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Real Estate Investors, Stock Traders, and Business Owners guide to preserve their wealth, protect their assets, and prosper in the future.
Episodes
Tuesday Jan 31, 2023
Tuesday Jan 31, 2023
In this episode, Toby Mathis and Clint Coons of Anderson Business Advisors discuss the new Corporate Transparency Act, and what it means for investors. The CTA is meant to prevent fraud within business entities by requiring everyone involved to report all their personal information, but Clint and Toby agree it’s mainly another way for the government to try to grab a few more dollars.
The guys then go on to a discussion about separating, isolating, and hiding assets within different kinds of legal trusts to prevent losing everything in the case of a lawsuit. All of this extremely valuable information is also available for FREE at the monthly asset protection events. See the link in the resources section below.
Highlights/Topics:
- With the Corporate Transparency Act, all LLC’s will require reporting your personal information to the government
- No matter when you set up your entity, you will have to report
- Fraud will continue to happen, regardless of the laws
- Trusts often are not subject to taxes at the state level- and can provide anonymity
- Franchise fees - there are legal ways to avoid it with trusts
- Land trusts
- Asset protection from lawsuits - separate, isolate, and hide your assets to limit losses
- Entities - a better protection than insurance
- Unfortunate stories of unprotected asset losses
- Come to one of our free asset protection events!
Resources:
Free Asset Protection Workshops
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w
Thursday Jan 26, 2023
Thursday Jan 26, 2023
Today we’ve got another unusual and inspiring episode of Anderson Business Advisors, Toby Mathis speaks with Joey DeMaio of Valhalla Studios in New York. As you may know, Joey is the guitarist from the popular and long-lived metal band Manowar. Joey’s career has spanned over 40 years at this point, and as an artist and businessperson, he has a fascinating story to tell.
You’ll hear how Joey joined a band days after seeing The Beatles on Ed Sullivan, some insider tips and advice about the “business” of music, how Manowar has survived and thrived for four decades and continues to perform around the world to huge crowds, and Joey’s many successes in and around the music business - running a studio, scoring movies, touring, and much more.
To most, DeMaio is known as the internationally acclaimed and award-winning virtuoso bass guitarist, founding member, composer, lyricist, engineer, and producer for the world-renowned Rock/Heavy Metal band MANOWAR, who have sold over 30 million records to date, and continue stunning their audiences with sold-out festival and solo performances ranging from 10,000 to 80,000 people a night. Since their inception, DeMaio has successfully steered the career of MANOWAR, who today are more popular than ever, all over the world.
Highlights/Topics:
- Joey's history with Manowar and myriad of amazing accomplishments in business and music
- Seeing The Beatles on Ed Sullivan - Joey’s future was clear
- Surprising insider nuggets about the music industry- musicians MUST know the business, and the band feeds an enormous network of people
- Manowar and their more than 40-year career– still going strong
- Breaking into the music business today- are you a ‘musician’, or a ‘performer’?
- Monetary scenarios - earning a living in the music business
- Manowar - what’s new, what’s next?
Resources:
https://linktr.ee/realjoeydemaio
https://manowar.com/
http://valhallastudiosny.com/
Magic Circle Entertainment LinkedIn
https://www.linkedin.com/company/magic-circle-entertainment/about/
https://andersonadvisors.com/
Tuesday Jan 24, 2023
Tuesday Jan 24, 2023
Tax Tuesday is here again. Toby Mathis hosts, with special guest Eliot Thomas from Anderson Advisors, here to help answer your questions.
On today’s episode, Eliot has grabbed a bunch of great questions for us to answer. Toby and Eliot will talk about the Augusta rule, easy tax deductions against W-2 income, cost segregation, bonus depreciation, real estate professional status, active participation, S-Corp, C-Corp and partnership advantages. Online, we have Ander, Patti, Ian, Dana, Matthew, Jared, Piao, Tanya, Troy, and Dutch, a multitude of CPAs, by the way, in our Q&A. If you ask questions in Q&A, you're going to get really, really smart people answering that question. Toby sends out a a huge public thank you to all these talented people.
If you have a tax-related question for us, submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- "I'm selling a property that was willed to be in 2019. I've been renting this property out since receiving it. It will sell for a profit of over $360,000. Would I pay taxes on the full profit or the difference between value at the time the property was willed or do I pay taxes on the difference between the profit and $250,000?” - You inherited it in 2019. It says you've immediately started renting it out, so it's an investment property. It's not going to qualify for the capital gain exclusion of living in our primary residence for two of the last five years.
