ERICOPOLY

I did not know this -- does anyone have a source or other material to read on that? I'm looking at Pub. 590 and there's no mention of Roth splits in divorce automatically being considered taxable withdrawals, which I imagine is a relatively common issue. Can the ex-wife not simply rollover the Roth "distribution" to her own Roth and not trigger the tax? I could not find any support for this either. Ericopoly, are you sure this information you gave for a divorce scenario is correct? I believe both traditional and roth assets can be transferred tax free under a Transfers Incident To Divorce (I am not a tax professional though). Thanks for correcting me. I hope I didn't make any of you married folks unduly sweat over your infidelities.

My house is 246 years old (built in 1768). I don't want a sci-fi roof. Mine in 1912. The last year without a Federal income tax. I moved in on the 100 yr anniversary.

Okay, so how much pre-tax income does that cost you? Solar panels generate a tax-free imputed income stream. The higher your income tax rate, the cheaper residential solar becomes. Take for example the peak 50% income tax rates in California... and you pay your utility bill with after-tax income... One kWh consumed at noon that costs 49 cents on my utility bill in fact costs me 98 cents in income. The higher and higher you jack up my tax rate, the cheaper and cheaper solar looks compared to coal/gas... Unless I purchase a coal/gas fueled residential electric generator... I'd love to try getting a permit for one of those ::)

I just need a product like this: http://www.solarreviews.com/news/colored-solar-panels-address-concerns-of-aesthetics-historic-preservation/

That's too bad. And it can't work on the main house? We'd rather not have them visible on the house.

I guess I own some via MPIC. Good!

There is no investment if you go with Solar City. Just a lower utility bill ;) Perhaps they are value shoppers and you are the one paying more? Eric, have you signed up for SolarCity? I remember you were looking at some alternatives a while ago, but I don't think you mentioned picking anything.. First, I wanted to put solar panels on the detached garage. I could fit a 10,000 watt system up there (40 250 watt panels). The roof though is "flat". The fire marshall has to sign off on the permit, so I had him out to the house. He wants a 3 foot wide perimeter around the east and north edges of the roof, as well as a 3 foot wide path right down the center of the roof. Suffice it to say, I can only fit a bit less than 1/2 as many panels as I'd like because of him. He's really messing it up. They want to be able to punch holes in the roof to vent it during a fire without walking on solar panels... give me a break... can't I just say "fine, I don't care if you walk on the panels...". So that nixed that idea... or at least I'm not going to come back to the idea quite yet. I couldn't do Solar City because I need to own the house first. I'm still renting with a purchase option. The whole solar lease thing puts a lien on the house -- I can't do that as it violates what the current owner wants. So while it is a sure-fire way to reduce the electric bill with no capital investment, it does require you to be the owner and willing to take on a lien. Not until I own the house first.

I have it... You don't need to retain "Premier" in the name, rather you just need to award yourself a special "Premier Class" of shares. Restricted to the top executive only.

There is no investment if you go with Solar City. Just a lower utility bill ;) Perhaps they are value shoppers and you are the one paying more?

Of course it will eventually be renamed... "Premier Parsad".

Solar is more economic than it looks because it relieves us of needing the transmission lines that carry the peak loads, and we don't need to build the peak load coal/gas plants. It is a lot cheaper than it looks for this reason. The naysayers are only looking at the dollar cost per watt for generating rooftop solar... they are not looking at the dollar cost per watt of what it offsets (peak load electricity costs). When people compare coal/gas to solar, they obfuscate the issue by just quoting the average costs for coal/gas. That's completely absurd and unrelated. I don't know if they're really that dishonest or just plain ignorant. It's the peak load generation costs for coal/gas that we should be comparing to solar. It is sort of a resounding "duh" moment.

