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21 Mar 2017 

The next hot trend in wearable devices? 'Hearables," IDC says

The next hot trend in wearable devices? 'Hearables," IDC says | PCWorld

Wearable devices that double as clothing or get worn on the ear will grow the fastest of all wearables in electronic voting system project documentation the next five years, market research firm IDC said Monday.

Earworn devices, sometimes called "hearables," will grow by 43% every year over that period, IDC said. They started from a small base: just 700,000 devices shipped in 2016.

Clothing will grow by 77% a year, starting at 2016's level of 1.3 million clothing wearables shipped, IDC added.

Earwear and clothing together will still make up only 11% of the wearable device market in 2021, well behind smartwatches and a group of wearables that IDC calls "basic" watches.

Today, these two groups of watches make up nearly half the wearables market, with about 49 million units shipped in 2016 out of 102 million total wearables shipped. Watches will jump to 152 million shipped in 2021, IDC predicted.

In the past two years, smartwatches and the more basic models struggled to find a mass market because the value propostion wasn't clear, IDC said. "Most potential customers saw watches performing multiple functions, but none of them worked exceptionally well to accomplish a myriad of tasks," said Ramon Llamas, an IDC analyst.

The trend will be to segment the devices into niches like kids' watches, athletic watches, luxury and fashion watches and more, he said. TAG Heuer sells the Connected smartwatch in the luxury category for $1,500, for example.

One of the biggest watch segments is kids' watches that offer location tracking for parents. "They aren't as well-known in the U.S. but they are big in Asia," said IDC analyst Jitesh Ubrani.

Earwear will be broken into wearables categories such disadvantages of online voting fitness tracking and coaching, while others will have features such as noise canceling and enhanced audio. Doppler Labs, maker of Here One earbuds, takes the concept of noise-canceling headphones to a smaller form factor.

There's also the prospect of real-time language translation with a hearable, Ubrani said. In one example, Mymanu, a UK-based startup, announced its Clik wireless earbuds earlier this year that can translate in up to 37 languages. The price is reportedly $190.

Clothing wearables are still an emerging market, but Llamas said clothes are being designed to track fitness and to communicate with workers. In one example, a first responder heading into a dangerous situation could have his heart rate or commands transmitted via his outer wear.

At Mobile World Congress in February, outdoor gear for marine rescue personnel was shown that can detect when the jacket is immersed in water and then transmit that information to a remote location.

This story, "The next hot trend in wearable devices? 'Hearables," IDC says" was originally published byComputerworld.

To comment on this article and other PCWorld content, visit our Facebook page or our Twitter feed.
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20 Mar 2017 

Glass washrooms in China offer stunning forest views

The walls, ceiling and floor of the toilet cubicles, located in Shiyan Lake Ecology Park, are almost completely transparent.

That means when nature calls users relieve themselves while simultaneously soaking in the stunning beauty of Shiyan Lake.

Washroom visitors aren't fully exposed.

A portion of the glass, from the floor to just over the toilet seat, is slightly frosted, shielding users from those who might be tempted to sneak a peek of something other than the great outdoors.

Shiyan Lake Ecology Park's glass washroom opened last week -- just in time for China's National Day holiday, when millions of Chinese take advantage of a week of public holidays to travel around the country.

'Insane. Perverse'

Social media users in China appear to be divided over the park's new attraction.

More than 14,000 comments have been posted on Chinese news site since the toilets opened.

Many plumbing supplies involve concerns about privacy.

"All the lechers will then stay in the toilets," commented a user named Fong.

Meanwhile, reader Lin asked: "Who would dare go to a toilet like this? Insane. Perverse."

Some questioned the intention of the designers.

"The toilet is another scenic spot," commented bathroom plumbing problems Weibo user Qiu.

"Such a victory in that sense."

This isn't the first public washroom in China to offer sweet views.

According to Chinese state media, a male washroom in the southern province of Guilin offers urinals mounted in front of two glass walls overlooking the flora and fauna outside and the mountains in the distance.

But Hunan province might just lead the way when it comes to building dramatic glass structures.

It's also home to the recently opened cliff-clinging glass skywalk and the longest glass bridge in the world, which towers over a steep canyon.

And for lovers of interesting restrooms, earlier this year backpacker bible Lonely Planet published a handsome book featuring wholesale plumbing supplies online more than 100 of them.

