M3 restaurant closed due to seizure

[ron_newman]

M3 restaurant, at Highland Ave and Cutter Ave, has big orange SEIZED signs plastered all over the doors and windows.

A notice left at the front door says that the Constable's Office seized the restaurant on behalf of landlord Christos Poutahidis, because the restaurant owes the landlord $25,238.

Comments

RE: that guy...

[rlcarr.livejournal.com]

So how exactly does he make money on your alleged scheme, given that income tax rates are less than 100%?

I have two properties, A and B. A has annual expenses of $10,000. B has annual expenses of $15,000. I rent A out for $30,000 and leave B vacant. My total profit is ($30,000 - $10,000) + ($0 - $15,000) = $5,000. I pay (say) 40% combined income tax on that and end up with $3,000 after tax.

Now I rent out B for $10,000. Total profit is now $15,000 and after paying 40% income tax I'm left with $9,000. That's better than $3,000.

Having deductible expenses is only going to help your overall situation if you would have had to incur those expenses anyway -- so if you're going to have to pay $N for something, then sure, it's to your advantage to try to structure things so that $N is tax-deductible. But if you didn't have to pay $N, not paying $N at all will always be better for you than paying $N and taking it as a tax deduction.

Re: that guy...

[rachelmello.livejournal.com]

The equation is probably closer to Property B has annual expenses of $10,000 and he could easily get $100,000 for it and make a tidy profit, but instead he asks $500,000 for it, claims a huge loss, and leaves it empty.

Re: that guy...

[rachelmello.livejournal.com]

...my point being that he can absorb a loss on Property B while making a huge profit on Property A, as long as within 3 - 5 years someone comes along and makes a bad business decision to rent at his inflated rates that will cover his losses. They can make a go of it for a year or two, he makes back his losses, they go out of business, and the cycle starts again. That's a perfectly successful business strategy for the developer that is actively damaging to the city. The laws should not be structured such that people can make lots of money off property in ways that actively harm the people who live here.