It's My Life
posted by B at 11:19 PM
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Thursday, August 31, 2006
Mastery Inactivity
畫說致富
葉姝對一般投資人來說，米勒的投資方法可能太高深，不容易學。不過他提出過一種簡單、易學的方法，就是「你看看五、六年前表現最差的資產或類股，就很清楚現在應該買什麼東西。」照這種說法，如果你現在想買美國股票，就應該買科技股和總市值最大、流動性最高的公司。
挑五年前衰股
這種作法背後的道理，是大家現在總是做五年前該做的事，例如，現在債券、新興市場、不動產投資信託、能源等十分熱門，但是五年前，這些投資標的都在下跌；相形之下，大型股和科技股過去五年表現最差，現在從投資價值來看，卻最有吸引力。
米勒運用的一些投資原則也相當值得散戶參考：
一、奉行價值型投資，以複雜模式評估投資標的股，不只評估股票，也評估事業，不只根據本益比、價格淨值比或價格現金流量比之類的會計關係，還根據很多指標做買賣決定；不過，他評估股票價值的眾多因素中，以現金流量折現為重點。
二、投資組合兼容並蓄，包括循環性訂價錯誤的價值股與長期訂價錯誤的成長股。
三、極力向下攤平，因為沒有人能夠買在最低點、賣在最高點，往下攤平到平均成本最低的人會贏得最後勝利。
三、根據道家「為無為」的態度、也就是「創造性不作為」的態度，處理投資組合中的個股，持股平均年度周轉率大約只有15%，也就是投資組合中個股的平均持股時間接近七年。
平均持股七年
四、買進、緊抱。米勒不頻繁交易，他喜歡買進好公司，長期抱著。近年雷格梅森價值信託基金年度周轉率不斷下降，表示他更緊抱這檔基金持有的大約40檔股票。相形之下，很多基金年度周轉率超過100%，一年內就把投資組合中所有股票全部換掉。
五、讓創造優異績效的好股繼續表現（前提是持股繼續維持強勁的成長展望）。投資人經常在股票上漲20%、50%或一倍後，把股票賣掉，減少自己 未來可能得到的潛在獲利，米勒會讓很多賺錢的好股發揮獲利能力，例如，去年聯合健康公司上漲43%、Google大漲118%後，他仍然緊緊抱著，沒有賣 掉，預期這兩檔股票會為他繼續帶來財富。
六、承受低風險、集中投資、大膽下大注。就資產龐大的大型股基金來說，雷格梅森價值信託基金大約40檔的持股堪稱持股集中。他像號稱「美國股神」的巴菲特一樣，喜歡買下一家公司的一大筆股權，然後持有很久一段時間。
熱門股非首選
從巴菲特和米勒這樣做得到的成果來看，顯然投資不見得要在熱門類股中下注，才能創造優異績效。巴菲特在網際網路泡沫期間，避免買科技股，米勒去年和今年避免投資能源股，都是奉行這種原則。
不過至少在短期內，米勒不買能源股的作法似乎還是有點失策，既然他已經認錯，近期內，他會不會針對能源股採取行動，的確是值得觀察又能夠發人深省的事情。
posted by B at 10:15 PM
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Tuesday, August 29, 2006
Haiku from the past
One Golden Star
--- Dina
One Golden Star
Light up the entire night
Dark-gray colored sky
Gaze Upon the Light
--- Ellen
Gaze upon the Light
Feel the silence pervade my
agitated heart
What Beautiful Sight
--- Mai
What beautiful sight
Dancing in joy with vision
To manifest love
Among the Hall of People
--- Vicky
Among the hall of
people, I stopped amid; felt
Like an animal
Music from Long Vacation:
Close to U, Missing U, Minami
Here We Are Again, Lalala Love Song
Links of Long Vacation:
L0, L1, L2, L3, L4, L5, L6, L7, L8, L9
V0, V1, V2, V3, V4, V5, V6, V7, V8, V9
Link to the original page
--- Dina
One Golden Star
Light up the entire night
Dark-gray colored sky
Gaze Upon the Light
--- Ellen
Gaze upon the Light
Feel the silence pervade my
agitated heart
What Beautiful Sight
--- Mai
What beautiful sight
Dancing in joy with vision
To manifest love
Among the Hall of People
--- Vicky
Among the hall of
people, I stopped amid; felt
Like an animal
Music from Long Vacation:
Close to U, Missing U, Minami
Here We Are Again, Lalala Love Song
Links of Long Vacation:
L0, L1, L2, L3, L4, L5, L6, L7, L8, L9
V0, V1, V2, V3, V4, V5, V6, V7, V8, V9
Link to the original page
posted by B at 11:17 PM
0 comments
Monday, August 28, 2006
Buy House
1. 購買遭查封的房產。現在網際網路發達，許多網站都提供試用期免費法拍屋名單的服務，試用期過後則以會員制方式參加，以定期得到名單，如 www.foreclosure.com。 此外，市面上的法拍屋很多都是由政府或是貸款公司沒收的，例如美國住宅與都市發展部 (U.S.Department of Housing & Urban Development網址www.hud.gov) 及房屋貸款公司房利美(Fannie Mae，網址 www.fanniemae.com) 及弗萊迪美(Freddie Mac，網址http://www.freddiemac.com)等，可上該局網站www.hud.gov或www.ushud.com獲得。
向貸款公司索取R.E.O.名單也是另一個可行方法。這些法拍屋是未順利在法院拍賣會中出售的，有興趣的人大都可以進屋參觀，這類的REO名單是免費的。也可向當地地產公司詢問，因為貸款公司或是政府也會透過這些經紀來銷售法拍屋。
2. 參與當地的一些投資者協會以求獲得這類的資訊，如National Real Estate Investors Association。紐約地區長島投資人組織(The Long Island Investors Group) 就是這類的組織。該組織的宗旨就是協助會員了解房屋市場走勢並提供上市屋的名單。
National Real Estate Investors Association總部位於肯德基州的Covington，現在和各地157個非營利俱樂部合作的全國房產投資人協會，定期提供二萬個會員房產投資資訊，該組織一年前只有1萬4000名會員。
3.也可以像購屋一樣，透過地產經紀來尋覓租屋。或是直接向屋主購買。
第三，清楚了解自己財務狀況。如果投資人擁有好的信用紀錄、沒也其他的負債，借貸到超低利率的房屋貸款機會很大。專家也建議房東，每月存入一筆和租金相同的存款，以做為以後維修的基金。
第四，避免以太高的價錢購買投資屋。專家認為，如果以太高的價錢購得投資屋，難保以後仍然能夠以這樣高的價錢出售。
posted by B at 8:36 PM
0 comments
Wednesday, August 23, 2006
Monday, August 21, 2006
News on M&A of REITs
Results Roundup: Delinquencies Up at Aames, Countrywide, Accredited, Saxon
A number of leading mortgage servicing operations reported quarterly and monthly results today, all of which show that mortgage delinquencies are on the rise – particularly among servicers with subprime inventory.
Aames Investment Corporation reported that delinquencies increased nearly 52 percent to 8.2 percent of loan volume during the second quarter of 2006, up from 5.4 percent at the end of 2005. The total number of loans foreclosed on by the subprime shop, expected to be acquired by Accredited Home Lenders Co. in October, rose during the first half of 2006 by than 157 percent relative to the foreclosure volume reported during the first half of 2005.
Countrywide Financial Corp. said today that pending foreclosures are at their highest level in over two years. The pending foreclosure rate of 0.48 percent for July 2006 is the highest since October 2003, when pending foreclosures stood at 0.50 percent. The portfolio delinquency rate of 4.11 percent is the highest since February, when delinquencies were reported at 4.29 percent.
In its second quarter report, Accredited Home Lenders noted that delinquent loans at the end of the second quarter 2006, including REO inventory, had increased 110 percent from one year ago. The delinquency rate of 3.76 percent at June 30 is a 52 percent increase from the start of 2006, when delinquencies stood at 2.47 percent; delinquencies at Accredited were at just 1.79 percent 12 months ago.
Lastly, soon-to-be acquired Saxon Capital’s second quarter results show that total delinquencies are up 26 percent from 6.36 percent in the first quarter of 2006 to 7.99 percent as of June 30, 2006. New foreclosures are up nearly 10 percent from a year ago, reaching 1.9 percent of the servicing portfolio’s principal balance at the end of the second quarter.
Stay with DS News for operational updates throughout each earnings season.
Real Estate
Morgan to Acquire Glenborough
By TSC Staff
8/21/2006 9:26 AM EDT
URL: http://www.thestreet.com/markets/realestate/10304829.html
Morgan Stanley's (MS) real estate division agreed to acquire Glenborough Realty Trust (GLB) in an all-cash transaction valued at roughly $1.9 billion. Each share of Glenborough will be bought for $26 a share, an 8.2% premium over its closing price Friday. Morgan expects to complete the deal in the fourth quarter. The purchase requires the approval of Glenborough's stockholders, but the company's board has already cleared the arrangement. Shares of Glenborough were rising $3.72, or 15.5%, to $27.75 in premarket trading Monday. "This transaction allows Glenborough to unlock tremendous value for our stockholders and demonstrates the inherent value of Glenborough's assets and our operating platform," the real estate investment trust said. Glenborough is focused on owning multitenant office properties concentrated in Washington, D.C., northern and southern California, Boston and northern New Jersey. The company has a portfolio of 45 properties.
27 July 2006
Innkeepers USA Signs Agreement to Acquire Four-Hotel Package in Southern California
A number of leading mortgage servicing operations reported quarterly and monthly results today, all of which show that mortgage delinquencies are on the rise – particularly among servicers with subprime inventory.