From pop-up pissoirs to clifftop drops, the gallery below shows a selection from "Toilets: A Spotter's Guide."
Admin · 26 vistas · Escribir un comentario
20 Mar 2017 

Elections: turnout in the 2004 presidential election.

One of the major stories of the 2004 presidential election was the

increase in voter turnout from 2000. There is no doubt that there was

heightened interest in the 2004 campaign and that rates of voter

participation increased most everywhere in the United States. All

Americans should be pleased with this aspect of the contest between Bush

and Kerry. Yet, this good news needs to be tempered once one puts

political interest and turnout in 2004 into historical perspective.

Journalists who wrote of "unprecedented interest" in the 2004

race for the White House were clearly exaggerating. And anyone who wrote

of "record turnout" among voters could only justify such a

claim by focusing on the sheer number of voters who cast ballots--not on

the percentage of eligible persons. This research note presents a

variety of data on these points in an attempt to place the 2004

participation results into clear perspective.

Interest in the 2004 Presidential Campaign

Few observers would question the assertion that public interest in

the Bush-Kerry race was higher than was the case for the Bush-Gore race

of 2000, and much higher than interest in the Clinton-Dole-Perot race of

1996. Yet, memories all too often seemed to be quite short in assessing

public interest in the presidential campaign. Relatively little mention

was made of the very high level of interest that the public expressed in

the Clinton-Bush-Perot contest of 1992. Polls done by the Pew Center for

People and the Press showed that interest in the 2004 campaign was

roughly identical to what was found at comparable points in the 1992

campaign. For example, they found that 76 percent of registered voters

interviewed in mid-October 2004 said they had given "a lot of

thought" to the presidential election compared to 77 percent who

responded this way in early October 1992. In mid-October 2004 a Pew

Center poll found that 54 percent said they had been following news

about the presidential election "very closely" and another 29

percent said "fairly closely." At roughly the same point in

1992, 55 percent responded "very closely" and 36 percent said

"fairly closely."

It is of course one thing to say you are interested in the campaign

and quite another to actually do something which demonstrates interest.

One measure for which good data exist over time is viewing presidential

debates. These statistics are highly reliable because Nielsen Media

Research compiles them based on devices attached to TVs in a random

sample of households. With the transformation of political conventions

into stage-managed coronations, live presidential debates have come to

be the only moments of true spontaneity and drama in modern American

campaigns. Just as interest in the Super Bowl, the Oscars, and other

regular big events in American culture can be traced by rising and

falling Nielsen ratings, so can interest in presidential campaigns via

debate ratings.

As shown in Table 1, like most other major events on television,

the Nielsen data show declining ratings for viewing presidential debates

since cable started to substantially fragment the viewing audience in

the early 1980s. There have been two clear exceptions to the pattern of

declining ratings for presidential debates during this period--1992 and

2004. Interestingly, in both cases the Nielsen ratings increased 19

percent from the level measured four years earlier. Thus, the increase

in interest in the 2004 election--as measured by watching the major

events of the campaign--was hardly unprecedented. Indeed, it was a

virtual repeat of what occurred between 1988 and 1992. The major

difference was that the typical audience for the presidential debates of

1992 was 43 percent of the population as compared to just 33 percent in

2004. Perhaps this decline was inevitable given the increased number of

viewing options for Americans as the television environment has been

transformed from broadcasting to narrowcasting. But in any event, it

would be hard to argue from these numbers that interest in the 2004

campaign rose to an unprecedented level.

Turnout of the Voting Age Population in 2004

The widely reported figure of 122 million voters who participated

in the 2004 presidential election was a record-shattering number in

terms of raw number of votes, far exceeding the previous mark of 105

million in 2000. Of course, if what is most important in voter turnout

is the number of people who vote, then India would win hands down as the

world's greatest democracy. One has to take into account the size

of the adult population in order to evaluate turnout in any election.

Although the American media seemed fascinated with the statistic of 122

million voters, the denominator for calculating turnout was rarely

mentioned. The traditionally used measure in the United States, where

registration is far from automatic and tens of millions of eligible

people do not bother to register, is the Census Bureau's estimate

of the voting age population. As of July 2003, the Census estimate of

the American population over 18 years of age was 217.8 million. Assuming

that the population continued to increase at the recent rate yields an

estimate of 221.3 million for voting age population in November 2004.

