<a aria-current="page" href="/" class="router-link-active router-link-exact-active"> Anderson Business Advisors Podcast

https://andersonadvisors.com/strategy-session/?utm_source=bonus-depreciation-in-2025&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=bonus-depreciation-in-2025&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

Thursday Feb 06, 2025

The #1 Real Estate Strategy for 2025

Thursday Feb 06, 2025

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, chats with Atticus LeBlanc, CEO of PadSplit. Toby and Atticus discuss the innovative approach PadSplit is taking to address homelessness and provide affordable housing. They dive into troubling statistics about homelessness in 2024 and how rising home prices and interest rates are impacting the housing market. PadSplit’s model—offering multi-room rentals—provides a solution for both underserved communities and real estate investors, creating a two-sided marketplace. The conversation covers the operational benefits for landlords, the low turnover rates, and the impact PadSplit has on helping residents transition out of homelessness. Learn how this model offers affordable housing in 24-48 hours for under $300, while benefiting investors by reducing costs and increasing revenue. It’s a win-win for both society and your investment portfolio!

Highlights/Topics:

Toby’s PadSplit experience, frightening stats on homelessness for 2024
Increasing home prices, interest rates are not helping single-family residences
PadSplit rooms are a great solution for the underserved, and for investors
Reducing barriers to entry for the unhoused, revenue increases for landlords
How PadSplit operates as a two-sided marketplace
Different scenarios using PadSplit for multi-room home rentals
Standard costs for a “turn” as a landlord, saving with PadSplit
Early intervention for issues is easier with a PadSplit scenario
Residents have thousands of options if they don’t care for the room
What are the eviction rates with PadSplit?
What percentage of residents move from unhoused situations? This is the “invisible working population’ - not people on the street with a cardboard sign.
Residents can get a room within 24-48 hours, for under $300
So something good for society, and something good for yourself
Share this with investors you know

Resources:

Atticus LeBlanc LinkedIn

https://www.linkedin.com/in/atticus-leblanc-3960466/

PadSplit

https://www.padsplit.com/

https://andersonadvisors.com/strategy-session/?utm_source=1-real-estate-strategy-for-2025&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=1-real-estate-strategy-for-2025&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

https://www.youtube.com/@ClintCoons

Tuesday Feb 04, 2025

How to Move a Rental Property to a Trust & S-Corp for Asset Protection

Tuesday Feb 04, 2025

Welcome to Tax Tuesday. Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., tackle various tax-related questions. Topics include retroactively claiming real estate deductions and depreciation, handling health insurance premiums for an S-corp, understanding the rules around setting up a trading account under an S-corp, and how to qualify for Real Estate Professional (REP) status while working a W2 job. The attorneys also discuss deadlines for S-election, converting properties for tax purposes, alternative methods for substantiating business expenses, and more. Tune in for valuable insights on managing your tax strategies effectively.

Send your tax questions to taxtuesday@andersonadvisors.com.

Highlights/Topics:

"I need to retroactively claim my real estate deduction or depreciation for my 2022 and 2023 taxes. I actively manage my own rental and have over 700-plus hours per year for real estate management. How do I claim accelerated depreciation for the past years?" - Yes, you can go back and retroactively capture previous depreciation, including accelerated depreciation or bonus depreciation, you do it n the current year. It's a form called 3115.
"I didn't have my health premiums added to my payroll statements for 2024. I have an S-corp and pay myself and another employee but wanted to deduct health insurance payments. Is there anything I can do at this point? Regarding asset protection, we have a rental property. We'd like to move this to a trust and then to an S-corp. Would that work?" - If the S-Corp it paying the premiums, on our 1040, we can make an adjustment on Schedule 1 for the insurance premiums because we're considered sole proprietor.
"I have seen some of your videos and had a question about setting up a trading account under an S-corporation. Is this correct? Can I pay my wife $15,000 from it and then match that amount toward a 401(k)? "My wife is a homemaker with low income. If we file just married filing jointly, are there any implications with this move? We are not traders but more investors."- Typically no, we would put it into an S-Corp.
"My employer recently went through a restructuring. They offered me one year's pay as severance. My last paycheck will be January, 2026. I feel confident that I'll be able to fulfill the REP status requirement for time spent on material real estate management activities in 2025. I will not make more money from my real estate investments as compared to my severance pay. Can I still qualify for the REP status? I used my solo 401(k) to invest in a real estate deal as a passive investor. The bank recently foreclosed the deal. It was a total loss. Is there any deduction that I can take for the loss?" - It’s a common misconception that you can’t get REP status with a W2. It’s about time, not how much you make.
"When is the deadline to make an S-election for 2025? Can you switch back to sole proprietorship after you elect S-corp in the same year or future years? Do you have to run payroll as an S-corp LLC? What are good indicators or reasons to switch to an S-corp for taxation?" - there's something called late election, very common, we do it all the time. The IRS is very good about allowing it. To be safe it should be done by March 15th.
"I'm converting a barn on my property to an auxiliary dwelling unit for realm purposes. I also have a separate building on the property that I use as a shop office for my construction business. How do I treat these properties for liability and tax purposes?" - the ADU, the Auxiliary Drilling and Dwelling Unit, that's going to be either a long-term rental or a short-term. You could use the shop office as an admin office. I’d wrap it in an LLC and strip the equity out.
“My business doesn't have traditional receipts for its expenses. We primarily rely on bank statements to track our spending. What supporting documentation would I need to provide to the IRS or my tax preparer substantiate these expenses and ensure accurate tax deductions? Are there any alternative methods to proving these expenses without traditional receipts?" - A bank statement, credit card statements, can be used, proof of payments, cancelled checks, etc.
"My business partner and I co-bought a condo in New York City by paying $900,000. He put in $700,000 and own 75%, and I put in $300,000 and own 25%. I'm deeding my ownership to him for $0. What would be his cost basis for future resale?" - Basically this is a gifting, it wasn't, they didn't sell it. So for any amount, so you just carry over the basis. File a 709.
Check out our free Emergency Binder on our website!

Resources:

https://andersonadvisors.com/strategy-session/?utm_source=how-to-move-a-rental-property-to-a-trust-s-corp-for-asset-protection&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-move-a-rental-property-to-a-trust-s-corp-for-asset-protection&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

Real Estate Templet on IG

https://www.youtube.com/@ClintCoons

Thursday Jan 30, 2025

The Real Estate Investing Strategy That is Taking Off

Thursday Jan 30, 2025

Today Clint Coons, Esq., sits down with Winston Templet, a seasoned real estate investor, developer, and contractor with over 20 years of experience. Based in Tennessee, Winston shares insights from his extensive career, including his early days as a reluctant real estate investor, where he began with trailer parks. They dive into the state of real estate investing in 2025, with Winston emphasizing the shift toward building rather than buying. Winston explains his approach to finding profitable properties, partnering with land sellers, and navigating complex regulations, zoning, and permits. He also offers valuable advice on selecting general contractors, financing options, and how to avoid common pitfalls, particularly for first-time investors. Throughout the conversation, Winston highlights the importance of education and building strong community relationships as keys to success in real estate.

Winston Templet is a seasoned real estate investor, developer, and contractor with over two decades of experience in the industry. Based in Tennessee, he has built a substantial real estate portfolio, demonstrating a keen ability to identify and capitalize on lucrative opportunities in the market. Winston co-founded "The Real Estate Templet," a platform dedicated to educating and empowering individuals of varying experience levels on real estate investment and development. Winston's passion for real estate is matched by his commitment to educating the next generation of real estate professionals. It is his firm belief that education is the key to success.

