Welcome to Jalassette News, take a top stories in cryptocurrency and Jalassette's and break it down to bite-sized pieces. Today, it's a little snippet, but what I want to talk about is one river makes one of the largest cryptocurrency trades in history and what that actually means to you and me. Now, obviously, this is a pretty good thing for the market in general. However, what does it mean for the people that help them do this? What does it mean for the price? And what does it mean for the future as far as customer service to where you are probably getting your cryptocurrency? So we'll go over that in a bit and it's just a little snippet I want to talk about. But let's just take a look at what's going on in the market today. Real quick, it is January 6th, 10 a.m. El Paso, Texas time. And real quick, it is again, Bitcoin is about above 35,000, so not too bad. And then everything else is doing great. So I'm not going to go into detail like I usually do as far as like with the market. Just know that everything's pretty much up. Let's see any down. That's a good question. Not really. So, well, that's not a little bit, but who cares, right? It's just that just kidding. I own that. I hopefully does pretty well. So this is just one of these great stories. As far as institutional investing really coming in. Now, over time, we have seen a lot of these institutions really FOMO in not really FOMO in the first one was really what was micro strategy square micro strategy. But they were kind of like one of the first that really kind of came in and bought a lot of capital into this market. And it's thankful because it shows every other company what is what is available for them to do. So when I see other companies getting in, I'm just like, Well, just one more, just one more. And if this would happen in like 2017, 2015, 2014, I mean, we'd be much farther along than what we are now. But the track wasn't built for these institutions to really get in. They needed to have a lot of structure put in place because they're just not used to, you know, having a hardware wallet doing all the custody services. I mean, it just wasn't it wasn't available to them. And now it really is. And that's why I think 2021 is going to be a pretty good year. We just did a video this morning where I talked about this is the best time to be in cryptocurrency. I mean, if you missed out before, as far as like doing dollar cost averaging, you know, every single day when everything was boring, doesn't matter right now. I envy you if you're here and you've just got in. Oh, I think great. So what's going on here? Well, one river makes one of the largest cryptocurrency trades in history. So first of all, one river, they are hedge fund asset management. And they do a lot of different things with the financial industry will go over how much assets they actually have under management, which really isn't that much from what I saw. But it was just interesting that they put this much money. I mean, they put a lot of money into Bitcoin. So one river has worked with crypto exchange Coinbase. Remember that name Coinbase to invest in undisclosed amount in cryptocurrency. We're going to tell you how much it is. According to Coinbase, which carried out the transactions, its purchase represents one of the largest digital asset trades in history. Now, keep in mind, when Michael strategy did this, they did around $425 million. And they did it over weeks. And the way that they weren't, the way that they didn't make the market pump was they did these micro transactions, because Coinbase wants to really put a time and energy into their institutional clients. They are really doing that a lot of and I think that's why things are suffering as far as the retails. We'll take a look at that a bit. So what they do is they do these little micro transactions one every three to five seconds, and it could be a full Bitcoin, it could be a fraction of a Bitcoin. And that's how they're able to buy, you know, $400 million, $600 million, a billion dollars worth of cryptocurrency, and the price doesn't go up that much, which is a bad thing for us. But just remember this, at some point, they can't do that as much as they do right now. At some point, there's not going to be anything left. And that's the great thing about Bitcoin is only, there's only 18 and a half million right now. And really, there's two million loss, I think it was like 16, 16 and a half million. And once all this gets bought up, all these little micro transactions, this stuff's going to stop because they can only do so many of these, you know, huge, enormous amount of micro transactions, I mean, they'll still do it.  And if you want to grab something, we'll just, you know, step the mind and take a number. And I'll tell you what my number is later on, because it's not going to be anything fairly quickly. So I think this is one of those things where time will win out. Okay, so the initial trades were executed over a five day period. So just imagine that five days, and they got in X amounts of Bitcoin. And this is Kim Yongjoo. He is the, I think he's the CEO for crypto quads. And he just talks about there's they have this service where they have all the data. Let me just blow this up because you can't really see it. There we are. So Bitcoin Coinbase Pro Outflow. So this is going back all the way to 2018. And these spikes are when there's just a massive outflow of Bitcoin from the exchanges to either a wallet or to an institution or whatever else. And you get to see there's not that many of those. But if you take a look here, this is around March and April. Obviously what happened in that time, there was a huge crash, people want to take it all off. Sure. Then you have these little increases. Here's July 2020. And then August, this was a micro strategy, did all the little magic right back here. And here's now. Now you saw a total outflow of 55,000 Bitcoin in a very small amount of time. And that is where all of these, all these Bitcoin transactions actually took place. So interesting time to be had. And then scrolling down, I think this is I mean, the rest of the article is interesting, but I got bored. So it's, this is really the crux of it. It says, say it's holding these assets over the long term. And this is from one rivers CEO, I believe. Yeah, holding his assets. Yeah, holding his assets over the long term aligns yourself with the macro mega trends of technological advance and currency debasement, both of which appear to be accelerating. So why did I read that to you? What is so important about that? Well, what's important about this is that what he is saying is that we are not here to trade. We are not here to grab up a little bit, make a quick profit and sell. What we are here for is because there's so much money printing, because there's so much problems in the world because we can see exactly which way technology is moving in as far as finance goes. This is what we've invested into and we're here for the long haul. So if you feel that there's going to be a lot of Bitcoin around, you've got huge companies like this buying up and you've had Michael Saylor from Michael strategy buying it up and going, Hey, we're not selling. And I'm pretty sure Jack Dorsey from Square and Twitter, I'm pretty sure his company isn't selling either, because they know exactly what's going to happen. This isn't an asset this is going to go to like 50,000 and then it's kind of teeter on that for the next decade. It's going to probably move up pretty exponentially. But again, only time will tell. And this actually gets back to the main point, which is this. Michael Saylor talks about he has no respect for traders. I have respect for traders because I can't do it and I just don't have the time of the patience or the intelligence probably to do it. But there's a lot of people that do it pretty well. Sometimes. But what we're talking about here is that for everybody who is trading, and they're like, Oh, great, you know, I made, you know, 50% gains or 30% gains, which is pretty good. But if you think about the long haul, this is why I'm an investor.  