Thus, the turnout rate among Americans who were at least 18 years of age

was about 55 percent. Although this represents a 4 percent increase over

turnout of voting age population in 2000, it is exactly equal to the 55

percent turnout the nation experienced in 1992 and well short of the

modern high of 63 percent in 1960.

Using 1960 as a benchmark comparison for turnout might well be

criticized as starting from an unnaturally high point. However, contrary

to any notion that turnout in 1960 was strictly due to the excitement

caused by the close Kennedy-Nixon contest, Converse et al. wrote in 1961

that the increase in turnout had mostly occurred in the South. (1) At

that point in the study of elections, scholars had good reason to be

optimistic that turnout would rise even further due to the clear

prospect that registration restrictions in the South would be loosened.

As expected decades ago, turnout in the South has indeed risen

substantially from a mere 40 percent of the voting age population in the

Kennedy-Nixon contest to 52 percent in 2004. On the other hand, outside

the South there has been a clear decline in turnout from a fairly

respectable rate of 70 percent in 1960 to a disappointing figure of 56

percent in 2004.

Turnout of the Citizen Voting Age Population in 2004

It should be noted that all of the turnout percentages presented

above are based on a denominator that includes everyone over the age of

18 residing in the United States, including non-citizens, felons, and

other individuals who are not actually eligible to vote due to a variety

of state laws. McDonald and Popkin argue that turnout decline is a

"myth" because the voting age population has increasingly

contained more people ineligible to vote due to rising immigration and

crime rates. (2) Although they have a reasonable point, adjusting the

voting age population for non-citizens does not greatly change the

pattern since 1960, as displayed in Table 2. When non-citizens are

removed from the calculations, one finds that only about 61 percent of

people in the non-South voted in 2004 as compared to 71 percent in 1960;

in the South a significant increase can again be seen from 41 to 57

percent. It would be hard to see how a change of this magnitude outside

the South can be seen as a myth. And taking into account changes in the

percentage of the population that is disenfranchised due to felony

convictions (currently about 1.6 percent) is scarcely likely to change

the pattern noticeably either.

Substantively, it is my view that the fact that non-citizens and

convicted felons are not voting is of importance, and that such

information should not be ignored by removing them from the national

calculations. Many of these people pay taxes and potentially stand to

benefit from government programs as well. Whether it is right or wrong

to exclude them from voting is not self-evident, as demonstrated by the

varying franchise rules that have been applied throughout U.S. political

history (3) and which currently are in place around the world. (4) In

his last message to Congress, President Clinton recommended restoring

voting rights to felons after they have served their sentences, a

proposal which was subsequently endorsed by the National Commission on

Federal Election Reform. (5) On the citizenship question, many leaders

in the Latino community believe that those who are on the road to

becoming citizens should be allowed to vote. (6) And in any event,

non-citizens are counted in the Census, which means that apportionment of political districts includes them. (In fact, there are districts in

the Los Angeles area where the majority of adults are resident aliens.

These people are probably receiving de facto representation, even though

they can't vote for the people who represent their interests.) In

sum, we need to take into account that such people are not voting today,

just as the fact that people who were effectively disenfranchised by Jim

Crow laws was taken into account in 1960.

State Patterns of Voter Turnout

Although it is noteworthy that millions of adult non-citizens who

count in the apportionment numbers, pay taxes, and are eligible to

receive government benefits are unable to vote, when it comes to

examining variations in statewide turnout it seems best to exclude them.

This is because tremendous variation exists in the percentage of

non-citizens from state to state. Fifteen states contained less than 2

percent non-citizens among their voting age population as of 2004,

whereas this rate exceeded 10 percent in seven states--with California

topping the lot at 18 percent. (7) Thus, California recorded a turnout

rate of 47 percent among its voting age population in 2004, but among

adult citizens its turnout was a more healthy 57 percent. To not adjust

turnout numbers for non-citizens would skew the results unfavorably

against states such as California and Texas. Thus, the results for

statewide turnout presented in Table 3 employ Citizen Voting Age

Population as the denominator.