Aames Investment Corporation reported that delinquencies increased nearly 52 percent to 8.2 percent of loan volume during the second quarter of 2006, up from 5.4 percent at the end of 2005. The total number of loans foreclosed on by the subprime shop, expected to be acquired by Accredited Home Lenders Co. in October, rose during the first half of 2006 by than 157 percent relative to the foreclosure volume reported during the first half of 2005.
Countrywide Financial Corp. said today that pending foreclosures are at their highest level in over two years. The pending foreclosure rate of 0.48 percent for July 2006 is the highest since October 2003, when pending foreclosures stood at 0.50 percent. The portfolio delinquency rate of 4.11 percent is the highest since February, when delinquencies were reported at 4.29 percent.
In its second quarter report, Accredited Home Lenders noted that delinquent loans at the end of the second quarter 2006, including REO inventory, had increased 110 percent from one year ago. The delinquency rate of 3.76 percent at June 30 is a 52 percent increase from the start of 2006, when delinquencies stood at 2.47 percent; delinquencies at Accredited were at just 1.79 percent 12 months ago.
Lastly, soon-to-be acquired Saxon Capital’s second quarter results show that total delinquencies are up 26 percent from 6.36 percent in the first quarter of 2006 to 7.99 percent as of June 30, 2006. New foreclosures are up nearly 10 percent from a year ago, reaching 1.9 percent of the servicing portfolio’s principal balance at the end of the second quarter.
Stay with DS News for operational updates throughout each earnings season.
Real Estate
Morgan to Acquire Glenborough
By TSC Staff
8/21/2006 9:26 AM EDT
URL: http://www.thestreet.com/markets/realestate/10304829.html
Morgan Stanley's (MS) real estate division agreed to acquire Glenborough Realty Trust (GLB) in an all-cash transaction valued at roughly $1.9 billion. Each share of Glenborough will be bought for $26 a share, an 8.2% premium over its closing price Friday. Morgan expects to complete the deal in the fourth quarter. The purchase requires the approval of Glenborough's stockholders, but the company's board has already cleared the arrangement. Shares of Glenborough were rising $3.72, or 15.5%, to $27.75 in premarket trading Monday. "This transaction allows Glenborough to unlock tremendous value for our stockholders and demonstrates the inherent value of Glenborough's assets and our operating platform," the real estate investment trust said. Glenborough is focused on owning multitenant office properties concentrated in Washington, D.C., northern and southern California, Boston and northern New Jersey. The company has a portfolio of 45 properties.
August 21, 2006 09:00:00 AM ET
Morgan Stanley Real Estate to Acquire Glenborough Realty Trust in an All Cash Transaction
Glenborough Realty Trust GLB(NYSE:GLB.PrA) (Glenborough) and Morgan Stanley Real Estate announced today that they have entered into a definitive agreement whereby funds managed by Morgan Stanley Real Estate will acquire all of the outstanding common stock of Glenborough in an all-cash transaction valued at approximately $1.9 billion.
Under the terms of the agreement, Morgan Stanley Real Estate will acquire all of Glenborough's outstanding common stock for $26.00 per share in cash through a merger transaction. The per share purchase price represents an 8.2% premium over Glenborough's closing price on August 18, 2006 and a 15.2% premium over the 30-day average closing price through August 18, 2006 for Glenborough's common stock on the NYSE. Holders of limited partnership units in Glenborough's operating partnership will receive $26.00 per unit in cash or, at their election, will have the right either to common units in the surviving operating partnership similar in their terms to the existing common units or, alternatively, to receive a preferred unit in the surviving operating partnership. The total consideration of approximately $1.9 billion includes repayment or assumption of Glenborough's existing debt and redemption of its Series A convertible preferred stock pursuant to its terms. The agreement contemplates that Glenborough will continue to pay regular quarterly distributions at an annualized rate of $1.10 per share and per unit through the closing of the merger with a pro rated distribution for the quarter in which the transaction closes being included in the merger consideration.
Completion of the merger is currently expected to occur during the fourth quarter of 2006 and is subject to approval by Glenborough's common stockholders and certain other customary closing conditions. The transaction has been approved by Glenborough's Board of Directors, which has also recommended that the common stockholders approve the merger.
Andrew Batinovich, Glenborough President and CEO, commented, "This transaction allows Glenborough to unlock tremendous value for our stockholders and demonstrates the inherent value of Glenborough's assets and our operating platform."
"We are excited about this unique opportunity to acquire a well-diversified office portfolio," said Michael Franco, Managing Director of Morgan Stanley Real Estate. "Glenborough's high-quality office properties are located in some of the country's most desirable and supply-constrained office markets, such as Washington, D.C., and Northern and Southern California. In Glenborough, we believe we have acquired some terrific assets and a talented team of professionals."
Goldman, Sachs & Co. acted as a financial advisor to Glenborough's Board of Directors and Morrison & Foerster LLP and Venable LLP served as legal counsel. Morgan Stanley acted as financial advisor to Morgan Stanley Real Estate and Goodwin Procter LLP and Paul, Hastings, Janofsky & Walker LLP served as legal counsel.
Glenborough is a REIT which is focused on owning high quality, multi-tenant office properties concentrated in Washington, D.C., Southern California, Boston, Northern New Jersey, and Northern California. The Company has a portfolio of 45 properties encompassing approximately 8 million square feet as of June 30, 2006.
Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking and Lending. Since 1991, Morgan Stanley Real Estate has acquired $87.7 billion of real estate assets worldwide and currently manages $50.9 billion in real estate on behalf of its clients. In addition, Morgan Stanley Real Estate provides a complete range of market-leading investment banking services to its clients including advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings. Morgan Stanley is also a global leader in real estate lending and, using its own capital, originated approximately $28 billion in commercial mortgages in 2005. For more information about Morgan Stanley Real Estate, go to www.morganstanley.com/realestate.
Morgan Stanley MS is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 30 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.
August 21, 2006 10:24 AM ET
Morgan Stanley Unit to Buy Glenborough
SAN MATEO, Calif. (AP) - Glenborough Realty Trust said Monday it agreed to be acquired by the real estate division of investment bank Morgan Stanley for $1.9 billion in cash plus the assumption of debt.
Morgan Stanley Real Estate agreed to pay $26 per share for the California-based realty group. The price represents a 8.2 percent premium over Glenborough's closing price of $24.03 on Friday.
A Morgan Stanley spokeswoman said the company would not disclose the amount of debt included in the deal. A Glenborough contact was not immediately available to comment.
Glenborough, which owns office properties in Boston, Washington, northern New Jersey and Northern and Southern California, said its shareholders can also opt instead of cash to take a preferred unit in the surviving operating partnership.
The agreement stipulates Glenborough will continue to pay a $1.10 annualized dividend until the transaction closes, which is expected in the fourth quarter.
Glenborough shares added $1.95, or 8.1 percent, to $25.98 in early trading.
© 2006 The Associated Press.August 21, 2006 11:39 AM ET
Morgan Stanley buys out Glenborough REIT for $1.9B
Glenborough Realty Trust Inc. said on Monday that it has agreed to be acquired by funds managed by Morgan Stanley Real Estate for about $1.9 billion.
The buyout values San Mateo-based Glenborough's (NYSE:GLB)shares at $26, an 8.2 percent premium over Friday's closing price.
The deal is expected to close in the fourth quarter.
Glenborough has 45 properties with about 8 million square feet in Washington, D.C., Southern California, Boston, Northern New Jersey and Northern California.
Morgan Stanley Real Estate manages $50.9 billion in real estate.
August 21, 2006 12:58 PM ET
Owner of Washington-area properties acquired
Morgan Stanley Real Estate acquired the assets of Glenborough Realty Trust for $1.9 billion.
Under the terms of the agreement, Morgan Stanley will pay $26 per share in cash, an 8.2 percent premium on Glenborough's stock price.
The deal, which already has approval of Glenborough's board, is expected to be completed in the fourth quarter.
Glenborough (NYSE: GB) is a San Mateo, Calif.-based real estate investment trust and owns 8 million square feet of office properties, including 1.3 million square feet in the Washington area. Its local properties include 1525 Wilson Blvd., Arlington; Metro Place II, Merrifield; Capitol Place III, D.C.; and 1100 17th St. NW, D.C.
"Glenborough's high-quality office properties are located in some of the country's most desirable and supply-constrained office markets, such as Washington, D.C., and Northern and Southern California," says Michael Franco, Managing Director of Morgan Stanley Real Estate.
Morgan Stanley Real Estate (NYSE:MS) currently manages $50.9 billion in real estate on behalf of its clients. Last year, the real estate division acquired several Washington-area office properties from The JBG Cos. for $644 million.
August 21, 2006 01:32 PM ET
Calif. REIT with regional properties acquired
Morgan Stanley Real Estate acquired the assets of Glenborough Realty Trust for $1.9 billion.
Its the second billion-dollar acquisition Morgan Stanley's had a hand in locally in the last year. Baltimore apartment operator Town and Country Trust struck a deal in December to be acquired by a joint venture led by Morgan Stanley for $1.3 billion. A bidding war among rival suitors soon broke out.
Under the terms of the agreement to buy Glenborough, Morgan Stanley will pay $26 per share in cash, an 8.2 percent premium on Glenborough's stock price.
The deal, which has been approved by Glenborough's board, is expected to be completed in the fourth quarter.
Glenborough (NYSE: GB) is a San Mateo, Calif.-based real estate investment trust and owns 8 million square feet of office properties, including 1.3 million square feet in the Washington area. Its local properties include 1525 Wilson Blvd., Arlington; Metro Place II, Merrifield; Capitol Place III, D.C.; and 1100 17th St. NW, D.C.
