Anderson Business Advisors Podcast
Estate Planning Mistakes to Ensure Your Legacy

Estate Planning Mistakes to Ensure Your Legacy

May 25, 2022

What are things that you absolutely want to make sure to avoid like the plague when it comes to estate planning? Absolutely avoid doing nothing. You should have a plan in place.

Today, Toby Mathis of Anderson Business Advisors talks about major mistakes to avoid and choices to make when estate planning and ensuring your legacy. The most important thing is to have the opportunity to put things in place and affect lives for decades, if not centuries, after you're gone.

Highlights/Topics:

  • Mistake #1: Doing nothing.
  • Mistake #2: Thinking that you're going to live forever.
  • Three Choices: Do a simple will, living trust, or go through the probate process.
  • Mistake #3: Documenting things, but not actually updating them..
  • Mistake #4: Focusing only on your own mortality, not everything else you have to offer.

Resources:

Toby Mathis

https://tobymathis.com/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/

 

How to Calculate Taxes for Flipping Houses

How to Calculate Taxes for Flipping Houses

May 17, 2022

How do you calculate taxes for flipping houses? Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

  • Is there depreciation recapture on a business vehicle when it is sold or no longer used for the business? Depreciation recapture works differently for personal/tangible property than for real estate. So, anything that's not real estate and intangible, such as a car.
  • Inherited IRAs: Are distributions taxed no matter what or can you shelter them with cost seg and depreciation from short-term rentals? Can you shelter with long-term rentals? It doesn't matter if the IRA is inherited, the distributions are taxable because you could have cost segs or short-term rentals from somewhere else that are offsetting that income. IRAs, unless it's a Roth IRA, are always going to generate taxable income.
  • I am a physician in a single-specialty practice under an LLP. I have set up my personal PLLC in the state. Do I need to set up payroll and give myself a W-2? It depends. Most states require that you're an S-corp. You are going to have to take a reasonable salary that is about a third of all the net profit.
  • We made $200,000 on our first flip, we closed in April 2022. How much should we put aside for IRS taxes? Would you happen to know how much we should put aside for state taxes as well? if you were set up as a business before you made the $200,000, then you just made the 200,000 and that's it. Pay the tax.

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Go to iTunes to leave a review of the Tax Tuesday podcast.

Resources:

Wills and Trusts

https://andersonadvisors.com/living-trusts/

Turo

https://turo.com/

Retirement Planning

https://andersonadvisors.com/retirement-plan/

Unrelated Business Income Tax (UBIT)

https://www.irs.gov/charities-non-profits/unrelated-business-income-tax

Form 1065

https://www.irs.gov/forms-pubs/about-form-1065

Toby Mathis

https://tobymathis.com/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/

 

Next Level Real Estate Investing Tricks - From Single to Multifamily Properties!

Next Level Real Estate Investing Tricks - From Single to Multifamily Properties!

May 10, 2022

How do you get started in real estate? What is that process? What can you do to scale and grow your own portfolio or take it to the next level? Do you already have a few single-family properties, but want to get involved in multifamily investing?

Today, Clint Coons of Anderson Business Advisors talks to Abel Pacheco, President and Principal of 5 Talents Capital, who loves investing in and owning multifamily properties in Texas.

Abel is a real estate entrepreneur with a proven track record of repositioning properties and delivering quality renovated housing products to market and consistent returns to investment partners. He has experience in acquiring distressed properties, handling renovations, raising private capital, and managing single and multifamily investment properties.

Highlights/Topics:

  • 5 Talents Capital: Abel buys apartment buildings and allows people that don’t have much time available to invest in commercial multifamily real estate via syndications.
  • Cash Flow Positive: Don't overlook the amount of time that you have available for side hustles and to make more money.
  • Education and Knowledge: Learn about wholesaling, seller financing, hard money loans, and finding motivated sellers for free from conferences, YouTube, and Google.
  • Knowledge: After educating yourself on different ways to invest, it takes mental and tactical shifting to find properties.
  • Networking: Unlock your mindset. You don't have to do everything yourself. You don't have to know everything. You just have to partner with people that are experts.
  • Create Luck: It's where planning meets opportunity. Then, when that opportunity is there and you plan for it, you better be ready to take action and be willing to move forward.
  • In multifamily, net worth equates to the size of the loan amount, equity enough to buy the deal, general partners need their own money for a deal.You have to have experience.
  • Where to Find Deals: Off- and on-market. In commercial real estate, almost all the deals actually trade through brokers.