- "What are some simple easy things that can be done to reduce taxable income and reduce taxes paid on each of my paychecks?” Donate to charity in large chunks, HSA, IRAs, etc.
- "Options for tax write-off, reducing tax burden if I have rental real estate, but I am not a full-time real estate professional. Both my wife and I have W-2 jobs that we don't foresee leaving anytime soon to become real estate investors." - See the answer to previous question, and also you want to look at if your AGI (adjusted gross income) is a little bit lower, maybe under $100,000, you can take up to $25,000 of the passive losses.
- "Augusta Rule: We have put our properties in a Wyoming entity and the Texas series LLC in late December of 2022, but have not started using it yet. Can we use the Augusta Rule in 2022 throughout the year for our business purposes, even though we've not completed setting up the business?" Augusta Rule, that's just what we call 280A most often. That's the ability to rent out your home. Dwelling is the proper term for no more than 14 days a calendar year. The income you receive, you don't have to pay tax on.
- “When a rehab required property acquired for long-term hold, when is the right time to do the cost segregation study? Before the rehab or after?" - Once you purchase a property or after the rehab, you could do it either way. If you don't do what's called a cost seg study, the IRS will let you treat it all as 27½ years…
- "Anderson created my S-corp entity in November of 2022. I've only had expenses for the year-end 2022, but no income or property purchases yet. What am I required to file for my S-corp regarding the expenses I've incurred?" – You're going to have to file your tax return for that S-corp. It is what we call an informational return. In other words, your S-corp doesn't pay any tax, but it does have a tax return called an 1120-S.
- "I created my two LLCs both with real estate assets with rental income in 2022. Also, I created a holding company that holds both the LLCs. I have a W-2 job. When do I file the tax for the holding company? Is it one tax filing that combines all the LLCs and my W-2?” - We recommend that the holding company becomes a partnership. Also, it helps from a lending standpoint. Typically, lenders are able to lend more to you being that the property is in a partnership than if it had been in a direct disregarded LLC.
- "Curious to hear an open discussion about one and how to utilize section 179 and/or bonus depreciation for vehicles." - Why not just do mileage reimbursement? It's like 65.5¢ a mile right now. It's your car. You can use non-commercial insurance. It could just be your car that you use. If you let employees use it, that goes out the window.
- "What are the steps to take in order to withdraw money from a C-corp account? Are there any tax consequences involved?" - With a C-corporation, the first thing I'd like to look at are the reimbursements…
- "How to save taxes as S-corp, and is it better to do an STD deduction?" - The S-corp has a lot of advantages to it to save on taxes. Standard deduction is huge for most people. But “it depends”.
- "Can you please touch upon what depreciation recapture is and how it impacts taxes?" - Basically, when you have an asset that's been used in a trade or business, we don't deduct the full cost of it immediately. We take a little bit over time, we call it depreciation. Then when you resell, you might have what's called depreciation recapture on that depreciation that you took over the years. It does depend on what kind of asset it is.
- "I work from my home office. How do I claim this?" - If you have a sole proprietorship, you can take a deduction for basically the percentage square use of that house, that’s an easy way to describe it. If you could get reimbursed, then it could be 20% of your house. By the way, that includes mortgage interest, property taxes. If you have somebody coming in cleaning your house, your utilities.
- Be sure to subscribe to our podcast. And if you are already a subscriber, please provide us a review of what you thought!
Resources:
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
Thursday Jan 12, 2023
Thursday Jan 12, 2023
In this special episode of Anderson Business Advisors, Toby Mathis speaks with Jim Richardson and Diane Lawson of Front Porch Co-Housing about a growing issue in our country - the lack of independent, affordable housing opportunities for neurodivergent adults.
This is an opportunity for our listeners to help solve. There are 5.4 million autistic adults in the U.S. today, and 87% of these individuals live with their parents. It is crucial that there be a plan for those adult children when their parents are gone. Investing in real estate used for this purpose is an amazing opportunity to be “more than a landlord” and the non-profit status of the Front Porch Co-Housing organization can also offer the investor certain advantages.
