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Yahoo
17 hours ago
- Business
- Yahoo
The 20 counties where taxpayers netted the highest capital gains
The more value that investors can receive in the form of long-term capital gains rather than ordinary income, the less they will pay back to Uncle Sam. Those in the 20 counties below ranked by the average net capital gains reported on their federal returns to the IRS are getting above-average appreciation on their assets with much lower tax rates, generally, than their incoming income, according to a study last month by advisor lead generation and client matchmaking service SmartAsset. The mix of areas known for a large concentration of wealthy residents and regions that don't immediately come to mind as a home to lots of rich people offered only more evidence of the investment industry's national scope. For financial advisors and their clients, the list provided geographic insights into the potential wealth management client base in the areas, and a reminder of important state-level variations in taxes that could affect portfolios and after-tax yields. "Net capital gains represent the profits a taxpayer recognizes from selling a capital asset after offsetting capital losses. These gains are often created by highly appreciated assets," Kathy Buchs, a senior tax advisor, team leader and managing director with Cleveland, Ohio-based registered investment advisory firm MAI Capital Management, said in an email. "We take geography into account when advising clients to sell an asset or consider tax loss harvesting due to state income tax ramifications," Buchs continued. "For example, California is a high-tax state that does not have preferential rates for capital gains. Therefore, it tends to be much more expensive to recognize gains in that state as compared to others." That difference in tax rules at the state level raises the possibility of strategies such as an incomplete gift non-grantor trust that, in some areas, could "eliminate the state taxation of the trust-owned portfolio," said Richard Austin, an executive director for estate and business planning with San Diego and Waltham, Massachusetts-based RIA firm Integrated Partners. In some cases, investors can even offset their capital gains for federal tax purposes based on losses in other holdings, he noted in an email. "Tax efficiency significantly impacts the performance of a client's portfolio by maximizing the after-tax return on investments," Austin said. "Investing across different countries and regions can reduce portfolio volatility. Markets in different parts of the world often have low correlation, meaning they don't always move in the same direction at the same time. If one market experiences a downturn, others might perform well, potentially stabilizing overall returns and the potential for future capital gains. State-specific tax rates impact tax efficiency of a portfolio. The difference in state income taxes creates a significant layer of complexity in achieving tax efficiency for a client's portfolio." Even though any type of data presents the possibility of noise factors affecting any particular region, the study "highlights that taking geography into account is essential when advising clients on their asset allocations," said Michelle Ash, a senior wealth advisor with the Jacksonville, Florida-based office of RIA firm Mercer Advisors. "Net capital gains is measured when a person is selling assets, and so it requires past investment success to be in that position," Ash said in an email. "It's no surprise to me that Florida would be the top state by this metric. Florida has no state income, inheritance or estate taxes, and so it's a beneficial place to live when you're selling assets. These Florida traits also attract a lot of retiring individuals who may be selling assets like homes and businesses when they retire or move." In focusing on capital gains, SmartAsset sought to home in on the areas where investors netted the most gains with preferential rates compared to ordinary income, according to the report's author, SmartAsset Director of Economic Analysis Jaclyn DeJohn. "Net capital gains, the profits from selling assets like stocks, real estate or businesses, are a key measure of investment success and regional wealth," DeJohn wrote. "Overall, high net capital gains can signal robust markets and affluent populations, with realized gains potentially boosting local economies through tax revenues and spending." Besides the listing below, here are some of the other interesting takeaways from the study: Three Georgia counties, Chattahoochee, Quitman and Taliaferro, displayed the smallest average net capital gains, at $2,400 or less. Fewer than 10% of returns in the counties had net capital gains. At the state level, West Virginia tax returns had the lowest average net capital gains at $14,612, followed by Wisconsin with $19,590 and