Resources:

Abel Pacheco on LinkedIn

https://www.linkedin.com/in/abelpacheco/

Abel Pacheco on Facebook

https://www.facebook.com/bullpacheco/

Abel Pacheco on Instagram

https://www.instagram.com/abeljpacheco/?hl=en

5 Talents.Capital

http://www.5talents.capital/

5 Talents Podcast

https://podcasts.apple.com/us/podcast/5-talents-podcast-passive-investing-cashflow-wealth/id1531901889

Meetup.com

https://www.meetup.com/

Rich Dad, Poor Dad by Robert Kiyosaki

https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1543626610

The ABCs of Real Estate Investing

https://www.amazon.com/ABCs-Real-Estate-Investing-Investors/dp/1937832031

Clint Coons

https://andersonadvisors.com/clint-coons/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

 

How Buying Real Estate Mortgage Notes Provides Less Risk for Investors

How Buying Real Estate Mortgage Notes Provides Less Risk for Investors

May 5, 2022

Many people talk about flipping and buying properties, but a niche area of real estate investing that most people are unaware of is called note buying.

Today, Clint Coons of Anderson Business Advisors talks to Bill Mencarow of Paper Source Online. The Paper Source, Inc., was founded in 1987 by Bill and his wife and business partner, Alison.

Bill and Alison have been note investors since the 1980s. Also, he is the editor and she is the publisher of The Paper Source Journal and they co-host the radio talk show, First Couple of Texas Radio.

Would you like to learn more about note investing and network with other note investors? Attend The Paper Source Note Convention on May 12-14, 2022. Register for the live event and use the discount code, NOTES2022, with your affiliate link for $50 off through May 1. Toby Mathis of Anderson Advisors will be speaking at this event.

Highlights/Topics:

  • What is a real estate note? A promise to pay—mortgage secured by real estate.
  • What’s your role if you own a real estate note? You’re the banker, not the landlord.
  • Why not be a landlord? You have to deal with tenants, toilets, and termites.
  • What are the reasons to buy/own real estate notes? Cash flow, higher yields, lower risk.
  • How the process of buying notes work? Sell note for lump sum to investor at a discount.
  • What are the different types of notes? First, second, or third position against note.
  • How do you know what you are buying? Perform due diligence—paper, property, payer.
  • How do you verify payments, borrower’s credit, and value of note to know what to offer?
  • What do you need to get started buying notes? Cash investment or broker note.
  • How to find real estate notes? Network to establish context with people with notes.

Resources

The Paper Source Online

The Paper Source Facebook Group

How To Get Started Profiting From Notes (Free E-Course)

First Couple of Texas Radio

Fair Credit Reporting Act

Clint Coons

Anderson Advisors

Anderson Advisors on YouTube

How to Report Income from your Rental Properties

How to Report Income from your Rental Properties

May 3, 2022

Is income from your rental properties active or passive? What is the best way to report your income and expenses for rentals? How long do you have before having to pay taxes on the sale of your property rental? Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions about income from rental properties. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

  • Is retirement income considered passive or active income? If it is a passive income, then can passive real estate depreciation be used against retirement income? Retirement income is not passive, active, earned, or portfolio income. It's ordinary income. Retirement income is not going to offset your passive losses, but it can cause social security to become taxable.
  • I've been told that filing Schedule E for rental properties, which I've been doing for the past several years, is not a good way to report your income and expenses for rentals. I want to file 1065, but I don't have a partner and don't intend to get one. I don't think Form 1120 or 1120S is a good way to file either. What do you recommend for next year? Stay away from corporations because of liability and other issues with appreciated property. If you take an appreciated asset out of a corporation, it's a taxable event.
  • I closed on a co-owned rental property in April 2021. I did not have an LLC with my co-owner, and we are still in the process of forming an LLC to protect the asset. Can we still take all the real estate deductions on our 2021 tax return, absent having an LLC in place last year? You don’t have to necessarily have a partnership agreement to form a partnership. Whether you had an LLC or not, you have effectively created a partnership, unless you've done this as tenants-in-common.
  • I just sold my condo that I owned for three years. One year I lived in it and two years I rented it out. How long do I have before I have to pay taxes on my sale? Technically, your taxes are due as they're accrued. You might have some quarterly taxes on it and your actual tax bill is going to be April 15 of the following year. If you sell it in 2022, you have to pay the tax on April 15, 2023.