Highlights/Topics:

Clint’s introduction of guest Winston Templet
A reluctant real estate investor - the trailer park story
The state of investing in 2025, builds instead of buying
How Winston finds properties, sharing wealth with land sellers, partnering for success
Regulations, zoning, permits, etc.
How to approach city and municipal offices, proposing zoning changes
Key costs that must be considered - engineering fees, sprinkler systems, green energy requirements
Financing recommendations, building relationships with community lenders, cash refi’s from other properties
Selecting general contractors - it is crucial to research, get referrals, and hire the right people, never pay money upfront!
First-timer mistakes to watch out for
Setting up protections from liability with the right business entities
Closing comments, final words of advice

Resources:

https://www.instagram.com/realestatetemplet/

The Real Estate Templet On YouTube

https://www.youtube.com/@UCs57I294Kvkpwtw3PQoaXGQ

https://andersonadvisors.com/strategy-session/?utm_source=the-real-estate-investing-strategy-that-is-taking-off&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=the-real-estate-investing-strategy-that-is-taking-off&utm_medium=podcast

Anderson Advisors Podcast

https://andersonadvisors.com/

https://andersonadvisors.com/podcast/

https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w

Tuesday Jan 21, 2025

How to Reduce Capital Gains Taxes When Selling a Long-Held Rental Property

Tuesday Jan 21, 2025

Welcome to the first Tax Tuesday episode of 2025. Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., discuss topics including whether hours spent on personal and rental properties count towards real estate professional status, the tax implications of using an LLC for a brokerage account that generates short-term capital gains, and how to handle HOA dues when calculating the cost basis of a condominium. They also discuss the consequences of failing to issue a 1099 to contractors, how to navigate a tricky 1031 exchange, and strategies to minimize capital gains taxes when selling a rental property. You’ll hear about ways to structure personal and business finances for educational deductions, managing a 401(k) loan from a tax perspective, and tips for maximizing tax benefits as a 1099 medical professional.

Send your tax questions to taxtuesday@andersonadvisors.com.

Highlights/Topics:

"I have a solo handyman business, do my hours performing services for homeowners and real estate investors properties count towards rep hours. Do my hours working on my residence count towards rep hours if I plan to move out and rent the house?" - Absolutely. That's exactly what you're supposed to do. That time is exactly what we're looking for to get over 750 hours of material participation in the management of your properties, et cetera.
"I am selling weekly options and was advised to put my brokerage account into an LLC taxed as a partnership. Doesn’t this expose me to the same tax liability I have now with no LLC? What is the best tax strategy for a brokerage account that is making a large profit that is all from short-term capital gains?" -No, you're not going to have the same tax liability by putting it in that type of partnership. But there's a lot of other things you can do.
"When calculating the cost basis of a condominium, how does one identify and add the portion of HOA dues spent for capital improvements to the property?" - If it's your personal residence, we don't deduct HOA costs.
"What happens if I don't issue a 1099 to an outside contractor? How do you spend a virtual assistant who made over $15,000?" - You can get penalized up to $600, perhaps more, if you don't get the 1099 out. VA’s overseas, if not a US taxpayer, you don’t need to send a 1099.
"How many properties must I acquire to meet the real estate professional status?" - The number of properties is irrelevant. You could have one, you could have a hundred. It's how much time you put into it.
"I have a rental property that I would like to sell. I purchased it in 1999 for $175, 000. The current value is $450,000–$500,000. How can I reduce capital gains taxes?" - The quick, real easy, no brainer answer, you could do a 1031-like kind of exchange.
"I'm in a 1031 exchange gone bad. The funds are with the intermediary in the escrow account. The replacement property seller did not cooperate and the deal is falling through. Now what can I do?" - Quick answer, you can pay tax. You could try and make the payments in installments.
"Can I structure and set up something through my business and nonprofit or personally that will allow me to deduct my child's college education expenses." "I'm aware of state-specific 529 programs." - You don't get a tax deduction for a 529 plan.
"I currently have a loan on my solo 401(k) and I want to pay it off early and turn around and take out another loan. How do I handle that from a tax perspective?" - You need to check with your particular plan. I just throw that out there for people who are thinking maybe of doing the same.
"I am a 1099 medical professional. What can I do from now on to properly prepare myself to maximize my tax situation? I'm on the payroll for my S-Corp and managing the 1099 income through the S Corp." "I don't know if I should be doing anything else." - Quarterly tax meetings. That's always the answer. Putting it in an S-Corp was the right thing.