Highlights/Topics:
- Diane’s experience with a neurodivergent son being denied housing
- Jim’s background - also has a son with autism who was denied housing
- The scope - millions of adults with neurodivergent issues
- A unique approach - co-housing neurotypical and neurodivergent adults - “neuro-inclusive living”
- Millennials (22-40), are experiencing unprecedented levels of loneliness and isolation
- The expansion plan for Front Porch Housing
- Costs for neuro-inclusive living - planning for an entire lifetime
- No state funding assistance – not classified as a ‘group home’
- Real estate investors can help their communities and be more than “just a landlord”
- Sponsoring a neurodivergent person in your community - visit the Front Porch link below
- Donations can also be land, real estate, vehicles to sell, and other assets - email Jim with the link below
Resources:
Front Porch Co-Housing Website
https://frontporchcohousing.org/
Donate to, or Support Front Porch
https://frontporchcohousing.org/support-us/sponsor/
diane@frontporchcohousing.org
jim@frontporchcohousing.org
https://andersonadvisors.com/
Toby Mathis on YouTube
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Jan 10, 2023
Tuesday Jan 10, 2023
In this episode of Anderson Business Advisors, Toby Mathis speaks with Eliot Thomas, Managing Tax Advisor at Anderson Business Advisors. There are lots of people helping to answer questions online - Patti, Ander, Matthew, Troy, Jared, Piao, Ian, Dutch, and Dana are on. There are so many people here. You have a whole bunch of tax professionals that are here to answer your questions. You can just go into the Q&A and put in a question.
You’ll hear Toby and Eliot discuss several listener questions around how to report capital losses in the stock market, a few questions on real estate and business LLCs vs. S-Corps, C-Corps, and Sole Proprietorships, disregarded entities, entertainment meals vs. business meal write-offs, and an in-depth discussion about a real estate contractor not filling out a W-9 and all the difficulties that might present. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- "Hey, I'm looking to start a new business. I need to choose a correct business entity in order to maximize my tax benefits, so I need to know if starting the business as an LLC and potentially working the business out of my home would be the best option for me." – by all means, you want the LLC for that asset protection, but the S-corp or the C-corporation—have those great reimbursements.
- "Can I write off my stock holding loss at the end of the year to reduce my W-2 earnings?" Yes, but we're limited potentially just to $3000 of capital loss that will offset against ordinary income, that being your W-2.
- "What are the rules for HSAs for people over 62?" – For 2023, the amount is going to be $3850 if you're single, and I guess it'd be $7750 for a family plan. If you are on Medicare, you can not contribute tax-free to an HSA.
- "I became a real estate professional in 2021 and have a significant net operating loss due to depreciation. What are the limitations of carrying the NOL backward in 2020 and 2019 to use that to lower taxes in the previous year?"-- As of right now, we don't get to carry back NOLs. We just carry them forward.
- "If my partnership LLC did not conduct any business this year, do I still need to file a Form 1065? -- You don't have to file 1065 for that first year.
- I'm in the process of setting up my real estate business. I already have a Wyoming LLC as a holding company. It's treated as a disregarded entity, but I have no investment in real estate yet. If I file my taxes this year before I acquire an investment property, what is the process for changing the filing election of the LLC from disregarded to a partnership for the new property?" – You don't have to do anything but file that return, or you could file the Form 8832 and declare it as a partnership.
- "I am new to real estate flipping and started my first flip last year. Construction was completed this year, and it closed this year. I asked my contractor if I need to complete a W-9 last year, and he told me not until the project was complete. Now, I'm realizing that I should have had him complete the form in 2021 for the amount I paid him and again this year. Can I now ask him to complete the W-9 and file the form for 2021 and 2022? The other issue is I had issues with this contractor for faulty workmanship he did on the flip and in the process of filing suit. What if he refuses to complete the W-9?" If you're dealing with a contractor who's organized as a business, chances are you still want that W-9 to prove that they're a business.
- "What forms do I need to fill out for my accountant to show capital loss in the stock market?" – Usually, you're going to get a 1099-B from your brokerage house. They can just use that, and that's really all you need.
- "As an owner-operator trucking company designated as an LLC, can you write off 100% of the operating fuel costs?" – If the truck that was burning that fuel was used 100% for business, absolutely.
- "I am a lender on a note to an LLC. What are the best practices for collecting payments and tracking interest payments for reporting purposes; separate bank account for the payments or create an end-of-the-year interest statement for myself?" - I like the separate bank account. Keep it separate from your personal obviously.
- "I attended your Las Vegas event. Please confirm if we are to refrain from listing items as entertainment when filing taxes." - They're probably referring to the Tax Cuts and Jobs Act getting rid of entertainment. There is no deduction for entertainment. If you are getting a meal that is for entertainment purposes, you cannot write it off. Business meals only for 2022.
