S.D. TOURISM SUFFERING

Pandemic has cost local businesses more than $3B, with no end in sight

The COVID-19 pandemic has cost local businesses more than $3 billion, with no end in sight.

As the novel coronavirus continues to linger well past what anyone expected in the early weeks of the pandemic, San Diego’s tourism industry is struggling to find any heartening news that will help reverse the economic devastation that so far has cost local businesses more than $3 billion in visitor spending.

“In terms of the economy, we’re in a deep recession, and for the travel and tourism economy, unfortunately, we’re in a deep depression,” San Diego Tourism Authority Chief Operating Officer Kerri Kapich told City Council members this week during a presentation that paints a grim outlook for San Diego’s visitor industry in the coming months.

She and other tourism officials reeled off, in somber tones, one bleak stat after another: A $150 million decline in hotel room tax revenue compared to two years ago; 50,000 visitor industry jobs vanished; overall hotel room revenue down this year nearly 60 percent.

“It will really be a long road back in terms of recovery,” Tourism Authority CEO Julie Coker told members of the council’s Economic Development and Intergovernmental Relations Committee. “Once a vaccine is in place, that will certainly help, and it will inspire travelers, whether it’s leisure or groups. However, we are looking at levels not back to (those of ) 2019 until 2023.

1959. In 2013, when Ramona died, the home was worth $800,000. Today, it’s worth $1 million.

At her death, Ramona’s half of the home got a new tax basis. Instead of $20,000 (half of the purchase price), her half of the home now has a tax basis of $400,000 (half of its $800,000 value at the time).

In most states, Raul would keep the $20,000 tax basis on his half, so his combined basis in the home would be $420,000. If he should sell the home for $1 million, the profit for tax purposes would be $580,000.

In California and other community property states, the entire house gets a step up in basis to $800,000 when Ramona dies. If Raul sells the house for $1 million, the profit (or capital gain, in tax parlance) would be $200,000.

Of course, there would be no tax owed on this home sale, since Raul can exempt up to $250,000 of home sale profits. Raul could use Ramona’s home sale exclusion, and avoid tax on up to $500,000 of home sale profit, if he sells the home within two years of her death.

If Raul keeps the home until his death, on the other hand, it will get a further step up in tax basis equal to whatever the home’s fair market value is at the time (let’s say $1.2 million). If the daughter sells it for that amount, no capital gains taxes would be owed.

Finding affordable financial planning

Dear Liz: I’ve read your advice and that of many others to only use a fee-only financial planner. However, we’ve never felt like we could afford that expense, and many of the planners I’ve found wouldn’t take accounts as small as ours anyway. We’re in our mid-40s and feel like we’ve wasted many years waiting to be “ready” for a fee-only planner. Is it really better to have zero financial planning advice, rather than just using a free planner?

Answer: A “free” planner is typically an adviser who is paid by commission. You may not pay for the advice directly, but you could wind up with underperforming, overpriced investments because the adviser is not required to put your best interests first.

You can find certified financial planners who charge by the hour at Garrett Planning Network, and the XY Planning Network represents planners willing to charge monthly retainers. Many discount brokerages and robo-advisers offer access to certified financial planners, as well. You might also consider an accredited financial counselor or financial fitness coach, which you can find through the Association for Financial Counseling & Planning Education. Although many certified financial planners cater to higher income people, coaches and counselors handle issues relevant to middle- and lower-income Americans, including budgeting, debt management and retirement planning.

Weston is a certified financial planner.