Things come up, you have to pay for bills, somebody gets sick, there's some other problems. You mean you have an emergency fund, whatever, sure. But the lion's share, I don't think a lot of people should be selling. At least I'm not going to sell. I can't tell you what to do. I'm not a financial advisor. But every time that you're selling, every time that you're getting rid of something, it's not me that's buying a Bitcoin. Well, actually, it is me. I mean, I still do dollar cost average every day in the crypto. But the majority of who's buying are people like this. They are these big institutions that are just so happy that you're buying and they're waiting in the shadows. And they've got an unfair advantage, which is Coinbase, who is helping them to snatch up everything while you let it go. And that is exactly what's happening. There is no love lost. They just are in it for the bottom line. And that's really what happens. So just think about that when you're selling, when you're trading, whatever else. And if you want to trade, sure, go ahead to have trade fund, have great time. Just don't do 100% trading. That's just crazy, crazy talk. So this leads me to my next point, which is how much should they actually spend? Because in all these articles, it doesn't tell you how much it is. It's just that it's the most in history, which is fantastic. But what does that really mean to us? Well, I found this article. This is December 18th from Bitcoin.com. These guys have the best, the best information I love. And it talks about how a billion in Bitcoin and Ether, one river hedge fund to increase holdings from 600 million. So they've already purchased 600 million back in the day, right? They've invested 600 million in Bitcoin and Ether with the plan to increase its holdings to one, let me highlight that, one billion next year. So I think they just bought a billion dollars additional worth of cryptocurrency assets. And I don't know if it's all Bitcoin, but that's just what they bought. And then scrolling down and talks about this. One river was founded by CEO Eric Peters in 2013. And they oversee about, this is crazy, 1.6 billion in total assets under management. And then the CEO states this, one river digital asset management has committed that will bring its holdings of Bitcoin and Ether to about one billion as of early 2021. So if they already put in 600 million, okay, then for them to have the highest amount of all time, it's not 400 million, because that would only be one, that would only be 400 million in one shot. And if you can take a look here at the Bitcoin treasuries, micro strategy, I don't have any more, it's a bummer, but micro strategy put in 425 million in one shot. So I think they invested a heck of a lot more. But what's interesting to me is that for the assets under management, they have 1.6 billion. So unless they did a C funding round or they got a whole lot of their investors and said, this is what we're doing, this is going to be a pre-investment and they raised a bunch of capital, they put a lot of money into cryptocurrencies and digital assets. So the question you have to ask yourself, am I at the right place at the right time with the right asset? And the answer is yes, yes, yes. So I think if you just take a look at what smart money is doing, this is where you get your information. And here's my last point and I'll say like this, there is one recurring theme, which is who is helping all these institutions? Well, they help micro strategy. They help these guys and their names are Coinbase and there's nothing wrong with that. I have nothing, I have no problems with a business being a business and doing different things and making a profit. That's the good old American dream, right? The problem is, is that when they do these types of things and they're really putting so much focus into the institutions, you get stuff like this. I just shown you this before. It goes down. Coinbase goes down and if you want to do any kind of trading, any kind of selling, any kind of buying, well, you're as so well.  So that is no good. That is a problem and I think it's going to be a problem happening more and more and more. And it's one of those things that if you want to use Coinbase and you're new, have at it but just realize that, this is what me and Steve Erlich talked about. He's the CEO of Voyager. He's like, you know, some companies, Steve will never, Steve will never pinpoint to a particular exchange. He goes, but some exchanges have moved on. He goes, if you don't realize that they are more so for the institutions and they are catering to the institutions more so and they're letting the retail fall by the wayside, then you just don't have your eyes open. It's essentially what he said and I can agree. And this is the same thing that's going on. So underneath this video in the description of my videos, there's the exchange of wallet fees as a link. It looks just like this and when you click on that, it goes to all my recommendations. These are the ones that I recommend I personally use and I've been using for quite some time and I love them. So I kind of have a one-two punch. Voyager is where I buy everything. And then Celsius is where I send things to because, well, too fast. So it can gain yield. Now some people always ask me, well, how much do you have in Celsius?  So if you're putting another place then it's not your crypto. Yeah, I get that. But when you're getting like 8%, 9%, 10%, I mean, synthetics I think is like 18% yield. You can't pass that up. So again, what I've always talked about, diversify. I'm not keeping 100% of my portfolio in Celsius. I used to keep 30, which I thought, which I reevaluated, thought that's a little, that's not a good idea, Rob. And now it's 15%. So I have 15% of my portfolio in Celsius gaining yield every single week and it's the easiest image you can possibly do. And what I like about is like Alex Moschinski talks about it's a flywheel. So if you put Bitcoin on there, you're going to earn rewards in Bitcoin. So let's say I have one Bitcoin and then for the week you gain, you know, zero one Bitcoin or whatever it is.  So that's why you Celsius and crack in and all these other things. Now just notice that everything here is an affiliate link. You don't have to use the link. You can go right to it, but just be aware of scams. But if you do use affiliate link, it's between 10 and 25 dollars of Bitcoin that you can use. So what everyone does, it's up to you. And then lastly, I just want to bring up that coin base. I put this in, when was this? This is December 1st. And I said, first of all, sometimes it's just easier to have it on in exchange. So I'm never going to fault anybody for like saying, well I just want to keep in exchange because it's easy out of a lot of things going on. Okay, I mean, some people say, well you've got to learn, you got to take it off.  That's so fine. You want to keep it on there. Just be aware that it's not your keys, not your crypto. But I've always said, and I've said this in December 1st, there's something going on with Coinbase. There's too many outages.   So if you keep going down and you didn't hire, if you hired more lawyers than you did programmers, then you got a problem. And that problem is going to relate to the retail customer. Now, they're pretty big. I don't know what's really going to make an effect, but for me, I won't. If it's a, it's an all-out failure, I'll use them. And if I got to offload some things, sure, but it's not my first choice. That's all I'll say. Anyhow, so that's it for today's video. Thanks for sticking with me to the end. I appreciate it. If you like these types of videos, then we're two months going to pop up on your left and right. And that is it for today. So thanks for sticking with me. Appreciate it. And see you on the next one.


