Chicago Relocation

It’s that time of the year again

March 31, 2014

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John D’Ambrogio

By: Craig Anderson, President of C.E. Anderson & Company

I’m proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money.~Arthur Godfrey

It’s that time of the year again.

It’s not good enough that we have to deal with post-holiday debt, and the incessant cold and snow of one of the worst winters in recent history; we now must reminisce, with accuracy, the financial life events of 2013 and reduce them to figures to be placed in hundreds of lines on multiple forms in the annual ritual we call Filing Our Income Tax Returns!

As always, it is a good idea to learn from the mistakes of others and reading a reminder of the oft overlooked deductions is a good place to start. As a reader of this Relo Blog, you or others you know are probably involved with, or have been, relocated. So let’s look at a few items surrounding moving and selling property that we should know.

Moving Expenses:

  • Many relocatees move as part of an employer sponsored program, so many costs are paid for by the employer. Often overlooked are move related expenses not covered by the employer, or not known by those individuals moving without sponsorship;
    • Cost of packing supplies, boxes, tape, bubble wrap, UPS or FedEx charges for pre-shipping any household goods. And yes, HHGs include our pets!
    • Tips paid to the van line driver and crew.
    • Any special packing, crating, dismantling, appliance hook-up, etc.
    • $.24 a mile (2013 rate) for driving not only your first but your second or third cars to your new location, plus tolls.
    • Lodging on route including your last night in your old location and first night at your destination. But no meals! So bring a sandwich.
    • HH goods from another location are deducted too, with certain restrictions.
    • Storage of HHG for up to 30 days, and the cost of putting things in and out of storage. In and out costs are always deductible regardless of the length of time goods are in storage.

Just remember that you can only deduct the expenses you paid for.  No deduction for expenses for which you were reimbursed or for Qualified Moving Expenses paid directly by your employer.  (See IRS Code 217 for a definition of QMEs.)

Mortgage Expenses:

  • Remember these fun facts concerning Mortgage Points and MIP;
    • Did you know that if the seller of your new house agreed to pay your mortgage points in lieu of reducing the sales price that the IRS lets YOU take a deduction for those points even though the seller paid them? Yea, I didn’t think you did.
    • Mortgage points paid as part of a re-finance are normally deducted over the life of the loan UNLESS the loan was used for home improvement – then take them now.
    • In the year you sell your home deduct the entire remaining balance of your points paid.
    • If you paid a premium for mortgage insurance you may be entitled to a mortgage interest deduction for a portion of the premium allocated to 2013. Enjoy this treat – it expired 12/31/2013 so this is the last year to take it!  Oh I forgot – if your adjusted gross income was over $110,000 – you don’t get the deduction. Sorry.

Other Random Thoughts:

  • If you claimed a Homebuyer Credit in 2008 – 2010 you may need to pay some of it back if your home ceased being your principle residence in 2013. (See IRS Form 5404)
    • Repayment is always required for a Credit taken in 2008.
    • Repayment for 2009 and 2010 Credits is only required if your home ceased being your primary digs – if sold, your payback is NOT required if you had no realized gain.
    • Remember you need to adjust your home’s Purchase Basis as well as its Selling Basis to determine the gain on sale. If you don’t understand this, look it up! IRS Publication 523.
    • Prior to 2007, if you were unfortunate enough to lose your house and the bank had to write off some of your outstanding mortgage debt, you received a 1099 from them because the IRS views cancellation of debt as a taxable event! (Talk about kicking the dog when he’s down) Since then, the Debt Relief Act stopped the taxability of relieved debt. If you had a Short Sale or if your bank wrote down your debt in 2013 you will still receive a 1099-C but the forgiven debt is not taxable. This benefit also expired 12/31/2013 and we do not know if Congress will extend it again.
    • The maximum you need to contribute to the OASDI portion of FICA tax is 6.2% of $113,700 of earnings in 2013 or $7,049. If you worked for more than one employer during the year you may have had more than that amount withheld (in total). So remember to take a credit on line 69 of your 1040 return for the excess.

As bad as it may seem the U.S. Tax rates are less than many other countries in the world. So, pay the piper and enjoy the dance, but just don’t overpay!



Why have REOs Decreased?

March 24, 2014

Filed Under
chicago foreclosure
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John D’Ambrogio

pulls apart the statistics to show you why there has been a decrease in foreclosure sales.



Chicago’s Loop – Make No Small Plans

March 17, 2014

Filed Under
Chicago neighborhoods
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John D’Ambrogio

Ah, the loop. Downtown. The Windy City. Urbs in Horto. The City of Big Shoulders. Chi-Town. The Second City. Well, it all starts here – The Loop. My Kind of Town. Downtown Chicago, our business district, the only place 90% of tourists (and a fair number of suburbanites) see. And well, if you could only see one area, this is it. The Loop rocks.