"Glenborough's high-quality office properties are located in some of the country's most desirable and supply-constrained office markets, such as Washington, D.C., and Northern and Southern California," said Michael Franco, managing director of Morgan Stanley Real Estate.
Morgan Stanley Real Estate (NYSE: MS) currently manages $50.9 billion in real estate on behalf of its clients. Last year, the real estate division acquired several Washington-area office properties from The JBG Cos. for $644 million.
August 21, 2006 04:34 PM ET
Morgan Stanley to Buy Glenborough Realty
SAN FRANCISCO (AP) - Glenborough Realty Trust Inc. Monday said it has agreed to be acquired by funds managed by Morgan Stanley & Co. for roughly $1.9 billion including the assumption of debt.
The buyout values San Mateo-based Glenborough common shares at $26 each, an 8.2 percent premium over their close on Friday at $24.03.
Glenborough shares rose $1.94, or 8.1 percent, to close Monday at $25.97 on the New York Stock Exchange.
Based on the number of shares outstanding at the end of June, the acquisition is worth roughly $860 million excluding debt.
Glenborough is a real-estate investment trust that owns 45 properties, mainly office buildings in Washington, Boston, California and New Jersey.
The company said holders of its limited partnership units can opt to receive either $26 in cash, or common units in the surviving operating partnership similar to the terms of the existing common units, or a preferred unit in the surviving operating partnership.
The bid includes repayment or assumption of Glenborough's existing debt and redemption of its Series A stock.
The deal is expected to close in the fourth quarter.
© 2006 The Associated Press.August 21, 2006 06:17 PM ET
Morgan Stanley fund to buy Glenborough Realty
NEW YORK (Reuters) - Glenborough Realty Trust , a real estate investment trust that owns office properties chiefly in suburban areas, agreed to be acquired by funds managed by Morgan Stanley Real Estate, the companies said on Monday.
Morgan Stanley's offer of $26 a share represents an 8.2 percent premium over Glenborough's Friday closing price and a 15.2 premium over the 30-day average closing price, the companies said.
The equity portion of the deal is valued at about $915 million, according to Robert W. Baird & Co. analyst David Loeb.
The deal give shareholders $26 in cash for their 32.2 million shares and holders of about 3 million operating partnership units the choice of either cash or a stake in the new entity.
The deal is expected to be completed in the fourth quarter. Morgan Stanley Real Estate, a unit of Morgan Stanley's institutional securities division, valued the deal at $1.9 billion including debt.
The companies declined to disclose the price excluding debt. Glenborough did not return phone calls.
The deal for San Francisco-based Glenborough would be the latest of a string of REIT acquisitions and highlights private-investor interest in the publicly traded real estate companies.
"The fact that they have been streamlining the portfolio well for the last couple of years and the diversity of the regions of their portfolio made it a likely candidate for sale," said RBC Capital senior analyst Sri Nagarajan.
Glenborough shares closed at $25.97, up $1.94 or 8 percent on the New York Stock Exchange on Monday.
Glenborough's properties are chiefly located in the suburbs of Washington, D.C., Southern California, Northern New Jersey and Boston, where the demand for office space has either rebounded strongly over the past year or is in earlier stages of recovery. About 21 percent of its holdings of 8 million square feet are located in city downtown areas.
"It's a mix of urban and suburban in 24-hour markets -- where's there's office and also residential and retail," Loeb said. "The common element here is that they're costal markets, close to transportation and executive housing."
The deal for Glenborough follows SL Green Realty Corp.'s $4 billion bid for smaller New York office property owner Reckson Associates Realty Corp. .
Since the beginning of last year, 144 REITs, mostly in the United States, have been acquired or have agreed to be acquired, according to data tracker Dealogic. Of those, 17 have agreed to be bought by private funds or companies for a value of $26 billion.
Because they are publicly traded companies, REITs are constrained in their use of debt -- credit lines, bonds, loans, and mortgages -- to the tune of about 50 percent of their balance sheet value.
However, some private companies have financed their acquisitions for REITs with more than 90 percent debt, betting that the strengthening of commercial real estate occupancy and rental rates will more than outweigh borrowing costs. With the use of debt, private buyers have been valuing some companies higher than public ones.
"We thought (Glenborough) was undervalued and put $26 target on it," said Loeb, who only recently issued coverage and a value on the shares. "It's no surprise a private market would come out and buy it."
Pension funds in particular are eyeing REITs as the quickest way for putting money to work rather than buying individual properties, he added.
Morgan Stanley is one of the world's biggest real estate investors, managing $51 billion in real estate on behalf of its clients besides a portfolio of $88 billion of property.
Recent Morgan acquisitions in the U.S. include its March purchase, with partners, of multifamily properties REIT Town & Country Trust for $1.5 billion. In February, Morgan Stanley Real Estate's Prime Property Fund closed on its acquisition of AMLI Residential Properties Trust for $2.1 billion.
(Additional reporting by Joe Giannone)
Copyright 2006 ReutersAugust 09, 2006 07:43 AM ET
Morgan Stanley to buy mortgage firm Saxon Capital
NEW YORK (Reuters) - Morgan Stanley on Wednesday said it agreed to acquire residential mortgage lender and servicer Saxon Capital Inc. for $706 million as the largest U.S. investment bank looks to catch up with rivals that have bigger, integrated mortgage businesses.
New York-based Morgan Stanley said it will pay $14.10 a share in cash for Saxon stock. That's a 29 premium to Saxon's $10.97 closing price on the New York Stock Exchange Tuesday.
Morgan Stanley said Saxon, based in Glen Allen, Virginia, will expand its ability to service mortgage accounts, improve risk management and generate loans to individuals with less-than-prime credit scores. Pending regulatory and shareholder approvals, the deal is expected to be completed by the end of this year.
Saxon was the 14th-largest non-prime mortgage servicer last year, handling accounts representing $26 billion in loans. The company, which also buys and originates loans, held $6.5 billion in mortgages in its portfolio as of March 31.
Separately, Saxon on Wednesday said second-quarter profit rose 23 percent to $8.6 million, or 17 cents a share. Servicing income in the period rose 19 percent to $20.4 million.
Residential home loans underpin the largest segment of global debt markets and in recent years have helped fuel record profit for leaders such as Lehman Brothers Holdings , Goldman Sachs Group and Bear Stearns Cos.
Lehman and Bear, in particular, snapped up small mortgage businesses that generate loans that could be packaged into bonds, then issued and traded. This top-to-bottom integration offers dealers wider profit margins and better insight into mortgage markets.
Copyright 2006 ReutersAugust 09, 2006 03:16 PM ET
Morgan Stanley to Buy Saxon Capital
NEW YORK (AP) - Morgan Stanley Inc. on Wednesday took a big step in its goal to build a stronger residential mortgage business, announcing it will acquire Saxon Capital Inc. in a $706 million deal.
The investment bank hopes to use Glen Allen, Va.-based Saxon's residential mortgage origination business to support its own mortgage-backed securities operations. Morgan Stanley is paying a 29 percent premium for Saxon by offering $14.10 per share in cash in a transaction expected to close at the end of the year.
Morgan Stanley Chief Executive John Mack has said repeatedly he will aggressively pursue acquisitions to prop up the company's mortgage-originations and servicing operations.
"The acquisition of Saxon is another important step in our long-term strategy of broadening the Firm's global franchise in the critical residential mortgage business, which represents the single largest segment of the global debt market," said Anthony Tufariello, Morgan Stanley's head of its securitized products group. "This deal also provides Morgan Stanley with new origination capabilities in the non-prime market, which we can build upon to provide access to high-quality product flow across all market cycles."
The news sent Saxon's shares soaring 27 percent, or $2.96, to $13.93 on the New York Stock Exchange. Over the past year, shares have traded between $8.84 and $14.30. Morgan Stanley shares fell 44 cents to $65.73 on the NYSE.
Saxon Chairman Richard A. Kraemer said the deal serves the "best long-term interests of our shareholders, clients and employees." He believes the company will be able to build on Morgan Stanley's existing business.
Saxon was advised by Credit Suisse Securities, who rendered a fairness opinion to Saxon's board. The company's legal advisers included Gibson, Dunn & Crutcher LLP and Ballard Spahr Andrews & Ingersoll LLP.
July 27, 2006 08:00 AM US Eastern Timezone
Hersha Hospitality Trust Purchases Brand New Residence Inn; Adds Twentieth Hotel in the High Barrier-to-Entry New England Market
PHILADELPHIA--(BUSINESS WIRE)--July 27, 2006--Hersha Hospitality Trust (AMEX: HT), a real estate investment trust (REIT) and owner of 60 nationally franchised, upper-upscale, upscale and midscale limited service and extended-stay hotels, today announced that it has closed on the purchase of the 96-suite Residence Inn in Norwood, Massachusetts, for $14.25 million. The Company will use a combination of cash and issue 425,486 operating partnership units to the seller to complete the transaction.Jay H. Shah, Chief Executive Officer commented, "We are pleased to acquire this newly built property, which is our tenth in the vibrant Boston marketplace. This Residence Inn was sourced to us through an off market negotiation with one of our key development partners in New England. This is our second transaction in 2006 where the developer has provided a vote of confidence in our strategy by electing to accept consideration in the form of Hersha Hospitality operating partnership units. We expect this transaction to provide an unlevered yield of 8 percent at the outset, but rise to 11 percent after stabilization. This property complements our existing portfolio of twelve upscale extended stay hotels."
The Residence Inn Norwood, Massachusetts, which opened today, July 27, 2006, is located on 275 Norwood Park South and is convenient to the corporate offices of Bayer Diagnostics, New York Life, Pepsi, the famous Auto Mile, and Gillette Stadium, home of the New England Patriots Football and New England Revolution Soccer Teams.
About Hersha Hospitality
Hersha Hospitality Trust is a self-advised real estate investment trust that owns interest in 60 midscale, upscale and upper upscale hotel properties with 7,443 rooms located in high barrier to entry markets primarily from Metro Boston, Massachusetts to Metro Washington, D.C., with strong, national franchise affiliations. The Company focuses on acquisition and joint venture opportunities in primary and secondary markets near major metropolitan areas. More information on the Company is available on the Company's web site at www.hersha.com.
August 01, 2006 04:37 PM US Eastern Timezone
LaSalle Hotel Properties Acquires the Hotel Solamar in San Diego, California
BETHESDA, Md.--(BUSINESS WIRE)--Aug. 1, 2006--LaSalle Hotel Properties (NYSE:LHO) today announced it has acquired the Hotel Solamar in San Diego, California, for $87.0 million. The 235-room, newly built, independent full-service hotel is located in the heart of downtown San Diego's Gaslamp Quarter Historic District. The hotel sits on the corner of Sixth Avenue and J Street, two blocks from Petco Park and three blocks from the San Diego Convention Center. The hotel is also surrounded by the city's trendiest shopping, theaters, art galleries and over 75 restaurants and night clubs. Hotel Solamar is operated by Kimpton Hotel & Restaurant Group, LLC.The hotel's unique sun and sea design creates an experience that attracts demand from all market segments. The hotel includes a full-service restaurant featuring Coastal California cuisine for breakfast, lunch and dinner and a popular rooftop oasis serving cocktails and light cuisine with 225 seats, a large pool, cabanas and views overlooking downtown San Diego. The Hotel Solamar opened in April 2005 and contains a fitness center, business center, in-room spa services, parking facility, 8,800 square feet of meeting space and an additional 2,000 square feet of unfinished street-front space available for retail or additional meeting space. The hotel is subject to a long-term ground lease.
"We are excited to further our presence in the emergent Gaslamp Quarter with the acquisition of this newly built high-style hotel," remarked Jon Bortz, Chairman and Chief Executive Officer of LaSalle Hotel Properties. "San Diego is one of the most attractive leisure and convention destinations and one of the highest occupancy markets in the United States. The Hotel Solamar is in an irreplaceable location in the heart of the fastest growing area of downtown San Diego, and it's just two blocks from our stylish Hilton Gaslamp Quarter Hotel."
Hotel Solamar will continue to be managed by Kimpton Hotel & Restaurant Group, LLC, which manages seven other hotels for LaSalle Hotel Properties located in Washington, D.C., Boston, MA and Seattle, WA. Kimpton operates upscale and luxury boutique/lifestyle hotels in the U.S. and Canada, and has had a strong relationship with the Company since 2001.
"We are delighted to expand our long-standing relationship with Kimpton and are eager to work with them to bring this fabulous new hotel to its full potential," continued Mr. Bortz.
"It is clear that Kimpton and LaSalle have a winning combination with a profitable track record, and we are excited to extend our partnership into the state of California," said Kimpton CEO and President Mike Depatie. "Being chosen by LaSalle Properties to manage an eighth hotel is yet another vote of confidence for Kimpton - for our expertise, the heartfelt care we provide our guests at every touch point, and for our unique culture that gives Kimpton-managed hotels a distinct competitive advantage."
LaSalle Hotel Properties is a leading multi-tenant, multi-operator real estate investment trust, owning interests in 30 upscale and luxury full-service hotels, totaling approximately 8,700 guest rooms in 15 markets in 11 states and the District of Columbia. The Company focuses on owning upscale and luxury full-service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier internationally recognized hotel operating companies, including Westin Hotels and Resorts, Sheraton Hotels & Resorts Worldwide, Inc., Crestline Hotels and Resorts, Inc., Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, White Lodging Services Corporation, Gemstone Resorts International, LLC, Thompson Hotels, Sandcastle Resorts & Hotels, Davidson Hotel Company, and the Kimpton Hotel & Restaurant Group, LLC.
| JULY 28, 2006 - 09:52 ET |
| Chartwell REIT Announces New Acquisitions, Mezzanine Financings And Internal Growth Projects |
| MISSISSAUGA, ONTARIO--(CCNMatthews - July 28, 2006) - Chartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) announced today that it had approved investments with a total cost of approximately $84.1 million in various new acquisitions, mezzanine financings and internal growth projects. Chartwell will acquire Elizabeth Towers, a 104 suite assisted-living retirement home and seniors apartment complex located in St. John's, Newfoundland. The property includes approximately 1.5 hectares of land and 33,700 square feet of commercial space, currently 100% leased under long-term agreements with such tenants as a medical clinic, pharmacy, fitness centre and other appropriate services. The purchase price will be approximately $24.7 million plus closing costs. A new seven-year mortgage of $16.1 million with an interest rate of 4.72% will be put in place on closing, anticipated in early August 2006. This acquisition, combined with the nearby 116-suite King William Village, a Chartwell Classic residence currently under development by Spectrum Seniors Housing Development LP ("Spectrum") and the Crosbie Group, will form a solid operating platform on which the REIT will expand in the vibrant Atlantic Canada market. Chartwell, through its joint venture with ING Real Estate Australia ("ING"), will also acquire Lake Worth Gardens, a 170 suite seniors independent living community located in Lake Worth, Florida. Lake Worth, situated in Palm Beach County, is one of the fastest growing metropolitan areas in the United States, and is recognized as one of the nation's best locations for new business ventures. Chartwell's joint venture US property management company, Horizon Bay Management, has been managing the property since January 2005. Chartwell and ING will each acquire a 50% interest in this high quality facility. The total purchase price will be approximately Cdn $22.0 million plus closing costs and a 10 year mortgage of approximately Cdn $15.4 million with an interest rate of 6.68% will be placed on the project on closing. Closing is expected in early August 2006. In addition, Chartwell will extend a mezzanine loan of $4.5 million to its joint venture partners, Spectrum and Melior Development Ltd., for the construction and lease-up of 175 new independent living suites in Gatineau, Quebec. This $22.6 million project, Cite Jardin Phase IV, will be built on land adjacent to the existing Cite Jardin towers (Phase I and II) acquired by the REIT in July 2004. Chartwell will receive interest on its mezzanine loan of 10% per annum, as well as an upfront placement fee of $780,000. The new development project is expected to be completed and fully stabilized in September 2009. The current Cite Jardin Phase III development project consisting of 173 new suites opened this summer with over 90% of the suites spoken for and is expected to be offered to Chartwell for purchase in the fall of 2006. A new internal growth project was also approved. The REIT will make an equity investment of approximately $3.9 million in the expansion of Residence Ste-Marthe in Saint-Hyacinthe, Quebec. Originally a religious convent, the project will add 131 new suites to the existing 67 suite facility. The completion of the project is estimated in late 2007 for a total cost of approximately $14.8 million. "The pace of our acquisition, development and internal expansion activities continues to accelerate, and we anticipate that we will easily exceed our acquisition targets by the end of the year," commented Stephen Suske, Vice Chair and President. Chartwell REIT is a growth-oriented investment trust owning and managing a complete spectrum of seniors housing properties. It is currently the second largest participant in the Canadian seniors housing business with a growing presence in the United States. Chartwell will capitalize on the strong demographic trends present in its markets to grow internally and through accretive acquisitions. Chartwell REIT also has an exclusive option to purchase stabilized facilities from Spectrum Seniors Housing Development LP, Canada's largest and fastest growing seniors housing development company. Chartwell's Distribution Reinvestment Plan (DRIP) allows Unitholders to have their monthly cash distributions used to purchase units without incurring commission or brokerage fees, and receive bonus units equal to 3% of their monthly cash distributions. More information can be obtained at www.chartwellreit.ca |
Innkeepers USA Signs Agreement to Acquire Four-Hotel Package in Southern California
PALM BEACH, Fla., July 27 /PRNewswire-FirstCall/ -- Innkeepers USA Trust (NYSE: KPA) , a hotel real estate investment trust (REIT), today announced that it has entered into an agreement to acquire from Bethesda, Md.-based RLJ Urban Lodging Fund, L.P., an affiliate of RLJ Development, LLC, four hotel properties with 931 rooms in Southern California for a total cost of $215 million, or $231,000 per room.
The company expects to fund the acquisition with borrowings under its unsecured line of credit and the issuance of approximately $165.0 million in non-recourse debt at a weighted average interest rate of approximately 6.25 percent, including the assumption of $13.7 million of debt. After the acquisition, the company estimates that its debt to total investment in hotels at cost will be approximately 40 percent, without regard to any future borrowings or equity offerings.
Innkeepers Hospitality Management, which is owned by Jeffrey H. Fisher, chief executive officer of Innkeepers USA Trust, will manage the hotels under long-term management agreements. The acquisition, which is expected to close in the 2006 third quarter, is subject to a number of customary contractual closing conditions.
The four hotels are being acquired at a net operating income (NOI) capitalization rate of approximately 7 percent on projected 2007 net operating income and a multiple of approximately 12.5 times projected 2007 earnings before interest, taxes, depreciation and amortization (EBITDA).
"This transaction combines one of the most dynamic regional lodging markets in the U.S. with strongly performing hotels, affiliated with two of the best-performing and most desirable brands among hotel investors -- Residence Inn by Marriott and Hilton," Fisher said. "The addition of these properties to our portfolio further diversifies our distribution throughout the state; marks our initial entry into San Diego, one of the very best and highest-barriers-to-entry hotel markets in the country; establishes a significant footprint in the desirable Anaheim market; and bolsters our existing presence in the fast growing Ontario market.
"With this acquisition, we are also furthering our strategy of opportunistically acquiring full-service hotels. Perhaps more important, this transaction gives us the opportunity to acquire a unique mix of high-quality, profitable, full-service and extended-stay hotels on a portfolio basis at an attractive price, with upside potential.
"Southern California remains one of the nation's most sought-after locations for real estate investment," he added. "Business and leisure travel to the region remains robust, with Smith Travel reporting revenue per available room (RevPAR) growth for all hotels in Southern California of 11- plus percent in 2005 and 9.3 percent in 2006 through June. Each of these properties is in an outstanding location in its respective market, which we believe will provide us an advantage over current and future competition."
The two Residence Inns are upscale, interior-corridor, all-suite buildings that opened in 2003. "No expense was spared in creating high-quality, upscale extended-stay properties that are among the best in the entire Residence Inn chain. The Hilton and Hilton Suites also are in excellent physical condition, with the sellers indicating that they have made $12.5 million in capital improvements in the last five years, equivalent to $23,100 per room. The renovation of the Hilton Ontario should be completed later this year. We have budgeted approximately $2.0 million for additional upgrades that may be required by franchisors as a result of the transfer. All four properties are well-positioned to take advantage of the expected aggressive average rate growth in their respective markets."
Fisher noted that the company will continue to seek acquisition and development opportunities that achieve high shareholder returns, with the primary focus remaining premium-branded upscale extended-stay and select- service hotels, the core of the company's portfolio; selected full-service hotels; and turn-around opportunities for hotels that operate under or can be converted to the industry's leading brands.
Innkeepers USA Trust owns or is invested in 70 hotels with a total of 8,818 suites or rooms in 20 states and Washington, D.C. For more information about Innkeepers USA Trust, visit the company's web site at http://www.innkeepersusa.com/.
July 27, 2006 05:15 PM US Eastern Timezone
First Potomac Realty Trust Acquires Value-Add Property in Montgomery County, Maryland for $39.5 Million; Gateway 270 West Provides Value-Add Opportunity in Maryland's I-270 Corridor
BETHESDA, Md.--(BUSINESS WIRE)--July 27, 2006--First Potomac Realty Trust (NYSE:FPO) today announced that it has acquired Gateway 270 West, a six-building flex/office property totaling 254,625 square feet, in Clarksburg, Maryland, from Forsgate Industrial Partners for $39.5 million in cash.Gateway 270 West is located on 35 acres in the rapidly growing I-270 Corridor submarket of Montgomery County and is currently 55% leased to 10 tenants. With this acquisition, First Potomac owns approximately 1.5 million square feet in the I-270 Corridor.
Commenting on the transaction, Nicholas R. Smith, First Potomac's chief investment officer, stated, "We have been closely monitoring the increasing rental rates in the I-270 Corridor. The market has improved dramatically and has tightened in recent months. We know the tenants in this market very well and expect that controlling a large share of the available space will enable us to lease the vacant space quickly at attractive rents. Our hands-on management and leasing philosophy should add significant value to this well-located property in one of the strongest markets in Maryland."
About First Potomac Realty Trust
First Potomac Realty Trust is a real estate investment trust (REIT) that focuses on owning and operating industrial and flex properties in the Washington, D.C. metropolitan area and other major markets in Virginia and Maryland. The Company's portfolio totals approximately 9.8 million square feet, and its largest tenant is the U.S. Government.
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SAN FRANCISCO, July 27 /PRNewswire-FirstCall/ -- Digital Realty Trust, Inc. , a leading owner and manager of corporate data centers and Internet gateways, today announced the acquisition of the Internet gateway for the Phoenix metropolitan area and data center facilities in Ft. Worth, Texas and Amsterdam, The Netherlands. The total purchase price paid for these three acquisitions was approximately $236.9 million. The Company has also announced the sale of Stanford Place II, located in the Denver Tech Center, realizing a gain of $17.9 million. Acquisitions The largest acquisition is a 347,000 square foot Internet gateway located at 120 East Van Buren in Phoenix, Arizona. It serves as the primary hub for Internet traffic in the greater Phoenix area and is the premier facility for corporate data center applications in the high-demand Phoenix market. The building contains 175,000 square feet of data center space including over 95,000 square feet of space operated by the building for corporate users as well as an 11,000 square foot meet-me-room (MMR) that facilitates access to the numerous carriers serving the property. Digital Realty Trust plans to add 30,000 square feet of new raised floor to accommodate the increasing demand for highly improved, custom data center space in the Phoenix market. The purchase price was $175.0 million. The second acquisition consists of twin 28,000 square foot data center buildings located in Amsterdam, The Netherlands. The buildings were constructed in 2000 as data centers specifically for a major European IT services company, which occupies 100% of the property through 2015. Combined, the buildings contain approximately 33,000 square feet of raised floor with the balance used for technical support and office space. The purchase price for the property was euro 8.875 million, or approximately $11.3 million based on current exchange rates. The third acquisition is the sale-leaseback of a highly improved data center facility located in Ft. Worth, Texas. The property was built in 2000 and totals 263,700 square feet, consisting of a single-story 109,500 square foot fully improved data center, a two-story 39,000 square foot annex containing office and conference facilities, and an 115,500 square foot warehouse. The facility is 100% leased to Savvis Corporation for a 15-year term. The tenant has the option to convert much of the warehouse space to a fully improved data center to accommodate its growth. The purchase price for the property was $50.6 million. According to Digital Realty Trust CEO Michael Foust, "The acquisition of Phoenix's premier Internet gateway facility represents a very significant addition to our portfolio. It enhances our presence in this important top tier market and expands our ability to provide exceptional data center and collocation services to our corporate and network customers. There are over 40 different fiber carriers operating in the facility; and with the substantial power available at the property, the building accommodates mission critical applications for a wide variety of corporate users. Additionally, the acquisition of the highly improved data centers in Ft. Worth and Amsterdam further expands our footprints in these key markets while adding to our portfolio of stabilized, income producing properties." | ||||||
27 July 2006
Innkeepers USA Signs Agreement to Acquire Four-Hotel Package in Southern California
PALM BEACH, Fla., Innkeepers USA Trust (NYSE:KPA) , a hotel real estate investment trust (REIT), today announced that it has entered into an agreement to acquire from Bethesda, Md.-based RLJ Urban Lodging Fund, L.P., an affiliate of RLJ Development, LLC, four hotel properties with 931 rooms in Southern California for a total cost of $215 million, or $231,000 per room.
The company expects to fund the acquisition with borrowings under its unsecured line of credit and the issuance of approximately $165.0 million in non-recourse debt at a weighted average interest rate of approximately 6.25 percent, including the assumption of $13.7 million of debt. After the acquisition, the company estimates that its debt to total investment in hotels at cost will be approximately 40 percent, without regard to any future borrowings or equity offerings.
Innkeepers Hospitality Management, which is owned by Jeffrey H. Fisher, chief executive officer of Innkeepers USA Trust, will manage the hotels under long-term management agreements. The acquisition, which is expected to close in the 2006 third quarter, is subject to a number of customary contractual closing conditions.
The four hotels are being acquired at a net operating income (NOI) capitalization rate of approximately 7 percent on projected 2007 net operating income and a multiple of approximately 12.5 times projected 2007 earnings before interest, taxes, depreciation and amortization (EBITDA).
"This transaction combines one of the most dynamic regional lodging markets in the U.S. with strongly performing hotels, affiliated with two of the best-performing and most desirable brands among hotel investors -- Residence Inn by Marriott and Hilton," Fisher said. "The addition of these properties to our portfolio further diversifies our distribution throughout the state; marks our initial entry into San Diego, one of the very best and highest-barriers-to-entry hotel markets in the country; establishes a significant footprint in the desirable Anaheim market; and bolsters our existing presence in the fast growing Ontario market.
"With this acquisition, we are also furthering our strategy of opportunistically acquiring full-service hotels. Perhaps more important, this transaction gives us the opportunity to acquire a unique mix of high-quality, profitable, full-service and extended-stay hotels on a portfolio basis at an attractive price, with upside potential.
"Southern California remains one of the nation's most sought-after locations for real estate investment," he added. "Business and leisure travel to the region remains robust, with Smith Travel reporting revenue per available room (RevPAR) growth for all hotels in Southern California of 11- plus percent in 2005 and 9.3 percent in 2006 through June. Each of these properties is in an outstanding location in its respective market, which we believe will provide us an advantage over current and future competition."
The two Residence Inns are upscale, interior-corridor, all-suite buildings that opened in 2003. "No expense was spared in creating high-quality, upscale extended-stay properties that are among the best in the entire Residence Inn chain. The Hilton and Hilton Suites also are in excellent physical condition, with the sellers indicating that they have made $12.5 million in capital improvements in the last five years, equivalent to $23,100 per room. The renovation of the Hilton Ontario should be completed later this year. We have budgeted approximately $2.0 million for additional upgrades that may be required by franchisors as a result of the transfer. All four properties are well-positioned to take advantage of the expected aggressive average rate growth in their respective markets."
Fisher noted that the company will continue to seek acquisition and development opportunities that achieve high shareholder returns, with the primary focus remaining premium-branded upscale extended-stay and select- service hotels, the core of the company's portfolio; selected full-service hotels; and turn-around opportunities for hotels that operate under or can be converted to the industry's leading brands.