Income tax 2021-2022. Rental property special situations part number one. Get ready to get refunds to the max diving into income tax 2021-2022. Most of this information can be found in Publication 527 residential rental property tax year 2021 on the IRS website irs.gov irs.gov income tax formula line one income would generally have another schedule basically an income statement with income and expenses expenses basically being deductions the net then is what rolls into line one income here on the income tax formula as well as eventually page one of the form 1040 this is the schedule E in essence the income statement schedule the supplemental income and loss were focused on the rental real estate so we're looking at special situations this chapter discusses some rental real estate activities that are subject to additional rules more rules is that even possible yeah it is we've got we we can do rules forever like infinity rules so we got the condominiums here a condominium is most often a dwelling unit in a multi-unit building but can also take other forms such as a townhouse or garden or apartment if you own a condominium you also own a share of the common elements such as land lobbies elevators and service areas so you could see obviously this kind of form of ownership can lead to differences or in the calculations or some complexity with regards to the taxation of it you and other condominium owners may pay dues or assessments to a special corporative that is organized to take care of the common elements so you you own the common elements the common elements are being taken care of by the organization that you know a joint type of organization to take care of it special rules apply if you rent your condominium to others you can deduct as rental expenses all the expenses discussed in chapter one and two in addition you can deduct any dues or assessments paid for maintenance of the common elements so those common element areas are going to be kind of a different situation for for a condominium kind of situation than a rental we owe the property outside of that situation so you can deduct special assessments you pay to condominium management corporative for improvements however you may be able to recover your share of the cost of any improvement by taking depreciation corporatives if you live in a corporative you don't own your apartment instead a corporation owns the apartment and you are a tenant stockholder in the corporate of housing corporation so you can see again this another form of ownership where you've got this kind of commutal element to it which is going to make the tax calculation a little bit difficult when you're looking at a renting type of situation as compared to if you just owned it outright as like a single dwelling residence for example if you rent your apartment to others you can usually deduct as rental expense all the maintenance fees you pay to the corporative housing corporation well that's nice in addition to the maintenance fees paid to the corporative housing corporation you can deduct your total payment for repairs upkeep and other rental expenses including interest paid on a loan used to buy your stock in the corporative depreciation you will be depreciating your stock in the corporative rather than the apartment itself so now because it's owned with basically the stock now that you're going to be depreciating your ownership interest in what you actually own the corporative in essence and that being a separate entity is the thing that owns the interest so figure your depreciation deduction as follows so how do you do that that seems a little bit more complicated than just depreciating the purchase of the home possibly so figure that depreciation for all the depreciable real property owned by the corporative depreciation methods are discussed in chapter two of this publication and publication 946 we touched on that briefly if you bought your corporative stock after its first offering figure the depreciable basis of this property as follows a multiply your cost per share by the total number of outstanding shares be add the amount figured in a any mortgage debt on the property on the date you bought the stock see subtract from the amount figured in part b any mortgage debt that isn't for the depreciable real property such as part for the land so you got the same kind of issue you know with the depreciation that we're going to be applying the amount that's going to be for land versus the amount for the building the land not being depreciable the building being depreciable number two subtract from the amount figured in part one any depreciation for space owned by the corporative they can be rented but can't be lived in by the tenant stock holder three divide the number of your shares of stock by the total number of shares outstanding including any shares held by the cooperative for multiply the result and two by the percent you figured in three this is the depreciation on the stock your depreciation deduction for the year I can't be more than the part of the adjusted basis defined in chapter two and the stock of the corporative that is allocable to your rental property payments added to capital account payments payments earmarked for a capital asset or improvement so now you've got improvements that are taking place if it was a if it was your own rental property that you owned outright then you've got the question of do I put the improvements on the books you know as an expense or no if it's an improvement I got a categorize it basically as an asset and depreciated well now you've got the cooperative putting the improvements on so you know what you do in that case so otherwise charged to the corporatives capital account for added to the basis of your stock in the corporation so one more time payments earmarked for a capital asset or improvement or otherwise charged to the corporatives capital account are added to the basis of your stock in the corporation for example you can't deduct a payment used to pave a community parking lot instead and install a new roof or pay the principal of the corporate a corporations mortgage treat as capital cost the amounts you were assessing for capital items this can't be more than the amount by which your payments to the corporation exceeded your share of the corporations mortgage interest and real estate taxes your share of interest and taxes is the amount the corporation elected to allocate to you if it reasonably reflects those expenses for your apartment so now you can have to deal with the taxes and you go to the corporate to and say the amount that they're going to allocate you for those items that would generally be you would take deductions on the schedule on your rental property so otherwise figure your share in the following manner so if they don't do that then how are you going to figure it one divide the number of your shares of stock by the total number of shares outstanding including