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Go to iTunes to leave a review of the Tax Tuesday podcast.

Resources:

Schedule E

https://www.irs.gov/forms-pubs/about-schedule-e-form-1040

1031 Exchange

https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx

Entity Formation

https://andersonadvisors.com/entity-formation/

Form 1065

https://www.irs.gov/forms-pubs/about-form-1065

National Alliance for Recovery Residences (NARR)

https://narronline.org/

Toby Mathis

https://tobymathis.com/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/

 

How Reinvesting Can Help you Avoid Capital Gains Taxes

How Reinvesting Can Help you Avoid Capital Gains Taxes

April 19, 2022

How can reinvesting help you avoid capital gains taxes? Jeff Webb and Eliot Thomas of Anderson Advisors answer that question and others about capital gains. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

  • Is it true that creating a revocable living trust will raise my capital gains taxes if I sell my primary residence vs. if I transfer the house into my name, I must live in it for two to five years to qualify for lower capital gains taxes? If you take advantage of Section 121,You have to live in it for two to five years no matter what. Putting it under the revocable living trust or in your own name, that can be done.
  • I have sold a real estate transaction in 2022. Can I avoid capital gains taxes if I purchase another real estate transaction in 2022? It depends. If you have already sold it and received the proceeds from the sale, Section 1031 (like-kind exchange) is no longer available or possible.
  • I am a retired person wanting to give a sum of money to my son. How can I advise him regarding deferring taxes on that inheritance money? You don't have to tell your son anything because he's not the one who has to pay taxes on it. The recipient doesn't have to pay tax. It's the grantor, donor, gift giver that may have to pay taxes on it.

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Go to iTunes to leave a review of the Tax Tuesday podcast.

Resources:

Living Trusts

https://andersonadvisors.com/living-trusts/

Capital Gains and Losses

https://www.irs.gov/taxtopics/tc409

Entity Formation

https://andersonadvisors.com/entity-formation/

Schedule C

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

Section 121 Exclusion

https://www.irs.gov/taxtopics/tc701

1031 Exchange

https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/

Pace Morby’s 2022 Real Estate Investing Secrets

Pace Morby’s 2022 Real Estate Investing Secrets

April 7, 2022

If you haven’t watched “Triple Digit Flip” on A&E yet, you need to because it’s tough to find real deals. What do you need to look at when analyzing properties and going through the numbers?

Today, Clint Coons of Anderson Business Advisors talks to Pace Morby, who shares his real estate investing secrets for 2022. If you haven’t listened to Pace’s first episode, go to Creative Financing Strategies with Pace Morby.

Pace is on a mission to bring others value and snuff out the fluff in the industry. He is known as the go to "subto guy" bringing creative strategies to the mainstream real estate investment industry.

Pace and his partner have amassed more than $32 million in buy-and-hold properties while operating wholesale, fix-and-flip, and other symbiotic businesses.

Also, Pace’s high energy and no BS approach attracts loyal followers across social media. He is able to tell stories and crush it when closing sellers.