Turnout rates of citizens varied quite widely from state to state

in 2004, with a difference of nearly 30 percent between the states with

the highest and lowest percentages. Yet, a common pattern is evident

among high-, medium-, and low-turnout states alike--namely that the

percentage of citizens participating in choosing the president increased

from 2000 to 2004. The only clear source of variation is that turnout

tended to go up the most in the battleground states, where the

candidates focused the vast majority of their time and resources in the

final week of the 2004 campaign. In the eleven battleground pop over here states

(shown in italics in Table 3) the mean increase in turnout was 6.6

percent. In contrast, the typical increase in voter participation in the

other states was just 4.2 percent. Thus, greater interest in the

presidential campaign nationwide can be estimated to have pushed turnout

up about 4 percent. And in the relatively few places where there was

extraordinary activity to get out the vote, the rate of increased

participation was even greater.

The importance of intense political competition in getting people

out to vote can also be seen in the instance of one hard-fought Senate

campaign. The race between Democratic Senate leader Tom Daschle and

Republican challenger John Thune in South Dakota probably attracted more

attention than any other statewide race in 2004. Interestingly, turnout

in South Dakota went up 10 percent over the state's 2000 rate, more

than any other state. Given that there was never any doubt that Bush

would win South Dakota's electoral votes, it is readily apparent

that the major force in driving turnout up must have been the heated

Senate contest. In fact, South Dakota was the only state in 2004 that

recorded more votes for a statewide race (391,092 votes for the Senate

contest) than for the presidency (388,156 votes). (8)

Another factor that almost certainly accounts for some of the

increase in turnout in 2004 involves technological improvements in

voting machines in many states. Because not every state reports the

number of people who actually cast ballots, analysts are forced to rely

on the total number of votes cast for president as the numerator in

calculating turnout. But as the nation learned during the 2000 Florida

recount controversy, not everyone who votes has a presidential choice

recorded, either because they fail to mark a choice or because of

technical problems with their votes. A national study by Caltech and MIT estimated that this percentage was approximately 2.3 percent of all

voters in 2000. (9) As a result of the Florida fiasco, a number of

states undertook major efforts to reduce the percentage of lost votes.

These efforts appear to have succeeded splendidly.

Florida itself decertified punch-card machines, which were widely

blamed for the high rate of invalid votes in Palm Beach, Miami-Dade, and

Broward Counties in 2000. As a result of improved voting machinery

between 2000 and 2004, the proportion of invalid votes for president

fell from 6.4 to 0.5 percent in Palm Beach, from 4.4 to 0.5 percent in

Miami-Dade, and from 2.5 to 0.4 percent in other Broward. These numbers

clearly played a part in boosting the proportion of Florida's

citizens casting a vote for president from 57 percent in 2000 to 64

percent in 2004.

Similarly, Georgia took action to adopt touch-screen voting

throughout the state after its secretary of state reported that 3.5

percent of Georgians who showed up at the polls in 2000 had no valid

choice for president. Invalid votes were particularly a problem in large

counties using punch-card equipment such as Fulton and DeKalb, which had

rates of invalid votes of 6.3 and 3.7 percent, respectively; in 2004,

both counties reported undervotes were reduced to a mere 0.3 percent. As

was the case in Florida, Georgia also experienced a turnout increase, of

7 percent from 2000 to 2004. But unlike Florida, Georgia was never

considered to be anything but a Bush state and an easy Senate pickup for

the GOP, thereby making it a particularly clear case of turnout being

driven up by more efficient voting machinery.

It might be thought that the introduction of punch-card machines in

the 1960s played a role in the fall of turnout rates that became

apparent soon afterward. However, The American Voter estimated in 1960

that 2 percent of votes cast were invalid (10)--a percentage virtually

identical to the MIT/Caltech study conducted just after the 2000

election. Thus, if anything, technological changes in vote recording

have probably had a favorable impact on turnout rates between 1960 and


Nevertheless, as can be seen in the right-hand column of Table 3,

many non-southern states still have a long way to go to get their rate

of citizen turnout up to what it was in 1960. Declines of 15 percentage

points or more are found in seven states, and another nine states have

experienced declines of at least 10 percentage points. These state-level

data demonstrate just how serious the waning of turnout is in some parts

of the United States, even with the increase in participation rates from

2000 to 2004. Notably, a fairly steep decline in turnout is quite

evident in some of the states that permit Election Day registration,

such as Idaho and Wyoming, as well as North Dakota, which does not

require registration at all. And those who believe that the decline of

turnout is overblown due to the increase of non-citizens in recent years

should particularly note that these numbers reflect citizens only.