- "I'm looking to convert from an LLC-S to a C-corp in 2023. Should I stay on a calendar or fiscal year schedule? What are the pros and cons?" – I like the fiscal year for C-corp because it tends to give you more flexibility, especially when it comes to payroll items or contributing to, say, Solo 401(k)s or something like that.
- Visit us at andersonadvisors.com. Grab one of the free events. We're going to do a ton of them this year.
Resources:
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Jan 03, 2023
Tuesday Jan 03, 2023
In this episode, Toby Mathis of Anderson Business Advisors welcomes Jose Luiz Morales, a self-made wealthy real estate professional who made many sacrifices at a young age in order to build a lifetime of wealth. Jose is a Real Estate Advisor with Morales Group, Brokered by eXp Realty, he has a podcast called “The Residual Real Estate Agent, and he belongs to a number of mastermind and mentoring groups based around investing and real estate.
You’ll hear the inspiring story of how Jose decided to stop hanging around with “knuckleheads” at age 23, and his life changed focus. By sacrificing a lot of the fun and frivolity most young people have in their 20s, Jose became a millionaire and built a foundation of assets that will not only allow him and his family to live a comfortable life, but they could feasibly even retire before age 40.
Highlights/Topics:
- Jose’s origin story
- Jose’s parents taught him the most valuable lessons, but never helped him financially
- At age 26 Jose’s monthly income was $6000
- Making sacrifices at a young age allowed for building wealth
- Moving out at age 27
- Everything Jose put on his vision/dream boards came to fruition
- Coaching, mentorship and mastermind groups
- Advice for young people - don’t hang around with knuckleheads
- Reach out to Jose to learn more about his methods and successes
Resources:
https://www.linkedin.com/in/joseluizmorales/
https://www.tiktok.com/@joseluizmorales805
https://www.youtube.com/@joseluizmorales
https://www.instagram.com/joseluizmoraies/
The Residual Real Estate Agent Podcast
https://podcasts.apple.com/us/podcast/the-residual-real-estate-agent-show/id1560901602
https://exprealty.com/
https://www.collective-genius.com/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw
Thursday Dec 29, 2022
Thursday Dec 29, 2022
In this episode of Anderson Business Advisors, Toby Mathis speaks with Trent Lee of First Choice Business Brokers (FCBB).
You’ll hear Toby and Trent discuss all the ways you can slice and dice the numbers to value a business. From EBITDA to discretionary earnings, normalizing value over the past few Covid years, using the SBA database, etc. Trent shares many stories from his experience both good and bad about how to value, run, and sell a business – from a small $70K pizzeria, to larger operations valued in the tens of millions, Trent is the expert in the business broker space.
Highlights/Topics:
- Trent’s the number one business broker in the country by volume
- The SBA database as a tool
- Seller’s discretionary earnings
- Recasting financials to normalize for Covid years
- Using multiples for valuation
- A few success stories from Trent’s experience
- Showing profit in your business for valuation vs. saving money immediately with tax write-offs
- The pizzeria story
- Matching business purchases to the background of the buyer
- Don’t touch anything on a profitable business for at least 6 months
- The mistakes - leaving value and profit on the table
- If you want to buy a business, call Trent
Resources
trent@fcbb.com
https://fcbb.com/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Wednesday Dec 28, 2022
Wednesday Dec 28, 2022
Today’s Tax Tuesday episode is your 2022 send-off with a series of rapid-fire questions around year-end tax situations. Toby Mathis hosts with a few staff available to answer online.
In this episode, you’ll hear our advice on combining multiple businesses and making sure they are incorporated and isolated from you personally which protects you from liability, opening a 401(k) by the end of the year vs. before the tax deadline, purchasing cars under a business umbrella to make income with Turo, and various other valuable end-of-the-year tips on tax strategies that you should do before January 1st, and a few that you can still take care of in early 2023 before the tax deadline. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- “Last year was the first time I wasn't able to take investment real estate depreciation or deduction due to AGI over 150. I don't have too many necessary losses or even losses that I don't know or don't think will get back up, but it seems like a way to reduce my AGI. How do multiple-unit landlords do it? I'm thinking five houses without stock could get you up over the limit." - You've probably been phasing out, you just didn't realize it. Maybe your loss was small enough.You could do certain things to lower your AGI. Harvesting capital losses is one of them.
- "My husband and I have full-time corporate jobs, but also have small side businesses—remodeling, party rentals, and online sales—which are really diverse, that are in different categories. How is it best to structure everything for easy accounting and tracking of funds from all of these? - The general rule is you want to isolate any business that's doing business with somebody else. You probably want to isolate them from each other. Keep your structure simple and have one set of books, just have one business. I would have it as an LLC. Isolate it from YOU.
