Income tax 2022-2023, residential rental property, rental income, and expenses if no personal use of dwelling. Part number two, let's do some wealth preservation with some tax preparation. Most of this information comes from publication 527 residential rental property including rental of Vacation Homes Tax Year 2022. You can find on the IRS website, irs.gov, irs.gov, looking at the income tax formula. We're focused online. One income remember and the first half of the income tax formula is in essence an income statement. However, it's just an outline. Other forms and schedules flow into these line items like the Schedule E, which in essence is an income statement in and of itself having rental income minus rental expenses, the net rental income in essence, rolling into line one income of our income tax formula. So in a prior presentation, we started talking about the situation, which is the easiest, most straightforward situation, least convoluted situation where we have rental property that doesn't have personal use related. Accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it to it. So we simply have the rental property. It's just rental property as opposed to a home that we're renting partially or a part of it or rental property that we use partially for a vacation or personal use situation. We want to think about that situation, which is most clean cut where we simply have property that is just rental property. And then once we have those concepts down, we can take those concepts, which will generally apply to the more convoluted situations where we have those mixes between personal and business and then try to think about the differences where we have to parse out the business versus personal kind of stuff. All right. So we're continuing on types of expenses. So listed below are the most common rental expenses, noting that with the rental expenses, it's kind of like the schedule C situation with business income. They usually make sense, right? Rental expenses are typically those ordinary and necessary type expenses you needed in order to generate the revenue so that we're taxed on net income as opposed to the gross income. And of course, the expenses will be those that are going to be common to owning rental property typically. So advertising common expense for just about any type of business, auto and travel expenses. Those get a little bit confusing because we're going to use a mileage method or a direct method and we depreciate the autos and stuff. But the use of the auto like a business normal business, you would expect to be an ordinary and necessary expense, cleaning and maintenance clearly could be a component. Commissions, we have depreciation. It's a big one because the rental property in and of itself is a huge cost and depreciating that cost becomes important. Insurance, common business type of expense, interest. So obviously there could be a loan and this time the loan of course was necessary for the financing to get the capital in order to have the rental property. So the interest on that loan would be business related as opposed to interest on say a personal car or something like that, where the interest would be personal in nature, legal and other professional fees, common business expense, local transportation expenses, management fees, which is something more common to the rental sector because you might have management fees that you're going to be paying as a common kind of practice within the industry. Mortgage interest paid to banks. So now we've got the interest specifically for the loan that was taken out for the possibly the rental property, of course, right, whereas possibly interest, other interests might be for other loans other than the direct mortgage itself, but applied to the rental property. Points, which kind of coincides with the interest. It's kind of a messy situation. We might dive into a little bit more detail. Shortly, our rental payments and repairs clearly taxes and utilities quite common. All right, depreciation depreciation is a capital expense. It is the mechanism for recovering your cost in an income producing property and must be taking over the expected life of the property. The general idea with depreciation. You can see it for like equipment, which is kind of more straightforward in some ways, because if you buy a piece of equipment, the idea would be, can I expense it this year? And oftentimes it's going to say, no, it's too, it's too big of an item. We need you, even though you're on a cash based system to do it and a cruel type thing, put it on the books as an asset, meaning it's not on the tax return generally, because we don't have the assets. We don't have a balance sheet on the tax return, although we might have a depreciation schedule on the tax return, and then we depreciate it over its useful life, which means that's where we see it on, you know, the schedule E when we're allocating the cost over the useful life. And then they might throw in some other kind of concepts with a depreciation like 179 deductions and special depreciation and so on with the rental property, obviously the property in and of itself becomes a huge cost. And then being able to allocate that cost over some period of time becomes quite important. The rental property itself is a little bit more confusing than other type of rental, other type of assets, because when you buy real estate, then the real estate itself might go up in value, whereas most things go down in value because they deteriorate. If you buy a forklift, you buy a car, buy a truck, those things go down in value. So depreciating the cost makes sense from that perspective as well, because we're going to lower the value of the asset and expense it over time. The same concept would apply to the building of a rental property because it will have wear and tear over time. However, many other factors could increase the value of the building just in terms of location and what not location, location, location, right? So the value of the building might actually go up in terms of fair market value even as you're depreciating it, allocating the cost over the life. All right, you can begin the depreciation rental property when it is ready and available for rent, see placed in service under when does depreciation begin and end in chapter two. Insurance premiums paid in advance. So if you pay an insurance premium for more than one year in advance, you can't deduct the total premium in the year you pay it. So here we come with this accrual versus cashed based thing again, oftentimes rental properties on a cashed based system. And if you pay in advanced for things like insurance, which is the common thing to have an advanced payment for, then you might, the IRS is skeptical that you're taking advantage of a cashed based system by taking more expense up front by expending the cash in a prepayment. So then you have to do it like an accrual kind of thing because the IRS doesn't want you to do that. So for each year of coverage, you can deduct only the part of the premium payment that applies to that year. That's an accrual kind of concept. See chapter six of publication 535 for information on deductible premiums. Interest expense. You can deduct mortgage interest you pay on your rental property. When you refinance a rental property for more than the previous outstanding balance, the portion of the interest allocable to loan proceeds not related to rental use generally can't be deducted as a rental expense. Chapter four of publication 535 explains mortgage interest in detail. So the general idea with interest would be if it was on a personal loan, like you got your own interest on a car, that's your personal car, not the business car, then you would think that you wouldn't be able to deduct it because it's personal. But if you needed to finance, you took out a loan, most likely a loan to purchase the home or purchase the rental property. And if it's just rental property, you're using the property just for rental use, then you would think that you needed to rent the money, meaning get the capital, take out the loan in order to get the property. So it's an ordinary necessary expense and the rent on the loans is interest. So it's the general idea, but it can get a little bit messy with regards to the interest. And then when you get into points, what's interest versus other things. And then if you had a personal and business use of property, then, then it gets messy in terms of the loan parsing out between personal and business again, expenses paid to to an obtain a mortgage. So certain expenses you pay to obtain a mortgage mortgage on your rental property can't be deducted as interest. These expenses, which include a mortgage commission, abstract fees and recording fees are capital expenses that are part of your basis in the property. Now this is something that it seems like, well, what's the difference, but it can have a big impact because what we want to be able to do is record things so that we can get the expense as soon as possible. So what I'd like to do is say, Hey, look, can't I record this like as an expense right now as like interest, I'm paying now or something so I could take the expense now because if I have to record it as part of the purchase of the property, then I'm going to have to put it on the books as an asset and I have to depreciate it over a very long time frame, which is a lot worse than getting the expense. So the general rule is that I would like to whenever possible that get the expense sooner rather than later. So form 1098 mortgage interest statement. So if you paid $600 or more of mortgage interest on your rental property to any one person, you should receive a form 1098 or similar statement showing the interest you paid for