July 24, 2006 10:48 AM US Eastern Timezone
Colonial Properties Trust Acquires Four Multifamily Communities in Key Markets
BIRMINGHAM, Ala.--(BUSINESS WIRE)--July 24, 2006--Colonial Properties Trust (NYSE:CLP), a real estate investment trust that owns a portfolio of multifamily, office and retail properties, today announced the purchase of four multifamily communities located in key markets in Texas, Georgia and North Carolina for a total of $141.8 million. Colonial Village at Shoal Creek, purchased for $33.9 million and Colonial Village at Willow Creek, purchased for $39.3 million are both located in Bedford, Texas (a well established submarket of Dallas/Ft.Worth). Colonial Grand at McDaniel Farm, in Atlanta, Georgia, was purchased for $41 million and Colonial Village at Chancellor Park in Charlotte, N.C. was purchased for $27.8 million. The investments, which were funded through the company's unsecured line of credit and subsequent disposition proceeds, add 1,650 Class A apartment units with an average age of 9 years.
"These properties are a great addition to Colonial Properties Trust and enhance the quality of our overall portfolio in the Dallas/Fort Worth, Atlanta and Charlotte markets" said Paul Earle, executive vice president of the company's multifamily division. "Additionally, this furthers the company's strategy of increasing our emphasis in multifamily," he added.
Colonial Village at Shoal Creek (formerly Shoal Creek) with 408 units was acquired on June 1st. Colonial Village at Willow Creek (formerly Meridian Hill) with 478 units and Colonial Grand at McDaniel Farm (formerly Summer Ridge) with 424 units were acquired on May 31st. Colonial Village at Chancellor Park (formerly Chancellor Park) with 340 units was acquired on June 30th. Occupancy rates for the four properties are as follows: Colonial Village at Shoal Creek, 95.6%; Colonial Village at Willow Creek, 94.8%; Colonial Grand at McDaniel Farm, 95% and Colonial Village at Chancellor Park, 91%.
- Accredited Home Lenders Holding Co. to Acquire Aames Investment Corporation
- 2006 May 25 | 12:15 PM
- Aames Investment Corporation announced that Accredited Home Lenders Holding Co. has signed a definitive agreement pursuant to which Accredited will acquire Aames. The stock-and-cash transaction values Aames at approximately $340 million, or $5.35 per share at closing prices. Of the $340 million purchase price, approximately $109 million, or 32% of the purchase price, will be paid in cash to Aames stockholders. The remainder will be paid in Accredited's common stock at an exchange ratio of 0.0700 shares of Accredited's common stock for each share of Aames common stock.
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Saturday, August 12, 2006
Alternative Minimum Tax (AMT)
| The Alternative Minimum Tax (AMT) was originally targeted at wealthy people with creative tax advisors or large amounts of certain kinds of deductions and exemptions. Next year it just might apply to you. Unlike most tax laws, the AMT is not adjusted for inflation and has gone largely unchanged for 30 years. Consequently, it applied to more and more people each year. 19,000 households paid the AMT in 1970. 2.4 million did in 2003.* Who Will Pay the AMT in 2005?**
Will You Have to Pay the AMT?*Source: Urban-Brookings Tax Policy Center, The AMT: Projections and Problems, July 7, 2003, Table 2: AMT Participation Rate, Microsimulation Model (version 0503-1) **Source: Urban-Brookings Tax Policy Center, The Individual Alternative Minimum Tax: A Data Update, August 30, 2004, Table 2: AMT Participation Rate, Microsimulation Model (version 0304-3).
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REMEMBER BACK when you were young and poor and nothing made you madder than tales of rich people who paid nothing in income taxes? Well, you weren't alone, and that anger led to the creation of something called the alternative minimum tax, which was designed to keep the rich from living tax-free.
Fast-forward a few years. You're a bit older, somewhat better off and paying far more in taxes than you ever thought possible. So what's the last thing you expect to see when you fill out your tax return? That you owe the alternative minimum tax. You can take some solace in the fact that thousands of taxpayers just like you have been snagged by this nasty bit of tax law in recent years. While only 19,000 people owed the AMT in 1970, millions are paying it now.
What happened? Inflation, mostly. While the "regular" tax brackets, exemptions and standard deductions are adjusted annually for inflation, the AMT brackets and exemptions are not, so many people whose income has grown with the economy enter the dreaded AMT zone each year. Especially vulnerable are people with income over $75,000 and some large deductions, but not the exotic ones that were originally targeted by the AMT's creators. Most vulnerable are taxpayers with several children, interest deductions from second mortgages, capital gains, high state and local taxes, and incentive stock options.
How the Tax Works
The best way to understand the AMT is to view it as a separate tax system. It has its own set of rates and its own rules for deductions, which usually are less generous than the regular rules. Because of these confusing rules, the only ways you can tell if you owe the tax are by filling out the forms (essentially doing your taxes a second time) or by being audited by the Internal Revenue Service. If it turns out you should have paid the AMT but didn't, you will owe the back taxes plus any interest or penalty that the IRS decides to dole out.
You should definitely run the numbers if your gross income is above $75,000 and you have write-offs for personal exemptions, taxes and home-equity loan interest. Ditto if you exercised incentive stock options during the year, or if you own a business, rental properties, partnership interests or S corporation stock. If you earn more than $100,000, run the numbers for that reason alone.
That means filling out Form 6251. In effect, you are simply adding back some tax deductions and income exclusions to your regular taxable income to arrive at your alternative minimum taxable income. Here is where the middle class gets soaked. First you have to add back your personal- and dependent-exemption deductions ($3,200 each in 2005, $3,300 each in 2006), then your standard deduction if you don't itemize ($10,000 for joint filers in 2005 and $10,300 for joint filers in 2006; $5,000 for singles in 2005 and $5,150 for singles in 2006). You also lose your state, local and foreign income and property-tax write-offs, as well as your home-equity loan interest, if the loan proceeds are not used for home improvements.
The AMT also ignores some itemized deductions, such as investment expenses and employee business expenses, and some medical and dental expenses. It also counts as income the interest from private-activity bonds, a type of tax-exempt bond issued by governments, usually to finance sports stadiums and the like. Finally, AMT rules force you to pay taxes on the "spread" between the market price and the exercise price of incentive stock options granted by your employer. For example, if you exercised an option to buy 100 shares of stock for $3 a share and the stock was trading at $10, the spread would be $7 a share, or $700. Under the regular rules, you wouldn't pay current taxes on that amount, but under the AMT, it's considered income.
Don't give up hope. You do get a few small breaks under AMT rules that you wouldn't see under the regular tax rules. For example, while you can't deduct state, local and foreign taxes under AMT rules, you can deduct the refunds, which would be considered income under the regular tax rules. And because you're taxed on the spread on your incentive stock options, your tax basis for the shares you bought is higher under the AMT, meaning your tax bill will be lower when you sell the shares.
The AMT form has quite a few other pluses and minuses, but you can probably ignore them unless you own a business, rental properties or interests in partnerships or S corporations. If you do, you may need a tax pro to prepare at least the Form 6251 part of your return.
Finally, you get to deduct the AMT exemption — $58,000 for joint filers; $40,250 for unmarried persons; $29,000 for those married filing separately. For 2006, the exemption amounts are $62,550 $42,500 and $31,275, respectively. However, this exemption is reduced by 25 cents for each dollar of AMT taxable income above $150,000 for couples ($112,500 for singles and $75,000 for married filing separate status), and it's not adjusted for inflation, which is one reason why more people owe the AMT every year.
After the exemption (if any) has been deducted, the result is subject to AMT rates — 26% on the first $175,000 ($87,500 for married couples filing separately) and 28% on the excess. Again, the AMT brackets are not adjusted for inflation, which causes much greater exposure to the tax as the years go by. If the AMT exceeds your regular tax, you have to pay the greater amount. Technically, the AMT is just the liability over and above the regular tax, and this figure is entered on page 2 of Form 1040.
Sorry, you're not finished yet. People get pushed into the AMT zone for different reasons, and some are actually better than others. That's because you could be eligible for the so-called minimum tax credit, which allows you to claim a credit on your tax return in future years for some of the extra taxes you paid under AMT rules. So you have to fill out another document, Form 8801, to determine if you are eligible. For whatever reason, the tax rules say that exercising incentive stock options is one of the few things that qualifies you for the credit, so if that's the reason you ended up paying the AMT, pay special attention to this form.
from: SmartMoney
Alternative Minimum Tax 101
A brief overview of the alternative minimum tax (AMT).
The alternative minimum tax (or AMT) is an extra tax some people have to pay on top of the regular income tax. The original idea behind this tax was to prevent people with very high incomes from using special tax benefits to pay little or no tax. But for various reasons the AMT reaches more people each year, including some people who don't have very high income and some people who don't have lots of special tax benefits. Congress is studying ways to correct this problem, but until it does, almost anyone is a potential target for this tax.
The name comes from the way the tax works. The AMT provides an alternative set of rules for calculating your income tax. In theory these rules determine minimum amount of tax that someone with your income should be required to pay. If you're already paying at least that much because of the "regular" income tax, you don't have to pay AMT. But if your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax.
| Q: | How do I know if I have to worry about the AMT? |
| A: | Unfortunately, there's no good answer to this common question — which is one of the big problems with the AMT. You can have AMT liability because of one big item on your tax return, or because of a combination of many small items. Some things that can contribute to AMT liability are mundane items that appear on many tax returns, such as a deduction for state income tax or interest on a second mortgage, or even your personal and dependency exemptions. See Top 10 Things that Cause AMT Liability. If you use computer software to prepare your tax return, the program may be able to do the AMT calculation. If you're preparing a return by hand, the only way to know for sure is to fill out Form 6251 — a laborious process. |
There are two essential pieces to the AMT. First, you need to understand how your AMT liability is calculated for a year when you pay AMT. And second, you need to know how the AMT credit can reduce your taxes in years after the year you paid alternative minimum tax.