any shares held by the corporation that'll give you your percent kind of ownership your ratio to multiply the corporation's deductible interest by the number you figured in in one so now you've got the interest and you're going to basically try to figure your share of it this is your share of the interest three multiply the corporation's deductible taxes by the number you figured in one so they got the total taxes deducted you're trying to figure your share with the ratio you figured in part one this is your share of the taxes property changed to rental use so now you got a property changing kind of situation that could cause some property problems possibly for example you had it as personal property for example and then you switched it over to rental property which it could be a little bit more difficult to figure what the initial basis of it is for example as opposed to a situation where you bought the property outright that was rental property that you plan on renting because at that point you know what the cost was when you purchased it on a market value because you purchased it on the market so if you change your home or other property or a part of it to rental use at any time other than the beginning of your tax year you must divide yearly expenses such as taxes insurance between rental use and personal use so normally when you change the use of a property would be nice if you could do it basically by the beginning of the year so you have a full year of use of rental property versus personal property but if you don't do that then you've got you've got to deal with this allocation another kind of ratio calculation you would think between the portion of the year which was rental versus personal usage so you can deduct as rental expenses only the part of the expense that is for the part of the year the property was used was used or held for rental purposes so you can't deduct you know rental expenses for the whole year for something that for part of the year was personal purposes and so you have to find some method to be allocating between the personal and the rental fractions of the year you can't deduct depreciation or insurance for the part of the year the property was held for personal use so you can't depreciate a whole year's worth of property if you didn't use it for the whole year so however you can include the home mortgage interest mortgage insurance premiums and real estate taxes for the part of the year the property was held for personal use when figuring amount you can deduct on schedule a so when you're talking about personal property possibly your principal residence for example that then was converted to rental property you often have the capacity to deduct something on the schedule a remember the general rule here for deductions for an income tax in general would be you would think you would only get deductions if you had to expend the money to generate revenue so that the income tax was not placed on gross income but rather net income that seems like the fair thing to do just in general and that's basically what happens on the schedule because it's basically a business so that means that the ordinary necessary kind of expenses those expenses that you needed in order to generate the rental income would be the types of things you would expect to be deductible but on the personal side we've got those added types of things and some of the big added types of things that don't really follow that that general rule or are itemized deductions big ones being the mortgage interest so if you can't if it was your principal residence you might still be able to deduct a mortgage interest if you're itemizing if your itemized deductions are greater than the standard deduction so now you've got this allocation between the portion of the year that was rental versus the portion that was personal still possibly being able to deduct some of that and taxes including property taxes which again it's a little kind of unusual that taxes you know personal taxes are deductible but they're deductible on the schedule a so if you can deduct them on the schedule e when it's rental property and you might be able to deduct them on schedule a when it was personal property if the property was both personal and business at some point throughout the year so example let's take a look at an example shall we your tax year your tax year is the calendar year that's January through December you move from your home in May and started renting it out in June 1st you may deduct as rental expenses 712 of your yearly expenses shed such as taxes and insurance so if we pull out the trusty calculator it's not a difficult ratio calculation to make we got 7 712 still we can deduct the 7 months for rental and there's 12 in the year so that would mean 712 there so that's going to be the 58.33% for example starting with June you can deduct as rental expenses the amount you paid for its it's generally build monthly such as utilities so utilities are not something you can deduct on a schedule a if it was personal but can deduct possibly for the rental half when figuring depreciation treat the property is placed in service on June so so then if you're talking about the personal stuff that you might still be able to deduct on the personal side if you had 712 right if you had 12 months minus the 7 for the months that were the personal use 5 out of 12 then you've got the 41.66 or you can think of it as 7 divided by 12 is the 58 minus 1 is the 41.66 for those expenses that might be able to be deducted either on the schedule a or the schedule e depending on if it be rental property or personal property and those would be like the mortgage interest and possibly the property taxes basis of property changed to rental use when you change property you're held for personal use to rental use for example your rent of your former home of the basis for depreciation will be the lesser of the fair market value or adjusted basis on the date of conversion so this becomes a problem because how do we know what the cost of the property is on a market basis we know that when there's a market exchange when the property is sold if you bought the property you'd have to like people that are on the market that don't have joint interest because we're not related in that events that would also cause problems and they have they have interest that are counter to each other and that's why the prices is usually a valid price in an arms length transaction but if you bought the property 10 years ago then it could have gone up or down in value over that point in time note that what we would like to do on the personal side is is be able to convert the property to rental property with the highest basis we could because the higher the basis the more benefit we're going to be able to get with regards to the the depreciation so so or and or when we sell it we're going to get a benefit now if it's personal property you got to know what