Conclusion: The Start of a Recovery or Just a Blip?

Although the increase in turnout rates from 2000 to 2004 is surely

good news, the prospects for this being the start of an extended upward

trend are less sanguine. The prospects for interest in the 2008 campaign

even equaling that of 2004 are not so good. One only has to briefly

reflect on the extraordinary events from the disputed outcome of the

2000 race, to the tragedy of September 11th, to the invasions of

Afghanistan and Iraq to realize that the period leading up to Election

Day 2004 was no ordinary time. As the old Chinese curse goes: "May

you live in interesting times." Were this level of interest in

presidential campaigns to be continued through 2008 it would probably

not be a good sign for the United States.

Like the substantial increase in turnout which occurred between

1988 and 1992, this most recent increase may well prove to be just a

short-lived blip. It is noteworthy that turnout fell off sharply after

1992 even though the newly elected president worked with the Congress to

take historic action to make voter registration easier. The National

Voter Registration Act of 1993 (widely known as the "Motor Voter

Act") succeeded in increasing the percentage of the public that was

registered to vote, but this positive development was more than offset

by declining interest in the subsequent two presidential elections.

Unlike the situation in 1992, in the aftermath of the 2004 campaign the

president and the Congress show no apparent interest in further

legislation to boost America's still anemic rate of voter turnout.

The lack of momentum in Congress for legislation that might

increase turnout is not due to a lack of good ideas on this subject.

After the 2000 election, the National Commission on Federal Electoral

Reform led by former Presidents Ford and Carter recommended that

Congress make Election Day a national holiday--a proposal that was also

endorsed by President Clinton. Based on data collected shortly after the

2004 election, there is good reason to suspect that turnout would have

been even higher had Election Day been a holiday. A post-election survey

by Harvard's Vanishing Voter project found that 24 percent of

non-voters said that they didn't vote because they were so busy

they didn't have time to go to the polls. Of course, some of these

people just used time pressures as an easy excuse, but it does seem

reasonable that in today's busy world that many of them would have

voted had they had the day off from work or school. According to the Pew

Center's post-election poll, 42 percent of voters who went to the

polls on Election Day 2004 had to wait in line. Of these voters who

faced lines, over 40 percent reported waiting at least half an hour. It

does not take much of a leap of faith to infer that some people may have

been discouraged by the prospect of waiting in long lines on a workday.

To those who question whether an Election Day holiday would really

make a positive difference, I would simply ask them to consider whether

they would recommend that Iraq or Afghanistan hold their elections on

Tuesday like we do. It is doubtful that any American elections expert

would recommend that these countries emulate our example in this

respect. So if Americans wouldn't recommend Tuesday elections to

other countries, why should the United States continue this practice? By

joining the modern world and voting on a leisure day, it is likely that

American turnout would increase.


Nielsen Ratings of Presidential Debates, 1960-2004

Presidential Debates Vice Presidential Debate

1960 59.4 --

1976 51.2 35.5

1980 58.9 --

1984 45.7 43.6

1988 36.4 33.6

1992 43.3 35.9

1996 27.7 19.7

2000 27.9 21.0

2004 33.3 28.1

Source: Nielsen Media Research.