Resources:

https://andersonadvisors.com/strategy-session/?utm_source=how-to-reduce-capital-gains-taxes-when-selling-a-long-held-rental-property&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-reduce-capital-gains-taxes-when-selling-a-long-held-rental-property&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

Schedule Your Free Consultation

https://www.youtube.com/@ClintCoons

Thursday Dec 26, 2024

Consolidating LLCs Under a Wyoming Holding Company: Is It the Right Move?

Thursday Dec 26, 2024

It’s our last Tax Tuesday episode of 2024! In this episode, Anderson attorneys Amanda Wynalda, Esq., and Eliot Thomas, Esq., address several listener questions on a variety of tax topics. They cover the tax implications of moving into a rental property, including how it affects capital gains and depreciation. They discuss the possibility of using an LLC as a management company for rental properties, allowing for contributions to a personal IRA. Eliot and Amanda also explain how negative cash flow from rentals can affect deductions and tax filings, the importance of staying organized with rental property expenses, and the consequences of transferring ownership in a 1031 exchange. Other topics include options for offsetting passive income with retirement accounts, consolidating LLCs under a Wyoming holding company, deductions for 529 plans, and the stepped-up basis for gifted stocks. Tune in for expert advice on these and more!

Submit your tax question to taxtuesday@andersonadvisors.com

Highlights/Topics:

What are the tax implications of moving into one of our rentals? Bought the property 13 years ago, have never lived in it, taken expenses and depreciation on the returns or should we just rent it from ourselves through our property manager? - Just moving in, no real tax consequence. Once you move in you’re not paying capital gains. The 13 years will be considered ‘non-conforming use’. Don’t rent it to yourself.
I own three rental properties. Can I use that LLC as a management company? Take a 10 to 15% management fee and use that money as an earned income to allow contribution to my personal IRA. Would that contribution be deducted from my rental income as cost to the rentals and Schedule E? When is the deadline for the contribution. My LLC has some expenses too. If my net income is only $3,000, can I still contribute $7,000 to my personal IRA and deduct that amount? - You’re running passive rental income through a mgmt company to make it ‘active’ income, yes you can do this. You need a management agreement that you actually pay before December 31st.
Can I use negative cash flow as a deduction towards income /capable gains? I'm in California and nothing cash flows for at least a few years. If I'm negative $1,000 or more cash flow, is this a deduction against passive income or capital gains? - Capital gains come in when you sell the property. You can pull passive losses from other properties you own.
What expenses are incurred for rental properties or tax deductible and what is the best way to stay organized when keeping records of bills and expensive for rental properties to make it easier at tax time? - Google IRS Schedule E page 1. There is a list there to refer to. Good bookkeeping is essential.
Can I transfer the ownership of a property owned by an LLC tax as a partnership that I purchased as a replacement property in a 1031 exchange or will that trigger a taxable event? - Yes you can transfer, but it will trigger a taxable event.
My wife receives income from multiple sources, real estate rental, consulting, etc. We plan to set up a C Corp to consolidate the passive income and offset some of that income with retirement contributions into a solo 401 (k). Unfortunately, we did not set up the C Corp in time for the tax year 2024. What options do we have with respect to retirement accounts to offset her passive income for 2024. What can we still do? - Consulting is not usually passive income.
Can multiple individual LLCs mix of small business and rentals be consolidated into one tax return under a Wyoming holding company? If so, is that a recommended practice? Adding in a small business? - For rentals this is a standard protection structure, one property per LLC. You can add the active, but we would not recommend it.
How much can we deduct with a 529 plan for our kids?- Some states may give you a deduction, but at the federal level there is no deduction.
If I gift my stock to my aging dad and become the beneficiary the stock when he passes will I get the stepped-up basis after I inherit them? - This is fantastic. Yes, you can do this. This is great, but they have to live for at least one year after the gift, and you have to make sure he’s actually going to leave it to you upon his death!