the year. So you're probably familiar with that form with regards to mortgage interest for a home, your personal residence. Obviously you get a similar form, similar idea, similar concept here, but it wouldn't be deducted on like a schedule A. If it was the rental property, it would be showing you the interest that was paid for the business property. So if you and at least one other person other than your spouse, if you file a joint return, reliable for and paid interest on the mortgage and the other person receive form 1098 report your share of interest on schedule E form 1040 line 13. So attach a statement to your return showing the name and address of the other person on the dotted line when when to line 13 enter C attached. So normally you're going to get that 1098. The IRS also gets the 1098 if the 1098 didn't go to you but went to someone else, but you are responsible for part of the interest. Now it gets a little confusing on the IRS side of things because they would expect to be seeing the 1098. So you have to tell them this is my portion of the mortgage interest and the 1098 got reported to this other person for whatever reason. Schedule and other professional fees. You can deduct as rental expense legal and other professional expenses such as tax return preparation fees you paid to prepare schedule E part one. So when you have tax return preparation, you can allocate part of the fee because part of the fee was for the business use or the schedule either rental property. For example, on your 2022 schedule E, you can deduct fees paid in 2022 to prepare part one of your 2021 schedule E. So you can also deduct as rental expense any expense other than federal taxes and penalties you paid to resolve a tax underpayment related to your rental activities. Local benefit taxes. In most cases you can't deduct charges for local benefits that increase the value of your property such as charges for putting in streets sidewalks or water and sewer systems. These charges are non depreciable capital expenditures and must be added to the basis of your property. So we have a similar situation we saw before from our perspective and the taxpayer side. We would like to say, hey, look, I would like to expense these now rather than having to add them as part of the property so that I can get the benefit from a tax perspective today as opposed to depreciating them over a very long time frame. So those those common scenario often comes up and from our perspective, the question is always is I would like to get the benefits sooner rather than later. Can I expense it now rather than capitalizing it? And the tax code is often saying we want you to include that as the capital assets so that you get the expense, but you don't get it until you depreciate it. So you get this longer, big, long time frame and the expense benefiting over time. OK, however, you can deduct local benefit taxes that are for maintaining, repairing or paying interest charges for the benefits, local transportation expenses. So you may be able to deduct your ordinary and necessary local transportation expenses if you incur them to collect rental income or to manage, conserve or maintain your rental. It's a rental property. So now you're moving around to collect your income. That's going to be part of, you know, the business system. So you would think those would be deductible. However, transportation expenses incurred to travel between your home and a rental property generally constitute non deductible commuting costs unless you use your home as your principal place of business. So now we've got this situation and this is kind of they're trying to kind of mirror what you might see on like a business side of things. So if you had a W2 like employee, they don't get to deduct the commute that they have to go to work. So you would think that a Schedule C business or a Schedule E business rental property also wouldn't get to deduct like the normal commuting costs. I think is the general concept here.  Well, now you would think that the movement from your principal place of business to some other place could be non commuting and therefore deductible. And then you get into the questions of what does it mean to be your principal place of business and so on and so forth. And you could see publication 587 business use of your home for information on determining if your home office qualifies as a principal place of business. So generally, if you use your personal car pickup truck or light van for rental activities, you can deduct the expenses using one of two methods. We got the actual expenses or the standard mileage rate. So that's the common issue with the automobiles. When you're doing your bookkeeping, you're going to be having expenses come up gasoline maintenance and so on recording that. But when you're then recording it for taxes, the question is, do you want to have the actual use the actual method or a standard mileage methods similar kind of concept that we see on a normal kind of schedule C type of business. The standard mileage method is usually kind of easier to calculate. And so then you can try to think about those two methods in which would be most beneficial. Oftentimes in the first year of operation, the direct method might be more beneficial, especially if you're allowed to use accelerated depreciation methods. But then you might be limited from going from the direct method and then switching to the standard mileage method. So you kind of have to think about it in terms of what do you think the benefit will be over the life of the use of the vehicle as opposed to in one particular year. So in any case, for 2022, the standard mileage rate for business use is 58.5 cents per mile from January 1st, 2022 to June 30, 2022, from July 1st, 2022 to December 31st, 2022. The standard mileage rate for business use is 62.5 cents per mile. So now you've got two rates for the year because they increase it like in the middle of the year. So for more information, see chapter four of publication 463. We got pre-rental expenses. You can deduct your ordinary and necessary expenses for managing, conserving and maintaining rental property from the time you make it available for rent. So now we have a question of, well, what if I'm just holding on to the property and it's not actually being rented at this point in time? But obviously I have to maintain it because I have an intent to rent it. Now, this gets a little bit messy because oftentimes with rental property, people sometimes hold on to the property primarily, there might have a primarily purpose of the property going up in value and getting value increase and possibly a capital gain when they sell the property as opposed to trying the principal purpose being rental income. So then you have to get into the question of, well, were you actually intending to rent out the property or are you just trying to write off expenses of like investment property or something like that, right? But you would think that if your intention is to rent it, then obviously the payments that you're incurring to maintain the property that's going to be rental property, even though someone is not in it at the particular moment would be deductible. If no one gets in it and in some time you might have losses on that property and losses are what the IRS is going to be skeptical of with this passive rental property, you know, stuff. All right, rental of equipment. So you can deduct rent, you pay for equipment that you use for rental purposes. However, in some cases, lease contracts are actually purchase contracts. If so, you can't deduct these payments. So if you're renting equipment, you can deduct the payments of the equipment that you're renting, but sometimes for different reasons, they structure something to look like a lease, but it's actually a purchase in reality because you're going to, in essence, pay the full purchase price by the end of the, where you're going to have a, you're going to purchase it by the end or something like that, in which case inform it's a lease, but in actuality, it's a purchase. So you can recover the cost of purchase equipment through depreciation. So if it's a purchase, you've got to depreciate it. If it's a lease, you expense the lease payments when they come up. So rental of property, you can deduct the rent, you pay for property that you use for rental purposes. If you buy a leasehold for rental purposes, you can deduct an equal part of the cost each year over the term of the lease. So travel expenses. You can deduct the ordinary and necessary expenses of traveling away from home if the primary purpose of this trip is to collect rental income or to manage, conserve, or maintain your rental property. So similar kind of concept that we had with the Schedule C type of business. Normal traveling is within the local community. If it's overnight, then it's going to be in the category of travel as opposed to just auto possibly. So you must properly allocate your expenses between rental and non-rental activities. You can't deduct the cost of traveling away from home if the primary purpose of the trip is to improve the property. The cost of improvements is recovered by taking depreciation. So we have that same concept again. If you're trying to improve the property, then the cost you can, from our perspective, we would like to expense it. But the IRS is saying, well no, that's part of the cost of your improvements, which you would have to put on the books as an asset and not get the benefit of the expense until you depreciate it. So for information on travel expenses, you can see Chapter 1 of Publication 463 on the IRS website. Uncollected rent.  