i heard about something called "puditive income"?

Question

and what they say it is, is if you have a home with a mortgage of say 500, and your home can easily go for 2500, the government can charge you for what they couldve made on your home at the end of the year on taxes...it would be considered as income, the difference between what you pay and what the government says the market value is...i googled the word puditive income and punitive income and got nothing...does anyone know what the exact phrase is?

Answer 1

Here's a good link, its from talk show host Neal Boortz
http://boortz.com/nuze/200611/11012006.html#dems

Answer 2

I think you are looking for the phrase "putative income." It is a concept used in valuing property that could be earning income but is not, say a farm that is not being put to productive use. The concept has to do with valuation. Gross income for income tax purposes requires realization. Putative income is not realization. Taxation based on an artificial concept would simply not meet the constitutional standards. Sounds like a red herring concept. Don't worry about it. Ain't gonna happen.

Answer 3

I neither know of such a phrase nor anything that might resemble your description.

Sounds like you could be mixing assessed valuation for property tax purposes with deferred capital gains on the sale of a house or possibly the sale of a house to a relative at far below market value in order to avoid capital gains taxes.

Or maybe you're thinking of imputed income, like you pay on company supplied medical insurance.

Answer 4

The term you are looking for is "putative income". Putative means "supposed" (as in "estimated"). Assuming you are American, the "government" taxes you three different ways - Federal, State and Local. Federal and State laws do not tax you on putative equity value of your house (market value minus mortgage, as you described). Neither do they tax you on your putative income. You only pay when you make a "realized" income, either by selling your property or by renting it out. Local tax authorities, in this case county assessors, tax you on the putative value of your house - not the putative income.