Resources:

https://andersonadvisors.com/strategy-session/?utm_source=consolidating-llcs-under-a-wyoming-holding-company&utm_medium=podcast

Bookkeeping Packages from Anderson Advisors

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=consolidating-llcs-under-a-wyoming-holding-company&utm_medium=podcast

https://bookkeeping.andersonadvisors.com/

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

Tuesday Dec 10, 2024

Staking Crypto: How Are Rewards Taxed?

Tuesday Dec 10, 2024

In this episode of Tax Tuesday, Anderson Advisors attorneys Clint Coon, Esq., and Eliot Thomas, Esq., discuss essential tax strategies for business owners and investors. Topics covered include late S election strategies, the best approach for payroll and officer compensation, and the benefits of Solo 401(k) plans over Roth IRAs. You’ll hear about how to tackle tax implications for cryptocurrency staking, offshore trusts, and real estate professional status. Additional insights include structuring holding companies for real estate investments, deducting rental expenses, and handling business losses. Tune in for expert advice on navigating complex tax decisions.

Send your tax questions to taxtuesday@andersonadvisors.com.

Highlights/Topics:

"I'm considering a late S election effective January 1st of 2024." Okay, so we're going back in time here for an LLC. "I understand it's late in the year to get everything in order. I've heard others recommend an option to avoid payroll for 2024 by issuing a 1099 miscellaneous as officer compensation in lieu of a late payroll, then get payroll set for 2025. Would you suggest this 1099 approach, or is there still time to get payroll done for all of 2024?" - We don't advise this here at Anderson. We want you to roll the proper W-2 payroll. Yes, there's plenty of time.
“What type of businesses do I need to set up a Solo 401(k) or Roth IRA?” - Look at the Solo 401(k) and use the Roth component built into the Solo 401(k) versus doing a Roth IRA because it gives you a little more flexibility in the control of those funds.
"Can you review the contribution rules for a Solo 401(k) and for an IRA in 2024? For instance, when you defer income at year end and make a company match, then also the IRA contribution if possible?” - You can contribute up to $23,000 as the employee, and then the employer can contribute up to 25% of your earned wages
"I invested in a cryptocurrency a few years ago. I have been staking it directly on the network, and in return, I receive a staking reward. How is the crypto activity taxed?" - The staking is usually considered ordinary income. That means it's going to be taxed at ordinary rates and very likely is subject to employment taxes.
“I've been considering opening an offshore trust that owns an offshore LLC that engages in forex day trading business in the Cayman Islands. I only pay taxes on distributions received from the trust that way, I can grow capital outside the US. Am I on the right path here? And are there other consequences that I should consider?” - The way the US taxes individuals is that when we say worldwide income, it's not the income you earn in your own name. It's also the income that you earn through entities that you hold an interest in.
"I have a real estate professional status." (We call it REP status for short.) "I have invested in both traditional, rentals, and syndications, both use cost segregation and bonus depreciation. Can I claim the paper loss from real estate syndications together with our other rental activity after electing to aggregate all real estate activity? Is it allowed to claim all losses, or the ones from syndications disallowed?" - You have to work over 750 hours in a real estate trade or business that you ‘materially participate’ in. That could be I sell houses, real estate agent, things like that. I manage houses, anything like that, and that has to be over 50% of your work week. Typically, it's difficult to do if you have a W-2 job.
"I own three separate holding companies, LLC taxed as a partnership for my real estate." We'd always recommend that, some oil, and mineral rights. "A second taxed as a partnership for active real estate flips." We might have an issue with that. "S-corporation for technology consulting." "I saw Anderson videos on holding a passive brokerage account, not active trading, in an LLC for asset protection. Where do you recommend I'd place this? Would it go into one of these other LLCs or some other holding company? I would prefer to avoid an extra annual federal tax filing if possible." - I would keep it completely separate because you've got this one set up for the oil, this one set up for the real estate, this one here is our active business. Putting your brokerage, your savings account into any of those entities just wouldn't make sense to me.
"I have a primary residence that I plan to rent after one year, which would be in December. If I put it into service this year, can I deduct expenses that were needed to make it ready for that rental, such as a cost seg for this year?” - It’s a question of when it is placed into service. If we've already placed it in the services and we start, depending on what we're doing to improve on it, if it is just an improvement, that's still just going to go to basis, and we would depreciate it now that it's a rental.
“Clint recommends using a partnership holding company for residential real estate investment. "Do I need to start a new IRS filing submission with a partnership holding company or keep it on my existing Schedule E, personal IRS filing? I have 25 investment homes, so I'd like to minimize the amount of work for this change. I'm not sure how to do this accounting change." - You can write out 25 little boxes down here that all lead up to just one entity, Wyoming holding. We'll make them do all 25.
"I have a relatively new corporation whose expenses exceed income," so we've got losses. "Can these expenses be used to offset income in 2025? If so, how would I indicate this on this year's tax return?" - If we have more expenses than income, it's a loss, it can carry forward into the next year.