the basis is because when you eventually sell it that's when it comes into play because you got the sales price minus the adjusted basis or whatever is going to be the gain or loss which even then might not be a big deal for most people because there's a huge exemption with your principal residents that could wipe out you know the gain in in essence at that point but when you convert it to if it was rental property the basis is going to be quite important because that's going to be one of the big kind of things that you're going to get for the depreciation so the basis for depreciation will be the lesser of which isn't the way we would like it to be going but the lesser of the fair market value of the adjusted basis on the date of the conversion so the lesser of the fair market value or the adjusted basis so fair market value what does that mean this is the price at which the property would change hands between a willing buyer and willing seller how in the world would you ever figure that out because every piece of property is unique where you got to get an possibly get an appraisal or try to estimate it in some way and of course there could be some margin that those estimates can swing you know can swing from one side to the other that's the problem with the real estate and they can swing quite a lot if you're talking about expensive pieces of property in terms of what you're estimating the market value to be could be quite different than if you actually put that unique piece of property on the market to sell it but any case neither having to buy nor sale or both having reasonable knowledge of all the all the facts sales of similar property on or about the same date may be helpful to figure the fair market value of the property so figure the basis the basis for depreciation is the lesser of the fair market value of the property on the date yet you changed it to rental use or your adjusted basis on the date of the change that is your original cost or other basis of the property plus the cost of permanent additions or improvements since you acquired it minus deductions for any casualty or theft losses claimed on earlier years income tax returns and other decreases to basis so meaning if you had the personal property and you made improvements to it that would increase it this is kind of difficult sometimes because sometimes people don't keep as formal records as they should on the personal property because it's not as you're not writing off the depreciation on it each year and you might have a huge exemption so people are kind of doing what they're doing and possibly not tracking it and you're not putting it on tax returns or anything like that so you got to kind of figure that out what you know what the basis of the property is and what improvements you had and so on and so forth so for other increases and decreases to basis you can see adjusted basis in chapter two so example let's do an example that'll help you're you originally built a house for one hundred and forty thousand I built it with my own two hands on a lot that cost fourteen thousand which you used as your home for many years so that's going to be the original price that we had for it and then before changing the property to rental use of this year you added twenty eight thousand of permanent improvements so I built those I built like a whole new the whole new like second floor on it to my own with my hammer so of improvements to the house and you claimed a three thousand five hundred casualty loss deduction for damage to the house part of the improvements qualify for a five hundred dollar residential energy credit which you claim on your prior year tax return because land isn't depreciable you can only deduct the cost of the house when figuring the basis of the land is the dirt you can't depreciate the dirt so only the land because it goes down I mean only the building because it goes down in value so the adjusted basis in the house at the time of the change was one hundred and sixty four thousand that's a hundred and forty thousand that's the original one that I built with my own two hands plus the twenty eight thousand notice we didn't add the fourteen thousand we got the twenty eight thousand that's the improvement that's that second floor that I built with my hammer minus the three thousand five hundred which was the amount that was claimed here and minus the five hundred so on that on the date of the change in use your property had a fair market value of one sixty eight so and that you might have taken an appraisal for example and try to determine the fair market value and it's one sixty eight of which twenty one thousand was for the land and one hundred and forty seven thousand was for the house now notice when you take the appraisal there they're probably not you know you can only see what they're selling for and then you gotta further calculate the ratio then on the land versus the house breaking out the basis for the depreciation on the house is the fair market value on the date of the change one hundred and forty seven thousand because it is less than the adjusted basis of one hundred and sixty four thousand so we have the one forty seven versus the one sixty four we had to take the lesser of the two which is again not what we would like to do I'd like to take the bigger one because then we get more depreciation for it and that would be better but no but no corporatives if you change your corporative apartment to a rental use figure your allowable depreciation as explained earlier depreciation methods are discussed in chapter two of this publication and publication nine four six the basis of all the depreciation real property owned by the corporative housing corporation is the smaller of the following amounts the fair market value of the property on the date you change your apartment to rental use this is considered to be the same as the corporation's adjusted basis minus straight line depreciation unless this value is unrealistic the corporation's adjusted basis in the property on that date don't subtract depreciation when figuring the corporation's adjusted basis if you bought the stock after its first offering the corporation's adjusted basis in the property is the amount figured in one under depreciation under corporates near the beginning of this chapter the fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation unless the value is unrealistic figuring the depreciation deduction to figure the deduction use the depreciation system in effect when you convert your residents to rental use so now you got to go through the depreciation methods that you're going to be using and at this point in time generally that will be the makers for any conversion after nineteen eighty six we talked about makers a bit in the past treat the property as a place in service on the conversion date example you converted residents see previous example under figuring the basis was available for rent on August first using table two two d c chapter two so we talked about the tables earlier in these in the makers depreciation the percent for your one beginning in august is one point three six four and the depreciation deduction for your one is two thousand five which is one forty seven thousand times point oh one three six four