How is that the most profitable time of day? They have extra transmission lines that need to be built just for a few hours of the day of peak usage. There are plants that are idled most of the time... except during the peak load hours. They might be charging a ton during those hours, but they have to recover the costs of all that extra infrastructure that needs to be built to service those peak hours. In other words, if we all ran our air conditioners off of batteries, and charged the batteries evenly throughout the day, we could then get to a near-constant load on the system. That would mean an optimal configuration of transmission lines and power generation plants. Electricity costs would then be able to fall... because there would be less infrastructure expenses to service. Although, I suppose the state regulators allow them to price-gouge a bit during those peak hours in order to discourage usage -- so we can get by with less transmission lines... etc... I didn't mean for the peakers, I meant for baseload. If you own a coal plant, you make your money selling power during the day, not at night. It's the most profitable time for them. But if the daytime peak is shaved off by solar, like it is right now in Queensland in Australia (you can google it), the whole dynamic changes a lot. The real cost of coal electricity generation is driven higher then, as the coal plants are only necessary at night. So they would need to charge more at night to cover their operational costs. So coal itself might be cheap... but not the power generated by it due to the lack of utilization when the sun is shining. Glad coal is more expensive than it looks. Funny, that's the same argument against solar power for years and years... if only the sun was shining at night, it could be cheap. Okay, so coal is cheap if only it could be run all day long... but we don't need it all day long so it isn't cheap after all.

Complete bullshit. The cost is ZERO to install solar for the poor (as long as they own the home). Solar City comes out to the house and installs the solar for no money down. Zero Zilch Nada. The rate Solar City charges is less than what they are already paying the utility. So they are guaranteed to pay less than they currently do each month. After five years, they can ask Solar City to remove the panels if they aren't happy -- they will remove the panels at ZERO cost.

How is that the most profitable time of day? They have extra transmission lines that need to be built just for a few hours of the day of peak usage. There are plants that are idled most of the time... except during the peak load hours. They might be charging a ton during those hours, but they have to recover the costs of all that extra infrastructure that needs to be built to service those peak hours. In other words, if we all ran our air conditioners off of batteries, and charged the batteries evenly throughout the day, we could then get to a near-constant load on the system. That would mean an optimal configuration of transmission lines and power generation plants. Electricity costs would then be able to fall... because there would be less infrastructure expenses to service. Although, I suppose the state regulators allow them to price-gouge a bit during those peak hours in order to discourage usage -- so we can get by with less transmission lines... etc...

If you look at the actual generation component of the bill it makes more sense. But SoCal is structurally more expensive than Finland. Fortum owns a lot of hydro Not just about hydro, although that's certainly a part of it. SoCal has a lot of peak demand issues from the sunny hot conditions -- air conditioners. So they have these extra power plants that are idle during the cooler weather, and get used for peak load only a few hours of the day when it's hot and the air conditioners are all running. That's why we have this "time of use" billing system, where my daytime usage is 49 cents and my night-time usage is only 9 cents. The utility is encouraging me to shift my usage to the night when nobody else is drawing power, so they won't need as many overflow plants that sit idle most of the time. This is why solar makes so much sense for consumers in SoCal -- it's because you get paid for your power generation at the peak rates. I live on the coast and it's usually only 72 degrees here so we never use our air-conditioner. We use most of our electricity at night when the lights and TV come on. So putting solar panels here is a great idea -- you get paid for the power not on your average rate, but rather on the time-of-use rate. So I can earn 49 cents for one kWh of power generated by my panels, and then at night time I can purchase 5.5kWh with that. So I get operational leverage on my electric bill.