Resources:

https://andersonadvisors.com/strategy-session/?utm_source=staking-crypto-how-are-rewards-taxed?&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=staking-crypto-how-are-rewards-taxed?&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

Tuesday Nov 26, 2024

Demystifying Cost Segregation: How Landlords Can Maximize Tax Savings on Property Investments

Tuesday Nov 26, 2024

In this episode of Tax Tuesday, Anderson Advisors attorneys Eliot Thomas, Esq., and Amanda Wynalda, Esq., dive into various tax strategies. You’ll hear about renting property to your business, self-rental rules, and IRS grouping options. Then, we address the sale of a California primary residence, including the $500,000 capital gains exclusion for married couples. We’ll explore cost segregation for landlords and the 1244 stock loss provision for individuals. We also have answers about tax implications for C Corps, including reimbursement rules for accountability plans and transitioning from LLCs. Lastly, we touch on Opportunity Zones, rental property sales strategies like 1031 exchanges, and the tax impact of converting a rental to a primary residence.

Submit your tax question to taxtuesday@andersonadvisors.com

Highlights/Topics:

So can I rent real property to my business? - Check self-rental rules, and the ‘grouping’ option from the IRS
Just sold our primary California residents in July for a million and ninety thousand dollars. We purchased it five years ago for six hundred and fifty thousand, with three hundred thousand down and a three hundred fifty-thousand-dollar mortgage. Any taxes due considering the 121 married filing joint exclusion of five hundred000 capital gains. - We're going to look at the sales price, less our ‘adjusted basis.’
Could you give an example about cost segregation? Have you heard? I have heard you talk a lot about it and they're kind of confused. I'm thinking about becoming a landlord. How can I do a cost segregation on, for example, the appliances that come with a purchased property? - The building itself has straight-line depreciation over many years. Contents of the building are depreciated at different rates.
Is the 1244 stock loss provision, a $50,000 tax credit, that is dollar for dollar, against your 2024 interest, social security and passive incomes on your 1040 for 2024. - 1244 is only applicable to individuals, as a deduction/loss. It reduces your taxable income.
When using the accountability plan for a C Corp, do the charges have to be made from the employee's personal account to qualify, and what happens if those charges are made on the company credit card? - The individual needs to pay for them first personally of their own pocket for a reasonable business expense, then submit for reimbursement.
We purchased our first commercial building this year. Even though I knew in the back of my mind the property was in an opportunity zone, it did not hit me until a couple days ago. Is there still an advantage for us to go into the opportunity zone route? I believe the only benefit at this point is a 10-year mark and step-up in basis. Is this correct? I believe there would be some elections we would have to make in a fund. Can you explain how it all gets set up and what we would need to do? - Once you obtain that property, a stopwatch starts, and you have 30 months to substantially improve it. You had to put the funds into the Opportunity Zone fund, which is the business entity, and then purchase the property there, not going to be able to back into it.
We are changing our LLC from being disregarded to being a C corporation. Over the year we have moved substantial money from our LLC to our personal accounts as distributions. Do we need to relabel those as dividends and would we be able to transfer the funds back, or does the C Corp election only affect forms from the date of transition, meaning we'll file a split return 1040 for a disregarded entity, 1120 for the C Corp? Thank you for all the great media you guys put out. - Nothing happens with the previous activity, but going forward you can’t take money out in the same way.
We have rental property bought originally in 1991 as our residence. The current tenants want to purchase the property. What is the best way to approach this? To lower capital gains, we are considering using the funds either to purchase another property or invest in tax liens and deeds. - You have a lot of options. Installment payments, interest from seller financing, or 1031 exchange
What are the tax implications of moving into a house that has been held as a rental for 12 years? They've never lived in it themselves. - What is your value/investment in the house? That becomes your adjusted basis when you move in, for future tax purposes. Many items are no longer deductible if they become your personal residence.

Resources:

https://andersonadvisors.com/strategy-session/?utm_source=demystifying-cost-segregationt&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=demystifying-cost-segregationt&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

https://www.youtube.com/@ClintCoons

Tuesday Nov 12, 2024

Turning Your Home into a Rental: Keeping Your 121 Exclusion Intact

Tuesday Nov 12, 2024

n this episode of Tax Tuesday, Anderson Advisors attorneys Eliot Thomas, Esq., and Toby Mathis, Esq., tackle a variety of listener questions. Topics include strategies for managing cryptocurrency gains, converting a primary home to a rental without losing the 121 exclusion, and navigating the primary residence exclusion when selling a home. They also discuss the benefits of forming an LLC for consulting income, handling rehab costs for a fix-and-flip property, and meeting the Real Estate Professional criteria for tax purposes. Toby and Eliot dive into depreciation recapture, 1031 exchanges, and how to structure property ownership to avoid taxable events. Tune in for expert insights on real estate and tax strategies for investors and homeowners alike.
Submit your tax question to taxtuesday@andersonadvisors.com

Highlights/Topics:

By crypto, I bought $125,000, $24,000 invested $30,000 is now over $1 million, scared to sell because of the 35 % tax. Hold on until $125,000, $25,000 for 20%, but I'm scared the price is in my portfolio. How can I get around the 35 % legally? - If you will have other losses from other sales, you can use those to offset in the short-term…
How do I convert my primary home into a rental without losing the 121 exclusion? - You can do this but you must meet the 5-year primary residence provision.
My wife and I are selling our primary residence. We'll be listing the house for sale before we have lived in it quite two years. But assuming that closing takes about 90 days, it'll be over two years at the closing. Will this be acceptable for using the primary residence exclusion? - The clock starts when you have the title in possession, so the clock also STOPS when the new buyer takes possession of the title.
I will be starting a consulting position in December. Is it better to create a LLC to receive wages or should I receive funds in my name? What are the benefits of creating the LLC? - If your employer agrees to pay you with 1099, you should have an S or C Corp LLC to protect your wages.
We haven't sold our fix-and-flip property After one year and are considering renting it instead How should we handle the rehab costs and office expenses and our tax return? The property is held in a disregarded LLC. - First we have to establish your “intent” - if you weren’t sure… you’re ok to leave it in that disregarded entity.
I've never been able to claim real estate professional due to a full-time W2 job. As of December 31st, 2023, I took early retirement. However, I was paid a severance until December 2024. During 2024, I have been leasing, advertising, physically rehabbing new property, responding to maintenance, etc. I'm also a licensed real estate broker in Kentucky where my properties are. I materially participate in 100 % of the rental activities. Can I claim real estate professional for 2024, even though I was being paid severance but not working my previous corporate job? - Yes, you can, as long as you meet the REP criteria.
When calculating capital gain from the sell of a rental property is the gain from the depreciated cost basis or cost basis after the depreciation recaptured. It's the gain from the recapture cost basis or cost basis. For example, I bought at $100,000, sold at $200,000, that's how you're supposed to do it, had $50,000 in depreciation. Woo. Would it be $100,000 capital gains tax plus the tax on the $50,000 depreciation recovered or $150,000 capital gains? - The first 50,000 is what's subject to depreciation recapture…the 100K is “straight capital gain”
I know it's a broad question, but would love for you guys to discuss depreciation recapture at sale after cost segregation has been formed on an investment property. If it helps, you could do, it could be a cost segregation on a pizza shop. - it depends on the different categories of whatever was in the building.
