainly because of massive relief packages aimed at stemming the economic upheaval caused by the coronavirus pandemic.
The agency projects a federal budget deficit of $3.3 trillion in 2020, more than triple the shortfall in 2019 and at 16% of GDP, the largest share since 1945. Federal debt is projected to hit 107% of GDP in 2023, the highest in the nation’s history.
But the federal deficit was predicted to soar even before the pandemic hit the US. In January, CBO projected that the budget deficit would likely blast through the symbolic threshold of $1 trillion this year, despite a healthy economy with very low unemployment. That would drive US debt to the highest postwar level over the next decade.
Author: By cnn
Alpine Income Property Trust, Inc. Announces a Portfolio Acquisition of Nine Single-Tenant Retail Properties Leased to Investment-Grade Rated Tenants Dollar General and Advance Auto Parts For $14.25 Million
Including these newly acquired properties, the Company’s portfolio now consists of 40 properties located in 27 markets and 17 states across 16 industries, with a weighted average remaining lease term of 8.5 years. The Company has acquired $89.7 million of single-tenant net leased properties year-to-date with a weighted average going-in cap rate of 6.92%.
We encourage you to visit our website at www.alpinereit.com.
This press release may contain “forward-looking statements.” Forward-looking statements include statements that may be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include general business and economic conditions, continued volatility and uncertainty in the credit markets and broader financial markets, risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters, the impact of the COVID-19 Pandemic on the Company’s business and the business of its tenants and the impact on the U.S. economy and market conditions generally, other factors affecting the Company’s business or the business of its tenants that are beyond the control of the Company or its tenants, and the factors set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Author: Alpine Income Property Trust
Will The IRS Deny Tax Benefits To Traders Due To Covid?
Trading during Covid.
So far, 2020 has been a highly volatile year in the financial markets due to significant uncertainty over Covid-19, a shock to the economy, and job losses. As the virus spread in the U.S, millions of displaced Americans turned to trading in financial markets as a means of making a new living. Some became active enough to qualify for trader tax status (TTS) benefits, which requires regular, frequent, and continuous trading. However, will the IRS deny TTS to Covid-19 traders if they only carry on a trading business during the pandemic for a short time?
I’m not as worried about existing traders from 2019 who incurred massive trading losses in Q1 2020 during the Covid correction and stopped trading at that time. Hopefully, they made a Section 475 ordinary loss election due by the July 15, 2020 deadline, which is conditional on eligibility for TTS. These pre-Covid traders were in business for more than 15 months, so their TTS/475 ordinary loss deduction should be safe.
I am more concerned with the millions of newcomer traders who opened online trading accounts offering free or low commissions in 2020. Many rookies have significant trading gains year-to-date, even after the recent sell-off. In the trading business, gains can turn into losses with a substantial correction. When that happens, TTS traders count on Section 475 for tax-loss or fire-loss insurance: The trading house burns down, and you can file for a refund with the IRS. The CARES Act permits five-year net operating loss (NOL) carryback refund claims for 2020, 2019, and 2018 tax returns.
Some rookie traders start off meeting the IRS requirements for TTS. Those rules are vague, so see GreenTraderTax’s golden rules for TTS. I wonder how IRS agents will consider the Covid pandemic when assessing TTS. Consider a furloughed worker who started trading at home full time in mid-2020. Was the trader’s intention to create a new business for the long-term, or to buy time and make some extra money before returning to his or her career after the pandemic subsides? TTS requires the intention to run a business from catching daily market movements, not from making investments for appreciation.
If a new trader started trading on June 1, 2020, but stops or significantly slows down trading when returning to work in November 2020, will the IRS deny TTS because he only traded actively for five months? The IRS agent might cite the landmark tax court case Chen vs. Commissioner, where TTS was denied. Chen only carried on TTS for three months.
I analyzed the Chen case in my trader tax guide; here’s an excerpt.
Chen vs. Commissioner
Comments from a senior IRS official about the Chen tax court case point out the IRS doesn’t respect individual traders who are brand new to trading activity and who enter and exit it too quickly. Chen only traded for three months before losing his trading money, thereby leaving his trading activity. Chen kept his software engineering job during his three months of trading.
The Chen case indicates the IRS wants to see a more extended time to establish TTS. Some IRS agents like to intimidate taxpayers with a full year requirement, but the law does not require that. Hundreds of thousands of businesses start and fail within three months, and the IRS doesn’t challenge them on business status. The IRS is rightfully more skeptical of traders vs. investors, perhaps even more so during the pandemic. The longer a trader can continue his business trading activity, the better his chances are with the IRS. We often ask clients about their trading activities in the prior and subsequent years as we prepare their tax returns for the year that just ended. Vigorous subsequent-year trading activities and gains add credibility to the tax return being filed. We mention these points in tax return footnotes, too. Traders can start their trading business in Q4 and continue it into the subsequent year.