Voter Turnout Rates in 2004 and 1960 by Region

2004 1960

Voting age population

Non-South 56 70

South 52 40

Citizen voting age population

Non-South 61 71

South 57 41


Turnout of Citizens of Voting Age by State in 2004, and Changes from

2000 and 1960

Turnout of Citizens Change from Change from

State in 2004 2000 1960

Minnesota# 77 +5 -1

Wisconsin# 74 +6 0

Maine 72 +4 -1

Oregon 71 +6 -2

New Hampshire# 70 +6 -10

Iowa 69 +5 -8

Alaska 69 0 +24

South Dakota 68 +10 -10

Colorado# 67 +7 -3

Michigan# 66 +7 -8

Ohio# 66 +10 -5

North Dakota 65 +4 -14

Vermont 65 0 -9

Washington 65 +4 -8

Massachusetts 65 +4 -13

Missouri 64 +6 -8

Florida# 64 +7 +14

Montana 64 +2 -7

Wyoming 63 +2 -10

Delaware 63 +5 -10

Connecticut 63 +2 -15

Pennsylvania# 62 +7 -9

Nebraska 62 +4 -9

Maryland 62 +7 +4

New Jersey 62 +6 -11

Kansas 61 +5 -9

Idaho 60 +4 -20

Virginia 60 +5 +27

Illinois 60 +4 -17

Louisiana 59 +4 +14

Kentucky 57 +4 0

California 57 +5 -10

New Mexico# 57 +7 -5

North Carolina 57 +5 +4

New York 57 0 -12

Rhode Island 56 -1 -21

Oklahoma 56 +6 -7

Tennessee 56 +7 +6

Alabama 56 +5 +25

D.C. 56 +2 --

Utah 55 +4 -20

Arizona 55 +7 +1

Nevada# 54 +6 -5

Indiana 54 +4 -23

Mississippi 54 +5 +29

West Virginia 53 +7 -25

Georgia 53 +7 +24

Texas 52 +5 +10

Arkansas 52 +3 +11

South Carolina 52 +5 +22

Hawaii 48 +4 -4

Note: States in italics were battleground states in the final week of

the 2004 campaign.

Note: States indicated with # were battleground states in the final

week of the 2004 campaign.

(1.) Philip E. Converse, Angus Campbell, Warren E. Miller, and

Donald E. Stokes, "Stability and Change in 1960: A Reinstating

Election," American Political Science Review 55(1961): 269-70.

(2.) Michael P. McDonald and Samuel L. Popkin, "The Myth of

the Vanishing Voter," American Political Science Review 95(2001):


(3.) See Alexander Keyssar, The Right to Vote: The Contested

History of Democracy in the United States (New York: Basic Books, 2000).

(4.) See Andre Blais, Louis Massicotte, and Antoine Yoshinaka,

"Deciding Who Has the Right to Vote: A Comparative Analysis of

Election Laws," Electoral Studies 20(2001): 41-62.

(5.) See President William Jefferson Clinton, "The Unfinished

Work of Building One America," Message to Congress, January 15,

2001; and the National Commission on Federal Election Reform, "To

Assure Pride and Confidence in the Electoral Process," August 2001.

(6.) See Louis DeSipio, Counting on the Latino Vote: Latinos as a

New Electorate (Charlottesville, VA: University of Virginia Press,

1996), 131.

(7.) I am indebted to Michael McDonald of George Mason University

for posting the Census Bureau's recent data on the percentages of

non-citizens in each state on his Web site. For 1960 and 2000, I have

relied on my own earlier research presented in Martin P. Wattenberg,

Where Have All the Voters Gone? (Cambridge, MA: Harvard University

Press, 2002), chap. 2.

(8.) South Dakota is the exception that proves the rule, however.

When a variety of indicators of competitiveness of Senate and

gubernatorial elections were tested in a multivariate model predicting

turnout change, they consistently failed to show any significant impact.

(9.) The Caltech/MIT Voting Project, "Residual Votes

Attributable to Technology: An Assessment of the Reliability of Existing

Voting Equipment," Version 2, March 30, 2001, p. 7.

(10.) Angus Campbell, Philip E. Converse, Warren E. Miller, and

Donald E. Stokes, The American Voter (Chicago: University of Chicago

Press, 1960), 95.

Martin P. Wattenberg is professor of political science at the

University of California, Irvine. He is the author of Where Have All the

Voters Gone? and The Decline of American Political Parties, 1952-1996.

Admin · 23 vistas · Escribir un comentario
07 Feb. 2017 

Taxing times: rental property foreclosures and short sales.

i recently reviewed the tax consequences of foreclosures and short

sales involving a taxpayer's principal residence (January/February

California CPA, Page 11), but what happens if the property involved is a

rental? Is there a similar exclusion of cancellation-of-debt income

(CODI) under Internal Revenue Code See. 108 for rental properties?

Recourse or Nonrecourse Debt?

Nonrecourse debt: lender cannot hold the borrower personally liable

for it and may go only against the value of the property that is

securing the debt to collect.

Recourse debt: lender can hold the borrower personally liable for

it beyond the value of the property that is securing the debt.

If there is any doubt about whether the debt is nonrecourse or

recourse, a real estate attorney should be hired to review the loan

documents and make the determination.

For purposes of this article, assume the rental property debt is

recourse debt.

Tax Consequences

If a lender discharges any part of a debt, then the taxpayer must

recognize the amount discharged as ordinary income [IRC Sec. 61(a)(12)].