It's not deductible. So if you use an accrual method, report income when you earn it. So if you are unable to collect the rent, you may be able to deduct it as business bad debt. In other words, if you have your system on a cash-based system and someone just doesn't pay you the rent, well you're not going to be able to deduct bad debt expense if you're on a cash-based system because you never recorded the income. You just never would have recorded the income. But if you are on a cruel system, you would have recorded the income in the month that they used it.  So then you would get a deduction. So c chapter 10 of publication 535 for more information about business bad debts, vacant rental property. If you hold property for rental purposes, you may be able to deduct your ordinary necessary expenses including depreciation for managing, conserving, and maintaining the property while the property is vacant. However, you can't deduct any loss of rental income for the period the property is vacant. So there is our situation with the properties not being used. You would think that if your intent is to use it for rental property, you would still get the deductions, but the iris is skeptical of the losses because if you get losses, then you might be able to deduct them against other income and that's where the iris is skeptical of this whole situation. So vacant while listed for sale, if you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property isn't held out and available for rent while listed for sale, the expenses aren't deductible rental expenses. Points. So the term points is often used to describe some of the charges paid or treated as paid by a borrower to take out a loan or a mortgage. So now when we have rental property, if we're purchasing the rental property, we take a loan out to finance the purchase of the rental property. We're going to have to pay interest on the loans and then sometimes you have these weird things where they structure points and points could be different things. They could be payments for part of the borrowing process or they could be like prepayments of interest or something like that in which case the question is how are we going to treat those? Do we have do we get to deduct them in the current period? Do we get to call them interest? Do we have to put them on the books and amortize them over the cost of the property which is a very long time frame or possibly over the life of the loan as points which might be a little bit less than the life of the property. So these charges are also called loan organization fees, maximum loan charges or premium charges. Any of these charges points that are solely for the use of money are interest because points are prepaid interest you generally can't deduct the full amount in the year paid but must deduct the interest over the term of the loan. So the general idea is that well you're prepaying the interest so the the governments can say well they are interest but you prepaid them so we're going to have to you're going to have to put them on the books as an asset. Not depreciate them necessarily not depreciate them as a capital asset part of the property they're not included as part of the cost of the building in other words and depreciated over the life of the building but rather over the life of the loan. Now the loan could also be quite long in length you might have a 30-year loan in which case you're going to be you won't get the benefit of the points for a long time but sometimes the loan isn't that long you might only have a 15 or 10-year loan so it would be better at least to put the points on the books as part of a loan you'd rather have to expense them today if you can't do that I would rather expense them for a shorter life asset such as a loan which might be 10 or 15 years as opposed to basically the the depreciation as part of the actual building which might be depreciated over you know a longer point in time is the general thought process. So the method used to figure the amount of points you can deduct each year follows the original issue discount OID rules in this case points are equivalent to OID which is the difference between stated redemption price at maturity generally the stated principal amount or amount borrowed over the issue price generally the proceeds. So then there becomes an issue on how we can deduct the points you know that when you think about well what can I do can I just take the points divided by the number of years and deduct it on a straight line basis that would be the easiest thing but not exactly the most proper thing it would be more proper to be using this method. Okay so if the difference is equal to or less than zero the amount of OID is zero the first step is to determine whether your total OID which you have on bonds or other investment in addition to the mortgage loan including the OID resulting from the points is insignificant or de minimis is it a small amount in comparison and therefore not worth the trouble in essence. If the OID isn't de minimis you must use the the constant yield method to figure how much you can deduct which is a more precise method than like a straight line method. De minimis OID the OID is de minimis if it is less than one fourth of 1.0025 of the stated redemption price at maturity principal amount of the loan multiplied by the number of full years from the date of original issue to maturity term of the loan so if the OID is de minimis you can choose one of the following ways to figure the amount of points you can deduct each year so on a constant yield basis over the term of the loan or on a straight line basis over the term of the loan the straight line basis is probably the is clearly the easier method so in proportion to stated interest payments and so then you can that's another way that you can do it try to tie it to the you know proportion without to the interest payments so in its entirety at maturity of the loan which is probably the worst way that you but if it's insignificant it won't really matter but you'd rather be deduction sooner rather than later so so you make this choice by deducting the OID points in a manner consistent with the method chosen on your timely file tax return for the tax year in which the loan is issued. All right example Carol took out a $100,000 mortgage loan on January 1st 2022 to buy a house she will use as rental during 2022 the loan is to be repaid over 30 years so that's a long loan so during 2022 I mean it's a standard loan but it's also quite long I mean that's about similar to the life that if you had to capitalize it as an asset in terms of the cost of the property right so in any case during 2022 Carol paid $10,000 of mortgage interest stated interest to the lender when the loan was made she paid $1,500 in points to the lender the points reduced the principal amount of the loan from $100,000 to $98,500 resulting in $1,500 OID so Carol determined that the points OID she paid are de minimis based on the following computation so there's a small amount of points based on the computation which means she has the flexibility to do more what she wants with with how she's going to allocate the points like a straight line method the easy thing to do so redemption price that maturity principal amount of the loan is $100,000 multiplied by the term of the loan in complete years 30 and multiplied by 0.0025 de minimis amount is $7,500 so she's good the points OID she paid $1,500 are less than the de minimis amount $7,500 so therefore Carol has de minimis OID and she can choose one of the following four ways discussed earlier to figure the amount she can deduct each year so she chooses the straight line method because she's not because that's easy under under the straight line method she can deduct $50 each year for 30 years so in practice that means you put it on the books as you know on the same depreciation kind of schedules but not as part of the building itself but rather as the points that you're going to allocate not over the the useful life of the building but rather over its own life straight line allocation of 30 years in this case because that's the years of the loan all right constant yield method if the OID isn't de minimis you must use the constant yield method to figure how much you can deduct each year oh no please no so you figure your deduction for the first year in the following manner okay so number one determine the issue price of the loan if you paid points on the loan the issue price is generally the difference between the principal and the points two multiply the result in one by the yield to maturity defined later three subtract any qualified stated interest payments defined later from the result in two this is the OID you can deduct in the first year so yield to maturity ytm this rate is generally shown in the literature literature you receive from your lender so if you if you don't have this information consult your lender or tax advisor in general the ytm yield to maturity is the discount rate that when used in computing the present value of all principal and interest payments produces an amount equal to the principal amount of the loan so qualified stated interest qsi in general this is the stated interest that is unconditionally payable in cash or property other than another loan of the issuer at least annually over the term of the loan at a fixed rate so example year one the facts are the same as in the previous example the yield to maturity on carol's loan is 10.2467 compounded annually she figured the amount of OID she could deduct in 2022 as follows principal 100 000 minus the points issue price of the loan 98 500 multiplied by the ytm yield to maturity which was that 10. or 0.102467 or 10.24 whatever total 10,093 minus the qsi the 10,000 and that gives us the points the OID deductible in 2022 to figure your deduction in any subsequent year you start with the with the adjusted issue price to get the adjusted issue price add to the issue price figured in year one any OID previously deducted then follow steps two and three earlier all right example year two carol figured the deduction for 2023 as follows you've got the issue price 98 500 plus points OID deducted that's the 93 the adjusted issue price is now 98 593 multiplied by the yield to maturity 0.102467 total 10,103 minus the qsi 10,000 gives us the points OID deductible in 2023 so you can see the the interest is not you know deducted the same over the life and you can this is similar to you can see why this would kind of be the case because if you look at your normal amortization schedule you note that when you when you're paying for uh for your monthly payments for example that uh there's a there's an allocation between interest and principal and the difference between interest and principal changes over the life of the loan so when you have this advanced payment that we're considering to be interest you have a similar kind of thing so to properly record it you would have to figure out you know closer to the proper interest amount which wouldn't simply be a straight line or the same each year okay loan or mortgage ends if your loan or mortgage ends you may be able to deduct any remaining points OID in the tax year in which the loan or mortgage ends so now you have a situation you've been you put these points on the books and you have to deduct them over the life of the loan 30 years but then the loan ends early well then if the loan ends early you would think that you would get to deduct the points at that time uh because it wouldn't make sense to keep on allocating the points when you no longer have the loan because the points were related to a prepayment on the loan that has now ended so a loan or mortgage may end due to refinancing prepayment for closure or similar event however if the refinancing is with the same lender the remaining points OID generally aren't deductible in the year in which the refinancing occurs but may be deductible over the term of the new mortgage loan so now you're going to say well I got to refinance I re-upped the loan with the same lender well so now you would think okay well then then the points should keep on writing you would think possibly to the to the terms of the new refinanced loan would be a logical uh kind of thought process then so points when loan refinance is more than the previous outstanding balance when you refinance a rental property for more than the previous outstanding balance the portion of the points allocable to loan proceeds not related to rental use generally can't be deducted as rental expense example Charles refinanced a loan with a balance of 100,000 the amount of the new loan was 120,000 higher than the original Charles used the additional 20,000 to purchase a car so he didn't put it into the rental properties for personal use now the points allocable to the 20,000 would be treated as non-deductible personal interest this kind of stuff can come up of course because oftentimes when you're getting a loan the bank wants collateral even if you're getting a personal loan so you end up with these loans where the where where you have business property possibly used to finance a loan that's then going to be used for personal stuff and then you get kind of a messy situation with regards to the deductible interest with with relation to the loan and you have to determine what was the loan proceeds for even though the the the business property was used as collateral our repairs and improvements generally an expense for repairing and maintaining your rental property may be deducted if you aren't required to capitalize the expense so the confusing thing here is often comes up is like well is the repair an improvement or repair we would rather have it be a repair typically because once again from our perspective from a tax perspective as the rent as the person who's renting here tax payer we want the expense as soon as possible so if there's a problem if there's a a leak in the roof we would like to be able to deduct the repair of the roof but if we repaired the whole roof then the question is well now i might have to i might have to put it on the books as an improvement which isn't good for us because then we would have to allocate the cost over the life of the improvement as opposed to getting the deduction in the current year so improvements you must capitalize any expense you pay to improve your your rental property meaning you don't expense it in the point in time you paid it you got to capitalize it which isn't as good because we still get the deduction but we don't get it until we depreciate it so and expenses for an improvement if the results in a is a betterment to the property so if it's improving the property then it's an improvement there's a lot of gray area that people get into with whether or not it's an expense repair or improvement so so it's so it betterment to the property restores your property or adopts your property to a new or different use table one one shows examples of many improvements all right betterments what does that mean expenses that may result in a betterment to your property include expenses for fixing a pre-existing defect or condition enlarging or expanding your property or increasing the capacity strength or quality of your of your property restoration so expenses that may be for restoration include expenses for replacing a substantial structural part of your property repairing damage to your property after you properly adjusted the basis of the property as a result of a casualty loss or rebuilding your property to a like new condition adaptation so expenses that may be for adaptation and include expenses for altering your property to a use that isn't consistent with the intended ordinary use of your property when you began renting the property so again these are the definitions of those things where you would think we're moving away from normal repairs to something that has to go on the books as an improvement we bettered the property we restored the property we adopted the property we changed it significantly in that in that case to what it was originally attended for okay example of improvements some common examples additions you put in a bedroom a bathroom a deck garage porch patio these aren't improvements these aren't things you can just expense in the year they happen you typically have to put them on the books uh as as improvements lawn and gardening landscaping driveway walkway fence retaining wall sprinkling system swimming pool typically things you can't just expense but have to put on the books as an asset and depreciate miscellaneous storm window doors a new roof so there's the roof example central vacuum wiring upgrades satellite dish security system heating and air conditioning heating system central air conditioning furnace now these often get kind of messy if you're like building a home and you get into questions like well does that have to be included as part of the home itself and depreciated over the life of the property or maybe could i could i call heating system like equipment and depreciated over a smaller useful life in other words once i have to put it on the books as a capital asset the question is what's the useful life of the capital asset i would rather have a smaller term than a longer term i would rather be able to expense it over depreciated over seven years than over 30 years right so you get in those kind of issues central air conditioning furnace ductwork central humidifier filtration system plumbing you got the septic system water heater soft water system filtration system interior improvements built in appliances kitchen modernization flooring wall-to-wall carpeting insulation attic walls floor pipes ductwork and so on so de minimis safe harbor for tangible property if you elect this de minimis safe harbor for your rental activity for the tax year you aren't required to capitalize the de minimis costs of acquiring or producing certain real and tangible personal property and may deduct these expenses as rental expenses online 19 of schedule e so de minimis means they're generally fairly small in proportion and therefore allowed to be deductible under the safe harbor rule so for more information on electing and using the de minimis safe harbor for tangible property you can see chapter one publication 535 safe harbor for routine maintenance if you determine that your costs for an improvement to a building or or equipment you may still be able to deduct your cost under the routine maintenance safe harbor so for more information there you can see publication 535