Highlights/Topics:

  • Highest and Best Offer: How much are you willing to pay for a property?
  • Wholesale vs. Cash: Seller is willing to work with cash or terms in competitive market
  • Secure Creative Financing: Structure loan the right way to buy deals and not overpay
  • Why? Sellers accept terms rather than cash because of tax liability and capital gains
  • Morby Method: Use better negotiation tactics or find lender to get a non-recourse loan
  • Cash Flow: Do you listen and follow Robert Kiyosaki or Dave Ramsey’s advice?
  • Where to find off-market deals and comp listings? PropStream or BatchLeads
  • Triple Digit Flip: How to get selected and start in real estate for free with Pace

Resources:

Pace Morby Mentorship: http://subto.com/

http://subto.com/

Pace Morby Ebook: Subto Seller Spells

https://go.subto.com/ebook-seller-spells

Pace Morby on Youtube: https://www.youtube.com/c/PaceMorby

https://www.youtube.com/c/PaceMorby

Pace Morby on Instagram: https://www.instagram.com/pacemorby/

https://www.instagram.com/pacemorby/

Facebook Group: Creative Financing with Pace Morby

https://www.facebook.com/groups/creativefinancewithpacemorby

Triple Digit Flip

https://www.aetv.com/shows/triple-digit-flip

My Investor Loan

https://www.myinvestorloan.com/

Clint Coons

https://andersonadvisors.com/clint-coons/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

 

How to Reduce Capital Gains Taxes on Your Vacation Home

How to Reduce Capital Gains Taxes on Your Vacation Home

April 5, 2022

Are there any strategies to mitigate capital gain tax on the sale of a vacation home? Can you no-tax your vacation home? Toby Mathis and Michael Bowman of Anderson Advisors answer your questions about how to mitigate capital gains taxes. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

  • For a partnership LLC, can capital gains (such as stock sale) from brokerage account owned by the business be combined/offset with real estate losses *such as depreciation) in the LLC? It depends on the type of real estate. If it's rental real estate, no, unless you’re a real estate professional or active participant in real estate, and you make less than $150,000.
  • When I sell a property for 1031 exchange, can I sell 100% ownership of the owning LLC instead of the actual real estate to avoid the transfer taxes, title fees - assuming the LLC is single owner and only owns the subject property, nothing else? You can’t do a 1031 exchange of an entity to try to avoid the transfer taxes and title fees, nor should you. Technically, the change of ownership of an entity, even 50%, is a deemed sale of the underlying asset.
  • If I buy an existing home inside an opportunity zone will I be able to save tax on the capital gain, if I keep the property for 10 years? You can buy a piece of property, but you have to double its depreciable basis. If you do that and hold it for at least 10 years, you could step up the basis on any given year to its fair market value and avoid tax on the growth of that asset. Yet, you have to recognize the deferred gain in the 2027 period.
  • Our vacation home is in another state and it's solely for personal use and never rented. We've owned it for 10 years. Are there strategies to mitigate capital gains tax on the sale of a vacation home? Do we have to make it our primary residence for two years before we can sell it and get the capital gains exemption? You have to live in your vacation home as your primary residence for two years prior to selling it. Or, make it into an investment property and do a 1031 exchange.

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Go to iTunes to leave a review of the Tax Tuesday podcast.

Resources:

Capital Gains and Losses

https://www.irs.gov/taxtopics/tc409

1031 Exchange

https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips

Opportunity Zones

https://www.irs.gov/credits-deductions/businesses/opportunity-zones

Toby Mathis

http://tobymathis.com/about-toby-mathis/

Michael Bowman

https://andersonadvisors.com/michael-bowman/#:~:text=Michael%20B.,Nevada%2C%20Arizona%2C%20and%20Washington.

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors Events

https://andersonadvisors.com/all-events/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/

 

How to Find Private Money Lenders: Getting Tax-Free Money from Stocks, Bonds, and Your Business

How to Find Private Money Lenders: Getting Tax-Free Money from Stocks, Bonds, and Your Business

March 31, 2022

What are some mind-blowing ways to access capital that you may not be aware of—where the money is 100% tax-free and you don’t have to report it on your personal credit and FICO score?

In this episode, Toby Mathis of Anderson Advisors talks to Geal Talbert, Vice President of Wealth Management at UBS Financial, and Dan Ollman, Executive Manager - Anderson Funding Community, which helps people get money for new businesses as well as for flippers from non-traditional sources.

Geal and Dan are two experts in the realm of other people’s money (OPM) and how you get access to it.