Our rental LLC owned by a Wyoming holding LLC sold a Toronto property for a huge gain. We hear all these huge gains today. Like all you guys are making money, but we plan to 1031 rates. Our qualified intermediary informed us that the replacement party property should be under the name of the same LLC that sold the property. How can we move the ownership of the 1031 new property into a new LLC without triggering a legal and /or taxable event, how can we protect the assets of the new property if we can only be under the name of the old rental LLC? We want to dissolve the old rental LLC. - if you do this properly through a qualified intermediary, that's a neutral third party that handles all the funds, you may be able to defer all the gain.
We are a group of four investors and we have an apartment rental complex, 12 units, and a separate single-family rental. We would like to exchange both of those properties and invest into a motel. Can we exchange the residential rental properties for a business real estate property? - Yes is the quick answer, must be “used in a trade or business”

Resources:

https://andersonadvisors.com/strategy-session/?utm_source=turning-your-home-into-a-rental-keeping-your-121-exclusion-intact&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=turning-your-home-into-a-rental-keeping-your-121-exclusion-intact&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

Tuesday Nov 05, 2024

Conservation Easements in Crisis: What the New IRS Rules Mean for You!

Tuesday Nov 05, 2024

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, chats with Tyler Surat of One Tree Advisors. Tyler is a seasoned expert in tax mitigation and land conservation strategies, who is helping clients utilize conservation easements to preserve land while mitigating taxes. You’ll hear the definition and benefits of conservation easements, the challenges posed by IRS scrutiny on certain easements due to misuse by "bad actors," and the importance of understanding state-specific tax laws. Tyler emphasizes the necessity of due diligence before pursuing an easement, considering factors like property registration and the differences between group and individual applications. Tune in for valuable insights into navigating the complexities of conservation strategies and tax implications.

Highlights/Topics:

Toby introduces Tyler, from CPA to CFO
What is it, and what’s covered under a ‘Conservation Easement’?
The IRS is contesting some easements from ‘bad actors’ in the real estate business
Groups vs. individuals
Is the property on a National Registry?
Tax laws in your specific state need to be considered
Audits can be a risk due to past individuals who have misused this tax break
Due diligence is essential before requesting an easement
Get in touch with Tyler at his email below with your questions
Share this with new investors you know

Resources:

Connect with Tyler Surat

Email: tsurat@onetreeadvisors.com

tsurat@onetreeadvisors.com

https://andersonadvisors.com/strategy-session/?utm_source=conservation-easements-in-crisis&utm_medium=podcast

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=renting-out-a-property-without-an-llc&utm_medium=podcast

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq