Without audience targeting are Google Ads Dead? Think again…
Early this month Google announced new restrictions for targeting specific audiences. The restrictions apply to content related to housing, employment, credit, and those who are disproportionately affected by societal biases. The news of these restrictions created quite a stir among industry brokers and lenders who heavily rely upon targeted Google ad campaigns. All which may have you asking if these changes will kill future reverse mortgage advertising on the world’s most popular search engine. In just a moment we’ll hear from our online SEO expert Josh Johnson to find out.
Google’s restrictions are not necessarily novel nor unexpected. It was just over two years ago Facebook faced scrutiny from federal regulators for allowing those offering credit or housing finance to restrict ad audiences by race or religion among other questionable metrics that would violate HUD’s fair housing rules. An investigation by ProPublica broke this news in October 2016. It was nearly two years later in August 2018 that HUD filed a formal complaint against the social media giant for discriminatory advertising practices. Seven months after HUD’s complaint Facebook announced sweeping changes. Both Facebook and later Google, took a blunt approach much to the chagrin of lenders and service providers.
What ad filters are going away? In its official release Google revealed, “credit products or services can no longer be targeted to audiences based on gender, age, parental status, marital status, or ZIP code.”
Is this the end of Google ads for reverse mortgages? To answer that question I reached out to Josh Johnson who heads up Reverse Focus’ Online Dominance SEO program and Google marketing. Here’s his explanation.
Here’s what makes Google unique from other platforms and why reverse mortgage Google ads will continue to reach the intended audience.
To summarize, older homeowners are intentionally seeking out reverse mortgage information on Google which means, yes-your ads will be seen by your target audience, even though you can no longer target specific age groups.
Biden Tax Plan eyes eliminating the stepped-up basis exemption as part of tax reform efforts
A little-known provision in the Biden administration’s tax plan could easily have millions of middle-class Americans paying much more in taxes. “One way the Biden tax plan may try to raise revenue to fund the administration’s $3 trillion infrastructure bill is by changing the way capital gains taxes are administered at death.” So write Taylor Tepper & Benjamin Curry in a Forbes Advisor column. That change would be of what is called ‘stepped-up basis’. Today, heirs are not taxed on the appreciation or gain in the value of a home or investments that took place before they inherited the asset.
However, a proposed provision in the Biden tax plan could leave children and heirs liable for capital gains taxes. Democrat Senators Corey Booker and Chris Van Hollen and Independent Bernie Sanders have proposed a bill to close what they say would close the stepped-up basis tax loophole. That could have a significant impact on middle-class families who would face having to pay capital gains.
The columnists cite the example of a single school teacher who takes home $60,000 a year. Under current rules when her uncle passes away leaving her his Tampa Bay condo he bought for $100,000 and fetches $600,000 in today’s market and she decides to sell she would pocket the full $600 without capital gains. If she postponed the sale she would only be responsible for taxable gains in value after the death of her uncle. Not bad. However, if the stepped-up basis rule were to be eliminated as proposed Anne’s gain of $500,000 would be taxed at a 20% long-term capital gains tax and she would face a net investment income tax rate of 3.8%. Anne’s total tax liability for the sale of her uncle’s property would then be $89,327.50. Aware of the potential backlash that this middle-class tax hike would have, the co-sponsors of the Senate bill have proposed a $1 million dollars per person exemption. With that provision, Anne’s tax liability would return to zero. However, if she inherited a property valued over $1 million any amount over that threshold would be subject to taxes.
According to the Tax Policy Center, this is not the first time closing the stepped-up basis tax has been considered. Attempts were made to change this tax in 1976, 2001, and 2015. “I have a hard time believing it will be completely eliminated,” said Joseph Velkos, a Key Private Bank trust tax director in Cleveland, Ohio. “If it is, it’ll affect many more people, including those making less than $400,000 a year.” That would in effect be a middle-class tax hike.
The wealthiest Americans know how to massage the tax code and use creative financial instruments and trusts to avoid or reduce taxes. Also, if the stepped-up basis were to be eliminated wealthy real estate holders may choose not to hold property until their death. As for the middle-class homeowner some may consider passing on a portion of their real estate’s gains today instead. One way to accomplish that would be a reverse mortgage.
And here’s where things get sticky. The tax code is extremely complex and when coupled with real estate law the waters become even murkier. That’s where an experienced tax professional and real estate attorney should be consulted, not a reverse mortgage originator. And that’s okay. We do what we do best. Today’s segment should simply alert us to what would be one of the most substantial and wide-reaching tax reforms in a generation that would change the way Americans invest and hold onto real estate. If you want to know more, sit down and chat with your local financial planner. They’ll likely appreciate your curiosity and may bring some useful strategies to light.