As Catherine said, my name is Casey Greenfield. I'm a matrimonial and family lawyer in New York. Family lawyer used to be a euphemism for divorce lawyers. But fittingly enough today, it actually now encompasses a great deal of work that doesn't involve marriage at all, which I'm sure is something we'll get to at some point today. With me I have Wendy Paris, who is, I believe, a Schwartz fellow here at New America. She's written extensively about marriage, family, divorce, and has a book coming out, I believe, the year after next, right? Or next year, depending. Can I finish it? 2015. 2015. OK, the year after next. I was right. I believe tentatively called Splatopia about what it sounds like. Father Daniel Madela, who is a licensed clinical social worker and director at Cognitive Therapy of New York, and is also a therapist in Westport, Connecticut. He's also a director of the Personality Disorders Awareness Network, which is something most of us could probably use. And he is a graduate of the Yale Divinity School and is also an Episcopal priest. Naomi Kahn, I'm very lucky to have here, is a professor at George Washington University Law School here. She teaches family law and has written a trove of articles, books, co-authored articles and books as well, about family law, policy, assisted reproductive technology, and is probably best known on the popular front for a book she co-authored called Red Families versus Blue Families, Legal Polarization and the Creation of Culture. So I was thinking that we might start today by discussing perhaps an offshoot of the first panel about single parenthood, single motherhood, which is a trend that I think is probably going on in every state, although you can probably speak to this better than I, which is that as families and the culture have changed, so has the way in which people approach the inevitable dissolution of their domestic relationships. And I was wondering maybe, Naomi, if you would indulge us with a brief description of trends that you see either in what's called collaborative law or mediation, as opposed to, say, a litigated dissolution. I think this is something probably we could all talk about. Yes, because we're going to get started. I actually, about five years ago, I teach family law, I teach a very basic course, and I started to have a collaborative family law divorce lawyer come talk to my classes about collaborative family law. And it was something that I've also done a family law casebook. It's something that's sort of like in the back five pages of the family law casebook, but it's become a huge, huge new way for people to think about doing divorce. And for collaborative divorce, there are different kinds of collaborative divorces. And we realize this may seem like a contradiction in terms, so just. Yeah, I mean, one of the things true collaborative divorce is you have to agree that you're going to mediate. You're going to come to some agreement in your divorce and that you're not going to use the same lawyer if that agreement falls apart. And so it truly is an attempt to collaborate on coming to an agreement with the risk being that you lose all of the time and all the money that you've invested in collaborative divorce if you can't reach an agreement. And the advocates of collaborative divorce think it's, I guess, even better than sliced bread, because it really does take away that contradictory aspect of divorce by involving professionals to deal with parenting issues. So children may have their own counsel, certainly have counselors. So it deals with children. It deals with financial issues. And it's also designed to deal with the emotional issues that come up between the parties. And Wendy, I know you've written on what you call the good divorce. And I think that that ties into what Naomi's describing as a way to dissolve a legal bond and look forward to the next step in the relationship. Could you talk for a minute about how you see that, either as the ideal or in practice? Yeah, I think one way that people talk about divorce is that it's a psychological and a legal event and that the one affects the other. So there's a lot of research. Is this very loud? There's a lot of research. And then anecdotal stories about people get started on their divorce. They mean to do it well. They get somebody says, no, you've got to get a lawyer. Take them for all these worths. And it becomes very adversarial. And then issues that happen in divorce like fear, sense of victimization, anger, these things really get exacerbated by the legal process when it's adversarial. So I've been really excited to see people stepping away from that. You see it a lot with mediation. People go to a mediator. And maybe it costs $1,500 or $3,000 to go to a mediator, as opposed to like $150,000 to hire two lawyers. That $150,000 adds to this fear, this anger, this resentment. So yeah, I think it's great. I've also talked to people like my hairdresser, who didn't use a lawyer at all, just read online what she was entitled to, suggested to her husband that he pay her that. He agreed. They filed the paper. They were done for $350. So I feel like collaborative is a spirit, like this. Like it's more of a cognitive thing. Like you want to try to do this together. And so I'm excited to see different ways that that legally can be done. So Naomi and hearing you, this sounds like a no-brainer in a way that we should approach the dissolution of the marital bond, if it's to be dissolved. I know that Daniel sees individuals and couples, both in a therapeutic context and in a, is it ecclesiastical, clerical, whatever. Sorry, no disrespect to the caller context. So I'm very, very curious to hear what you think as someone who watches people together, but also watches them coming apart. And after that, what you think, I'm not asking for your legal advice. Good, that's a good thing. That we'll divide that here, yeah. Well, I guess I'm less excited about collaborative divorce because I think it's an idea that makes sense in theory, and it sounds right. But what I have seen is that children of it, look, without children, if two people want to divorce and go collaborative, that's cool. But the thing is, is that children, I think, get really confused and overly friendly divorces. And I think it leads to, I think, more abandonment fears that is what I've seen and mistrust. Because I think that an overly friendly divorce, child's world really doesn't make sense. Why aren't mom and dad together? They seem to like each other. They seem to get along and so forth. And then I think there's a re-traumatizing aspect, especially when couples get together for holidays or for birthdays or whatever, or family dinners and so forth. Because I think children will always have the wish that the parents will get back together and that's always then dashed. And I think that it creates a lot of confusion. And I think the reasons for the divorce then are hidden and murky and it's all obfuscation. And I think children don't know what to do with that. As you talked, I just, my kids watch the parent trap over and over and over, which involves, I mean, there's the fan, it's the complete fantasy that, and when they watched it, the complete fantasy is that parents who've been divorced of these two twins are gonna come back together and reunite and live happily ever after. And they watched it with friends of theirs from divorced families and their friends from divorced families had exactly that impression that, oh, gosh, maybe they will and it was somewhat destructive for them. I guess, and I should say that it is not, I don't think it's necessarily even a given that as we move forward into the kind of society that was discussed at the first panel, and I think Daniel mentioned kind of offhandedly, it is not necessarily so, I believe, that marriage without children should be even viewed legally as a comparable institution to marriage with children. Obviously, we talk about them very distinctly when we talk about social benefits and psychological benefits and so forth or potential harms to something like a collaborative approach gone wrong, but I don't know what you think about this. I wouldn't be surprised if down the line with changes in legislation and changes in policy, if these even, if the distinction becomes about between marriage and not marriage as opposed to family units with children and family units without children, that's just my kind of off-the-cuff speculation. But yeah. Let me say there are proposals to make, to have to sort of track divorce. See? Yes, yes. Among others, Bill Galston has suggested that there be two tracks that, for example, if there are children that there has to be a longer waiting period. So making it harder to get divorced if children are involved as a way, I think of, I mean, of forcing the parents to reconsider the decision. Well, that reminds me, I was talking earlier before the panel with Daniel about something that exists in the cobwebs of my brain that, for all I know, exists in 15 states by now that, at least in the late 90s, the Louisiana legislature, I think, was trying to push forth a bill on a two-track marriage. But it was ex-ante, it was called Covenant Marriage, that was basically an attempt to... Three states. It exists in three states? This, as I understand it, is an opt-in civil marriage union that imposes greater barriers to divorce or something like that. Oh yeah. And so it's an attempt, I guess, to replicate the religious covenant structure within the civil realm. Right? Essentially it brings back fault-divorce for the people who opt into it. Okay. And so it essentially says you pretty much agree you will not get divorced unless there is fault. Now, if you can prove fault, then... Right, that in 250, you know? Yes, right. But I'm interested to what you're saying about the waiting period, the tracks, because I think, Daniel, you're focused being on the kids of these situations. As we think forward about policy, potential policy prescriptions, I think you have some notion about this, right? Well, I do think that, again, I approach that, yes, that children need to be well-loved, but children need stability and predictability. And so whatever form or fashion a family takes, the disruption of that is, I think, what I'm most concerned about. And I don't think that's ever good for kids. I think there's mitigating factors that can make it better, there's resilience, but in the end, it's hard. And I believe that there should be, as in medicine, an informed consent that I think parents who divorce with children should have a certain number of hours to understand what are the potential consequences to their children. I'm interested, and I mean, that's interesting, but there's a lot of these parent education programs coming up, Sesame Street Workshop is just building one on how to talk to your kids about divorce. There's something called sand castles, which I think is actually mandated in 14 counties in Florida or something, which is a three and a half hour course where kids sit with other kids their age whose parents are getting divorced, so they have a peer community and there's a workbook and they can talk about it. There's another one that a psychologist in New York does, and I think these things are so helpful, can be so helpful to kids. Some of them are teaching resilience, teaching parents how to talk to kids, teaching kids how to problem solve, teaching kids how to identify their own strengths. So I don't know about. But it's so after the fact though, because I mean, resilience is a great thing, but kids who grow up in poverty or in violence, kids with resilience do better, but doesn't mean the violence or the poverty is good. So resilience, see those deal after the fact and they help children process feelings and not personalize, but I'm talking about beforehand. I think that we have to talk about that parents should know what are the potential negative consequences of the disruption of stability in a family. Yeah, I just think it's helpful to. I'm not saying those are bad. Yeah, no, I mean, if you're in a bad marriage and then, you know, there's all this research that shows that what damages kids is conflict. You know, hundreds of studies, conflict between the parents, losing contact with the parent, inadequate resources, and instability. And there's a study by Michael at Cambridge that looks at 400 studies done over the last 40 years about what damages kids. And these are the things he comes up with, not even whether the other parent lives in the house, that that just doesn't seem to track, it's about conflict. So you don't really, I don't think you want to encourage parents to stay in their marriage because it's gonna mess up the kids so bad while they're fighting over the dinner table. Like I don't think that, I don't think the fear, it seems like everybody who's contemplating a divorce doesn't want to do it because of the kids. Like I feel like that fear is almost overblown and it would be better to help kids' parents understand, look, if you're gonna fight, do it outside the house, or let's not get into an adversarial process. Well, let's, one, I think potential risk factor in that is that there is the risk that of veering into a little bit of what the, I believe the right wing calls self-esteem or whatever they call that, that maneuvers like that actually, it may be, are intended to make the adults feel more justified in their decisions regardless of what the reality is. I mean, I think that what you're describing is not necessarily untrue, but it's a pretty common trope, right? That it is better to divide a household that is rife with conflict than to keep it together for the kids, right? And that that's, it's what we tell ourselves. It doesn't mean it's not true. I happen to think it's often true. And anecdotally, I'm sure we've seen cases where it's true, but I do think that that's a kind of adult-focused view rather than a kid-focused view, very much so. Because I think, can I just say that? I think that oftentimes that's what I think about this overly, again, friendly divorce is that it soothes the parent's conscience. Oh, look, we can divorce, and we'll do it really in a friendly manner, and all will be well. I think it's, I don't think the kids are heard. Well, one thing that, I mean, this obviously reminds me of what Katie was talking about in the earlier panel about conflict and stress, or maybe it was, Jason and Katie were both talking about this, that the predictor of the well-being of the children is the presence or absence of conflict and stress in the household. And I think we've all probably seen households where the kids were miserable, and then the parents split up, and then the kids seem much better off. And we've probably seen the reverse happen, and maybe that tracks with when the conflict is visible to the kids. Sometimes it might be legible before the parents split up. Sometimes there might be more fighting after the fact, and more of the, if your dad doesn't tell your dad if he doesn't pay me this week, you're not going over there. That's probably a bad outcome, right? But I would think that the issue of conflict is not necessarily linked to the moment of the split, if that makes any sense. But this does, when you were talking about the cost, for example, of mediation, which is, I think by any measure, factors lower than a traditional adversarial process. And let me back up for one second. At least in New York, which is my jurisdiction, mediation, as briefly described here, is a process by which, not just in divorce, it happens in all areas of at least civil litigation, I mean, civil conflict, a third party who is a neutral, who is sometimes but not always a lawyer, tries to help the parties resolve whatever their dispute is, rather than each of them being separately represented in our traditional adversarial model. There are a lot of advocates for this process, a lot of people who are strongly opposed to it, some, as I am, who are highly skeptical of it. But that's sort of the model of what we're talking about here, when we talk about mediation versus adversarial process. Adversarial doesn't always mean fighting. It here, in these United States, is actually a technical term, meaning, if I'm representing Naomi and Wendy is representing Daniel, we are adversaries, and we will refer to each other as such in court, and we don't even necessarily mean anything bad by it. So when I say adversarial, I don't mean fighting, I mean literally, technically, an adversarial process. Anyway, because of the cost issue that has been raised, it is without question, $40, $1,500, whatever it is, to mediate a dissolution, or to mediate a dispute about child support between unmarried parents, or a custody issue between unmarried parents. You have written Naomi extensively about, I think you call it the class gap in both marriage and divorce. And I'd love to hear your thoughts about how access to different financial resources affects people's decision-making in terms of how to proceed with dissolution, particularly as society changes and wealth distribution changes. Well, it's actually, I mean, contrasting the outcomes of what happens upon divorce versus what happens in other kinds of relationship dissolutions is really, really fascinating, and I'm notwithstanding, Daniel, we say about sort of making sure that children see the conflict. When the parents are married, there's much more likely to be a joint custody order, which then I think requires that the parents exhibit some cooperation or else you'll really, really be scarring the kids. And so there's a huge gap in a variety of different ways when it comes to relationships that dissolve via divorce versus relationships that dissolve non-marrily. And that does, in fact, track the class gap as well in terms of who is likely to get married, but then that also means in terms of who is likely to get divorced as well. But so the different outcomes for based on divorce is not just things, that not just joint custody, but about 15% of people who are divorced get alimony. You can't get that, obviously you can't get that unless there's some money there, but you also can't get that outside of divorce. And when there's been divorce, the custodial parent is also much more likely to get full amounts of child support than when there hasn't been a divorce. So it's important as we talk about what's actually going on with divorce to think about all those families that we were talking about in the earlier panel, that is all of the single parent families where the outcomes post-divorce aren't as good. The other thing is that that recent Pew report on bread winning women showed that although divorced women have their standard of living think they're still in much better shape than never married women. So there's this huge gap that goes on and it also, I mean our conversations before the panel, we talked about it also in terms of what actually happens during the divorce process. Who's most likely to have access to these parenting education programs? And I think, please correct me if I'm mis paraphrasing you, but you've written that there is a, or you've said off the record, that if we were to draw, say, a divorce line, and we're talking about, I guess socioeconomic class here, or just even economic, that those at the very top are the least likely to divorce and that there are also these different patterns in relationship to solution between those who divorce them were never married. If you can, can you speak to that, what you think that's about that those at the top are the least likely to divorce? I mean, I could rattle off random speculations, right? Like, if you have enough money, why do you have to get divorced? You could just stay in separate rooms and you don't have to fight about money. So that's one idea. Actually, that's really important. Money, yes. No, I mean, part of it is, part of it is the later age of marriage among college educated folks that, I mean, it's age of marriage is a huge predictor, not in any individual case, but in general, in terms of who's most likely to get divorced and college educated women are one third as likely to get divorced as high school educated women. And that's because of the much, one of the reasons is the much earlier age of marriage. But the other reasons really are the economics as well. When you're in economic distress, well, gee, then your marriage is also in all kinds of distress as well. And Paul Amato, who's a Penn State sociologist in this great study, looking at who's happy in their marriages and people who don't face economic distress are quite happy in their marriages. And it's not a question of whether or not a woman is working, what's most important, what turns out to be a huge predictor of marriage is whether or not the man, or if divorced rather, is whether or not the man is working. And if the man isn't working, then it's much more likely that the couple's gonna get divorced than when he is working. If the woman's working- I love when scholars support my pet fears that I like invent in my living room, I love this. So, please keep talking, yeah. No, it's just that when women work, it's a question of what's the underlying marital happiness which has, so it's less to do with whether or not women are working and much more to do with what's the underlying level of happiness.  