Hello and welcome to the International Daily Roundup by People's Dispatch, where we bring you major news developments from around the world. Our headlines? Port workers in Canada launch indefinite general strike. Avo Morales announces regional integration platform for social movements, CIPRI report reveals global military spending rose despite COVID-19 pandemic, and in our video section we take a look at the renewed protests, demanding the release of Mumi Abu Jamal in the US. In our first story, we go to Canada where port workers have launched an indefinite strike in the Quebec province. Workers are protesting the recent announced changes in work shifts and prolonged contract negotiations. 1,150 workers, organised by the Canadian Union of Public Employees, staged a walkout with the Port of Montreal on April 26th. CUP workers at first launched an overtime strike on April 13th. This was after the Maritime Employees Association suspended minimum pay guarantees over a decline in cargo traffic. Dock workers at the Port of Montreal have also been without an employment contract since December 2018. As long-standing issues had resulted in a 19-day strike held in August last year, workers had also launched weekend strikes starting April 17th and 18th, after no resolution was reached in the negotiations for a new contract. The strike on April 26th was launched on the same day as the new work shifts were set to be imposed. Those new shifts would be 7 hours long, as opposed to the previous shifts that lasted 5 hours and 20 minutes. Following a 72-hour strike notice issued by the workers on Friday, the federal government announced it would introduce a back-to-work legislation to forcibly end the strike. Minister Philomena Tassie made the announcement on April 25th. As reported by CT News Montreal, Tassie by timetabled the bill as early as April 28th. The decision has been condemned by the Port workers, trade unions and certain opposition groups. The Port of Montreal is the second-largest in Canada, with around 19,000 people employed directly and indirectly. CUP workers have stated that a strike will not impact essential services and shipments related to pandemic relief. In our next story, former Bolivian President Evo Morales has announced a creation of a regional integration platform known as Runasur. It will serve as a unity platform for indigenous communities and social movements across Latin America. The platform was formally announced on April 26th, following meetings with the Technical Commission in Cochabamba in Bolivia. The commission is composed of representatives from Venezuela, Ecuador, Argentina and Bolivia. Members of unions and social movements are also present as observers. Morales stated on Monday that Runasur was aimed at fighting for true liberation and creating a plurinational America. The platform will be anti-capitalist, anti-colonial, sovereign and anti-imperial. Responsibilities and decision-making roles will rotate and decisions will be based on the consensus. Delegates also call for an end to the technological monopolization of health. The members of the Technical Commission will be now responsible for reaching out to social movements in eight other South American countries. Runasur will serve as a collective platform for mobilizations across sectors, as well as all regions. It is headquartered in Bolivia and will now convene for a meeting with 12 American countries. Our next story is about defense spending and global military expenditure grew to $1,981 billion in 2020. The increase was recorded despite a contraction of the global GDP by over 4.4%. In fact, 2020 witnessed a 2.6% increase in defense expenditure as compared to 2019. These findings are part of a new report released by the Stockholm International Peace Research Institute or CIPRI on April 26th. As per the report, five countries accounted for 62% of the global expenditure. These were the US, China, India, Russia and the UK. The US was once again the largest contributor to defense expenditure with a record increase of over 4.4%. Its military budget was around $778 billion in 2020 alone. This is 39% of the total global military expenditure. Europe as a whole recorded an increase of 4% compared to 2019. Chinese defense expenditure also grew to $252 billion. Latin America and the West Asia recorded a decline while Asia and Oceania saw a 2.5% increase. The rise in defense expenditure, especially in the context of the COVID-19 pandemic, has drawn widespread condemnation. The UK government has been criticized for increasing its defense spending while the country was among the worst hit. India has also increased its defense expenditure last year to $72.9 billion. The country is now facing a brutal second wave of COVID-19 and a healthcare system faces severe shortages. In our final story, we go to the US where demonstrations were held this weekend for the release of Moomi Abu Jamal, a former member of the Black Panthers. He has been a prominent activist and journalist. Abu Jamal is currently serving a life sentence over allegations that he killed a police officer in 1981. Our activists have consistently pointed to police and judicial misconduct and irregularities in his conviction. Right's group Amnesty International also stated that his trial did not meet international standards. April 24th marked Abu Jamal's 67th birthday. Here is a video feature on the mobilizations held in solidarity with him. It is incredibly important for us to unite to free Moomi Abu Jamal. He has been in prison for over 40 years for a crime he did not commit for his outspoken defense of black people, of people who are struggling against the US government, against gentrification and he was framed and he was set up at a time when the Philadelphia Police Department and government was rampant with KKK members and white council members. But now it is a very even more critical time for Moomiah because he is 67 years old and he has incredible health problems that were developed inside. And it's important that you all know that Moomiah is innocent and that we will rally around his freedom with him having his heart surgery and then with his chain shackles on his hospital bed. What I think is we're going to have a continued struggle even though the murderer of Brother Floyd was you know found guilty. The whole world was watching what were they going to do but that one correct decision does not obliterate or erase the entire Jim Crow lynching mass incarceration. That's all your time for today. We'll be back tomorrow with more news from around the world. Until then keep watching People's Dispatch.