Chen messed up many things in this case. First and foremost, he lied to the IRS about electing Section 475 MTM ordinary loss treatment on time and then used 475 MTM when he wasn’t eligible. Chen should have been subject to a $3,000 capital loss limitation rather than deducting a massive 475 ordinary loss triggering a huge tax refund. Second, he brought a losing case to tax court and made the mistake of representing himself. Once Chen was busted on the phony MTM election, he caved in on all points, including TTS. Chen did not have many TTS business expenses, so he figured it wasn’t worth continuing to fight.
Even though he only traded for three months while keeping his full-time job, it doesn’t mean he didn’t start a new business — intending to change careers to business trading — and make a substantial investment of time, money, and activity. Tax code or case law doesn’t state that a business must be carried on for a full year or as the primary means of making a living. Countless companies startup and fail in a few short months, and many times the entrepreneur hasn’t left his or her job while experimenting as a businessperson. Chen may have won TTS had he been upfront with the IRS and engaged a tax attorney or trader tax expert to represent him in court.
TTS tax benefits
I consult new traders on TTS. It’s incredible how many of these traders, from all walks of life, ages and careers, have made small fortunes since April. Others incurred substantial losses. During my tax consultations, many clients tell me they don’t want to return to their jobs if and when called back, and that TTS trading is their new career, which they cherish.
In The Tax Moves Day Traders Need to Make Now, Laura Saunders and Mischa Frankl-Duval report on this very issue (Wall Street Journal, Sept. 11, 2020), warning taxpayers to be careful when thinking about claiming TTS.
Our own Darren Neuschwander, CPA, was interviewed for the piece, stating he has seen a rise in inquiries about trader tax status this year. “The requirements for this break haven’t been clarified by the IRS, but they are stiff. Among other things, traders often need to trade for at least four hours a day, for an average of four days a week, and make at least 720 trades a year,” Neuschwander said.
Also, see my interview in theWall Street Journal’s July 5, 2020 article, The Benefits of Calling Yourself a ‘Trader’ for Tax Purposes by Nick Ravo.
Author: Robert Green
How to Maximize Your Retirement Portfolio with These Top-Ranked Dividend Stocks – September 14, 2020
Believe it or not, seniors fear running out of cash more than they fear dying.
And retirees have good reason to be worried about making their assets last. People are living longer, so that money has to cover a longer period. Making matters worse, income generated using tried – and – true retirement planning approaches may not cover expenses these days. That means seniors must dip into principal to meet living expenses.
Retirement investing approaches of the past don’t work today.
For many years, bonds or other fixed-income assets could produce the yield needed to provide solid income for retirement needs. However, these yields have dwindled over time: 10-year Treasury bond rates in the late 1990s were around 6.50%, but today, that rate is a thing of the past, with a slim likelihood of rates making a comeback in the foreseeable future.
While this yield reduction may not seem drastic, it adds up: for a $1 million investment in 10-year Treasuries, the rate drop means a difference in yield of more than $1 million.
Today’s retirees are getting hit hard by reduced bond yields – and the Social Security picture isn’t too rosy either. Right now and for the near future, Social Security benefits are still being paid, but it has been estimated that the Social Security funds will be depleted as soon as 2035.
Unfortunately, it looks like the two traditional sources of retirement income – bonds and Social Security – may not be able to adequately meet the needs of present and future retirees. But what if there was another option that could provide a steady, reliable source of income in retirement?
Invest in Dividend Stocks
As we see it, dividend-paying stocks from generally low-risk, top notch companies are a brilliant way to create steady and solid income streams to supplant current low risk, low yielding Treasury and fixed-income alternatives.
For example, AT&T and Coca-Cola are income stocks with attractive dividend yields of 3% or better. Look for stocks like this that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions.
One approach to recognizing appropriate stocks is to look for companies with an average dividend yield of 3% and positive average annual dividend growth. Numerous stocks hike dividends over time, counterbalancing inflation risks.
Here are three dividend-paying stocks retirees should consider for their nest egg portfolio.
Ahold NV (ADRNY – Free Report) is currently shelling out a dividend of $0.48 per share, with a dividend yield of 3.15%. This compares to the Consumer Products – Staples industry’s yield of 0% and the S&P 500’s yield of 1.65%. In terms of dividend growth, the company’s current annualized dividend of $0.97 is up 23.06% from last year.
