🏠I'm back, so what happened while I was gone?

I know that I'm late with my newsletter, but that's because I was on vacation (more on that later).

In the meantime, here's what's been going on:

🧾Tax Updates:

↳📝 If you claimed the "No Tax on Tips", the IRS is looking. Only certain industries get the tax break (i.e. servers and baristas are a Yay! Accountants and lawyers are a Nay!). So, if you weren't supposed to get the tax break, and you took it, you may get a letter from Uncle Sam.

↳💻 If you owe the IRS money, they recently launched a new Tax Debt Help Tool that lets people figure out different payment options.

↳🔍Aggressive tax deductions using Conservation Easement are getting audit-flagged more. The IRS won some big cases in Tax Court, so if you're in this boat, or considering this strategy, you may want to think again.

🏦Bond Yields go big, and there's a new sheriff in town.

J Pow has left the building, and "Kev Kev" Warsh is now holding the keys to the Fed Reserve Castle (👋 bye-bye J Pow, it was swell).

And just in time for the implosion of the Yen-Carry trade (that's when people borrow money in Yen at a low interest rate and invest the money at a higher interest rate).

The Bank of Japan's🔴bonds are at all-time highs (30-year bonds are at 4% for the first time in history) and it's spooking 👻 the market.

The reason: 💴Japan is the USA's biggest creditor (purchaser of bonds, $1.2 Trillion to be exact) and they may want their money back.

So, what is "Kev, Kev" to do? 🤔 As it stands now, it looks like he's not cutting interest rates, if anything a 0.25% raise may be on the table.

Looks like he's going to have a tough go of it.

The only advice I have for him is, "Welcome home Kevin 🤠, hope you enjoy the water. J Pow left it warm for you."

People are going cray, cray over Real Estate numbers

Apparently, the American Dream has a price tag, but nobody is buying.

According to RedFin's data last week:

That's right, there are 630K more sellers than buyers. However, homes aren't moving, and sellers aren't budging. I'm sure you're wondering what's up? 🤔

🏚️ First things first, this is a historical GAP
↳ 630,000 more sellers than buyers. That's up 30% YoY.
↳ A buyer's market is usually when there are 10%+ more sellers than buyers.
↳ We're at 46.5%. Which is not a buyer's market, it's a buyer's paradise, but buyers are still sitting on their hands.🙌

💸 Sellers are cutting prices, just not enough
↳ High housing costs and economic uncertainty have caused many house hunters to retreat.🏃
↳ The national average 30-year fixed rate is 6.7%, median home price is $440K.
↳ Nobody is financing a starter home with those numbers🙅
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📉 Sub-3% mortgages and AI anxiety have paralyzed the market
↳ If you locked in a sub-3% mortgage, you'll might lower your asking price, but only so far.
↳ The economy feels fragile. People are bracing for an AI disruption and don't want to absorb six figures of new debt going into it.💸
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🩸The Buffet Rule: "Blood in the streets"
↳ I've seen some lowball offers get accepted, so seller desperation is growing.
↳ But most buyers are waiting for the full "the Buffett moment" before they strike
↳ But if you wait too long, the deal might be gone. 🎯

What I'm mostly seeing☝️🤓

A lot of people on the sidelines waiting for another shoe to drop. Can't say I entirely blame them.

When people can work from Lisbon, Austin, or a beach in Thailand, why would they chain themselves to a $450K mortgage in one zip code?
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Maybe the American Dream didn't die. It just bought a one-way ticket and packed a carry-on. ✈️

Market Highlights - last month

Tech and S&P are up overall ~ S&P 500 $7,383 (+7.86%) ~ Nasdaq $25,709 (+10.62%) Gold Broke Even ~ Gold $4,354 (+0.29%) BTC and Silver not so hot. ~ BTC $61,752 (-29.36%) ~ Silver $68.02 (-3.69%)

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What's been going on with your Favorite CPA

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I know it's been a minute since I last posted something. That's because I was on vacation for a few weeks visiting Portugal, Istanbul, and NYC. I hung out with friends and family. It was the best!❤️

Check in with you guys in a few more weeks.

Romeo Razi, CPA ​Taxedright.com​

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600 1st Ave, Ste 330 PMB 92768, Seattle, WA 98104-2246
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