So, suppose f is differentiable. So, consider, now consider what directional derivative is what? It is nothing but the rate of change.  So, let us consider this function. So, it is a function of T goes to x T y T. The chain rule is coming into picture now. T goes to x. So, this is x T and this is y T. f takes x T y 2 to some value in R. So, if f is differentiable, the function x T that is differentiable. So, composite function is differentiable. Chain rule applies. So, conditions of chain rule are met if f is differentiable, implies what is the derivative of this? What is the derivative of this function? Let us call it as w T. T goes to one variable. So, what is the derivative of this function? Chain rule f of x at x 0 y 0. What is the derivative of this with respect to T x T?  That is the derivative of this function. So, that is d w by T T. And what is this? We are looking at the derivative of this function. So, what is this equal to? One end, if I look at the composite function and… So, this is the rate of change of this composite function. What is the rate of change of that function we looked at? That was precisely… What was that? That is the directional derivative. So, it says if I look at the apply the chain rule, this is nothing but the directional derivative of f x 0 y 0. So, if the function is differentiable, then the directional derivative exists and is given by this. I do not have to go to the limit or anything, because limit is taken care by the chain rule now. Is that comfortable? Everybody or not? So, I am looking at this function. What is the derivative of this? This minus divided by T. That is precisely the directional derivative, is not it? If I want to calculate the w T, if I want to calculate its derivative, what I have to do? This minus f at x 0 y 0 divided by T limit of that. That is by definition. So, that is by definition it is this. By chain rule it is this. So, both are equal. That is all. So, it says if… So, theorem says, if f is differentiable at x 0 y 0, then the directional derivative of f in the direction of x 0 y 0 is precisely equal to u 1 f x plus u 2 f of x 0 y 0. From here, let us, a bit of vector, let me write this right hand side in terms of vectors. I want to write. So, let us write. So, I am saying this is equal to u 1 comma u 2. There are components of the given vector u dot product with f x x 0 y 0 and second component f y x 0 y 0. I am creating a new vector. Given the function f, if it has partial derivatives, then this gives me a vector f x partial derivative comma f y partial derivative. So, this can be thought of as a dot product of these two vectors now. This can be thought of as a dot product of these two vectors. This is a very important quantity associated with a function. So, for f, which is on D in R 2 to R, this vector f x at the point x 0 y 0, f y at the point x 0 y 0 is a vector. It is denoted by inverted triangle of f at the point x 0 y 0. It is called the gradient of f at x 0 y 0. For three variables, it will be a vector of the components 3. So, f z will come. But the interesting thing is, so if I write that way, gradient of f dot u at that point is equal to the directional derivative in that notation. Now, you see how things get interpreted. So, directional derivative intuitively is a rate of change of the function in that direction. And that is equal to the gradient times u. Now, here is a bit of vector algebra. A dot b, you can write as norm of this, norm of u into, what is a dot b? Norm a, norm b into cos of the angle between them. So, cos theta. This norm is 1. So, we can forget that. Now, what is a theta?  So, this is theta is the angle between the two. So, and it is cos of theta. When is cos theta minimum, angle is pi by 2 and then it is 0. So, it says the rate of change of the function is 0 at that point in the direction of the gradient. When u is angle is 0, so direction of u is same as direction of gradient. So, it says the rate. So, interpreting this in terms of rate of change. So, rate of change of the function f is 0 when direction is that of the gradient. Are you following what I am saying? No? So, let me interpret it again. It says gradient of f at point x 0, y 0 is a vector dot product with u is equal to directional derivative f at the point x 0, y 0. And this we said it is equal to gradient of f, norm of gradient of f into cos theta because that is 1 is equal to d u. So, theta equal to 0 implies what? Theta equal to pi by 2 implies what? Cos is 0, implies d u f at x 0, y 0 is equal to 0. So, what is the meaning of saying this is 0? If I interpret it as the rate of change, so rate of change of the function f in the direction of u is 0 when u is same as, direction is same as that of gradient because then only the angle is 0. Angle between the gradient and u is 0, sorry pi by 2, when perpendicular sorry, when it is perpendicular. So, rate of change of the function is 0 in the direction perpendicular to that of gradient. And when it is maximum, when it is equal to 1, pi is angle is 0. So, rate of change of the function is maximum in the direction of the gradient. Is it okay? Yes. So, this is the physical interpretation. You can imagine a plate, surface is some kind of a plate and there is a vector given and the gradient vector is there at any point. So, if at a point I want to know and you are measuring the temperature, function is the temperature at a point of the plate and as you move on that plate in which direction the rate of change of temperature is maximum or minimum, you would like to know.  So, you would like to seek the path direction in which temperature rate of change direction should be minimum. So, that is perpendicular to the, at that point find out the gradient that is the minimum, maximum when it is parallel to it. So, these are physical applications, this kind of a thing.  Something more I should say about this. Here is another interpretation of this.  It is maximum parallel to gradient of f. Is that okay? That we have seen. See how these things lead to physical applications. So, here is another one. So, let us take f f function of two variables again. So, we saw its graph in a surface. So, this is a surface. So, f of f, x, y, f of x, y. Now, in this, what is happening is whether I should introduce the notion of general surface or not. So, here is where z is equal to f of x, y. The z coordinate is taken. It is going a bit away from what we... So, this is kind of a surface, but the point is not every surface looks like z is equal to f of x, y. For example, if you look at the sphere, what is the equation of sphere? It is all points x, y and z, say that x square plus y square plus z square equal to some constant. That is the radius square. So, here there is a relation between x, y and z. So, a sphere, which normally we write as x square plus y square plus z square equal to, say, something, say, 9. What do you mean by that? That is the equation of a sphere. That means, we are looking at the points x, y and z, say that there is a relation. So, as an object in R3, it is given by this equation. Now, here z is not... You cannot calculate z in terms of x and y because there is only a relation given. So, if