- "Do I have to open a 401(k) by the end of the year to make contributions?" – If its your salary deferral, yes, if its employer, you can do it after the next year starts.
- "My CPA has suggested I take the late election of an S-corp. C-corp was formed on June of 22. I've had plenty of expenses building the foundation of a wholesaling business, but no deals yet. With tax filing, I assume I do a late election of an S-corp. Will my taxes be filed as an S-corp or as a C-corp? And how does that impact the business startup expenses I've had since March of 2022?" - My suggestion is that C-corps are a trade or business the day that they started.
- "How can I make sure our Utah-based kids pay minimal tax on the sale of our property in California when we die? We know it will be stepped up in value. When I sold my own dad's property in California when he died recently, we paid a big tax on it to California as non residents. Should we sell it and do a 1099 exchange?" - California doesn't have an inheritance tax, period. They haven't had one since the 80s, so I'm trying to think of how they taxed you. Send us an email I would like to find out more and answer this!
- "I lived in a condo for nine years and bought a house last year with a 5% down payment. The condo was rented out. If I sell it now, will I have to pay capital gains tax? If so, how can I avoid paying capital gains tax?" 26 USC 121 - It says that if you lived in a property as your primary residence for two of the last five years, if you're single, you get a $250,000 capital gain exclusion. If you're married, you get a $500,000 capital gain exclusion.
- "Looking for the best ways to protect net profits. I've seen 401(k) contributions, IRA contributions, investment and materials equipment, owner distributions, We are uncertain of future events and would like to keep what we've earned without paying it all to the government." - If it's net profit from the business- use all the business expenses. Look at a defined benefit plan, charity, accelerated depreciation...a lot of things you can be doing.
- "If I'm using a private lender to buy a property and borrow $10,000 more than my purchase price, is the additional $10,000 taxed as income?" The answer is no. You can always borrow money, and it's not taxable to you.
- "This year, we made a little more money and wanted to know if your service will help us offset anything with my somewhat new business before the end of the year is over. I currently have a massage, esthetician business that I opened in October 2018. Then the pandemic hit in March of 2019, in which my state licensing demanded we stop all services or we'd get our license taken away causing me to go in the red for 2019, 2020, and 2021. Moving forward, my business has been slowly coming back but still struggling. During the pandemic, I went back to school getting certified to work in the holistic health care setting. I'm in the process of adding that business to my existing, so I wanted to get advice on the best way to set things up if I have multiple businesses." That's a question I cannot answer for you. But make sure they are isolated from YOU like my previous question.
- "My husband and I are wanting to take advantage of the equity in our home and would like to invest into some rental properties to start to dabble in real estate investing and Airbnb. I also wanted to know if your company will be there for us on any financial advising and legal advising in our planning on this new venture." This is exactly what we do. Rental properties are different from Airbnb. As it is all real estate - probably want to isolate A, B, and C from each other, and we want a structure that allows us to get the maximum tax benefit in isolating that liability.
- "We are dabbling in Turo. So far, it's been doing well. We're interested in expanding it with more cars to add in. However, we now would like any new cars we added to be purchased under the business name." - Depending on the type of car, it could be a deductible in one year. If you're doing this in your name, you're exposed. You have a ton of exposure. You need a business name on it.
- There are a lot of things that are not time-ish critical before the end of the calendar year, but the big ones are salaries, reimbursements, charitable giving.
- Check our YouTube channel for more on end of the year tax strategies.
- We hope you have a great start to the new year!
Resources:
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Dec 13, 2022
Tuesday Dec 13, 2022
Today’s Tax Tuesday episode answers several listener questions around end-of-the-year strategies for reducing taxes. Toby Mathis hosts with special guest Jeff Webb, CFO of Anderson Business Advisors. Online we have Ian, Troy, and Eliot helping answer your questions.
In this episode, you’ll hear our advice on the following: selling stock and how you can minimize capital gains taxes, setting up trusts - including dynasty trusts and how estate taxes are assessed there, buying a vehicle for business use and the requirements for writing off depreciation and mileage, and as always there are listener questions about real estate investments and tax scenarios, including LLC’s, partnerships, and long and short term rentals. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- "What is the best strategy for hiring your kids?" - If your kids are under 18, you do not have to pay withholdings or Social Security. If less than $12,950, it doesn't matter whether they're my dependents or not. They don't have to file a tax return.
