Credit Card Network vs Issuer: What Is the Difference?

While credit card networks and card issuers both play a role when you use your credit card to make a purchase, they do different things. Credit card networks facilitate transactions between merchants and credit card issuers. Meanwhile, credit card issuers are the ones that provide credit cards to consumers and pay for transactions on the cardholder’s behalf when they use their card.

Where it can get confusing is that some credit card networks are also card issuers. To get a better understanding, keep reading for a closer look at the differences between a credit card network vs. issuer.

What Is a Credit Card Network?

Credit card networks are the party that creates a digital infrastructure that makes it possible for merchants to facilitate transactions between merchants and the credit card issuers — meaning they’re key to how credit cards work. In order to facilitate these transactions, the credit card networks charge the merchants an interchange fee, also known as a swipe fee.

Here’s an example of how this works: Let’s say someone walks into a clothing store and uses their credit card to buy a pair of pants. They swipe or tap their credit card to make the purchase. At this point, the store’s payment system will send the details of this transaction to the cardholder’s credit card network, which then relays the information to the credit card issuer. The credit card issuer decides whether or not to approve the transaction. Finally, the clothing store is alerted as to whether or not the transition was approved.

Essentially, credit card networks make it possible for businesses to accept credit cards as a form of payment, making them integral to what a credit card is. Credit card networks are also responsible for determining where certain credit cards are accepted, as not every merchant may accept all networks.

The Four Major Card Networks

The four major credit card networks that consumers are most likely to come across are:

•   American Express

•   Discover

•   Mastercard

•   Visa

All of these credit card networks have created their own digital infrastructure to facilitate transactions between credit card issuers and merchants. These four credit card networks are so commonly used that generally anywhere in the U.S. it’s possible to find a business that accepts one or more of the payment methods supported by these merchants. When traveling abroad, it’s more common to come across Visa and Mastercard networks.

Two of these popular payment networks — American Express and Discover — are also credit card issuers. However, their offerings as a credit card network are separate from their credit card offerings as an issuer.

Does It Matter Which Card Network You Use?

Which credit card network someone can use depends on the type of credit card they have and whether the credit card network that supports that card is available through the merchant where they want to make a purchase. Most merchants in the U.S. work with all of the major networks who support the most popular credit cards, so it shouldn’t matter too much which credit card network you have when shopping domestically. When traveling abroad, however, it’s important to have cash on hand in case the credit card network options are more limited.

Merchants are the ones who are more likely to be affected by the credit card networks that they use. This is due to the fact that credit card networks determine how much the merchant will pay in fees in order to use their processing system.

Recommended: Charge Cards Advantages and Disadvantages

What Are Credit Card Issuers?

Credit card issuers are the financial institutions that create and manage credit cards. They’re responsible for approving applicants, determining cardholder rewards and fees, and setting credit limits and the APR on a credit card.

Essentially, credit card issuers manage the entire experience of using a credit card. Cardholders work with their credit card issuer when they need to get a new card after losing one, when they have to make their credit card minimum payment, or when they want to check their current card balance.

Credit card issuers can be banks, credit unions, fintech companies, or other types of financial institutions. Some of the biggest credit card issuers in the U.S. are:

•   American Express

•   Bank of America

•   Barclays

•   Capital One

•   Chase

•   Citi

•   Discover

•   Synchrony Bank

•   U.S. Bank

•   Wells Fargo

Credit Card Network vs Issuer: What Is the Difference?

Credit card issuers and credit card payment networks are easy to confuse. The main difference is that credit card networks facilitate payments between merchants and credit card issuers whereas credit card issuers create and manage credit cards for consumers. If you have an issue with your credit card — like in the instance you want to dispute a credit card charge or request a credit card chargeback — it’s the issuer you’d go to.

These are the main differences to be aware of when it comes to credit card networks vs. issuers:

Credit Card Issuer Credit Card Payment Network

•   Creates credit cards

•   Manages credit cards

•   Accepts or declines applicants

•   Sets credit card fees

•   Determines interest rates and credit limits

•   Creates rewards offerings

•   Approves and declines transactions

•   Processes transactions between credit card companies and merchants

•   Creates the digital infrastructure that facilitates these transactions

•   Charges an interchange fee to merchants

•   Determines which credit cards can be used at which merchants

How Credit Card Networks and Issuers Work Together

Credit card networks and issuers need each other to function. Without a credit card network, consumers wouldn’t be able to use their card to shop with any merchants, and the credit card issuer’s product would go unused. Credit card networks create the infrastructure that allows merchants to accept credit cards as payment.

However, it’s up to the credit card issuers to approve or decline the transaction. The credit card issuer is also the one responsible for getting credit cards into consumers’ hands when they’re eligible and old enough to get a credit card, thus creating a need for the credit card networks’ services.

Recommended: When Are Credit Card Payments Due

Get a New SoFi Credit Card Online and Earn 2% Cash Back

Credit cards can be a useful financial tool, but it’s important to understand their ins and outs before swiping — including the difference between a credit card network vs. card issuer. Both are critical to credit card transactions, with the credit card network facilitating the transaction between the issuer and the merchant, and the credit card network approving or denying the transaction.

While the major credit card networks are available at most merchants in the U.S., this may not be the case abroad, which is why it’s important to be aware of when choosing a credit card. This among many other considerations, of course, such as searching for a good APR for a credit card and assessing the fees involved.

If you’re on the search for a new card, consider applying for a credit card with SoFi. SoFi cardholders earn 2% unlimited cash back when redeemed to save, invest, or pay down eligible SoFi debt. Cardholders earn 1% cash back when redeemed for a statement credit.1

Learn more about the SoFi credit card today!

FAQ

What is a credit card network?

A credit card network is the party that creates the necessary infrastructure to process transactions between a credit card issuer and a merchant. Whenever someone makes a purchase with a credit card, it is processed by a credit card network. In return for processing the transaction, the merchant pays the credit card network an interchange fee, which is how the credit card networks make money.

How do I know my credit card issuer?

To find out a credit card’s issuer, simply look at your credit card. There will be a string of numbers on the credit card, and the first six to eight digits represent the Bank Identification Number (BIN) or the Issuer Identification Number (IIN). The Issuer identification number identifies who the credit card issuer is.

Who is the largest credit card issuer?

The four largest credit card networks are American Express, Discover, Mastercard, and Visa. Most merchants in the U.S. work with all four credit card networks. When traveling abroad, it’s more common to come across Visa and Mastercard networks.


1See Rewards Details at SoFi.com/card/rewards.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
The SoFi Credit Card is issued by The Bank of Missouri (TBOM) (“Issuer”) pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Photo credit: iStock/Poike
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Source: sofi.com

Swimming Pool Financing: What to Know and Best Pool Loans

Who doesn’t love a relaxing dip in the swimming pool on a sweltering, hot day? And when that swimming pool is in your backyard, it’s even better.

You could bring your friends together over the summer by hosting pool parties. You could teach your kids to swim right at home. If you rent out your place on Airbnb or Vrbo, you could fetch top dollar for the additional amenity.

Sounds like a dream.

If your house didn’t already come with a pool when you moved in, there’s still a possibility of turning your pool fantasies into reality if you have enough space.

And if you don’t have tens of thousands of dollars upfront to spend on a pool construction project, there’s always pool financing.

What Is Pool Financing?

Pool financing is when you borrow money from a financial institution or lender to cover the costs of building a pool. Pool construction typically costs anywhere from $17,971 to $46,481 with the average cost being around $32,059, according to HomeAdvisor.

Of course, the cost will vary based on the size, the type of pool, your location and where you plan to build the pool on your property. Adding a small plunge pool to a cleared, flat space in your backyard will cost considerably less than adding a resort-style pool with waterfalls and a jacuzzi to your property that requires you to cut down multiple trees and level the land.

Besides the personal enjoyment that comes along with having a pool, this addition to your home could boost your property value and make your home more desirable to future buyers, renters or short-term guests.

The high cost to install a pool means that many people rely on pool financing. There are several ways to go about getting a loan for a pool.

Options for Pool Financing

If you want to add a pool to your property, but don’t have the cash upfront, you have several options.

You could get a personal loan (sometimes referred to as a pool loan), a home equity loan, a home equity line of credit or a cash-out refinance. Some pool builders or retailers offer in-house loan programs through their partner lenders. You might also consider using a credit card as your method of financing.

Personal Loans (AKA Pool Loans)

Pool loans are unsecured personal loans offered by banks, credit unions and online lenders. You may be able to get a pool loan through the financial institution where you already have existing accounts, or you might choose to get financed from an online lender or financing consultant company that deals exclusively with pool loans and home improvement loans.

One of the benefits of personal loans is that you don’t have to offer up any collateral. If you stop making payments and default on your loan, you don’t have to worry about your house being foreclosed — though the lender still could sue you. If approved for an unsecured personal loan, you can usually receive funds within a couple of days, much quicker than some other financing options.

Because you don’t have any collateral backing the loan, however, these financing options can come with higher interest rates. Interest rates can start around 3% and go up to about 36%.

A borrower’s credit score, credit history, income and existing debt load all affect the interest rate.

Personal loan terms generally range from about two to 12 years — though some pool loans can have terms up to 20 years or more. You can get loans from $1,000 to over $200,000 to fund simple above-ground pools or elaborate in-ground pool projects.

Home Equity Loans

Home equity loans are essentially when you tap into the equity you have in your home and take out a second mortgage. If you have a significant amount of equity, you could finance your pool project this way.

Home equity loans generally have lower interest rates than personal loans because your home is used as collateral. If you default on your loan, the lender could foreclose on your home.

Also, with home equity loans you’ll face additional fees, like a home appraisal cost and closing costs, so be sure to factor that into your decision making.

Home Equity Line of Credit (HELOC)

A home equity line of credit or HELOC also taps into the equity you have in your home, but it’s a revolving line of credit that you can use for several years instead of a loan that provides you with one lump sum of cash.

With a HELOC, you can pull out funds as needed to finance your pool construction and other home improvement projects. While you’ll only pay back what you borrow, the interest on HELOCs are usually adjustable rates rather than fixed rates. That means your monthly payments can increase during your repayment period.

Cash-Out Refinance

A cash-out refinance is essentially when you replace your existing mortgage with a new mortgage that exceeds what you owe on the house and you take out the difference in cash.

You can then use that lump sum to pay for your pool, and you’ll pay it back throughout the course of your new mortgage — over the next 10 to 30 years depending on your loan terms.

A cash-out refinance might make sense if you’re able to get a lower interest rate than your current mortgage. However, just like with a home equity loan or HELOC, your home is being used as collateral, and you’ll face additional fees involved in the refinancing process.

In-House Financing from the Pool Builder

Some pool companies may directly provide you with pool financing offers, so you don’t have to search for financing on your own. The pool companies typically aren’t offering the loan to you themselves, but they’ve partnered with a lender or network of lenders to provide you with financing options.

This type of financing is the same as applying for a personal loan or pool loan. The benefit is that you get a one-stop-shop experience instead of having to reach out to lenders individually. Your pool contractor may even be able to assist you through the loan process.

The downside is that you could potentially miss out on a better deal by only getting quotes from the pool company’s partnered lenders.

Credit Cards

Because of their high interest rates, credit cards are usually not recommended as options for financing a new swimming pool. However, there can be situations where it’d make sense.

If you’re able to open a zero-interest credit card and pay the balance back before the zero-interest period expires, paying with a credit card can be a great option — especially if it’s a rewards card that’ll give you points, airline miles or cash-back for spending or a bonus just for opening the account.

If you choose this financing option, be sure that you’ll be able to pay off the balance in a relatively short period of time. Most credit cards only offer zero-interest periods for the first 12 to 21 months. After that your interest rate could go up to 18% or more.

Pool Loan Comparisons

Getting quotes from multiple lenders will help you select the best deal for your pool construction project. Here’s what a few top lenders are currently offering.

Lyon Financial

Best for Long Loan Terms

4.5 out of 5 Overall

Key Features

  • Pays the pool contractor directly
  • 600 minimum credit score
  • Offers military discounts

Lyon Financial is a financing consultant that has been in business since 1979 and works with a network of lenders to provide loans for pool and home improvement projects. Unlike personal loans that provide the borrower with the funds upfront, Lyon Financial disburses the funding directly to the pool builder in stages as the project progresses.

Lyon Financial

APR (interest rates)

As low as 2.99%

Maximum loan amount

$200,000

Loan terms

Up to 25 years

HFS Financial

Best for Large Pool Loans

4 out of 5 Overall

Key Features

  • Provides loans up to $500,000
  • Most loans are funded within 48 hours
  • No prepayment penalties

HFS Financial is a financing company that partners with third-party lenders to provide homeowners with the money to construct pools on their property. Use their “60 second loan application” to kick off the loan process. Funds are typically dispersed within 48 hours.

HFS Financial

APR (interest rates)

As low as 2.99%

Maximum loan amount

$500,000

Loan terms

Up to 20 years

Viking Capital

Best for Customer Service

4.5 out of 5 Overall

Key Features

  • Supports a network of pool builders
  • 650 minimum credit score
  • Offers military discounts

Viking Capital is a family-owned business that has been in operation since 1999. The company acts in the capacity of a financial consultant, and partners with a network of lenders to provide multiple loan offers for pool construction projects.

Viking Capital

APR (interest rates)

As low as 5.49%

Maximum loan amount

$125,000

Loan terms

Up to 20 years

5 Steps to Securing Pool Financing

Follow these steps to secure a loan for your pool.

1. Determine What Monthly Payments You Can Afford

Before you dig into your pool financing options, you should be clear on what monthly payment you can afford. Having a pool is a luxury. You don’t want a pool construction project to jeopardize your ability to pay your bills and meet your needs.

Figure out how much disposable income you have to work with by comparing your monthly earnings to how much you typically spend each month.

Don’t forget to factor in maintenance and additional utilities usage when estimating how much you can afford to go toward pool costs.

2. Check Your Credit History

When you’re financing a pool, having a good or excellent credit score will help you secure a loan with a low interest rate. Ideally, your credit score should be 700 or above.

Some lenders may offer you financing if you have fair or poor credit, however you may have to pay a lot more over time due to higher interest rates.

To boost your credit score before applying for a pool loan, follow these steps.

3. Get Cost Estimates for Your Pool

Talk with pool builders to get estimates on the total cost of your desired pool project. Get estimates from multiple pool companies so you have a better idea of what options exist.

If the estimates come in higher than you expected, consider scaling down the size of your pool project or using different materials.

Make sure any additional work — like constructing safety fencing — is included in your estimate.

4. Choose What Type of Financing Your Prefer and Shop Around For Lenders

After you figure out what options are available within your budget, it’s time to decide on what type of financing you prefer.

Will you be applying for an unsecured loan or do you plan to tap into your home equity or refinance your mortgage? Are you going to purchase a small above-ground pool that you could pay off in 15 months using a zero-interest credit card?

Once you know what type of financing you’ll go with, reach out to multiple lenders so you can compare offers and choose the best deal. You may be able to use a competitor’s lower offer to get a lender to reduce their offer even further.

5. Complete Loan Application and Sign Off on All Paperwork

The final step to get your pool project financed is to complete any additional paperwork and sign off on the dotted line. Expect to provide information about your income and other existing debt.

Your credit score may take a dip after taking on new debt, but it should rebound as you make regular, on-time payments.

Alternatives to Pool Financing

Taking on debt for a new pool doesn’t have to be your only option.

You could put off your pool construction project for a few years and save up for the expense in cash. Open a high-yield savings account to use as a sinking fund and don’t make withdrawals from the account until you’ve reached your savings goal.