The Loop is the center for commercial, theater and finance in the little village on the water once called “Shikaakwa.” That’s the 17th century French interpretation of the Illini word for “The Stinking Onion.  This eventually evolved into the word Chicago. So there’s your history lesson for the day.  Second largest business district (thanks Manhattan), hence “Second City.”

Love architecture? Well, look no further my friend. Thanks (unfortunately) to the Chicago Fire of 1871 (witnessed by my firm’s founder Lyman Baird) the city by the lake had a clean slate just in time for the arrival of the world’s first high rise – 1884′s Home Insurance Building. As I crane my head to the corner of my window I can see one of the most historically significant structures in the city the Rookery Building.  It’s importance extends beyond it’s housing the architects Root, Wright, Sullivan, & “Make No Small Plans” Burnham.
You want cool bulidings? Try the Auditorium Building, the Art Institute, the CBOT, Chicago Theater, Chicago Cultural Center, Fine Arts Building, the Palmer House, the Sears Tower (no, it’s not the Willis Tower), Symphony Center. After you visit those, we can give you 25 more…. actually, try the Chicago Architectural Foundation for some extremely cool info and bus/walking/El/bike tours! The river is a particularly great way to see The Loop.

The Loop is narrowly defined as the area inside the elevated trains that literally “loop” around the business district.  The trains make up the pink/green/orange/brown/purple lines -or the area more broadly defined as Congress Ave./The Lake (Michigan Ave.)/ and The Chicago River.  And as you’ve already read about “South Loop”, “North Loop” and “West Loop” we pretty much like to overlap neighborhoods whenever possible.

Compared to pretty much anywhere else in the city, you won’t find much residential real estate in The Loop.  And what is there is pretty much exclusively high-rise and expensive. Which makes sense, especially since it’s surrounded by many areas where you can easily walk to within 10 minutes.
That being said, Chicago’s first non-native resident was Jean Baptiste Point Du Sable, often cited as a French Canadian of African descent (although little is known to verify this claim). Fort Dearborn eventually followed as this became a small village where the river meets the lake.

So lace up the gym shoes (that’s what we call sneakers out here in the Midwest), put on multiple layers based on weather, and take a lovely walk around the world’s most beautiful city!


Wicker Park – A Grown-Up Hipster

March 10, 2014

Filed Under
Chicago neighborhoods
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John D’Ambrogio

As mentioned earlier, it’s really hard to separate Wicker Park from Bucktown. It’s not as easy as “north or south of North Ave.” But I’m giving it a go…..

Originally Wicker Park was a northern European enclave – Germans, Scandinavians and later Poles (hence the remaining Zimne Piwo signs under that Old Style beer light on so many neighborhood joints). Believe it or not, the provisional Polish government had their meetings in WP during the Great War.

People lament that Wicker Park has changed.  That it’s not as cool and hip as it was “back in the day.” I’ll admit, as a relocation counselor 20 years ago I did describe it as a cool, hip, up and coming, “gentrifying” artist community. It still is – it’s just way more gentrified!  Neighborhoods change and evolve and get reborn like a Phoenix all the time. Wicker Park (and Bucktown) are now “mature” neighborhoods and great places to live.

Being closer to the Loop,Wicker Park’s commute is a little easier than Bucktown. Really, Wicker Park’s an easy place to live without a car.  Housing wise, there’s better values than their eastern neighbor (Lincoln Park, Near North) primarily based on the proximity to the lake. Lots of lofts in this community, both classic (reclaimed from the manufacturing world) and those created specifically for residential use. Search some here.

What should you check out? Don’t miss the world famous Double Door, where the Stones played their “secret” concert back in ‘97 (Mick wasn’t even 60 yet!). It’s located at the famous six corners of North/Milwaukee/Damen (where WP and BT meet). Hear rock, punk, funk, you name it! For something different, but still a very cool experience, walk around the corner to Subterranean. If you want a true Indie Chicago music experience, go a little south to Empty Bottle. I know, I know that’s not officially Wicker Park.  Please forgive me Ukrainian Hipsters.

Each summer the Wicker Park Fest (usually in July) is an explosion of music, food, beer and crafts. The Trib named it best fest last year. Like most neighborhood fests these days, they’re “free” with “a $5 donation.” Which I think is really funny.

For an on-film glimpse at Wicker Park, watch High Fidelity” with our own John Cusak.

For some food, check out the incredibly hip Bongo Room with a great brunch and fantastic joe. There’s a bit of a dual for favorite pizza joint in Wicker Park (don’t forget, I’m an Aurleio’s guy so I’m not voting). If you like New Haven style pizza with some great micro brews, check out Piece.

There also Roots.  Their pizza is really good, but their “build your own salad” is KILLER – 50 choices. Go for some goat cheese with pistachios, and avocado cream…


March 2014 State of the Real Estate Market

March 7, 2014

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John D’Ambrogio

John D’Ambrogio shares how the bullish January market followed by a consistent February market is shaping the potential for a hot spring seller’s market.