Where the unpaid indebtedness is recourse, the foreclosure, or short

sale, transaction is split into two parts: CODI equal to the outstanding

principal amount of debt owed minus the fair market value of the

property; and gain or loss equal to the fair market value of the

property, minus its adjusted basis [Treas. Reg. Sec. 1.1001-2(a)(2)].

If the borrower qualifies, one or more of the relief provisions

available under Sec. 108 may be used to exclude the CODI. One such

provision is the Qualified Real Property Business Indebtedness (QRPBI)

exclusion [Sec. 108(a)(1)(D)], to which California conforms.

To qualify for this exclusion, the debt must be incurred or assumed

by the taxpayer before Jan. 1, 1993, in connection with real property

used in a trade or business (or if incurred or assumed after that date,

is "qualified acquisition indebtedness") and is secured by the

real property [Sec. 108(c)(3)(A) and (B)]. The taxpayer must make an

election to exclude the CODI [Sec. 108(c)(3)(C)].


If the taxpayer qualifies for this exclusion, then the CODI is

excluded from gross income and applied instead to reduce the

taxpayer's adjusted basis of the property [Sec. 108(c)(1)]. The

exclusion is limited to the excess of the principal amount of the

qualified debt over the fair market value of the property [Sec.

108(c)(2)(A)], and also limited to the taxpayer's basis in the

property [Sec. 108(c)(1)(A)]. The exclusion is limited overall to the

taxpayer's aggregate adjusted bases of all depreciable real

properties [Sec. 108(c)(2)(B)].

If the taxpayer is insolvent, then the insolvency exclusion [Sec.

108(a)(1)(B)] takes precedence over the QRPBI exclusion [Sec.


Is Renting Considered a Business?

As stated above, the real property must be used in a business.

Historically, the courts have held that the rental of even a single

property may constitute a trade or business | Curphey v. Comm., 73 T.C.

766, 773 (1980)]. However, the ownership and rental of property does not

always constitute a business, such as when the taxpayer is essentially

an investor or the lease is a "net lease" [Neili v. Comm., 46

B.T.A. 197 (1942); Rev. Rul. 73-522, 1973-2 C.B. 226].

In Technical Advice Memorandum 8350008, the IRS took the position

that the mere rental of real property does not constitute a trade or

business under Sec. 1231. As a result, taxpayers may be concerned about

whether the IRS will allow the QRPBI exclusion to be used for rental


The only guidance comes from several IRS letter rulings issued

after the 1983 TAM, holding that a multitenant office building held by a

limited partnership and a multiunit residential building held by a

general partnership, qualified as businesses for purposes of the QRPBI

exclusion (private letter rulings 9426006-9426019: 9840026).

Ultimately, the issue depends upon the facts what is foreclosurre and circumstances. If

the taxpayer rents the property continuously to an unrelated party for a

fair market rent, then it will probably be considered a business [e.g.

Mayes v. U.S., 60 AFTR2d (RIA) [paragraph]5046, 87-2 USTC (CCH)

[paragraph]9478 (W.D.Mo. 1986)].

Qualified Acquisition Indebtedness

Also, as stated above, if the debt was incurred or assumed by the

taxpayer after Jan. 1, 1993, it must constitute "qualified

acquisition indebtedness." This means that the debt must have been

incurred to acquire, construct, reconstruct or substantially improve the

property [Sec. 108(c)(4)].

Refinancing indebtedness also qualifies, but only to the extent

that it doesn't exceed the principal balance of the debt paid off

by the refinance loan [last sentence of Sec. 108(c)(3)]. To the extent

that the proceeds from the refinance loan are used to substantially

improve the property, that portion will qualify [H. Rept. No. 100-391,

Omnibus Reconciliation Act of 1987 (P.L. 100-203), 10/19/87].

Making the Election

The QRPBI election must be made on a timely-filed return (including

extensions) for the year in which the taxpayer has CODI. The election is

made by filing Form 982 with the return [Treas. Reg. Sec. 1.108-5(b)].

Principal Residence Converted to Rental

If a taxpayer's principal residence is converted to rental

use, and there is CODI from a foreclosure or short sale, does the

taxpayer claim the Qualified Principal Residence Indebtedness exclusion

or the QRPBI exclusion? It depends upon the kind of debt that is

discharged [secs. 108(a)(1)(D) and (E). If, at the time that the debt is

canceled, the property is being used as a rental then the QRPBI

exclusion applies.