AMT Liability
The best way to understand alternative minimum tax liability is to see how it's calculated. Here's the big picture.
Compute an Alternate Tax
First, you figure the amount of tax you would owe under a different set of rules. What's different about these rules? Broadly speaking, three things:
- Various tax benefits that are available under the regular tax are reduced or eliminated.
- You get a special deduction called the AMT exemption, which is designed to prevent the AMT from applying to taxpayers with modest income. This deduction phases out when your income reaches higher levels, a fact that causes significant problems under the alternative minimum tax.
- You calculate the tax using AMT rates, which start at 26% and move to 28% at higher income levels. By comparison, the regular tax rates start at 10% and then move through a series of steps to a high of 35%.
The result of this calculation is the amount of income tax you would owe under this "alternative" system of tax.
Compare with the Regular Tax
Then you compare this tax with your regular tax. If the regular tax is higher, you don't owe any AMT. But if the regular tax is lower, the difference between the two taxes is the amount of AMT you have to pay.
Example 1: Your regular income tax is $47,000. When you calculate your tax using the AMT rules, you come up with $39,000. That's lower than the regular tax, so you don't pay any AMT.
Example 2: Your regular income tax is $47,000. When you calculate your tax using the AMT rules, you come up with $58,000. You have to pay $11,000 of AMT on top of the $47,000 of regular income tax.
If you're paying attention, you've probably noticed that the total amount of tax you pay in Example 2 is equal to the tax calculated under the AMT: $58,000. But it's important to note that you actually pay $47,000 of regular tax plus $11,000 of AMT, as we'll see below.
Reporting: To calculate and report your AMT liability you need to fill out Form 6251, Alternative Minimum Tax — Individuals.
Estimated tax: You're required to take your AMT liability into account in determining how much estimated tax you pay. For information about estimated tax payments, see Guide to Estimated Tax.
AMT Credit
Here's good news: a portion of your AMT liability — perhaps all — may reduce the tax you pay on future tax returns. Working with this AMT credit is a two-step process. First you find out how much credit is available, then you find out how much of the credit you can use.
Find the Available Credit
The first part of your task is to find out how much of the AMT liability from a prior year is eligible for the credit. This involves calculating the alternative minimum tax under a different set of rules — sort of an alternative AMT. What you're doing here is finding out how much of your alternative minimum tax liability came from timing items: items that allow you to delay reporting income, as opposed to items that actually reduce the amount of income or tax you report. If you're lucky, your entire AMT will be available as a credit in future years. But some people find that only a small portion, or none at all, is available for use as a credit.
Determine How Much AMT Credit You Can Use
If you have some AMT credit available from a prior year, you have to determine how much of the credit you can use in the current year. You can only use the AMT credit in a year when you're not paying alternative minimum tax.
The amount of credit you can use is based on the difference between your regular tax and the tax calculated under the AMT rules.
Example: Suppose you have $8,000 of AMT credit available from 2003. In 2004 your regular tax is $37,000. Your tax calculated under the AMT rules is $32,000. You don't have to pay AMT because your regular tax is higher than the tax calculated under the AMT rules. Better still, you're allowed to claim $5,000 of AMT credit, reducing your regular tax to $32,000.
In this example, you would still have $3,000 of AMT credit you haven't used. That amount will be available in 2005. In tax lingo, it's carried forward.
Of course, you can't claim more than the amount of the available credit. In the example, if the AMT credit available from 2003 was $2,700, then you would use the full amount of the credit in 2004. You would reduce your regular tax to $34,300 — not all the way to $32,000.
Reporting: To calculate and report your AMT credit you need to fill out Form 8801, Credit for Prior Year Minimum Tax — Individuals, Estates, and Trusts.
Top Ten Things that Cause
AMT Liability
An overview of some of the things that may cause you to pay alternative minimum tax (AMT).
This page provides a list of items that can cause (or contribute to) liability under the alternative minimum tax. The list isn't complete — there are other items that can contribute to AMT liability. Based on our experience, the items described below are likely to affect more people than other items. For a complete list, see Form 6251, Alternative Minimum Tax — Individuals and the instructions for that form. By the way, if you count more than 10 items below, just consider it a bonus.
Exemptions
Believe it or not, exemptions contribute to AMT liability. The exemptions you claim for yourself, your spouse and your dependents are not allowed when calculating alternative minimum tax. It's pretty rare (though not impossible) to see a tax return where someone had to pay AMT solely because of their exemptions, but the more exemptions you claim, the more likely it is that you'll have AMT liability when all is said and done.
Standard Deduction
Some 70% of American taxpayers claim the standard deduction (rather than itemizing). The standard deduction isn't allowed under the AMT. Usually this isn't a problem because the AMT generally hits people with higher incomes, and these people are more likely to claim itemized deductions. Yet it's worth noting that a deduction that's so widely used can contribute to AMT liability.
State and Local Taxes
If you itemize, there's a good chance you claim a deduction for state and local tax, including property tax and state income tax. For 2004 and 2005, you can claim a deduction for sales tax if you don't claim a deduction for state or local income tax. These deductions are not allowed under the AMT. If you live in a place where state and local taxes are high, you're more likely to be subject to the alternative minimum tax.
Interest on Second Mortgages
The AMT allows a deduction for interest on mortgage borrowings used to buy, build or improve your home. If you borrowed against your home for some other purpose, the interest deduction isn't allowed under the alternative minimum tax.
Medical Expenses
The AMT allows a medical expense deduction, but it's more limited than the deduction under the regular income tax. If you claim an itemized deduction for medical expenses, part or all of it will be disallowed when you calculate your alternative minimum tax.
Miscellaneous Itemized Deductions
Certain itemized deductions are available if your total in this general category is more than 2% of your adjusted gross income. Among the items here are unreimbursed employee expenses, tax preparation fees, and many investment expenses. You can't deduct these items under the AMT, though. If you claim a large number in this area, you could end up paying alternative minimum tax.
Various Credits
Many of the credits that are allowed when you calculate your regular income tax aren't allowed when you calculate your AMT. The more credits you claim, the more likely it is that you'll end up paying alternative minimum tax. Fortunately, Congress has extended relief for the "personal credits" in recent years.
Incentive Stock Options
Generally you don't report anything on your regular income tax at the time you exercise an incentive stock option. But you have to report income for purposes of the AMT. Exercising a large incentive stock option is almost certain to cause you to pay alternative minimum tax.
For more about the AMT consequences of incentive stock options see our online Guide to Compensation in Stock and Options — or our book, Consider Your Options.
Long-Term Capital Gains
Long-term capital gains receive the same preferential rate under the AMT as they do under the regular income tax. In theory, they shouldn't cause you to pay alternative minimum tax. In practice, it's possible to be stuck with AMT liability because of a large capital gain. The reasons are a little complicated, but mainly have to do with the fact that a large capital gain reduces or eliminates the AMT exemption amount, which is designed to protect low-income taxpayers from having to pay alternative minimum tax.
Tax-Exempt Interest
Interest that's exempt from the regular income tax may or may not be exempt from the AMT. It depends on complicated rules that are fully understood only by bond lawyers. Bonds that aren't exempt from AMT pay a slightly higher rate of interest to compensate for the fact that they aren't fully tax-exempt. If you invest in bonds that aren't exempt under the alternative minimum tax, you're a candidate for AMT liability.
Many mutual funds that provide exempt interest invest at least some of their money in bonds that aren't exempt under the AMT, to get a higher rate of interest. Their annual statement tells you how much of the exempt interest dividend you received during the year is taxable under the alternative minimum tax.
Tax Shelters
The Tax Reform Act of 1986 severely curtailed the ability to reduce income tax through tax shelters. Yet there are still some legitimate ways of reducing tax liability through investments in certain types of partnership or limited liability company arrangements involving such activities as oil and gas drilling. The AMT provides reduced tax benefits for these activities. You should always explore the alternative minimum tax consequences (among other things) before investing in a tax shelter.
AMT and Long-Term Capital Gain
Here's how you can encounter the alternative minimum tax (AMT) because of a long-term capital gain.
Congress didn't intend for the alternative minimum tax to apply merely because you have a long-term capital gain. When Congress reduced the capital gain rates in 1997 and again in 2003, it provided that the lower rates would apply under the AMT, too. But the way it works out, you may still pay AMT because of a large long-term capital gain.
The AMT Exemption
A major reason for paying AMT in the year of a large capital gain is the AMT exemption. This is a special deduction that's designed to prevent the alternative minimum tax from applying at lower income levels. The problem is that the AMT exemption is phased out when your income goes above a certain level. Capital gain is income, so it can reduce or eliminate your AMT exemption.
For example, if you're single and your income under the AMT rules is $112,500 or less, you're allowed an AMT exemption of $40,250. (This is the amount for 2003 and 2004; after that Congress will have to take action to prevent the exemption amount from falling back to a lower level.) Normally that's enough to prevent you from paying AMT unless you're able to claim special tax benefits that reduce your regular tax. But suppose your income is around that level before you add a $200,000 capital gain (sale of a real estate investment, or stock, or perhaps sale of a business you built up). Your tax on the capital gain is 15% under both the regular tax and the AMT: $30,000. But under the AMT, the added income wiped out your AMT exemption.
How big is the effect? The answer depends on how close you are to paying AMT before this happens. Overall, though, a large capital gain can cause you to incur $10,000 or more of AMT.
Do the Math
Here's how it works. For every $1,000 of added long-term capital gain, your regular income tax goes up by $150 (15%). When we move over to the AMT, the same $1,000 is taxed at 15%, but in addition eliminates $250 of your exemption amount, because the exemption is phased out at a rate of 25%. The exemption amount is used to reduce the amount of tax you pay on your ordinary income (the income that is taxed at either 26% or 28% under the AMT). So your tax under the AMT rules goes up by about $70, which is 28% of this added $250. You didn't really add another $250 of income, but your exemption amount went down by $250, and that exposed another $250 of your existing income to tax under the AMT.