Geal's specialization includes advanced planning strategies for tax minimization, estate transfer, and business exit planning to ensure clients maximize the net proceeds from the sale of their business.

DISCLAIMER: The rates mentioned on this podcast change regularly.

Highlights/Topics:

  • Rampant Inflation: At almost 8%, now is not the time to sell assets to pay bills.
  • Why sell when you don’t have to? Instead, you buy, borrow, and step up in basis.
  • Security-backed Lines of Credit: Different investments have different line maximums.
  • How long does it take and how much do you get? Depends on quality of equity of stock.
  • What could go wrong? You’ll have to come up with more cash or sell to cash.
  • No Cost: What does it cost to get a line of credit? Do you pay for points upfront?
  • What does somebody need to have in their account to qualify for a fixed rate? $25,000
  • Private Money: If assets continue to grow, then dividends are used to pay back loans.
  • Non-revenue-producing Business: Brand new companies/startups can get lines of credit.
  • Line of Credit: Get credit when you don’t need it. You never know when you’ll need it.

Resources:

Geal Talbert

https://advisors.ubs.com/geal.talbert/

The Succession Group

https://advisors.ubs.com/successiongroup/

Dan Ollman Phone: (800) 706-4741 x 270

Dan Ollman Email: funding@andersonadvisors.com

1-on-1 Consultation: https://calendly.com/anderson-funding-community/

Toby Mathis

https://andersonadvisors.com/tobymathis-2/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Why you should consider switching from LLC to S-Corp

Why you should consider switching from LLC to S-Corp

March 22, 2022

Should you consider switching from a Limited Liability Company (LLC) to S corporation? Not if you and your business partner have an LLC for your real estate investments that is an LLC taxed as a partnership. There’s no reason to convert it to an S-Corp.

In this episode of Tax Tuesday, Toby Mathis and Jeff Webb of Anderson Advisors provide answers to your tax questions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

  • If I buy an existing home inside an opportunity zone, will I be able to save tax on the capital gain if I keep the property for 10 years? Qualified opportunities had three benefits. The deferral, step-up, and payout. You still get the deferral. It's a shorter deferral now, but you still get it. The step-up in basis is now gone. You've got a 10% step-up in basis of your property that you put into the opportunity zone. The payout is if you hold the property you put in there for 10 years, that's tax free and still exists. The one thing that's missing is that 10% step up-in basis.
  • We sold a single family residence in December 2021 and in the process of a 1031 exchange. Can our expenses, such as repairs, painting interior, and replacing carpet, be deducted as expenses, or used to increase the cost basis of the property? Although the word, repairs, was used, carpet and paint is always deductible as a repair. You never capitalize that. Anything that's truly repairs, write it off as a rental expense. If it goes to basis, you're not getting any benefit out of it.
  • My business partner and I have an LLC for our real estate investments. Our LLC is taxed as a partnership. Would it be better to convert our LLC to a S corporation? If so, why? No, there’s no reason to convert it to an S-Corp.
  • I incorrectly allocated too much building versus land. I understand that my depreciation expense will decrease. How do I correct my tax returns for a basis error on my vacation rental property? This is a change in accounting estimate, which means if it's wrong on last year's return, you go in and correct the numbers on this year's return. If you mess up something on a return, but thought you were correct when you did it, you are not under any legal obligation to go back and restate it.

For all questions/answers discussed, sign up to be a Platinum member to view the replay!

Go to iTunes to leave a review of the Tax Tuesday podcast.

Resources:

Opportunity Zones

https://www.irs.gov/credits-deductions/businesses/opportunity-zones 

1031 Exchange

https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips

Form 3115

https://www.irs.gov/forms-pubs/about-form-3115

Section 121

https://www.irs.gov/pub/irs-drop/rr-14-02.pdf

Toby Mathis

https://andersonadvisors.com/tobymathis-2/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors Events

https://andersonadvisors.com/all-events/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

Anderson Advisors on Facebook

https://www.facebook.com/AndersonBusinessAdvisors/

Anderson Advisors Podcast

https://andersonadvisors.com/podcast/

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