you want to calculate, it will be z square equal to 9 square 9 minus x square minus y square. So, z will be plus minus square root. If you take plus, it will give you the upper part of the sphere. If you take negative, it will give you the... So, this is what we call as an implicit equation of surfaces. z is not explicitly known. It is only implicitly given. So, there are many surfaces which are of this type. For example, if you take shape of an egg, that is called a lipsoid. That is also implicit. Some are explicit, some are implicit. What I want to do is, I want to look at a curve on this... I want to look at a curve on this surface. So, let us take... So, this is in R3. Surface is in R3. I want a curve on this surface. So, what is a curve? What is a curve? Is it like a path of a particle? Imagine a fly moving around in the room. At some, you start observing at t equal to 0. It is at somewhere. t equal to 1, it is somewhere. t equal to 2, somewhere. It moves around. To locate its position, we have to know what is the coordinates x t, y t and z t. So, a curve is a function from R to R3. t goes to x t, y t, z t. So, let us call it as a function R. Any curve is a path of a particle. You can imagine, at some time, you are observing what is the position of something. You can think it as way. So, at t, it gives a point which is in... So, this is the point p. I want this curve to be on the surface. Then, what should happen? If it is to be on the surface, then what should happen? It would satisfy the equation of the surface. So, 1 s means z is equal to z of t is equal to f of x t, y t. Is that okay? Because z was equal to f of x y. So, z of t must be equal to that. That I can write as f of x t, y t, z t. I am sorry, f of x t, y t minus z t equal to 0. Brought everything on the one side for every t to be on the surface. This is a function of t. Now, mathematics enters into picture. This function is 0 everywhere. So, what happens to the derivative of this? Also, it should be 0. What is the derivative of left hand side? It implies, what is the derivative of left hand side? f x, right? Into x dash t, sorry, into x dash of t plus f y z dash of t plus minus z dash of t equal to 0. I want to rewrite this now as a vector equation. So, it is f x f y minus 1 dot x dash t, y dash t, z dash t equal to 0. This equation, I am just differentiating this with respect to t. This is chain rule and that is z t only. So, z dash. Oh, this one. Oh, sorry. Yeah, yeah. I meant y dash. I wrote as z dash. Sorry, sorry. That mistake. So, that is y dash. Sorry, right? It is okay now. Everybody happy? Yeah. So, this quantity multiplied by this quantity is 0. What is this quantity? Geometrically, x t, y t, z t was the point on the surface. This is the derivative. So, this is the tangent vector to the curve at that point and says this vector is perpendicular to the tangent vector. So, what should be this vector? It should be normal to the surface. This vector is perpendicular to whatever curve I take. So, in the picture, at this point, there is a vector which is not changing because the vector is f x f y. It depends only on f. There is a vector and of course, z component is minus 1. So, whichever direction. But at this point, if I take the tangent, then this vector is perpendicular. If I take some other curve, take the tangent till it is perpendicular. So, this is a vector which is perpendicular to all tangents to all the curves. So, what this vector should be? We should call it as the normal to the surface. We should call this vector as normal to the surface. All the tangents will lie in a plane. That will be the tangent plane to the surface. So, we are going back to saying derivative helps us to define tangent. So, what we are doing is we are saying that derivative in the following sense, the partial derivatives for a function of two variable, we assume they are differentiable. So, partial derivatives exist and are continuous and so on. Then this vector is perpendicular to this.  So, we call this as this is called this meaning f x f y minus 1 is called tangent vector to the surface at this point 0 y 0 z 0. Some confusion is called, sorry, not normal, sorry, is called the normal vector to the surface at plane perpendicular to this is called the tangent plane is called the tangent plane to the surface s at x 0 y 0 z 0. So, I am just trying to bring out the similarity between one variable and several variables. In one variable, we had continuity, we had differentiability. Continuity meant that there is no break in the graph of the function and differentiability was something stronger which implied continuity and said that at every point you can draw a tangent. So, same way we are saying in three variables, differentiability you can define and differentiability implies continuity and differentiability means that at every point on the surface you can have a on the graph of the function that is a surface you can have a tangent plane and that we are coming via normal. We are saying there is a normal, normal is the gradient vector. Gradient vector is a very crucial one. It tells you how the things are changing on the surface name gradient right itself should indicate English word gradient should indicate. So, rate of change is maximum if it is it is maximum when it is parallel to the gradient right and minimum when it is perpendicular to the gradient. Gradient is also the direction of the normal geometrically to the surface at that point. You may wondering why this minus 1 is coming because our surface is explicit z is equal to f x y. If you take a sphere, if you take the sphere x square plus y square plus z square equal to 0. So, let me just let me just indicate if you take the sphere is x square plus minus 9 equal to 0 say that is my f x y z that is a surface is given by a function of three variables which is implicit z is equal to f x y I could write it as f x y minus z is equal to 0 I could write this as f x y. There z was explicitly known in terms of here z is not explicitly known, but still even if I take a curve on this surface it will still have that thing same property x square y square z square. So, what is f of x t y t z t that will be that will be a curve on this surface that is equal to 0 on the surface. So, that is equal to 0. So, what is the derivative of this f x x dash f y y dash f z y z z z dash t equal to 0 that is same as saying f x f y f z dot x dash t y dash t z dash t equal to 0. Still you can what is this now that is a gradient for this what is the gradient f z is minus 1 that is why this minus 1 is coming here there is nothing special happening for explicit when z is explicit that value will be 1 or minus 1 depending on whether you write z minus or this minus in general this will be the gradient vector which is normal to the surface. So, this is very useful in doing what is called differential geometry later on that normal and so on. So, we will not be doing into that my idea of bringing the directional derivative was to indicate that there is something called rate of change in any direction possible and how it interprets geometrically. So, gradient vector is the one which is crucial. So, let us stop here.