Oh yeah, there's no doubt it makes sense in some scenarios. Keep in mind though you're talking about the highest tier in the state which has the 6th highest average rate of electricity in the country (Source: http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a ). The average rate for CA is around 17 cents. I'm in Los Angeles and our highest tier during the most expensive season is 21.5 cents. Even so, I was doing some back of the envelope calculations for a household in my area and installing solar would yield mid-teen returns (after federal and state incentives). I was just pointing out to yadayada that in his back of the envelope calculation for the power consumption of the entire United States, using 37 cents per kWh isn't appropriate. I'm wondering if one were to sign a Power Purchase Agreement with Solar City, what kind of rates they would charge. Hypothetically, if someone was with Southern California Edison (Tier 1 - 13 cents, Tier 2 - 16 cents, Tier 3 - 27 cents, Tier 4 - 31 cents), and Solar City quoted a PPA for 20 cents a kWh, you would only get a system big enough to get you down to Tier 2 and no more. Has anyone received a quote? From their annual report I see that cost of installation is about $3/Watt so a 1KW system would cost them roughly $3000. This should generate between 1400-2000 kWh in California (more in SoCal, less in NorCal). Say 1700 kWh on average. If they sell this to the customer at 17 cents a kWh (average for CA), they get revenue of about $290/year. Federal and State incentives would bring the cost down (I have no idea what kind of incentives they receive) and maintenance would eat into some of that. Anyway, the stock looks absurdly overpriced but I'm off to do more reading since the industry is interesting and I'm realizing I don't know enough to even ballpark what they/any other company in the industry could potentially make. Oh wait though, it gets better. I have the "Home and Electric Vehicle Plan" with them. So my power costs 49 cents per kWh between 10am and 6pm (you know, like when the sun is shining). So if I install solar, it will be paid off in less than 2 years. 49 cents! https://www.sce.com/wps/portal/home/residential/electric-cars/residential-rates/!ut/p/b1/hc_NboJAFAXgZ3HBUubAGMHuhpQMg3-1osXZNNDgSIKMQVrSt-9o3Giq3t25-U5yL5EkJbLOfkqVtaWus-qU5fDT8TmLxBKCrxIGEbwGTjQVwGxgwMYA3BmGZ_0PIq-Jn_DQkDFG6zeXDjzvFvB3z4WI1-FkHjgufPcCRhxhFM8NSBYUgi4wWzJGgeEFPDgyJlJVOj8_vGF1Tn1FZFNsi6Zo7O_GrHdtezi-WLDQdZ2ttFZVYX_pvYX_Kjt9bEl6Lclhn6IUfZn_dr0_EY5KsQ!!/dl4/d5/L2dBISEvZ0FBIS9nQSEh/?from=/residential/rates/electric-vehicles.htm#/accordionGrp1-2/accordionGrp1-1

Southern California Edison rates: 31c per kWh for Tier 4 https://www.sce.com/wps/portal/home/customer-service/billing-payment/understanding-your-bill/!ut/p/b0/04_Sj9CPykssy0xPLMnMz0vMAfGjzOINLdwdPTyDDTwtfMLMDTyd3IMDwwLCDCxDjfQLsh0VAVoaPaU!/ On a tiered plan, you typically will wind up offsetting the 31 cents first. Once the Solar Panels generate enough electricity to knock you down to the next Tier of usage, you are paying 27c. So basically, Solar City can easily beat those rates and still earn a good rate.

That is not my understanding, at least for your main home: http://www.irs.gov/taxtopics/tc701.html I stand corrected. I wasn't aware of that. I thought the only way to exclude it from taxes was to use it to buy another home. You can do that for all the rest of your (non-owner occupied) real estate transactions. It's called a "1031 exchange". Enables you to start with a small property with a lot of leverage, then after lots of appreciation you trade up to a larger property with a lot of leverage, then on and on and on. Then you're Donald Trump one day... all without paying one iota of capital gains taxes. You then die and your cost basis is bumped up to present market value. Now compare that to investing in stocks... every transaction is taxed along the way. WTF?

I have arrived at a name for Sanjeev's new company: "Alpha Holdings" I know, Sanjeev will be thrilled! Not only is that right up his ally, it can be listed as 'AH' so alphabetically it trumps 'BH'.

I agree but they are treating the water anyhow before it goes to the ocean. Putting treated water into the ocean? WTF! It's treated... so... why... dump it into the ocean! Nuts.

We've cut back 40%, but our bill is almost unchanged. They still need the revenue, so they raised the unit price of the water. The majority of the rest of the bill is made up of fixed costs to pay off their bonds. They need to get their money one way or another -- we can't all save money by using less, because they have all this debt incurred to hook up to the aquaduct, as well as general fixed maintenance costs (replace old pipes, etc...). Water is free (it falls from the sky). Impounding the water and getting it to my house is what costs money. It generally costs the public water utility district the same whether I use a lot or a little. They could implement a cap and trade program to encourage water conservation. People who want more water can buy it from people willing to cut back -- the water utility company can earn a spread on that as market maker, and can pass along the savings to people who cut back instead of making it all up through higher water rates. Let's say you do with with a tiered rate structure -- people selling part of their ration might be able to zero out their water bill, with people who need more water above their ration paying a heavy toll for the excess. People are so wealthy around here that when they brought in rationing, people went "off grid" on them and sunk private wells. There are 500 outstanding permits for wells right now. That leaves less revenue for the water district. These people are stupid, they just keep shooting themselves with this policy -- it's slowly strangling their cash flow as each customer abandons them. Others are just buying the water from private water companies -- a 5,000 gallon tanker comes to their house and tops up a cistern. That is what they use to irrigate their landscaping.

