Personal Finance

Making Cents: The Ups and Downs of Family Owned Real Estate

By: John P. Napolitano, CFP®, CPA, PFS, MST

Some families intentionally pool their resources to make investments in real estate. Others inherit properties and become partners, whether that was their plan or not. Either way, owning real estate with family members can be a great way to benefit from family resources or be the straw that breaks the camel’s back with respect to family harmony.

Whether the real estate in question is a three family inherited from Mom or a collection of commercial properties, the essential issues to resolve surround the management of the properties, the division of cash flow and profits and the estate planning consequences of owning valuable illiquid properties. The ownership of real estate is a business with active moving parts, not a passive investment, and must be dealt with accordingly.

Making Cents: Temporary Renting of Personal Real Estate Has Many Possible Risks

by John Napolitano CFP®, CPA, MST

US Wealth Management Chairman and CEO


Whether it’s called home or room sharing, short term rental arrangements (or whatever the regulators ultimately call it), millions of people have jumped on the bandwagon of either renting or advertising rooms for rent for as short as a single night. This may work wonders for your cash flow if you need extra money, but it also has a set of income tax and risk management considerations that can’t be ignored.

For tax purposes, as soon as you make your home available and start to advertise it, you’re technically converting all or part of it to rental property for tax purposes. What that means is that you’ll have an accounting exercise each year to segregate your expenses to separate those costs incurred towards the rental activity versus those that were for your personal portion of the property.

What to Do After a Strong 2017? Rebalance

As appeared in Independent Investor – February 2018

By now, you have probably received year-end statements   for your investment accounts and retirement plan. If your investments include a large share of stocks or stock funds, the news was probably good. In fact, 2017 was a banner year   for stocks in general. The S&P 500 increased by 19% for the year, the Dow Jones Industrial Average gained 25%, and    the NASDAQ Composite increased an impressive 28%.  Growth and value stocks both did well, while large, mid, and small cap indices all saw double-digit gains.1

This strong performance adds to an already solid bull run — the second longest in history. From the start of 2009 to the end of 2017, the Dow Jones Industrial Average increased approximately 180%, the S&P 500 almost 196%, and the NASDAQ Composite an impressive 338%.2

Market analysts are at odds as to where the market will go from here. But they do agree on one thing: such a run-up is likely to leave many a portfolio heavily weighted in stocks.  For many, it could be a good time to rebalance.

Off to Florida, For Tax Reasons

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP® as seen in the Patriot Ledger

This year, it seems the snow birds have taken off for warmer climates before the song birds. There could be a number of reasons why they're in such a rush migrate south. One could be a desire to make a state such as Florida their domicile.

Domicile in this instance means the state in which you live for tax purposes. To claim domicile in Florida, for example, you’d actually have to live in Florida for at least 6 months and a day; more than half of the year. The time does not need to be in succession, but it must add up to more than half the year in that domicile state. The only exception may be vacation or business travel.

To elaborate, if you live in Miami Beach for 6 months and a day, and while in Miami you had business trips that required travel out of state, time devoted to business travel may still count as time in Florida. I suggest “may” because it would be dicey if your business travel took you to your former state of domicile for business – especially if you use that former domicile residence as the place you stay when traveling for business.

Your tax return can tell a lot of tales

by John Napolitano CFP®,CPA,PFS,MST,RLP® as seen in the Patriot Ledger

While you are gathering your tax documents this tax season, let the documents you are gathering do the talking… if they could that is. Because if these documents could talk, they’d tell many of the dangling matters in your financial life that you need to fix to avoid a potential problem in waiting.

Risk is everywhere

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP® as seen in the Patriot Ledger

When most people think about financial risk, losing money is what they think about. But risk is much broader than just losing money, and the more money you have, the more likely it is that these risks are a part of your life.

Let’s start with your home. Is your home a magnet for the kid’s friends? Do you have a pool, motorcycles, bicycles, trampolines, dogs… You get it. The toys that people with money have are known as an attractive nuisance. Dogs, of course, have nothing to do with money unless your dog goes and bites someone. And if you are not properly covered for this peril, it can cost you a pretty penny.

Beyond Retirement: What About Your Other Goals?

created by Wealth Management Systems Inc.


In addition to saving for retirement, there may be several other major financial goals you'll need to juggle in a lifetime.

Let's say that at the age of 25 you earned $35,000. If your salary increased at the average historical rate, you'd have earned nearly $2 million in total by the time you were 65.1 That might sound like a lot -- until you begin thinking about all the financial goals you'll need to juggle in a lifetime, including buying a home and paying for your child's education, while funding your own retirement.

If managed wisely, your money could potentially go a long way. It's really all about putting a plan in place and sticking to it. These tips may help get you started.

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