- "How was a 'dynasty' set up so it is not taxed at the estate rate after the death of the creator? Are both the trust and the beneficiary taxed in any year funds are distributed?" - The answer is probably not if you're distributing all the funds. If I just own a bunch of stock and I don't sell any, there's no income. There's no tax. They don't care what you sell it for. What they care about is what its fair market value is on the date of your passing.
- "I have substantial credit card debt and private debt amounting to $120,000. I own a few rental properties. Currently own six long-term incomes and two Airbnbs. Two properties are mortgage free, and one of the current long-term tenants wishes to buy the property." They're asking for an opinion here. "Should I sell and pay off consumer debt? Should I owner-finance? If I sell and owner-finance, can I avoid capital gains?" - I would sell and pay off the consumer debt. It's probably costing a lot of money. Or, I might just refi it and pay off my consumer debt. HELOC would work.
- "We want to sell some stocks to pay off some debts, but we know that if we do, we're looking at a huge capital gain. What can we do to lessen the tax that we have to pay on the capital gains?" - If you have stocks, especially stocks with big gains, there's a good chance that your brokerage house will give you a line of credit against those stocks. But, I'm probably not going to do it right now just to pay off debts. But I could borrow tax-free against those same stocks and do it.
- "Is Anderson Advisors training recommending to have an operating agreement that allows the non-pro-rata and discretionary authority to make distribution on a regular timeframe or amount? For a multi-member LLC, how do we deal with yearly taxes in this case?" - We want to make sure that we have an operating agreement that says, I get to decide if I distribute money or not.
- "What options are there to save money on taxes if you own an LLC? Can passive income be used to fund a retirement account such as a solo 401(k)?" – you have to get wages of some sort to fund a Solo 401(k). You cannot have wages out of a sole proprietorship. If the sole proprietorship is a passive activity, there's no way to convert that.
- "I'd like to take advantage of Section 179 before the end of the year and buy a business vehicle. Can you talk in more depth about Section 179 and how depreciation and bonus depreciation work? Also, what kind of vehicles qualify for this?" – If it's under a 6000 GVWR (gross vehicular weight rating) vehicle, your limitation is $19,200 of depreciation in that first year. That includes bonus depreciation. If it is over 6000 pounds, then your bonus depreciation is pretty much unlimited. It all comes down to are you actually using it for business? And what percentage?
- "What is the best way to get money from my entity, a C-corp, while limiting the amount paid in taxes personally and as a corporation?" - Repay your shareholder loans. That’s the best way to get money out of your C-corp if it already owes you money.
- "If my bill would be over $500,000, what can I do before the end of the year to reduce this?" - Look at retirement plans and advance retirement plans, charitable donations, and cost segregation.
- "I'm looking to attain two or more rental properties within the next year or so. Is it better to create an LLC for each property or take title under my current S-corp? I have an S-corp retail classification that I am considering dissolving. Should I just reclassify my S-corp as a real estate investment and take title in the name of the S-corp?" - Since this company was already in existence doing something else, I do not favor reclassifying. I would dissolve it.
- Send us your questions, and we do about 50 events a year - check out the event schedule listed in the notes.
Resources:
https://www.amazon.com/Next-Level-Estate-Asset-Protection/dp/1950863883
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Dec 06, 2022
Tuesday Dec 06, 2022
In this episode of Anderson Business Advisors, Toby Mathis speaks with attorney Jonathan Evans from Anderson Advisors. You’ll hear Toby and Jonathan discuss all the pros and cons of LLCs – they are expensive in some states, more affordable in places like Wyoming and Delaware, they don’t provide the stock tax breaks that other entities do, and there are some investment restrictions. However, the name itself shows one of their greatest benefits which is “Limited Liability” and separating you personally from your business entity. They are flexible, offer a lot of choice, and in the end, are still a good option for setting up your business.
Highlights/Topics:
- Jonathan’s background
- The problems with LLCs - expenses in certain states
- LLCs don’t have stock - but there are huge tax breaks for businesses that DO have stock - the 1244 and the 1202
- Olmstead v. The FTC in Florida’s Supreme Court - opening single -member LLCs to creditors
- Wyoming is a leader for affordable asset protection
- Investment restrictions in LLCs vs. corporations
- LLCs and international investors
- Disregarded entities and active businesses
- Some redeeming qualities of LLCs - “Limited Liability” being number one
- Flexibility and choice in operations with LLCs
- The LLC is still a valuable entity for your business - work with a professional
Resources:
https://www.linkedin.com/in/jonathan-evans-a3640895/
jonathanevans@andersonadvisors.com
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