Costamare (CMRE – Free Report) is paying out a dividend of 0.1 per share at the moment, with a dividend yield of 7.35% compared to the Transportation – Shipping industry’s yield of 0% and the S&P 500’s yield. Taking a look at the company’s dividend growth, its current annualized dividend of $0.4 is flat compared to last year.
Currently paying a dividend of 0.2 per share, Sinclair (SBGI – Free Report) has a dividend yield of 4.01%. This is compared to the Broadcast Radio and Television industry’s yield of 0% and the S&P 500’s current yield. Looking at dividend growth, the company’s current annualized dividend of $0.8 is flat compared to last year.
But aren’t stocks generally more risky than bonds?
The fact is that stocks, as an asset class, carry more risk than bonds. To counterbalance this, invest in superior quality dividend stocks that not only can grow over time but more significantly, can also decrease your overall portfolio volatility with respect to the broader stock market.
An advantage of owning dividend stocks for your retirement nest egg is that numerous companies, particularly blue chip stocks, raise their dividends over time, helping alleviate the impact of inflation on your potential retirement income.
Thinking about dividend-focused mutual funds or ETFs? Watch out for fees.
If you’re interested in investing in dividends, but are thinking about mutual funds or ETFs rather than stocks, beware of fees. Mutual funds and specialized ETFs may carry high fees, which could lower the overall gains you earn from dividends, undercutting your dividend income strategy. Be sure to look for funds with low fees if you decide on this approach.
Seeking steady, consistent income through dividends can be a smart option for financial security in retirement, whether you invest in mutual funds, ETFs, or in dividend-paying stocks.
Generating income is just one aspect of planning for a comfortable retirement.
To learn more ways to maximize your assets – and avoid pitfalls that could jeopardize your financial security – download our free report:
Will You Retire a Multi-Millionaire? 7 Things You Can Do Now
Author: Zacks Investment Research
Finding the right balance of stocks and fixed income is the key to your investment survival
The decline in interest rates to ultra low levels may cause you to wonder whether it is time to switch some of your investment money from fixed income to stocks.
Many experts advise investors to consider it under the right circumstances. But don’t do it lightly. Upping equity exposure can make sense for some investors, but it adds risk and could be a big mistake for others.
Finding the right asset allocation is personal and will vary by individual. But historically, a mix of 60 per cent equity and 40 per cent fixed income (a “60/40” mix) has long been considered the “centre of gravity” for investing long-term, as termed by financial historian Peter Bernstein in a famous article written in 2002 titled “The 60/40 Solution.”
But with interest rates so low, many experts argue that the asset mix centre of gravity has shifted. “75/25 is the new 60/40,” is the catchphrase endorsed in recent interviews by finance professor Jeremy Siegel, author of “Stocks for the Long Run.”
And Siegel is not alone.
“The 60/40 mix is pretty much under siege in the industry literature,” says Tom Bradley, chair of Steadyhand Investment Funds. “I see an article every week or two that is pointing out the 40 per cent (in fixed income) is earning 1 per cent, maybe up to 2 per cent if you take some risk,” says Bradley. “60/40 has actually served people quite well. But Jeremy and others are right to question what works well going forward.”
However loading up on equities isn’t a wise move for everyone.
“Too many people are going all equities — or going from 60/40 to 75/25 — without really thinking about the consequences,” says Bradley.
We discuss circumstances below when adding equity makes sense and when it doesn’t.
Balancing risk and reward
In large part, your long-term asset allocation should depend on your optimal tradeoff between expected returns and risk.
Stocks provide higher expected returns over the long term but come with the risk of substantial losses over shorter intervals. Unfortunately, you can’t reliably predict the timing, depth and length of these down periods.
While it’s uncommon for stocks to lose money over longer intervals of 10 years or more, it has happened periodically. For example, from the beginning of 2000, it took about 11 years for the S&P 500 Index of large-capitalization U.S. stocks to recover in terms of total returns from the combined impacts of the tech bubble collapse and then the Great Financial Crisis. Patience usually rewards equity investors in the end but sometimes a great deal of patience is required.
Relatively safe forms of fixed income like investment grade bonds and government-insured GICs traditionally provided moderate expected returns and helped stabilize your portfolio when stocks suffered during periodic downturns. With ultralow interest rates now, expected returns from fixed income are almost negligible. But relatively safe forms of fixed income are still by far the most reliable source of stability for your portfolio. That should count for a lot given the great uncertainty about how the pandemic will play out, what the path to economic recovery will be, and how stock markets will respond.
It’s important to test whatever asset allocation you’re considering against adverse conditions. It’s easy for investors to think they have already aced the test when they stayed the course during the sharp market meltdown in March. But as stock downturns go, that one was unusually brief. So a more stringent test would be, not what happened in March, but what could happen with another steep downturn in stocks that lasts far longer with a much more gradual and extended recovery.
Your inherent capability to withstand such tests is indicated by your over-all risk tolerance. It is important to realize that over-all risk tolerance depends both on your willingness and your ability to take on risk. It incorporates both attitude-related behaviour and capacity for risk based on circumstance.
If you invest in stocks, you should invest for the long term and be willing to stay the course with investments during market downturns (and ideally rebalance). If you lack the fortitude to stay the course, you’re unlikely to achieve the higher long term returns from stocks that you expect. “If you go much heavier with equities and then bail out when it’s not working — you’ve lost all the benefit and probably more,” says Bradley.
But a stay-the-course resolve by itself is not enough. You also need to ensure you have sufficient ability to take on risk, so you’re not forced by circumstances to sell off stocks at the wrong time when they’re down.
If you’re in the prime of your working life investing for the long term with a secure job and are undeterred by market gyrations, then you might have both a willingness and ability to assume considerable risk. If you loaded up on stocks, your portfolio would suffer severely at the onset of a stock downturn, but you could apply a continuing flow of new savings to purchase more shares at attractive prices. If the stock slump lasts several years, that allows you to buy a lot of stock cheaply. Your portfolio would then be well-positioned to rebound if you can patiently wait for the next bull market.
If that describes your situation, you might well suit a stock-heavy asset mix like 75/25 or something similar. On the other hand, if you’re unable or unwilling to embrace the extra risk, stick with 60/40 or something else with more fixed income.
Retirees are usually in a different situation compared to mid-career investors. For starters, retirees usually don’t have means to replenish a portfolio with new savings should it be depleted by mishap. That means retirees usually have a more cautious willingness to assume stock market risk.
In addition, retirees often depend on cash flow from their portfolios to generate money to live on, which tends to result in reduced ability to take on risk. If you’re loaded up with stocks and you experience a market meltdown near the start of retirement that lasts for a few years, then having to continually sell stocks at beaten down prices to support yourself could have severe consequences. That could deplete your portfolio pretty heavily so you don’t benefit nearly as much when the recovery in stock prices eventually occurs. In that case, it makes sense to ensure that you have enough fixed income to cover withdrawal needs during an extended bear market in stocks, so stocks can recover undisturbed.
Just how much fixed income you will need will depend on many factors, but you won’t want to scrimp. In my view, an asset allocation of between 50/50 and 60/40 generally makes sense for typical retirees with moderate risk tolerance investing for the long term with a continuing need to draw on their portfolios to support themselves. If you’re wealthy or have living needs covered by a generous employer pension, then you might suit a little more equity. On the other hand, if you want to play it safe and are willing to accept more anemic expected returns, then less equity might be appropriate.
Another point to consider, is make sure you’re not taking more risk than you realize with your fixed income investments, says Bradley. Many investors searching for yield have loaded up on riskier forms of fixed income like high-yield bonds, he notes. Unfortunately, higher-risk fixed income tends to sell off similar to equities during stock market downturns, thus providing little or no stabilizing power when you need it most. “If you have taken that 40 per cent (in fixed income) and dialed it up (with riskier investments), then you’ve effectively already taken your equity content higher,” says Bradley.
The 60/40 mix isn’t necessarily supplanted as the “centre of gravity” for setting your asset allocation, but how gravity pulls on your portfolio works a little differently with ultra low interest rates.
You can’t expect to earn as much return from fixed income as you once could, but neither can you afford to compensate by taking on more risk than you can handle. Whatever asset allocation you go with, it’s important you find the right balance of risk and expected returns that works best for you.
David Aston, a freelance contributing columnist for the Star, is a personal finance and investment journalist. He has an M.A. in economics and is a Chartered Professional Accountant. Reach him via email: [email protected]
Author: By David AstonContributing ColumnistMon., Sept. 14, 2020timer6 min. read
RBI to automate income recognition Asset Classification & Provisioning processes in banks.
The Reserve Bank of India vide its notification dated 14th September 2020 has directed banks to introduce an automated IT-based system for asset classification and provisioning.
Further banks may draw up their standard operating procedure (SOP) for System based NPA classification for usage by the operating staff.