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Is Cash No Longer Legal Tender?
An anonymous reader asks: "I attend the University of Illinois at Chicago. Last semester my housing arrangements went smoothly. I put down my application fee, and my deposit just fine, got a room for the semester and life went on. This semester, because there was supposedly a large number of students who did not check into their rooms last semester, we were required to make a $100 prepayment, in addition to the application fee and deposit. No problem, I think, I see the university is trying to make a quick buck off people who don't follow through with their plans. Now I do NOT have a checking account, a credit card, or anything. I don't trust the banks, or the credit card companies, so I am one of the few people who do EVERYTHING in cash. However, they refused to take the cash. Is it legal for a state-owned university, let alone any business to not take legal tender?"
The housing department also will not charge my university account (so I can pay the bursar or whoever I need to) in cash, and they want a check or money order. Nowhere in their letter did they say that. I fear out of technicality I am going to loose my housing since I cannot get them their money on time because they do not take cash.
What can I do?"
What can I do?"
Just go get a money order from the post office or even a convenience store.
Doing everything in cash, imo, is sort of retarded. I don't particularly trust banks either, but when inconvenience impacts me regularly, I make concessions.
The more you know.
You are correct sir. See US Treasury site:
- tender.shtml
http://www.treas.gov/education/faq/currency/legal
Only creditors have to take legal tender, so if you pay first, they can place restrictions on form of payment.
The funny thing is, I don't want it. Credit is really just newspeak for "debt". The only debt I ever want to have, and I don't really want it very much, is a mortgage. Credit cards are useful occassionally - my fiancee and I use hers maybe three times a year - but I'd much rather use my debit card. Aside from anything else, my debit card doesn't pretend to be giving me something.
As for borrowing: get a loan from a bank. Borrowing on a credit card is madness, interest-wise.
TWW
"Encyclopedia" is to "Wikipedia" what "Library" is to "Some people at a bus stop"
The problem with this is that it can be very difficult to get a mortgage if you have no credit history. Unless you have borrowed money in the past and paid it back on time banks have no way to gauge whether you are likely to pay your mortgage. It is only by borrowing every increasing amounts of money and paying it back reliably that you can increase your credit rating.
Just to add a bit of anecdotal evidence: My sister has never had a credit card or used an overdraft facility, she viewed this as being financially responsible. When she came to apply for a loan to cover a year studying abroad she was refused on the basis that she had no credit history.
What you describe is extremely counterproductive for landlords. Where to begin?
- As a landlord, you don't pay much tax on your buildings. Because you're only paying tax on your profits, and expenses are astronomical in the rental industry, and you are allowed to depreciate your property for tax purposes, often landlords will show a tax LOSS (or a modest profit), even while turning plenty of profit. Even if you underreport your income, you won't decrease your tax liability by much or anything at all.
- When you are applying for a loan or attempting to sell a building, you want to show that building to be operating as profitably as possible. Non-residential real estate is priced based on a multiple of the building's earnings (as opposed to comps), so if you are only declaring 50% or 75% of your rental receipts, you have just decreased the value of your building! Also, you will make it much harder to get a loan because banks want to see earnings. And yes, they absolutely do look at your tax returns.
- When deciding where to be, erm.., creative on your taxes, always remember the following maxim: If you're caught overdeducting, you pay a fine. If you underreport income, you go to jail.
- You open yourself up to fair housing problems. Picture this: a tenant doesn't pay his rent, so you evict. Nothing fancy there. But let's say that this nonpaying tenant is black, and wants to mess with you because he's mad that you evicted him (or he really feels discriminated against. Doesn't matter.).
Bottom line, this is really the wrong industry to underreport your income in. This is why, even with all of the shady landlords out there, you never see landlords being busted for underreporting.Example. Many landlords like a unit to cash flow $100/mo after expenses (mortgage, taxes, insurance, repairs, maintenance, advertising, vacancy, collections, credit loss, etc.) That $100/mo can easily be swallowed up by depreciating the building. Of course, depreciating the building will lower your cost basis and increase your capital gain when you sell the property, but google "1031" for more information on how to fix that little snag.
He calls some infomercial contingency-fee lawyer, sues you for fair housing violations, and during discovery, finds out that ALL of your tenants are underpaying. By 25-50%! But a quick glance at the court records reveals that you did not evict all of them. Why did you single out this one tenant, hmm? Oh, you are in for a costly court battle, settlement, and/or judgment now. Unless you are prepared to testify under oath that you belong in jail for underreporting your income. (And prepared to pay your attorney $10,000.00 for the privilege)
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
The post office will provide you with a money order for a reasonable fee, and there's no place in the country that will refuse a postal money order.
It doesn't hurt to be nice.