We have talked a lot about alternative family structures or unconventional family structures or changing family structures. I would wager that some of the criticism of unusual family arrangements or messy family arrangements is that they are overly secularized, right? That there's some, call it moral, call it irreligious component there. Would you say based on anecdota, data or data or your own experience as someone who treats religious people and not religious people that people entering into a union, a civil union or marriage in a religious context are going into it with a kind of better view towards the institution or is it, do you see it as like, that's a stop herring or something? First of all, I wouldn't say that alternate family arrangements are secularized, I mean, I think a lot of religions, including my church, are very supportive of what might be called modern family arrangements and so forth. I wouldn't say that, I wouldn't call them secularized, I think the religion and the church blesses those. What there is, there doesn't seem to be any difference as they say among, let's say, Christians of any sort, evangelical, to liberal in relationship to divorce, but it does appear that going to church several times a month is, I believe, associated with 30% less divorce regardless of, again, conservative or liberal, so I think that there's something about commitment in a community that probably supports it. And I guess the question there is a cause correlation one that we're not gonna answer in the next 15 minutes. And I guess Wendy, do you see a policy prescription? I mean, I understand from reading your work and from hearing you talk a little bit that you have a view of things that are maybe more likely to lead to better outcomes, post-dissolution, I'm not trying to put words in your mouth, but do you see, if you could wave a magic wand and have a policy in place, for example, should everyone have to go through the equivalent of pre-Kana, which is what Catholics have to do before they get married, as far as I know, is there something that comes to mind for you to say, I wish everybody had to do X? I'm nervous about policy prescriptions in terms of invading your family, right? Invading the family life, so, but that said, I feel like we need more marriage education. I feel like it should start in high school, like relationship education. I think if you are looking at divorce, you should have to go to divorce counseling. Again, it's like, do you wanna mandate this? I don't know. Children, absolutely, one of these programs should be very, very accessible. If not, it's very hard, like, I'm doing this book and I just found out about the Sesame Street thing. It gets very hard to find these kinds of things, so I feel like marriage education, divorce education, something about dealing with children, and then there's so much research now coming out of positive psychology about a lot of this cognitive behavioral therapy techniques for helping people deal with what happens in divorce, such as loneliness, there's a lot of research about the benefit of empathy over anger and how empathy can help you reduce your own anger, there's divorce coaches now, and my divorce coach talks about trying to see everything that happens in your divorce as a positive for you, like, what can you learn from this, how can you grow from this, and to not get into thinking, well, he has it better than I do, which is really easy to do. In terms of policy prescription, I think these are some psychological tools that would be very useful, and then I also think... That makes my heart race with anxiety, I just... That you would have to do some kind of... No, that whole idea, that they embrace the positive.  That's a separate, that's a separate discussion. I'm not trying to advocate divorce, but if you're doing it, if you're doing it, you're doing it. So if you've never had to pay your bills and suddenly you have to, well, that's great, right? That can be a great growth experience. So if you're doing it, I feel like even issues with loneliness, a lot of people are lonely in their marriage, so now you're out of your marriage and you're lonely, so let's take a look at who's in your life and how do you view yourself and your relationship with others, like, is there really good growth opportunities? I guess the flip side of it, and then we will take a few questions if there aren't any, the flip side of that is that, and I'm, you know, I am hearing this as a part of the, as coming, this is the totally other, right? I am adversarial by nature and by profession. I hear that as, maybe I hear that from the perspective of, for example, the client who is the less empowered person in the relationship, the same person who, for example, I would recommend not go to mediation, where maybe you're advising in some ways what sounds like a very Christian or a very, again, positive and empowering view could also be very much viewed as they suck it up. Yeah, but what a great opportunity for that person who's not empowered to say, you know what, why have I not been empowered in my life? And here's my chance. Sure, and I totally get the argument and it totally makes me hysterical. So we have a few minutes left and I'm wondering if there are any questions if people want to. Oh, oh my goodness. I guess the woman in the red glasses frames right here. Yes. I just wanted to make a couple of comments. I guess as always there were some generalities and one thing I learned from divorces is that no two divorces are ever the same. You know, I had to talk to a lot of different people to figure out to learn about loneliness from one person and about how hard to push for a settlement from another. This is the part where we don't quote Anna Karenina, right? Yeah. Another thing that was mentioned is the parent trap fantasy which I agree many kids have. I have asked my grown children, did they have that fantasy? And they said no. And that was because my kids knew when I really meant no and I would say something like there is a 0% possibility.  And so when I told them that, it was crystal clear to them. And so I think that's something parents can do. As far as without house, I think the fact that my kids I think came out extremely well was that they had two parents who did put the kids first. I say hate is stronger than love when I see what parents say about the other parent or they'll reveal the philandering and all that. And we were able to go on family vacation for nine years. It's starting six years after our divorce. Nothing in the world was better for my kids. They loved it. So I think the idea of the good divorce, my God, of course, to me. And I'll just say one last thing is that my lawyer who was so Peter Sherman, some of you may know him he's retired now, but he was so fantastic. And he sent us to a therapist to do the custody. He said I'm a lawyer. Why should I help you settle the custody? And I think that was a fantastic thing. There are now some very few law firms now that have on staff parenting coordinators for that non-lawyer parenting coordinators who do exactly that for that reason. Anyhow, that's my two cents or 10 cents. Okay. I guess going down straight down the line there. Hi, thank you for this panel. I have a couple of points. First, the idea of collaborative divorce is, I think you probably have some good points to it as the previous speaker said, but it all depends on there being a certain amount of goodwill between the divorcing parents. And if there isn't, it's really hard to get to that. I understand that the adversarial model sort of positions the parents in opposition to each other, but sometimes that's necessary if they really can't agree. So it sounds like a really great idea, but I think it's not always possible. Second, along with the parent trap family, it seems to, and I don't know exactly what the research is on this, but it seems like the divorced family is being positioned against a perfect intact family. And as we all know, intact families are hardly perfect. And many kids, I don't know what the percentages of kids who come out neurotic from non-divorced families is, but I suspect it's not a whole lot lower than those from divorced families. But my final point is this, and that is that you haven't really addressed any of the structural issues that make it so difficult for divorced couples, specifically, particularly women. We talked a little bit about the economics. Women do certainly, I mean women, because women earn 70% less, 70% of what men do invariably unless they're very high-powered, very high-earning people are gonna end up with a lower salary than their husbands. So they can't provide the kids with all the things that the husband might be able to, and so forth and so on. Plus, there's the whole issue of the lack of childcare, the lack of paid maternity leave, parental leave, all that stuff that make it so difficult. I mean, because divorced women end up being working mothers. Maybe they were working mothers before, but they end up being working mothers, and I think we really have to take into account all of the policies or non-polices in the U.S. that make being a working mother and a working father, but especially working mothers so difficult. Sure, I agree with you, that's something we didn't touch on. Unfortunately, these are short panels. A couple of just, I guess, non-scientific or unscientific things I'd like to say about that. First is there are a lot of women in what might fall under the not financially distressed category of family who are themselves quite financially stressed, because they don't have access to or control over the marital finances at all. So if you were to look at the family unit from kind of on high, you'd see a very secure financial model, but then if you actually looked within it in the micro level, you'd actually see a woman with basically no power who's being asked to show her grocery receipts or her husband, and then when she comes out of the marriage, sure, she might have a lot less money and she might be working a lot harder, but she may well find herself with a lot more control over her financial life and therefore a lot more financial freedom. That anecdotally, I see happen all the time. The second issue is that I think that when, that in the adversarial model, it's not just that some people need it because they can't solve everything through collaborative divorce. I think that's a myth. And I actually think that collaborative divorce is something of a fiction, but that's for something I'll yap about another time. There is also I think a very strong argument to be made that the adversarial model, when implemented correctly, takes the emotion out of it and allows you to get to a solution more civilly. That's, of course, my opinion on this is somewhat extreme, but I don't really like this opposition that comes up over and over that, that it's if you can't solve it yourselves, then you go adversarial. I do also think particularly for women, separate representation is often much more important than is given credit for. You're taking furious notes, Naomi. I feel like you want to say something, yeah. No, I just want to, I mean, the economics post-divorce really, is really an important issue. I mean, it is still true that notwithstanding that 40% of women are the primary breadwinners within marriages, men are still three times more likely to be the breadwinner than are their wives. So there is a mismatch just going into, just within the ongoing marriage. On the other hand, at divorce, there's it's a lot more efficient for two people to live in one household than for two people to live in two separate households. And so there's often just not enough money to go around. The average American's net worth is $77,000, and the average income is about $46,000. Now it's higher, men do earn more, but there's still, the economics really are a nightmare when it comes to living in two households separately. I agree. I agree. I agree. In my splotopia chapter on finances, I see people who often, they get remarried. So you have, this is one, and then there's some new research showing that women's standard of living doesn't decline as much as it was thought, that there was a mistaken study, you know, from the, that study was this horrible study that was repeated, repeated, repeated, repeated, showing that women's standard of living declined 74%. And in fact, she flipped her numbers and it was 26%, and that's not even true if you take into account child support custody, the nice house she may stay in. But what I've seen, again anecdotally, is people who are in bad marriages and they're weighed down and they're having trouble focusing on their career because 40% of their brain power is going to this fight. So then I see people, they get out of those marriages and they're able to focus, and this has happened to me, this has happened to people I've interviewed, so yes, they're working, but they're in control. What you're saying is so interesting to me that women who are living in a well-to-do family but felt no control, and then I've certainly talked to people like that who came out of it, and so I don't know why I was so poor in my marriage and now I make less, but I have more. So I do think that the emotional can affect the financial. I think we have to have one more super quick question and there's one hand emerge. Oh, there are two. I don't know, somebody else decide. I'm horribly indecisive for an adversarial lawyer. He's persistent. Okay, he's persistent with the tie. The tie with the tie here, I guess. The other one might have had a tie on it, so I just couldn't say. So I'm sort of curious, because I think everyone can sort of point to the illustration where divorce made that individual circumstance better off for the kids, for the people that are involved, as well as individual kind of anecdotal evidence that it made people worse off. I guess I'm kind of interested in what the norms are and then what the policy response should be in terms of that, is divorce on balance, something that makes people better off or worse off, and then indicating what that norm would be as kind of the general guidance for policy, what policy prescription should it make divorce easier or harder? My personal pet thing on this, and for all I know it's in the works already, is I think that, I don't know, that anyone who wants to get married should, when applying for the license, not only have to have a waiting period, but should have to pay into the equivalent of a workers' comp fund, which is like the least controversial broad policy, I think that exists in the country, and it should be a dissolution compensation fund that would offset the crippling cost of divorce. I believe that that's because divorce is generally not a good thing and that people shouldn't go into marriage so lightly. That's what I think. In terms of the norms, I'm curious to hear what you guys think. I think people just get married without much thought and that they get divorced when they feel like it, but that's based on nothing. That's just what I think. Yeah, I don't know. It depended on what you're measuring, when you say what are the norms for successful outcome you said? Is divorce on balance better or worse for people in terms of a generality about it? Because making policy based on exceptions or anecdotes is kind of hard. I'm just trying to understand, is it a good thing or sort of a bad thing, whatever indices you want to use for that? Well, I'm gonna say again that instability in a family is always going to be bad, it's gonna be worse for a kid. Except in high conflict. Except, right, which is a worse instability, perhaps. Marriage isn't a set thing. Marriage isn't a set thing, so you're not comparing divorce to a particular type of marriage. Marriages are so variable. And you're also building out of that the preponderance of children who are born into non-marital situations to begin with. Unfortunately, we're out of time, as everyone could probably tell. I could certainly talk all day about this stuff. I wanna thank Wendy and Daniel and Naomi for participating. Naomi is doing a double header here, and thank you all very much, and I hope you never need my services, and I don't know. Thanks again. Thank you. Thank you.


Hi everybody, I have Ilya, the Director of the Kidney Cancer Research Bureau from Moscow. He wants to tell us about his organization. Go ahead Ilya. Kidney Cancer Research Bureau is a non-for-profit Russian organization made up of researchers, medical oncologists and other professionals. Kidney Cancer Research Bureau funded Kidney Cancer Patient League in Russia and both those organizations are under the umbrella of Kidney Cancer Association. So we divide the aims of Kidney Cancer Association such as education, research and advocacy. During this year we organized four patient schools in the largest cities in Russia and also together with Kidney Cancer Association we have conference of Kidney Cancer. This year we organized this meeting in Yekaterinburg is the capital of Ural and this meeting includes day for patients and day for specialists. This is a unique meeting for our country. Also we translated a book of Kidney Cancer Association. We have a Kidney Cancer in Russian and provided for our patients and their families. Kidney Cancer Research Bureau translated NCCN guidelines and then we developed own hybrid guidelines which combined of priority and alternative treatments because we have some financial problems in our country. Also our website Rackpochkinet is a kidney cancer in Russia is the number one of our source in Rune at Russian Internet. We have information for patients and professionals and from this year we started video educational program together with Kidney Cancer Association too. Also we impact on the financial support of kidney cancer as a problem in Russia. For example we sent many letters to Ministry of Health in Russia and this year we have success Ministry of Health provided financial support for new targeted agents for Russian patients. Also we impact on development of national kidney cancer registry in Russia. So we have many aims and I think that together with Kidney Cancer Association and other organizations we make world without kidney cancer. And that's good. We're glad to work with you now. About how many kidney cancer patients do you have every year, Ilya? We have 1,000 members of patients and annually incidence of kidney cancer is about 17,000 per year, patients per year. And we have 30,000 of metastatic kidney cancer patients per year. And I've been talking with Ilya, he's working with the Kidney Cancer Association with their vision of a world without kidney cancer. Thank you.