Iowa with $20,220. On the other end of the spectrum among the states, federal returns out of Florida ($84,911), Wyoming ($84,246), Nevada ($77,491), the District of Columbia ($58,733) and Texas ($52,926) reported the highest average net capital gains. Scroll down the slideshow for the ranking of the top 20 counties in the U.S. in terms of average net capital gains. To see a list of the top 10 cities with the highest income among retirees, click here. For the group of the top 20 metropolitan areas where financial advisors' median pay increased the most last year, follow this link. Note: The below rankings are based on a report by SmartAsset called, "Where Americans Earn the Most From Investments." The study crunched the latest tax return data for the 2022 tax year released by the IRS across 3,022 U.S. counties and for each of the 50 states and the District of Columbia. The data include average net capital gains and investment-yield figures like taxable and tax-exempt interest and ordinary and qualified dividends. # of returns: 15,180# of returns reporting net capital gains: 6,010 (40%)Mean taxable interest: $40,033Mean tax-exempt interest: $39,659Mean qualified dividends: $167,921Mean ordinary dividends: $196,121Average net capital gains: $515,267 # of returns: 2,390# of returns reporting net capital gains: 150 (6%)Mean taxable interest: $977Mean tax-exempt interest: $1,600Mean qualified dividends: $4,055Mean ordinary dividends: $6,336Average net capital gains: $317,793 # of returns: 10,480# of returns reporting net capital gains: 4,170 (40%)Mean taxable interest: $30,111Mean tax-exempt interest: $28,688Mean qualified dividends: $53,044Mean ordinary dividends: $67,047Average net capital gains: $312,592 # of returns: 1,480# of returns reporting net capital gains: 300 (20%)Mean taxable interest: $6,082Mean tax-exempt interest: $13,317Mean qualified dividends: $11,627Mean ordinary dividends: $16,190Average net capital gains: $233,680 # of returns: 24,870# of returns reporting net capital gains: 9,370 (38%)Mean taxable interest: $9,425Mean tax-exempt interest: $22,022Mean qualified dividends: $36,713Mean ordinary dividends: $47,348Average net capital gains: $219,262 # of returns: 45,760# of returns reporting net capital gains: 12,220 (27%)Mean taxable interest: $13,432Mean tax-exempt interest: $29,645Mean qualified dividends: $66,673Mean ordinary dividends: $75,201Average net capital gains: $191,886 # of returns: 784,220# of returns reporting net capital gains: 216,920 (28%)Mean taxable interest: $16,155Mean tax-exempt interest: $29,882Mean qualified dividends: $42,043Mean ordinary dividends: $50,783Average net capital gains: $186,281 # of returns: 1,436,490# of returns reporting net capital gains: 202,220 (14%)Mean taxable interest: $13,127Mean tax-exempt interest: $23,350Mean qualified dividends: $29,924Mean ordinary dividends: $38,036Average net capital gains: $184,899 # of returns: 213,630# of returns reporting net capital gains: 73,450 (34%)Mean taxable interest: $12,151Mean tax-exempt interest: $29,690Mean qualified dividends: $47,507Mean ordinary dividends: $57,951Average net capital gains: $184,017 # of returns: 4,500# of returns reporting net capital gains: 1,560 (35%)Mean taxable interest: $9,440Mean tax-exempt interest: $17,268Mean qualified dividends: $25,636Mean ordinary dividends: $37,121Average net capital gains: $183,261 # of returns: 13,540# of returns reporting net capital gains: 4,910 (36%)Mean taxable interest: $10,555Mean tax-exempt interest: $19,372Mean qualified dividends: $38,999Mean ordinary dividends: $48,990Average net capital gains: $176,812 # of returns: 10,580# of returns reporting net capital gains: 1,720 (16%)Mean taxable interest: $1,262Mean tax-exempt interest: $4,845Mean qualified dividends: $3,916Mean ordinary dividends: $5,540Average net capital gains: $150,127 # of returns: 846,440# of returns reporting net capital gains: 302,610 (36%)Mean taxable interest: $19,397Mean tax-exempt interest: $18,965Mean qualified dividends: $32,211Mean ordinary dividends: $42,540Average net capital gains: $149,273 # of returns: 40,310# of returns reporting net capital gains: 10,470 (26%)Mean taxable interest: $8,426Mean tax-exempt interest: $17,430Mean qualified dividends: $21,624Mean ordinary dividends: $27,814Average net capital gains: $140,537 # of returns: 84,420# of returns reporting net capital gains: 28,290 (34%)Mean taxable interest: $10,613Mean tax-exempt interest: $19,398Mean qualified dividends: $32,712Mean ordinary dividends: $39,381Average net capital gains: $130,146 # of returns: 85,800# of returns reporting net capital gains: 25,510 (30%)Mean taxable interest: $9,009Mean tax-exempt interest: $23,468Mean qualified dividends: $35,483Mean ordinary dividends: $42,487Average net capital gains: $126,594 # of returns: 16,800# of returns reporting net capital gains: 4,520 (27%)Mean taxable interest: $5,083Mean tax-exempt