RELATED ARTICLE: Defining Examples

Example 1

* January 2007: Residential rental property purchased for $355,000

($55,000 down, $300,000 interest-only recourse loan).

* January 2008: FMV property $200,000, loan balance $300,000 (in

default), lender forecloses, cancels $300,000 loan, adjusted basis

$350,000 ($355,000 minus $5,000 depreciation).

This results in:

* $100,000 CODI ($300,000 debt minus $200,000 FMV).

* Form 982 filed with 2008 return to elect $100,000 QRPBI


* Due to QRPBI exclusion, adjusted real estate companies list basis is reduced to $250,000.

* $50,000 loss on foreclosure ($200,000 FMV minus $250,000 adjusted


* Same results for California purposes.

Example 2

* May 2000: Principal residence purchased for $400,000 ($80,000

down, $320,000 nonrecourse loan)

* January 2004: FMV residence $1 million, loan balance $300,000,

refinanced for $800,000 (proceeds placed in savings account).

* January 2005: Converted residence to rental, used $500,000 in

savings account to buy new principal residence.

* January 2009: FMV rental property $600,000, loan balance $750,000

(in default), "short sale" for $600,000 (proceeds to lender),

lender cancels $150,000 balance owed, adjusted basis $360,000 ($400,000

minus (4 years x $10,000) depreciation).

This results in:

* $150,000 CODI ($750,000 debt, minus $600,000 FMV).

* Cannot use Qualified Principal Residence exclusion since property

is a rental.

* Only $300,000 of debt is "qualified acquisition

indebtedness" since $500,000 of $800,000 refinance loan wasn't

used to acquire, reconstruct or improve the property.

* No QRPBI exclusion, since qualified debt ($300,000) doesn't

exceed FMV ($600,000) [IRC Sec. 108(c)(2)(A)].

* $240,000 gain on "short sale" ($600,000 FMV, minus

$360,000 adjusted basis).

* Same results for California purposes.

David M. Fogel, CPA is a Roseville-based tax consultant. You can

reach him at [email protected]
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30 Dic 2016 

‘Rogue One’ Becomes Third-Highest Grossing Film of 2016 at U.S. Box Office

'Rogue One' Is Third Top Movie of 2016 | Variety

"Rogue One: A Star Wars Story" is breaking records left and right, hitting $687.7 million worldwide after two weeks.

The eighth "Star Wars" movie grossed $16.6 million domestically at 4,157 locations on Thursday, giving it $375.2 million in its first 14 days to make it the third-highest domestic grosser of the year. The space opera surpassed "The Secret Life of Pets" ($368 million), "The Jungle Book" ($364 million), and "Deadpool" ($363 million) on the same day. It trails only "Finding Dory" at $486 million and "Captain America: Civil War" at $408 million among 2016 releases.

The Disney-Lucasfilm tentpole is already the 29th-highest earner of all time at domestic box office, topping the total cumes of a pair of 2004 titles -- "Spider-Man 2" and "The Passion of the Christ."

"Rogue One" outdistanced Illumination-Universal's animated comedy "Sing," which came in with $15 million on its ninth day of release on Thursday at 4,022 domestic sites. "Sing" has grossed $123 million thus far.

"Rogue One" pulled in $17.3 million internationally on Thursday to reach $312.5 million, led by the U.K. with $57 million, Germany with $31.1 million, France click this link now with $26.7 million, Australia with $24.5 million, and Japan with $20.2 million. "Rogue One" will launch in China on Jan. 6.

The worldwide total for "Rogue One" is already the 10th highest of 2016 and the 91st highest of all time, topping the entire run of Tom Cruise's "Mission: Impossible -- Rogue Nation."

"Rogue One" opened a year after "Star Wars: The Force Awakens" debuted and took in $652 million domestically in two weeks -- on its way to a record $936 million by the end of its run. "Star Wars: Episode VIII" hits theaters on Dec. 15, 2017.

"Rogue One" and "Sing" have propelled the overall domestic box office to a new yearly record, with tracking service comScore projecting a final number of $11.36 billion after passing the 2015 record of $11.14 billion on Dec. 28. That's you can look here a year-to-year gain of 2%.
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