If you think you’re outgrowing your current home — or are looking to downsize — wait until you’re ready to move and then look for a new home with an existing pool.

Or if you’re okay with not having a pool in your backyard, you’ll save money by visiting public pools or renting private pools from Swimply on occasion. This is a good option if you think you wouldn’t get much regular use of having your own pool.

Frequently Asked Questions

How many years can you refinance a pool for?

You can finance a pool over 20 to 30 years, depending on the type of financing you secure. If you need decades to pay back the loan, you might consider refinancing your mortgage or taking out a second mortgage. Private, unsecured loans typically need to be repaid sooner, however some have loan terms of 20 years or more.

What is the best way to finance a pool?

It all depends on your individual circumstances and preferences. If you’ve built up a ton of equity in your home and want to spread your debt payments over a lot of time, you might lean toward a home equity loan or HELOC. If you’ve got excellent credit and would qualify for a low-interest personal loan (unsecured loan), that might be the better option.

What credit score do you need for pool financing?

Ideally, you’ll want to have a credit score of 700 or higher to get the best interest rates for pool financing. Some companies, however, will accept lower credit scores. As a result, your loan may have a higher interest rate.

What is a good interest rate for a pool loan?

An interest rate around 5% is a good deal for a pool loan. You may be able to find rates even lower if you have excellent credit.

Nicole Dow is a senior writer at The Penny Hoarder.

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Source: thepennyhoarder.com

Understanding the Parent Plus Loan Forgiveness Program

Parent PLUS loan forgiveness provides financial relief to parents who borrowed money to cover the cost of their children’s college or career school. It isn’t always a quick fix, but there are certain federal and private programs that might offer the financial assistance needed to help them get on track.

To receive federal relief for Parent PLUS loans, parent borrowers have a few options.

They can consolidate the loan in order to enroll in an Income-Contingent Repayment plan after 25 years, pursue Public Service Loan Forgiveness after 10 years, or choose from a number of private student loan assistance programs or refinancing options.

Keep reading to learn more about what the available student loan forgiveness possibilities are for Parent PLUS loans.

Will Parent Plus Loans Be Included in Student Loan Forgiveness?

Parent PLUS loans are eligible for several of the same student loan forgiveness programs as federal student loans for students, including:

•   Borrower Defense Loan Discharge

•   Total and Permanent Disability (TPD) Discharge

•   Public Service Loan Forgiveness (PSLF)

That said, Parent PLUS loans generally have fewer repayment options in the first place and the eligibility requirements for these forgiveness programs can be strict and may require borrowers to consolidate their PLUS loan, such as with PSLF. This can make it tricky for borrowers to navigate how to use these federal relief programs to their advantage.

Refinancing is another option for Parent PLUS loan borrowers — applying for a new private student loan with an, ideally, lower interest rate. That said, some lenders offer less flexibility for repayment and the fine print can be lengthy, so there’s an inherent risk associated with refinancing Parent PLUS loans. It’s also worth noting that refinancing a PLUS loan will eliminate it from any federal repayment plans or forgiveness options.

Recommended: What Is a Parent PLUS Loan?

Parent Student Loan Forgiveness Program

When it comes to student loan forgiveness, the programs aren’t just available for the students. Parents who are on the hook for student loan debt can also qualify for student loan forgiveness.

As previously mentioned, a Parent PLUS loan may be eligible for Parent Student Loan Forgiveness through two specific federal programs:

•   Income-Contingent Repayment

•   The Public Service Loan Forgiveness (PSLF) Program

There are also a few private student loan forgiveness options, which we’ll get into below.

Income-Contingent Repayment (ICR)

An Income-Contingent Repayment plan, or ICR plan, is the only income-driven repayment plan that’s available for Parent PLUS borrowers. In order to qualify, parent borrowers must first consolidate their loans into a Direct Consolidation Loan, then repay that loan under the ICR plan.

•   A Parent PLUS loan that’s included in a Direct Consolidation Loan could be eligible for Income-Contingent Repayment, but only if the borrower entered their repayment period on or after July 1, 2006.

•   A Parent PLUS loan that’s included in the Federal Direct Loan Program or the Federal Family Education Loan Program (FFELP) is also eligible for ICR if it’s included in the Federal Direct Consolidation Loan.

ICR determines a borrower’s monthly payment based on 20% of their discretionary income or the amount by which their AGI exceeds 100% of the poverty line. After a 25-year repayment term, or 300 payments, the remaining loan balance will be forgiven.

Typically, the IRS considers canceled debt a form of taxable income, but the American Rescue Plan Act of 2021 made all student loan forgiveness tax-free through 2025.

Public Service Loan Forgiveness (PSLF)

Borrowers with Parent PLUS loans may be eligible for Public Service Loan Forgiveness Program, but in order to pursue that option must first consolidate the Parent PLUS loan into a Direct Consolidation Loan.

Then, after they’ve made 120 qualifying payments (ten year’s worth), borrowers become eligible for the Public Service Loan Forgiveness Program (PSLF). The parent borrower (not the student) must be employed full-time in a qualifying public service job. PSLF also has strict requirements such as certifying employment so it’s important to follow instructions closely if pursuing this option.

The Temporary Expanded Public Service Loan Forgiveness (TEPSLF) is another option for Parent PLUS borrowers if some or all of their 120 qualifying payments were made under either a graduated repayment plan or an extended repayment plan. The catch here is that the last year of their payments must have been at least as much as they would if they had paid under an ICR plan.

Refinance Parent Plus Loans

Refinancing a Parent PLUS loan is another option that could provide some financial relief.

For borrowers who don’t qualify for any of the loan forgiveness options above, it may be possible to lower their monthly payments by refinancing Parent PLUS student loans with a private lender.

In doing so, you’ll lose the government benefits associated with your federal loans, as briefly mentioned above, such as:

•   Student loan forgiveness

•   Forbearance options or options to defer your student loans

•   Choice of repayment options

Refinancing a Parent PLUS loan into the dependent’s name is another option, which some borrowers opt for once their child has graduated and started working. Not all loan servicers are willing to offer this type of refinancing option, though.

Transfer Parent Plus Student Loan to Student

Transferring Parent PLUS loans to a student can be complicated. There isn’t a federal loan program available that will conduct this exchange, and, as mentioned above, some private lenders won’t offer this option.

That said, some private lenders, like SoFi, allow dependents to take out a refinanced student loan and use it to pay off the PLUS loan of their parent.

Alternatives to Student Loan Forgiveness Parent Plus

When it comes to Parent PLUS loans, there are a few ways to get out of student loan debt legally, including the scenarios outlined below.

Student Loan Forgiveness Death of Parent

Federal student loans qualify for loan discharge when the borrower passes away. In the case of Parent PLUS loans, they are also discharged if the student who received the borrowed funds passes away.

In order to qualify for federal loan discharge due to death, borrowers must provide a copy of a death certificate to either the U.S. Department of Education or the loan servicer.

Recommended: Can Student Loans Be Discharged?

State Parent PLUS Student Loan Forgiveness Programs

Many individual states offer some sort of student loan repayment assistance or student loan forgiveness programs for Parent PLUS loan borrowers.

For an overview of options available in different states, you can take a look at The College Investor’s State-by-State Guide to Student Loan Forgiveness . For information on student loan and aid available take a look at the SoFi guide on state-by-state student aid available for borrowers.

Disability

In the event of the borrower becoming totally and permanently disabled, a Parent PLUS loan may be discharged. To qualify for a Total and Permanent Disability (TPD) discharge , borrowers must complete and submit a TPD discharge application, as well as documentation showing that they meet the requirements for being considered totally and permanently disabled. Note that in order to qualify for TPD, the parent borrower must be considered disabled. This type of forgiveness does not apply to Parent PLUS loans in the event that the student becomes disabled.

Bankruptcy

If a borrower can demonstrate undue financial hardship upon repaying the student loan, they might be able to discharge their Parent PLUS loan. Note having student loans discharged in bankruptcy is extremely rare. Proving “undue hardship” varies depending on the court that’s granting it, but most rulings abide by the Brunner test, which requires the debtor to meet all three of these criteria in order to discharge the student loan:

•   Poverty – Maintaining a minimal standard of living for the borrower and their dependents is deemed impossible if they’re forced to repay their student loans.

•   Persistence – The borrower’s current financial situation will likely continue for the majority of the repayment period.

•   Good faith – The borrower has made a “good faith” effort to repay their student loans.

Closed School Discharge

For parent borrowers whose children attended a school that closed while they were enrolled or who withdrew from the school during a “lookback period” of 120 days before its closure, a Closed School Discharge is another available form of student loan forgiveness.

In some circumstances, the government may extend the lookback period even further. For example, The Department of Education has changed the lookback period to 180 days for loans that were issued after July 1, 2020.

Borrower Defense

Borrower Defense Loan Discharge is available to Parent PLUS borrowers whose children were misled by their college or university or whose college or university engaged in certain forms of misconduct or violation of state laws.

To make a case for borrower defense, the Parent PLUS borrower must be able to demonstrate that their school violated a state law directly related to their federal student loan.

Explore Private Student Loan Options for Parents

Banks, credit unions, state loan agencies and other lenders typically offer private student loans for parents who want to help their children pay for college and refinancing options for parents and students.

Refinancing options will vary by lenders and some may be willing to refinance a Parent PLUS loan into a private refinanced loan in the student’s name. In addition to competitive interest rates and member benefits, SoFi does allow students to take over their parent’s loan during the refinancing process. Interest rates and terms may vary based on individual criteria such as income, credit score, and history.

If you decide refinancing a Parent PLUS loan makes sense for you, SoFi makes it simple. The application process is entirely online and SoFi offers flexible repayment options to help you land a loan that fits your budget. You can find your rate in a few minutes and checking if you prequalify won’t affect your credit score.*

The Takeaway

Parent PLUS Loan forgiveness offers financial relief to parents who borrowed money to help their child pay for college.

To receive federal relief for Parent PLUS loans, parent borrowers can enroll in an Income-Contingent Repayment plan, pursue Public Service Loan Forgiveness, transfer their student loan to another student, take advantage of a state Parent PLUS student loan forgiveness program, or opt for private student loan assistance or refinancing.

Learn more about refinancing a Parent PLUS loan with SoFi.


*Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL SEPTEMBER 1, 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’swebsite .
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Source: sofi.com

3 Instances When a Landlord Can Legally Break a Rental Lease

Read this to understand when you can legally break a lease agreement.

Even before the pandemic, landlords filed 3.6 million eviction cases on average in the U.S. each year. The process is emotional and difficult for everyone involved, but there are circumstances for which you as a landlord will have to break a lease agreement early.

If you’ve got a month-to-month lease agreement, either party can terminate at any time with proper notification, at a minimum of 30 days. But if you’ve got a fixed-term lease agreement with a tenant, such as a one-year lease, you can’t break the lease mid-way through on a whim.

When can you legally terminate a lease agreement early?

Breaking a lease agreement with cause

You’ve got a lease agreement that’s legally binding that the tenant signed before moving in. If that tenant violates the lease agreement by having an unapproved roommate, unauthorized pet, unpaid rent, has caused major damage or conducted illegal activities, you have every right to terminate their lease “with cause.”

In this instance, you would send your tenant a “cure or quit” notice. Either they “cure” the problem by paying rent owed, for example, or they “quit” the property. You can even send an “unconditional” quit notice if the issue at hand isn’t cured. For example, if the tenant alters or damages part of the property without your consent and there’s no way to fix the problem. Check your state laws on these types of lease terminations.

Eviction notice.

Eviction notice.

Can a landlord break a lease agreement without cause?

You can do so but you must include the reasons for this kind of early termination in the tenant’s lease agreement. If it’s not in the agreement, you can’t just force a tenant out on a whim.

Add a clause to your lease agreement that allows you to break a lease with 30- or 60-days’ notice so the tenant has time to find another place to live. Work with an attorney to make sure the language is accurate. Be upfront and clear in your language and point it out to the tenant at signing. There’s no reason to hide your intentions. If you know well in advance that you may have to break the lease, sign a month-to-month lease.

Reasons to break the lease early

There are certain circumstances under which you can break a lease, including:

1. You want to sell the property

You can sell whenever you want, but you must have a clause in the lease agreement in order to terminate the lease legally. Lease contracts will transfer along with the property and the new owner has to abide by them. Some buyers want properties that are already tenanted.

Decide if you want the tenants on the property during the sales process or if you want them out before putting the property on the market. Also, check whether your state requires you to offer existing tenants the first right of refusal.

You want to keep your tenants happy if they’re staying on the premises. And they do have some legal rights, including 24-hour notice of showings, the right to stay during a showing and the transfer of their security deposit to the new owner once the property sells.

Lay hardwood floors

Lay hardwood floors

2. You need to renovate the property

As a landlord, you must keep your property safe and habitable. If you need full access to the property in order to renovate and remodel to keep your property in good condition, you can terminate a lease. If the upgrades are going to cause health and safety issues, you can terminate a lease early. Again, you must have a clause in the lease agreement in order to terminate the lease legally.

3. You need to move into the rental space

If you’re renting out a house, for example, and you need to move back in, you can legally terminate the lease early.

How to terminate a lease

There are a few steps you must follow to legally end a lease to avoid a tenant possibly filing a claim in court.

Send a notice to the tenant letting them know that you’re terminating their lease. Check your state laws on how to write and deliver this termination notice. There are specific requirements for doing this.

Depending on the reasons you’re giving this notice, it may state the tenant’s transgression and warn them that they must vacate the property or face eviction. Or, you might give the tenant a few days to act on fixing whatever they did wrong, e.g., find a new home for their unauthorized pet or pay any rent owed. Again, check your state laws.

If the tenant doesn’t comply with the notice, you may have to file an eviction lawsuit.

Make sure it

Make sure it

When a landlord is not allowed to break the lease early

The bottom line is if you haven’t included a clause in your lease that you may terminate the lease early, you can’t just go ahead and do so. And your state may have a list of circumstances under which you’re restricted from ending a lease early. For example, there are usually rules around breaking the lease on a rent-controlled apartment.

You may just have to wait

Nobody likes the eviction process, and you don’t want to end up in court. But sometimes, you must remove a tenant. If it’s possible, your best bet is to wait until lease renewal time and not renew the lease. Depending on your state laws, you may need to give 30- to 60-days’ notice on non-renewal.

If you didn’t have an early termination clause in your lease agreement, but you need your tenant to move out, you can pay them, a.k.a., offering cash for keys. You give a tenant enough money to cover their moving costs and a deposit on another place they might rent.

Always be open and communicative with your tenants for the best outcome. In all cases, if you’re a property manager or landlord and you need to break a lease agreement, check your state laws and get an attorney’s input.

Source: rent.com

Should I File a Home Insurance Claim? Pros, Cons, When It Makes Sense

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Additional Resources

You love the big cherry tree in your home’s front yard. Each spring, it explodes in a riot of bright pink flowers. Each summer, it drops sour fruit that perks up nicely in a sugary pie. 

Until it doesn’t. One summer day, your family comes home to find one of the cherry tree’s limbs in your living room, felled by a strong thunderstorm. The damage is extensive: two broken windows, a caved-in window sill, and serious water and impact damage to the living room floor and furniture.  

Once the initial shock wears off, you prepare to file a home insurance claim. But then, you start to ask questions. What if your insurance company denies the water damage portion of the claim? What if my home insurance premiums spike? How much will I have to pay out of pocket due to your policy’s high deductible? Should I even file this claim? 


Should I File a Home Insurance Claim?

The fact that a seemingly serious event like a tree falling through your house is such a close call teaches us an important lesson about homeowners insurance: It’s not always in your best interest to file a claim. Even when they cause short-term financial pain, some incidents aren’t worth filing over. 


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Plus, standard homeowners insurance policies exclude certain types of incidents that can cause serious financial stress for homeowners, such as floods and earthquakes. You need separate insurance policies if your home is at risk of these uncovered perils.

Pros & Cons of Filing a Homeowners Insurance Claim

If you’re considering filing a homeowners insurance claim, you’re probably facing a hefty bill for cleanup and repairs or a long list of damaged items to replace. Or perhaps you’re staring down a lawsuit brought by a guest or worker who sustained serious injuries on your property.  

In any case, you need to figure out whether it makes sense to go through with your claim — and fast. That means objectively assessing the pros and cons of doing so.

Pros of Filing a Home Insurance Claim

Depending on the circumstances, filing a home insurance claim has significant financial benefits.

  1. It Helps You Pay for Repairs. If your claim is approved, you can use the payout to offset the cost of repairs and restore your home to its previous condition. Without this financial assistance, you might find yourself cutting corners or making ill-advised financial moves to cover the cost, such as dipping into your 401(k). 
  2. It Helps You Replace Damaged or Stolen Goods. Your homeowners insurance policy could help offset the cost of replacing possessions damaged in a naturally occurring incident like a storm or fire. If your home was burglarized or vandalized, the proceeds could cover the cost of replacing stolen property as well. Depending on your policy, you could receive the items’ actual cash value or replacement cost, which is the cost of buying them new.
  3. Repairs Help Maintain Your Home’s Value. Homebuyers don’t pay top dollar for properties with fire-damaged siding, broken windows, or gaping holes in the roof. Your home insurance payout helps restore your home’s value with minimal out-of-pocket cost.

Cons of Filing a Home Insurance Claim

Filing a claim on your homeowners insurance policy isn’t always a slam dunk. The claims process has some hidden and not-so-hidden pitfalls that could leave you worse off than when you began.

  1. Your Insurance Premium May Go Up. Although this isn’t guaranteed, your homeowners insurance rates could rise after you file your claim. Exactly how much depends on the type of claim you file, the size of the claim, and your previous claims history. Generally, liability claims bump premiums more than claims related to fire, vandalism, or natural disasters.
  2. Too Many Claims Mean Your Policy May Not Be Renewed. A rate increase is unwelcome but manageable. A canceled policy is far more serious. If insurers see you as riskier than the typical homeowner, you could have trouble getting coverage on your own. Your lender might need to step in and take out a policy on your behalf — often at a much higher premium than your old policy.
  3. If You Get a Claim-Free Discount, You Could Lose It. Once you file a home insurance claim, your claims history is no longer spotless. That matters because many home insurance companies offer claim-free discounts for homeowners who never file claims.

When You SHOULD File a Home Insurance Claim

So, you’re thinking about filing a home insurance claim. How can you be sure you’re making the right call?

Use these tests to assess your would-be claim. The more that apply to you, the stronger your position.

Repair or Replacement Costs More Than Your Deductible

This is the first test your would-be claim must pass. If it doesn’t, there’s no point in filing a claim.

Your deductible is the amount you must pay out of pocket before your home insurance kicks in. Your policy documents should clearly specify this amount. It’s either expressed as a flat dollar amount or a percentage of the policy’s total coverage amount.

Dollar amount deductibles typically range from $500 to $2,500, with $1,000 being a common value. Some policies have more than one deductible, depending on the type of property damage. Separate “wind and hail” deductibles are common, for example — and often higher than the standard deductible.

If your home sustained significant damage or loss, your claim value should easily exceed your deductible. For example, if you expect repairs to cost $20,000 and your deductible is $2,000, your insurance company covers $18,000 — 90% of the total cost.

On the other hand, if you expect repairs to cost $3,000, your insurance company only covers $1,000 — 33% of the total cost. That’s a closer call because filing a claim could result in higher home insurance premiums that eventually offset your payout. 

The Event Is Covered by Your Policy

Your homeowners insurance company isn’t obligated to provide reimbursement for every type of damage or loss to your home. In fact, while your policy covers a lot, it probably excludes specific events, known as exclusions.

Common exclusions include but aren’t limited to:

  • Earthquake
  • Flood
  • Damage and liability issues caused by poor maintenance 
  • Insect infestations
  • Mold
  • Personal property losses and liability issues caused by power outages or power surges
  • Intentional damage caused by a resident
  • Damage caused by war or nuclear fallout
  • Injuries caused by aggressive dogs
  • Issues related to or caused by home-based businesses
  • Costs related to building code violations

You may need to purchase separate insurance policies to cover some of these perils. For example, your lender may require you to carry flood insurance if you live in a recognized flood zone. 

Other add-on policies are optional but often a good idea. For example, if you run a business out of your home, you should consider carrying business insurance to protect against inventory or equipment losses or damage to your workspace.

You’ve Suffered Significant Loss or Damage

Often, it’s not a close call. If your home is seriously damaged or destroyed in an event that’s covered by your policy, you absolutely should file a homeowners insurance claim. Otherwise, you’ll be on the hook for tens or hundreds of thousands of dollars in repair or replacement costs.

If you have any doubts about the extent of the damage to your home, get a few repair quotes from building contractors in your area. You can also talk to your insurance agent or ask your home insurance company to send out an insurance claims adjuster before you file.

You Haven’t Made a Claim in the Past 5 Years

Approved homeowners insurance claims typically remain on your insurance record for five years after they’re made. 

This record is known as the Comprehensive Loss Underwriting Exchange (CLUE) database. When you make a claim, your insurer checks its own records and the CLUE database to see whether you’ve made any other claims in the past five years.

If you have made a claim in the past five years, expect your insurance premiums to spike after your second claim is approved. 

For fire, theft, and general liability claims, the increase could amount to 50% or more of your previous premium. A weather-related claim won’t increase your premium quite as much, but you’ll still notice a jump.


When You Should NOT File a Home Insurance Claim

It’s not always worth it to file a home insurance claim. 

Certain situations, such as minor damage that costs less to repair than your insurance deductible, all but rule out a claim. Others, such as an active claim history, bring an elevated risk of a denied claim.

If any of these situations apply to you, think twice about filing a home insurance claim.

Repair or Replacement Costs Less Than Your Deductible

If the damage or loss is relatively minor, your deductible could be too high to bother filing a claim. There’s no point in filing a claim — and potentially increasing your policy premiums — if you won’t even receive a payout.

Even if it’s a close call, be mindful of the potential for your premiums to go up after a successful claim. A claim worth $20,000 probably makes sense, but a claim worth $3,000 or $4,000 might actually set you back.

Damage Was Caused by Lack of Maintenance or Normal Wear & Tear

An event that appears to be covered by your policy might not be if the insurance adjuster can argue that it was caused by neglect, poor maintenance, or even normal wear and tear.

For example, let’s say your home loses heat during the winter, causing a water pipe to burst in your ceiling. Homeowners insurance policies generally cover this type of event — if the burst pipe was in good condition to begin with. If the pipe was already heavily corroded, your insurer might blame you for not replacing it sooner. They could deny the claim altogether.

The Event Isn’t Covered by Your Policy

It’s often quite easy to figure out whether a particular event is eligible for home insurance coverage. If your home collapses in an earthquake and your policy specifically rules out claims for earthquake damage, you’re out of luck. Hopefully, you have earthquake insurance.

But closer calls are more common than you’d think. If your resident termite colony worsens an existing foundation issue that eventually spurs a costly repair, your insurer could argue that the entire claim falls under the insect damage exclusion. 

When in doubt, it’s worthwhile to begin the claims process anyway. If you don’t like what the insurance adjuster has to say, you can drop the claim without increasing your insurance rates. 

Or you can hire a public adjuster — an independent insurance adjuster who can make a stronger case to your insurance company. Public adjusters usually work on contingency, so they only get paid if your claim is successful.

You’ve Made Multiple Claims in the Past 5 Years

The more homeowners insurance claims you make in a five-year period, the more your insurance rates increase after a successful new claim. 

Make too many claims in too short a period, and your insurance company could drop you altogether. If you’re unable to find replacement coverage, your lender could take out a policy on your behalf. Expect this lender policy to cost a lot more than your old policy.

All that said, you shouldn’t automatically rule out a new homeowners insurance claim just because you recently got an insurance payout or two. If your home is seriously damaged or destroyed by a covered event, it’s probably still worth it to file. Just be ready to pay higher premiums on the back end.


Final Word

Some say the best way to save money on homeowners insurance is not to file a claim at all. There’s a grain of truth to that, but don’t take it too literally. 

If your home is seriously damaged in an event that’s covered by your policy, a home insurance claim is absolutely warranted. Taking the time to file could save you tens or hundreds of thousands of dollars in out-of-pocket expenses, keeping you on track to reach your long-term financial goals.

Still, it’s always a good idea to take stock of the situation before filing a claim. If your home sustains damage due to an event not covered by your policy or the cost of repairs doesn’t exceed your policy’s deductible, a claim isn’t in the cards. And even if filing a claim would be profitable on paper, it’s worth considering the long-term costs — in the form of higher premiums for years to come.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Historic Old Hollywood Charm: See Inside Vanessa Hudgens’ Luxurious Los Feliz Estate

After searching for five years, Vanessa Hudgens found the perfect Georgian colonial estate in Los Feliz, Calif. to call home. Find out how the High School Musical star transported an old Hollywood home into her “French” and “vibey” dream house.

Nicknamed “The Little DeMille,” iconic Hollywood filmmaker Cecil B. DeMille built the stunning Los Feliz house for his mistress in 1922.

And now, the Princess Switch star, 32, is opening up the doors of the updated home to Architectural Digest for an exclusive tour.

From her DIY remodel in the kitchen, to her “obsession” with candlesticks and vintage books, to the “sexy” and “cave-like” bathroom, here’s the full scoop on Vanessa Hudgens’ luxe Los Angeles home.

An historic Hollywood home transformed into the perfect “escape” 

According to Daily Mail, Hudgens purchased the luxurious Los Feliz home from Academy Award-winning actor Gary Oldman. After a 5-year house hunt, Hudgens bought the home in December 2018 for just under $5 million. 

The 3,168 square foot Georgian colonial home retains many of its original features. 

Sitting on a half-acre, the stunning estate includes three bedrooms and four bathrooms with a separate one-bed, one-bath guesthouse that sits over a detached two-car garage.

Nestled in the Hollywood Hills, the historic Los Feliz home provides the perfect escape for the Tick, Tick…Boom! actress. 

“There were so many things about it that struck me,” Hudgens tells AD of her plush property.

She adds: “Walking through the gate and seeing this house covered in ivy, surrounded by olive trees, it was like I had been transported to France or Italy. It felt like such an escape.”

ivy-covered entrance to vanessa hudgens' house
Photo credit: Jenna Peffley for Architectural Digest

Sisters unite! Ashley Tisdale helped Hudgens with the DIY decor

BFF to the rescue!

While Hudgens always “wanted an old home,” there’s no escaping the upkeep and renovations with an older building.

After purchasing the house three years ago, Hudgens enlisted the help of her High School Musical costar and good pal Ashley Tisdale. 

“I got new marble, painted the cabinets, got new knobs and drawer pulls—I really wanted brass. My girlfriend Ashley Tisdale does interior design, and I got her advice on where to shop,” Hudgens says.

vanessa hudgens' lively kitchen
Photo credit: Jenna Peffley for Architectural Digest

Hudgens also hired Jake Arnold to help bring her overall vision together, including a vast collection of vintage books, colorful art pieces, the perfect lighting for all her house plants, and a wide selection of candlesticks. 

“I wanted it to be casual, relaxed and cozy,” she says of the interior design, adding, “I’m a big fan of candlesticks, so you will notice them everywhere.”

The luxe Los Feliz pad also has this “big selling point”

Amid the big plants, abstract art and witchy books, Hudgens couldn’t help but gush about the home’s fabulous floors.

“Oh and the floors!” she boasts.

The herringbone wood parquets “were a big selling point for me when I saw this house,” she shares. 

Made from 18th-century French oak taken from an old chapel in Europe, the floors were originally added by Oldman. 

exterior of vanessa hudgens' house and the outdoor pool
Photo credit: Jenna Peffley for Architectural Digest

Hudgens took on a pandemic project to improve her new home

Admitting that her kitchen looked “very different” when she moved in, the Powerless star remodeled it during the pandemic.

“I took it upon myself to have a project, and put it all together,” Hudgens says of the DIY project.

“I painted the cabinets, removed some cabinets, and put big oak beams for open shelving,” shares the actress.

kitchen cabinets revamped by actress vanessa hudgens herself
Photo credit: Jenna Peffley for Architectural Digest

Including eccentric wallpaper featuring mushrooms and dragons, Hudgens decorated the breakfast nook with designs from the House of Hackney.

“I figured, Why not? I did what I like to call a facelift to it,” Hudgens says of her kitchen renovations. 

The funky wallpaper rests above a custom booth, inspired from “the dopest place ever.”

“I had the booth made for this space,” says Hudgens. “I was really inspired by the restaurant Maison Premiere, this absinthe and oyster bar in New York. It’s the dopest place ever.”

The actress also added extra tile, made of Carrara marble, from the primary bath for the backsplash.

A look at the romantic, the sexy and the cave-like features throughout the plush property 

Hudgens invites fans into her “romantic” dining room, which features an Italian chandelier from 1stdibs. 

Admitting she doesn’t cook often, Hudgens says, “I’m normally a ‘Let’s get everyone over, have a drink or two, put on a playlist, and then we all figure out what we want to eat and I just order it’ type of host.”

Heading upstairs, the Grease: Live star shows off her bedroom that features feminine art and pops of orange.

“For some reason I just really fell in love with the idea of orange for my bedroom,” she shares.

Hudgens is all about body-positivity, and shows fans a nude painting in her bedroom. “I wanted the house to be super feminine, to celebrate women’s bodies, to be a kind of femme palace,” Hudgens says.

When in California, enjoy the sunshine! The beautiful backyard features a pool, pizza oven, fire pit and plenty of outdoor space for entertaining.

“I wanted a yard that felt like a park where I could run around with my friends, have space to play, and just feel safe,” Hudgens shares.

Saving the best for last, Hudgens shows off her Goth black bathroom which is one of her “favorite places in the house.”

actress vanessa hudgens inside her bathroom in her los feliz house
Photo credit: Jenna Peffley for Architectural Digest

Featuring marble countertops, black walls and an egg-shaped tub, Hudgens went for a cave-like aesthetic in the primary bathroom. 

“The bathroom is a sexy cave,” shares the actress.

See the luxurious LA home for yourself! From the ivy exterior, to the poolside murals, to the various Teen Choice Awards and the ghost-like painting of herself, check out the YouTube video for a full tour with the High School Musical star.

More celebrity homes

Zendaya Owns a $4 Million Home Fit for a Disney PrincessThe Story of Taylor Swift’s Holiday House — Home to “the Last Great American Dynasty”
From a Prince to a King: A Look at Will Smith & Jada Pinkett Smith’s Real Estate Portfolio
Everything We Know About Adam Levine’s House in Los Angeles

Source: fancypantshomes.com

2 Strategies to Reduce Taxes from the Sale of Your Business

Recently, one of my colleagues took me aside and asked what I could do to help a 40-year-old client who sold his business last year for $40 million. He wanted to shelter the proceeds from capital gains taxes and possibly fund a trust for his family. We both already knew that the opportunity to reduce the tax recognition on the capital gain had long passed.

Had he sought our advice long before he was committed to the sale of this business, we could have explored some valuable options. Here are two of them.

The Qualified Small Business Stock Exclusion

One option our client may have considered is to investigate qualifying his business for Small Business Stock treatment under Section 1202 of the Internal Revenue Code (IRC). Section 1202 was added through the 1993 Revenue Reconciliation Act to encourage small business investment. A Qualified Small Business (QSB) is any active domestic C corporation engaged in certain business activities whose assets have a fair market value of not more than $50 million on or immediately after the original issuance of stock, regardless of any subsequent appreciation (IRC § 1202 (d)(1)).

Qualified Small Business Stock that is issued after Aug. 10, 1993, and held for at least five years before it is sold may be partially or wholly exempt from federal capital gains taxes on the value of the shares sold, up to the greater of $10 million in eligible gain or 10 times the aggregate cost basis in the shares sold in each tax year (IRC § 1202 (b)(1)). Be aware that this limitation applies to each separate shareholder, and a trust, or multiple trusts, established and funded with QSB Stock gifted by a qualified QSB shareholder may enable much more than $10 million in gain exclusion. For QSB shares acquired after Sept. 27, 2010, the capital gain exclusion percentage is 100%, and it is excluded from alternative minimum taxes and the net investment income tax with the same five-year holding requirement (IRC § 1202 (a)(4)).

But only certain types of companies fall under the category of a QSB. To be a QSB, the domestic corporation must engage in a “Qualified Trade or Business” (QTB). Such a business will generally manufacture or sell products, as opposed to providing services and expertise. Businesses that generally will not qualify are those offering services in health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, banking and insurance, as well as hospitality businesses such as hotels and restaurants (IRC § 1202 (e)(3)).

To qualify and continue as a QSB, the business must follow certain rules (there are many, and these are the most basic): It must be a domestic C corporation when the stock is issued and when sold, and at least 80% of its assets must be used in the active conduct of one or more QTBs during substantially the entire five-year holding period. If the business is already an LLC or S corporation, it may still qualify if the business reorganizes and revokes the subchapter S election and issues new stock in the C corporation, then meets the holding period before selling.

It is critical that management of the company understands all of IRC Section 1202’s requirements and agrees to maintain the business in a manner that continues to satisfy the active business requirement and the asset investment limitations, and avoid the pitfalls related to stock redemptions, tax elections and conversions.

To summarize, in order for the QSB shareholder to claim the tax benefits upon sale, the following must apply: The shareholder may be a person or business not organized as a C-Corp; the QSB stock must be original issue and not purchased in trade for other stock; the shareholder must hold the QSB stock for at least five years; and the QSB issuing the stock must devote more than 80% of its assets toward the operation or one or more QTBs.

The Tennessee Income Tax Non-Grantor Trust Strategy

Most states conform to the QSB stock exclusion and also exclude capital gains tax on QSB stock when sold as required in IRC § 1202. The exceptions are California, Mississippi, Alabama, Pennsylvania, New Jersey, Puerto Rico, Hawaii and Massachusetts. If you live in one of those states, you may want to consider a concurrent trust strategy described below to eliminate all capital gains taxes on the sale of QSB stock. But even in conforming states, the QSB shareholder can claim additional exclusions greater than the $10 million exclusion limitation by gifting into multiple trusts so all the possible gain from the sale is excluded.

Shareholders living in a nonconforming state or expecting an aggregate capital gain much greater than the $10 million cap may use a Tennessee Income Non-Grantor Trust (TING) to eliminate all federal and state taxation on the sale of the QSB stock gifted to the TING prior to an agreement to sell. Tennessee law enables a person who owns a highly appreciated asset, like QSB stock, to reduce or eliminate his resident state capital gains taxes on the sale of the QSB stock through a TING. While several other states also have laws that support this strategy, Tennessee legislators have adopted the best parts of other states’ laws. To be clear, a taxpayer already living in a state with no state income tax may use resident state trusts to spread the capital gain resulting from the sale of QSB Stock.

The grantor will gift the QSB stock to one or more TINGs (a gift of QSB stock is an exception to the original issue rule under IRC § 1202 (h)(2) and the five-year holding period is not interrupted by a gift to a trust under IRC § 1202 (h)(1)). The trustee may then sell the QSB stock in a manner that allows treatment as a long-term capital gain. If the TING makes no distributions in the tax year in which the QSB stock meeting all the requirements is sold, the sale will be excluded from federal and state capital gain recognition.

The Sourced Income Rule Affecting Trust Taxation

The client’s resident state may seek to tax at least some of the income of a nonresident TING if the client’s resident state has a close interest in the trust’s assets, such as through real property located in or a business operating in that state. This is known as the Sourced Income Rule. Some states think they have a sufficient connection to levy a tax on a nonresident trust simply because the settlor or a beneficiary of the trust lives in that state, or the trustee has an office in that state. That broad application of the definition of a resident trust may be misplaced, but many of our clients want to avoid any expense from litigating against a state taxing authority.

However, if the tax savings are substantial, then a client considering a TING should be aware that the Supreme Court has unanimously ruled that the state of North Carolina overstepped its taxing authority when it sought to tax trust income based solely on the residence of a trust beneficiary. North Carolina argued that its taxing authority included any trust income that “is for the benefit of” a state resident. The Supreme Court disagreed and ruled in the case of North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust “that the presence of in-state beneficiaries alone does not empower a state to tax trust income that has not been distributed to the beneficiaries where the beneficiaries have no right to demand that income and are uncertain ever to receive it.” This ruling may serve to restrain other state taxing authorities from applying an overly broad application of their resident trust rule.

Both of these strategies used together can be highly beneficial for a QSB shareholder living in a QSB nonconforming state or one who expects the total capital gain from a sale to exceed the $10 million cap on a QSB capital gain exclusion. However, these strategies also require that the QSB management and the QSB shareholder plan many years ahead of any contemplated sale.

Senior Vice President, Argent Trust Company

Timothy Barrett is a senior vice president and trust counsel with Argent Trust Company. Timothy is a graduate of the Louis D. Brandeis School of Law, 2016 Bingham Fellow, a board member of the Metro Louisville Estate Planning Council, and is a member of the Louisville, Kentucky and Indiana Bar Associations, and the University of Kentucky Estate Planning Institute Program Planning Committee.

Source: kiplinger.com

Joe Rogan’s Real Estate Experience: Living a Luxurious Lake Life in Austin, Texas

Podcasting has its privileges. After sealing a deal for over $100 million with Spotify, Joe Rogan has become the most popular — and best paid — podcaster on earth. 

The Joe Rogan Experience host first rose to fame in the 1990s sitcom NewsRadio and went on to host stunt/dare game show Fear Factor, followed by forays into martial arts, where he is a renowned commentator for the UFC.

And while nowadays his name is tied to his immensely popular podcast (which was the most popular podcast in the U.S. for much of 2020 and 2021, reaching an estimate 11 million people per episode), the former Fear Factor host has had an extensive stand-up comedy career, which he started in back 1988 and continues to the present day.

Cashing in his podcasting pennies, Joe and his family recently took up residence in a multi-million dollar mansion. Below you’ll find all the details we could find about the Rogans’ $14.4 million property in Austin, Texas.

Joe Rogan’s house upgrade from California to Texas

The Joe Rogan Experience host, 54, and his family-of-five became part of the “mass exodus out of California” due to the Golden State’s lockdown rates and COVID-19 responses, lack of rain, homelessness epidemic, overpopulation and increased taxes.

According to the father-of-three, the Lone Star State — and the multi-million dollar dream house he found there — is a far more appealing alternative and the perfect place to call home.

While his 7,500 square foot home in California was cozy, the comedian recently moved his family into a much larger estate in Austin, Texas. 

path leading to Joe Rogan's house
Joe Rogan’s new house in Austin, Texas. Image credit: Peter Vitale via Benjamin Wood

Rogan’s house in Austin, Texas is one of the most exclusive properties in the area, and puts the podcaster in proximity to some other well-known celebrities that reside in the state’s capital — including Supernatural actor Jensen Ackles, who also lives in a lovely lake house in Austin.

Reportedly worth four times more than his home in California, Joe purchased the Texas estate for $14.4 million.

Nestled in the outskirts of Austin, the massive spread is outside the chaos of the city, but close enough for the everyday conveniences.

With A-list neighbors such as billionaire John Paul DeJoria and Academy Award-winning actress Sandra Bullock, the podcast king created his castle in this southern slice of heaven.

Inside Joe Rogan’s Austin home, a million-dollar home fit for the world’s leading podcaster

Purchased in an off-the-market deal, Joe and his family-of-five recently moved into their lakeside home in the second half of 2020.

Although not many details have been leaked online about their sprawling new digs, it seems that Joe and his wife Jessica have plenty of room for their three daughters: Lola, 12, Rosy, 11, and 24-year-old Kayja Rose. 

According to Dirt, the massive lakeside mansion boasts 10,980 square feet and features 8 bedrooms and 10 bathrooms. 

the entrance to Joe Rogan's house in Austin, TX
Stepping inside Joe Rogan’s Austin house. Image credit: Peter Vitale via Benjamin Wood
Joe Rogan’s new house comes with floor-to-ceiling glass walls that open up to mesmerizing lake views. Image credit: Peter Vitale via Benjamin Wood

Located on Lake Austin, the Tuscan-style estate was built in 2006 and listed for $7.25 in 2015. 

According to Work and Money, designer Benjamin Wood and his philanthropist wife Theresa Castellano Wood are the former owners of the elegant abode.

They’re also the ones who added the Asian-inspired and modern upgrades, which add a wow factor to the already-impressive home.

Rogan’s house includes an open floorplan with the dining room, living room and library all sharing one space. Painted deep blue, this shared living space is accented by rustic wooden pillars and light wood feature walls. 

living room with floor-to-ceiling walls of glass inside Joe Rogan's house in Austin, TX
The main living area has an open floorplan that combines the dining room, living room and library. Image credit: Peter Vitale via Benjamin Wood
The living area is accented by dark blue walls and dramatic furnishings. Image credit: Peter Vitale via Benjamin Wood
The statement piece in Joe Rogan’s house in Texas is a floor-to-ceiling built-in library. Image credit: Peter Vitale via Benjamin Wood

With rustic farmhouse vibes, the beautifully open kitchen includes two islands, antique cabinets and plenty of room for Joe’s favorite wild meat meals. 

With floor-to-ceiling glass walls, the family-of-five can couch-it while glancing out at the four acres of spectacular views on their private property.

The kitchen inside Joe Rogan’s Austin house comes with antique cabinetry and two kitchen islands. Image credit: Peter Vitale via Benjamin Wood
The inviting kitchen boasts a rustic farmhouse vibe, complemented by stylish finishes and large windows. Image credit: Peter Vitale via Benjamin Wood

Of course, the UFC commentator has a customized home gym with all the bells and whistles. And did we mention his fully-equipped podcast room?

The lakeside mansion features a large back porch and deck, alongside an impressive mezzanine featuring a large Buddha statue. With over 300 feet of water frontage, the Rogans are sure to enjoy the property’s party deck on Lake Austin.

After their lake adventures, Joe and his family can jump in the outdoor pool which includes a stonework patio and plenty of shade for those hot Texas summers. 

The house Joe Rogan left behind

In 2003, Joe and wife Jessica purchased their Bell Canyon, Calif. home for $2.33 million. After living there for 17 years, the Rogans made a handsome $1.12 million profit when they sold it for $3.45 million in March 2021.

Joe Rogan’s former home in Bell Canyon, California, which he sold for $3.45 million. Image credit: Realtor.com

With 7,500 square feet and 5 bedrooms, the family home included 5 bathrooms and 2.14 acres of outdoor space. Their former California home featured a pool and backyard deck, but nothing in comparison to their palatial Austin estate.

For now, Joe Rogan’s experience seems to be fit for a king. From the overpopulation of the Golden State to the laid back vibes of the Lone Star State, it seems like Joe’s choices in terms of real estate went from lovely to luxurious.

More celebrity homes you’ll enjoy

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Source: fancypantshomes.com

Marilyn Monroe’s Former Penthouse in West Hollywood Lists for $2.49 Million

Here’s a slice of old Hollywood charm at its finest: a West Hollywood penthouse that was once home to Marilyn Monroe has just resurfaced on the market.

The actress, who rose to fame playing comedic “blonde bombshell” characters — which propelled her to become one of the most popular sex symbols of the 1950s and early 1960s — moved into the two-story penthouse in the mid-50s, at the height of her success.

Marilyn called many places home over the years. In fact, sources say that Monroe lived in over 43 separate residences over the years.

From high-end hotels to small apartments and sprawling Spanish-style mansions, to a brief stint living in Frank Sinatra’s guest house, or taking an extended (and somewhat controversial) stay at Bing Crosby’s Rancho Mirage estate, Marilyn Monroe moved around quite a few times before settling on a place of her own.

In 1954, the Monkey Business actress moved into a two-level penthouse at the Granville Towers, which sources say was her final apartment before she bought her Brentwood estate — which was the only property Marilyn ever owned.

After splitting from her second husband, New York Yankees star Joe DiMaggio, Monroe moved into her seventh (and last) apartment in West Hollywood. For about a year, the model-actress set up residence in the luxurious condo that has just been listed for $2.49 million. 

Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency

And Monroe may have not been the only famous “blonde bombshell” to live in the two-story apartment. A Los Angeles Times story from three years ago also identified Portia de Rossi as a former resident.

A stylish residence set in a star-studded building

Oozing old Hollywood charm, the posh penthouse is located in one of the most spectacular buildings in West Hollywood.

Image credit: The Luxury Level courtesy of The Agency

Set on the top floor of Granville Towers, a 1930s French Normandy-style Hollywood classic, Monroe’s former abode boasts gorgeous architectural elements such as vaulted ceilings and floor-to-ceiling skylight windows.

Located at the corner of Sunset Boulevard and Crescent Heights, the 2,032-square-foot apartment offers sweeping views of the city and mountains.

Featuring two bedrooms and two bathrooms, a stunning circular staircase connects the two levels of luxurious living space. 

circular staircase in Marilyn Monroe's former West Hollywood condo
Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency
Image credit: The Luxury Level courtesy of The Agency

The elegant interiors include glistening hardwood floors, spa-like bathrooms and built-in window seats.

The kitchen boasts Venetian plaster, steel cabinetry and Viking appliances, and the formal dining room includes a jaw-dropping chandelier.

While the location is prime, the amenities are just as impressive. With a 24-hour doorman always on duty, the old Hollywood building includes a beautiful courtyard and garden, a clubhouse, outdoor pool and spa. 

Image credit: The Luxury Level courtesy of The Agency

Marilyn was by no means to only high-profile celebrity to call the West Hollywood building home.

A celebrity favorite, Granville Towers has attracted many A-listers in its almost century-long existence. In recent years, celebrities like Nicole Scherzinger, Ashley Greene, Mickey Rourke, Brendan Fraser, or David Bowie have all lived in the posh building.

Listed by Amanda Lynn, Gina Michelle and George Ouzounian of The Agency, Marilyn Monroe’s former home is almost a collectible for die-hard fans of old Hollywood. 

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The Iconic Beverly House: where Jackie O & JFK Honeymooned, ‘The Bodyguard’ was Filmed, and where Beyonce Shot ‘Black is King’

Source: fancypantshomes.com