interest: $10,513Mean qualified dividends: $13,262Mean ordinary dividends: $17,528Average net capital gains: $113,429 # of returns: 4,920# of returns reporting net capital gains: 1,480 (30%)Mean taxable interest: $1,936Mean tax-exempt interest: $10,200Mean qualified dividends: $17,662Mean ordinary dividends: $18,627Average net capital gains: $111,880 # of returns: 1,213,090# of returns reporting net capital gains: 188,570 (16%)Mean taxable interest: $7,393Mean tax-exempt interest: $14,890Mean qualified dividends: $20,200Mean ordinary dividends: $24,441Average net capital gains: $110,534 # of returns: 636,070# of returns reporting net capital gains: 172,730 (27%)Mean taxable interest: $5,131Mean tax-exempt interest: $9,958Mean qualified dividends: $12,869Mean ordinary dividends: $16,792Average net capital gains: $109,439
Yahoo
a day ago
- Business
- Yahoo
These U.S. metro areas are among the best for first-time homebuyers
With mortgage rates and housing prices still stubbornly elevated, potential homebuyers are looking for ways save wherever they can. The median sale price for a home in the first-quarter of 2025 was over $400,000, according to the Federal Reserve Bank of St. Louis. Mortgage rates, meanwhile, continue to hover around 7% — up from a record low of 2.65% in January 2021. Moody's decision to downgrade the U.S.' credit rating briefly pushed rates above the 7% threshold earlier this month. While homebuyers cannot control median home prices and mortgage rates, their choice of city or town to buy in can play a defining role in how much they end up spending on a property. Certain locales will offer more affordable listings and a wider range of options to choose from — giving buyers something to think about as they decide where to make their next investment. A recent study from SmartAsset ranks the best cities for first-time buyers — providing a cheat sheet of sorts for those on the hunt for a new home. The financial technology company looked at 180 U.S. cities and ranked their appeal for first-time buyers based on affordability, available housing inventory, demand and how much home prices are expected to shift in the area over the next year. Here is a breakdown of the cities that will give first-time homebuyers the best bang for their buck. Best place to buy overall McAllen, Texas, located on the state's southern tip, claimed the No. 1 spot on SmartAsset's list. A major selling point for the border city is that housing prices are forecast to change just 0.4% over the next year, meaning that buyers can rest assured the market won't fluctuate too wildly as they search for the right home. The median sale price for homes in McAllen — $204,499 — is about four times as much as the median local income, giving buyers more moderate wiggle room when it comes to affordability. Best in affordability When looking solely at affordability — the median sale price of a home relative to the median local income — Midwestern metro areas reign. Illinois cities Peoria and Decatur top the ranking in affordability, according to SmartAsset. Other locales house hunters may want to keep an eye on include Cedar Rapids, Iowa; Davenport, Iowa; Muncie, Indiana; Springfield, Illinois; and St. Joseph, Missouri, which are among the least expensive metro areas, according to the study. While Midwestern cities ranked higher in affordability than others, only Lawton, Oklahoma, where homes have a median sale price of $150,007, made it into SmartAsset's top 10 cities for first-time homebuyers overall. Best place for expanded inventory One of biggest issues plaguing the housing market is the limited supply of homes for sale While studies show that the inventory of available properties is rising in many markets, some metro areas are still suffering from shortages, which increases competition and prices for homebuyers. If you're looking for more robust inventory, you may want to consider heading south. Cape Coral, Florida, offers the greatest number of homes for sale per capita, according to SmartAsset, followed by Port St. Lucie, Florida. E.l.f. Beauty calls Hailey Bieber an industry disruptor amid Rhode sale These 3 record breakers have one thing in common Reporter's Notebook: John Dickerson reflects on his spelling woes
CBS News
a day ago
- Business
- CBS News
Here are the best U.S. cities for first-time homebuyers