This is crazy! California has suffered the loss of 63 trillion gallons (or 240 gigatons) of water in the past 18 months, which has resulted in the ground literally rising by an average of .15 inches since last year. http://www.breitbart.com/Breitbart-California/2014/08/28/After-Losing-63-Trillion-Gallons-of-Water-California-Is-Experiencing-Shift-in-Mountains-Rising-Lands

What proportion of agricultural use comes back as rain from evaporation as compared to home use? These numbers are probably extremely misleading. My guess is more of the home use goes down the drain and out to sea compared to agriculture where most probably falls as rain to the east. Scarcity is also likely a myth. I visited Portland and wondering why part of the Columbia flow is not used for California considering the claims made at the tourist sites that 10% of the flow of the Columbia is as much water as all the world's 14,600 or so desalination plants. So the problem seems to be lack of pricing so it is not economic to transport water from places where there is abundance. The only thing East of California's "central valley" is the Sierra Nevada. Not much rain happening there! So no, it is not coming back as rainfall. Well... unless you roundtrip it all the way around the world (everything is East). We get our rains when moist air moves in from the Pacific Ocean. Last few years, that hasn't happened. Occasionally in summer we'll get some rain coming in from Mexico -- summer monsoonal rains, but that's very rare in California and it's once again coming from moist Pacific Ocean air currents. Back to the evaporation thing though... we have a huge ocean full of water off our coastline, it is evaporating, but regardless it's not falling on us as rain. I doubt adding the evaporation from the almond orchards to the picture is going to make a huge difference. Look at the total surface area of the Pacific Ocean, then look at the Central Valley of California.

5% rent increases and a maintenance cost of only 0,33%? That is certainly optimistic! What does it cost to refurbish a room in a $3M home? What about a new bathroom, kitchen? Placing a new roof? Landscaping the garden? I didn't say $4m or $5m home. It doesn't take much to hit $3m here. As for optimism... that would be if I mentioned capital gains. Like if the property appreciated... 1% annually... it adds $30,000 a year tax-free (until it hits $500,000 total at which point it starts becoming taxable capital gains). Now, a $30,000 tax-free capital gain covers $30,000 of after-tax expenses. 5% a year rent increases for Montecito don't appear high -- the incomes have been growing at least that fast... this is not median income people, or low income people. The people in the upper income brackets have been seeing income growth in excess of that for quite a while. Good arguments Eric, can't really argue that. But while that may be the situation over there, it certainly isn't so everywhere! It's how I struggled to eventually pull the trigger and commit to buy (I bought a 3-yr purchase option locking the price). Even in housing, I'm playing with options. Too funny. :D That's great. What do you pay percentage-wise for such an option? Just curious! The option was 10%, and I put in an additional .002% each month towards the option. All option payments are credited back to me if I exercise the option. It's a 3 year option.

5% rent increases and a maintenance cost of only 0,33%? That is certainly optimistic! What does it cost to refurbish a room in a $3M home? What about a new bathroom, kitchen? Placing a new roof? Landscaping the garden? I didn't say $4m or $5m home. It doesn't take much to hit $3m here. As for optimism... that would be if I mentioned capital gains. Like if the property appreciated... 1% annually... it adds $30,000 a year tax-free (until it hits $500,000 total at which point it starts becoming taxable capital gains). Now, a $30,000 tax-free capital gain covers $30,000 of after-tax expenses. 5% a year rent increases for Montecito don't appear high -- the incomes have been growing at least that fast... this is not median income people, or low income people. The people in the upper income brackets have been seeing income growth in excess of that for quite a while. Good arguments Eric, can't really argue that. But while that may be the situation over there, it certainly isn't so everywhere! It's how I struggled to eventually pull the trigger and commit to buy (I bought a 3-yr purchase option locking the price). Even in housing, I'm playing with options. Too funny.