Result? Under the AMT, adding $1,000 of long-term capital gain can increase your tax by as much as $220, consisting of the $150 tax on the gain itself and the $70 that hits you because the exemption amount is reduced. In effect, you're paying 22% on the gain under the AMT and 15% on the gain under the regular income tax, so a big capital gain can lead to a big AMT bill.
That doesn't necessarily mean you pay AMT every time you have a long-term capital gain. Most people have at least a little bit of a cushion between the amount of regular tax they pay and the level where they would have to start paying alternative minimum tax. (The size of your cushion depends on various items. See Top 10 Things that Cause AMT Liability.) Besides, the capital gain can cause some tax benefits to phase out under the regular tax, too. But there's a good chance you'll pay AMT if your income is in the range where the exemption amount is phased out and you have a large long-term capital gain.
More Bad News
There's more bad news. People who get caught by the AMT because of a large long-term capital gain usually don't qualify for the AMT credit in later years. The AMT is being caused by items that aren't considered timing items. Possibly you have some timing items in addition to the large capital gain, and in that case at least part of your AMT would be available as a credit in later years. Typically this added tax is just a dead loss.
What to Do
In many cases there isn't a heck of a lot you can do about this added tax. But if you're aware of the issue, you may be able to take measures to reduce the impact.
Timing your capital gains. In some situations you can control the year in which you report capital gains. You may be able to delay a sale until after the end of the year, or spread the gain over a number of years by using an installment sale. There's no simple answer to whether these measures help or hurt, so someone has to sharpen a pencil and grind out some numbers.
For example, your gain may be at a level where spreading it over a number of years will keep you out of the AMT — or at least reduce the impact. In this case an installment sale might be an attractive alternative. But suppose your gain is so large that it will phase out your AMT exemption amount many times over. In this situation, you may get a better result by reporting all the gain in one year, so you're only affecting one year's exemption amount.
Timing other items. Another way to plan for the AMT is to see if you can change the timing of other items that are affected by the tax. For example, if you make estimated payments of state income tax, you may try to schedule your payments so they don't fall in the same year as your large capital gain. Of course you have to take any potential penalties into account with the tax savings if you take this approach.
Dual Basis Assets
Some assets have a different basis under the alternative minimum tax (AMT) than under the regular tax.
Your basis in an asset, such as stock or real property, is used to determine how much gain or loss you report when you sell that asset. (Basis may be used for other purposes as well.) In some situations an asset may have one basis for regular income tax purposes and a different basis (usually higher) for alternative minimum tax purposes. When that happens, the AMT gain or loss on a sale of that asset won't be the same as the regular tax gain or loss. If you're not alert to this situation you may end up paying more tax than necessary.
What Causes Dual Basis
Ordinarily, your basis for an asset is simply the amount you paid for it plus any costs of acquisition (such as brokerage fees). But various events can cause an adjustment in the basis of an asset. For example, if you claim a deduction for depreciation of an asset, you reduce your basis in that asset by the amount of the deduction.
Some of the things that cause an adjustment in basis under the regular tax have a different treatment under the alternative minimum tax. For example, you may have to use a less favorable depreciation schedule for AMT purposes than you use for the regular tax. That means you've claimed smaller depreciation deductions for that asset under the AMT, and as a consequence will have a higher basis in the asset.
Example: Over the years you've used a piece of equipment that cost $20,000, you've claimed depreciation deductions of $12,000, leaving you with an adjusted basis of $8,000. During those same years, your AMT depreciation deductions for the same piece of equipment were $9,000. That means your AMT basis is $11,000.
Incentive Stock Options
One very important circumstance where you can have dual basis in an asset is when you exercise an incentive stock option. You have to report an adjustment for AMT purposes when you exercise an incentive stock option. As a result you may end up paying alternative minimum tax. But another result is that your AMT basis in the stock is increased by the amount of the adjustment.
Example: At a time when your company's stock was trading at $80 per share, you exercised an incentive stock option to purchase 500 shares at $24 per share. For AMT purposes you report an adjustment of $28,000 ($56 per share). The result is that you hold stock with a basis of $24 per share for regular tax purposes and $80 per share for AMT purposes.
Sale of a Dual Basis Asset
When you sell a dual basis asset, you report the difference between the regular tax gain or loss and the AMT gain or loss as an adjustment. If your AMT basis is higher (as is usually the case), you report this item as a negative adjustment. The result may be to reduce the amount of AMT you pay or increase the amount of AMT credit you can use.
Example: In the preceding example, you held stock with a basis of $24 per share for regular tax purposes and $80 per share for AMT purposes. If you sell the stock for $100 per share and have no other capital gains or losses, you should report a negative adjustment of $56 per share on your AMT calculation. If you have to pay AMT in the year of the sale, this adjustment will reduce your alternative minimum tax liability. If you don't have to pay alternative minimum tax in the year of the sale, the adjustment may make it possible to claim a larger portion of your AMT credit in that year.
The difference between the regular tax gain or loss and the AMT gain or loss isn't necessarily the same as the adjustment you reported when you exercised the option.
Example: You exercised an ISO with a spread of $50,000. During the period you held the stock its value declined, and you sold it for a profit of $12,000. Under the AMT you had a loss of $38,000, but because of the capital loss limitation only $3,000 of this loss is allowed in the current year (unless you have other capital gains to absorb the loss). The difference between your regular tax gain or loss (a gain of $12,000) and your AMT gain or loss (a loss of $3,000) is $15,000, and that's the amount of the adjustment you report when you sell the stock. You also have an AMT capital loss carryforward you can use in future years to recover more of your AMT credit if you didn't recover the entire amount in the year you made this sale.
Claiming AMT Credit
Are you overlooking an opportunity to claim AMT credit?
Certain items under the alternative minimum tax (AMT) give rise to a credit you can claim in a later year. You don't get to claim AMT credit if you paid AMT because you had a large number of exemptions, or a large itemized deduction for state and local taxes. Yet you may be able to claim AMT credit if you paid AMT because you exercised an incentive stock option. The credit can also apply when AMT arises from certain other "timing items," such as an AMT adjustment relating to accelerated depreciation.
Many people assume that if the AMT credit arises from exercising an incentive stock option, they can't claim the credit until they sell the shares they acquired by exercising the option. That's not the case. Selling ISO shares may help you claim a larger AMT credit, but you can claim the credit without selling shares — if your regular income tax is larger than the tax figured under the AMT rules.
Example: Suppose you exercised an incentive stock option in 1999, planning to sell the shares when they matured in 2000. You paid $10,000 of AMT on your 1999 tax return, but the share value dropped before you had a chance to sell. You decided to hold on and see if the value of the shares would recover. Several years later you still hold the shares, and now you're wondering if you can sell the shares to claim the credit.
Chances are that you could have recovered thousands of dollars in AMT credit already, on your tax returns for years 2000 through 2003. You didn't have to sell the shares to claim the credit. You simply had to file Form 8801 with your tax return. Depending on your situation — income level, filing status, number of personal exemptions and so forth — you may find that you were entitled to hundreds or even thousands of dollars of credit each year without selling the shares.
Here's the rule: If you pay AMT because of exercising an incentive stock option, you need to file Form 6251 for the year of exercise. Then every year after that you need to file both Form 6251 and Form 8801 until you've claimed the entire credit.
You Didn't File?
If you didn't file Form 8801 with your prior year returns, you need to amend those returns, for two reasons. One is that you could have a nice refund check coming. And the other is that there's no way to claim the credit in a later year without filling out this form for the years intervening between the year you paid AMT and the year you claimed the credit.
That's because the amount of credit available for you to claim depends on what happened in each year. You don't know the amount of your credit carryover to 2004 without filling out this form for 2003. But to fill it out for 2003, you need the numbers from Form 8801 for 2002 — and so on, back to the year you paid AMT.
Time is Running Out
As a general rule you're allowed to go back and amend tax returns for three years. If you failed to claim AMT credit that was available for your year 2001 tax return, you need to file the amended return by April 15, 2005 (or three years after the actual filing date if you applied for an extension and filed within the extension period).
Why not just forget about those prior years and claim the credit beginning in 2004? The answer is that it just doesn't work that way. The amount of credit that carries over from one year to the next depends on the specifics of your tax return for each intervening year, not that amount of credit you actually claim. In other words, use it or lose it!
Tax Rate Tables: Alternative Minimum Tax
The alternative minimum tax applies if it exceeds the regular tax (that is, the tax from the tax tables, rate schedules, etc.). You may have to pay the alternative minimum tax if you:
Claim a large number of exemptions.
Itemize deductions and claim large deductions for taxes and/or miscellaneous deductions subject to the 2% of AGI limit.
Take out a home mortgage or equity line of credit and use the proceeds for a purpose other than to buy, build, or substantially improve your home.
Exercise incentive stock options and did not dispose of the stock in the year of the exercise.
Other less common items may apply. See the instructions for Form 6251.
Alternative Minimum Tax | ||
| 2005 | 2006 |
Tax Rate on Alternative Minimum Taxable Income | 26% up to $175,000 ($87,500 MFS), 28% in excess of these amounts | Same |
Exemption | $40,250 (SGL,HH) | $42,500 (SGL,HH) |
Minimum Exemption for Dependent Children Under Age 14 for 2005 (18 for 2006) | Earned Income + $5,850 | Earned Income + $6,050 |
Last Update: May 18, 2006
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