What to consider when buying a home with someone else With mortgage rates and housing prices still stubbornly elevated, potential homebuyers are looking for ways save wherever they can. The median sale price for a home in the first-quarter of 2025 was over $400,000, according to the Federal Reserve Bank of St. Louis. Mortgage rates, meanwhile, continue to hover around 7% — up from a record low of 2.65% in January 2021. Moody's decision to downgrade the U.S.' credit rating briefly pushed rates above the 7% threshold earlier this month. While homebuyers cannot control median home prices and mortgage rates, their choice of city or town to buy in can play a defining role in how much they end up spending on a property. Certain locales will offer more affordable listings and a wider range of options to choose from — giving buyers something to think about as they decide where to make their next investment. A recent study from SmartAsset ranks the best cities for first-time buyers — providing a cheat sheet of sorts for those on the hunt for a new home. The financial technology company looked at 180 U.S. cities and ranked their appeal for first-time buyers based on affordability, available housing inventory, demand and how much home prices are expected to shift in the area over the next year. Here is a breakdown of the cities that will give first-time homebuyers the best bang for their buck. Best place to buy overall McAllen, Texas, located on the state's southern tip, claimed the No. 1 spot on SmartAsset's list. A major selling point for the border city is that housing prices are forecast to change just 0.4% over the next year, meaning that buyers can rest assured the market won't fluctuate too wildly as they search for the right home. The median sale price for homes in McAllen — $204,499 — is about four times as much as the median local income, giving buyers more moderate wiggle room when it comes to affordability. Best in affordability When looking solely at affordability — the median sale price of a home relative to the median local income — Midwestern metro areas reign. Illinois cities Peoria and Decatur top the ranking in affordability, according to SmartAsset. Other locales house hunters may want to keep an eye on include Cedar Rapids, Iowa; Davenport, Iowa; Muncie, Indiana; Springfield, Illinois; and St. Joseph, Missouri, which are among the least expensive metro areas, according to the study. While Midwestern cities ranked higher in affordability than others, only Lawton, Oklahoma, where homes have a median sale price of $150,007, made it into SmartAsset's top 10 cities for first-time homebuyers overall. Best place for expanded inventory One of biggest issues plaguing the housing market is the limited supply of homes for sale While studies show that the inventory of available properties is rising in many markets, some metro areas are still suffering from shortages, which increases competition and prices for homebuyers. If you're looking for more robust inventory, you may want to consider heading south. Cape Coral, Florida, offers the greatest number of homes for sale per capita, according to SmartAsset, followed by Port St. Lucie, Florida.
CNBC
2 days ago
- Business
- CNBC
The 10 U.S. cities where retirees live on the highest annual incomes from Social Security and savings
In Carlsbad, California, retirees live on an average income of $85,442 a year from Social Security payments and withdrawals from savings and investments — the highest amount of any of the 344 largest U.S. cities, according to a recent SmartAsset analysis of Census Bureau data. These two sources generally make up the majority of retirees' income. In fact, 58% of retirees say Social Security is a major source of their income, according to a 2024 Gallup poll. In 2025, eligible Americans will receive an average of just under $24,000 a year in retirement benefits, according to the Social Security Administration. But because Social Security retirement benefits are partially tied to earnings, higher earners tend to get bigger checks when they start claiming, though there is a cap. The same group is also likely to save more for retirement during their working years, which is why the cities where retirement income is the highest also tend to have the largest average Social Security benefits. In just 19 of the cities SmartAsset analyzed, Social Security checks make up more than half of retirees' total income, and those places are home to some of the lowest-earning retirees overall. In the 10 highest-earning cities, Social Security makes up roughly 30% to 40% of retirees' total income. Further, Social Security payments don't seem to vary as widely as retirement account withdrawals, per SmartAsset's findings. Average annual Social Security benefits span from a low of $15,421 in Hartford, Connecticut, to a high of $31,752 in The Woodlands, Texas. In contrast, the lowest average retirement withdrawals come in at $16,282 a year in Allentown, Pennsylvania, compared with the highest in Carlsbad at $56,685. Here's where retirees bring in the most each year, between Social Security payments and retirement account withdrawals. The amount you'll receive from Social Security in retirement varies based on a number of factors, including how many years you worked, how much you contributed to Social Security taxes, your birth year and the age you start claiming benefits. Your benefits may be reduced if you start collecting earlier than your full retirement age, which is 67 for Americans born in 1960 and later. You have more control over the amount you're able to withdraw from tax-deferred retirement accounts like 401(k)s, although there are still some restrictions. You can start withdrawing money at age 59½, but once you turn 73, you generally must take out a set amount each year, known as required minimum distributions. The amount of money you'll need each year in retirement can vary widely based on your location, if you plan to work at all and what kind of lifestyle you want. A comfortable life — meaning your essential bills are covered and you have some extra funds for leisure or unexpected costs — could run you as little as $61,000 a year in Mississippi or over $129,000 a year in Hawaii, according to 2024 estimates from GOBankingRates. A general rule of thumb for retirement planning is to aim to live on 4% of your savings your first year in retirement, then adjust that amount for inflation going forward. The idea is that making withdrawals of around 4% each year will allow you to live off your savings for roughly 30 years. For reference, a retiree in Carlsbad would need over $1.4 million invested to be able to take out $56,685 in their first year following the 4% rule. But you may need more or less, depending on the lifestyle you want. When deciding the total amount of savings to aim for, take into account factors such as where you plan live, how long you expect to be retired and how you plan to spend your time. ,
Yahoo
3 days ago
- Business
- Yahoo
KC house that was offered as HGTV prize sells for $725K. Here's what happened
The winner of the 2024 sweepstakes for 'HGTV Urban Oasis' will not go home to Waldo after all, despite a home there being offered as the grand prize. The reason is a secret second prize option hidden in the rules of the giveaway. Instead, a buyer closed on the Kansas City house for $725,000 on Tuesday, according to Sarah Legg, the real estate agent for the property. The house received seven offers after it was listed in late April, Legg said. In 2023, Legg said she showed the TV production staff four or five houses. HGTV chose this house because 'they wanted something that was close to amenities, kind of in the urban core. They wanted walkability.' The home design cable network bought the house to remodel and give to a lucky viewer. A Memphis-based HGTV designer planned upgrades to the inside and outside, and a camera crew surprised the lucky winner, who already lived in the Kansas City area. According to HGTV, this was the first local winner of their home giveaways, which since 2010 have taken place in cities including New York City, Chicago, Atlanta and Louisville. After the reveal, the winner had a decision: She could take the house, furnishings, fixtures and art, which were valued altogether at almost $670,000, plus a $50,000 cash bonus. Or she couldtake the cash option. This monetary option offered the winner a lump sum of $250,000 instead of the house, plus the $50,000 cash bonus. The Kansas City winner chose the latter, and the home went back on the market. Finances might be why a sweepstakes winner would choose the cash option, Legg said. 'There are tax implications when you win a prize of that nature,' Legg said. Winners must already have a lot of cash on hand to take the house in the sweepstakes, because they have to pay hundreds of thousands of dollars to the government by the time taxes are due. This is because the house counts as income on taxes. With the Kansas City HGTV house, a single person would have to pay approximately $263,000 in income taxes on the house alone, even before income taxes on the cash prize and their own employment income, according to SmartAsset's income tax calculator. In addition, the winner would have to find money for closing fees and property taxes, according to the sweepstakes rules. For the cash option, the winner wouldn't have to front the taxes and the approximately $100,000 in income taxes would be deducted from the lump sum of $300,000, according to SmartAsset. HGTV did not respond to requests for comment or answer how many of its sweepstakes winners chose the houses, but Legg said that it's '50/50 with the network on whether or not the winner actually keeps the home.' With shuttlecock wallpaper in the laundry room and a jazz-themed music room, the house puts Kansas City in the center of the design. Designer Carmeon Hamilton said in a September interview with The Star that the home was inspired by modern and Scandinavian design, along with the metro's character. The royal blue cabinets in the kitchen were meant to echo fireplace tile, but 'once we realized how many sports teams in Kansas City were blue, we knew it would go over very well with the citizens in town,' Hamilton said. The new owners will be less than a 10-minute walk from Kansas City Bier Company, Andy's and Fareway Meat Market. The Star's Lisa Gutierrez contributed to this report.
