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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 Mar 22, 2022
Tuesday Mar 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:
https://www.irs.gov/credits-deductions/businesses/opportunity-zones
https://www.irs.gov/forms-pubs/about-form-3115
https://www.irs.gov/pub/irs-drop/rr-14-02.pdf
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Mar 08, 2022
Tuesday Mar 08, 2022
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:
- I bought a property in Georgia in 2021, doing renovations and repairs, planning to rent it out in March 2022. I didn't collect rents in 2021, so, I can't claim this property on my 2021 tax return, correct? Can I deduct the expenses ahead for renovations in 2021 in my next year's tax return, 2022? Correct, you cannot claim those deductions in 2021. They don't disappear, but what happens is the majority of those renovation and repair expenses go into the basis of your property. You will get to depreciate them if you do cost segregation.
- Is YouTube income considered passive or active? It depends on whether you're passively or actively participating. What matters is a test for material participation.
- I manage properties for a relative as an employee of a C-Corp. During a banking transaction, I personally received the rents through Zelle in 2021, the start of 2022. Those rents were then redeposited into the property owner's personal bank account. Will I have a problem with my 2021 tax return? Do I need to issue a 1099 to the property owner for 2022? Never accept payments in your personal name that belonged to somebody else. You're not going to have a problem, but if you did receive a 1099 for this money, then issue a 1099 back to whoever the money was paid to.
- Can you elaborate on revocable versus irrevocable trust from a tax standpoint? A revocable trust is almost like a disregarded entity. It's good for protecting assets—your estate and so forth—from probate, but you can change it every day if you want. The revocable trust is taxed as though it doesn't exist.
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:
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
https://www.irs.gov/forms-pubs/about-schedule-b-form-1040
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Feb 22, 2022
Tuesday Feb 22, 2022
Oh, you did what? I can't believe you did that! Call me next time. Accountants and attorneys could have saved you money. You, too, can annoy and laugh at others at family and social gatherings and parties.
In this episode of Tax Tuesday, Toby Mathis and Jeff Webb of Anderson Advisors discuss how to write off rental property expenses, as well as answer additional tax-related questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Can losses from real estate syndications be taken against active income if you or your spouse are real estate professionals, or is there more criteria? Real estate syndications are treated pretty much the same way that any other type of real estate property would be that's for rent. If you do a cost segregation, you have accelerated depreciation. You can deduct stuff as a real estate professional that you may not be able to deduct as just somebody investing in real estate.
- Can I owner finance or lease purchase a property that currently has a mortgage on my personal name and the deed is titled on my LLC? Yes, you could do this as a Subject 2. They're not taking over the mortgage, they're buying it subject to the existing mortgage.
- Trying to buy a short-term rental. If I sign for the loan personally and title the property in an LLC, would that be considered co-mingling personal assets with LLC to break the corporate veil? No, that doesn't really break the corporate veil, but you should keep the transactions as separate as possible. If you're just buying the property and then transferring it to the LLC, that's not a big deal.
- Can I start filing taxes for LLCs I created for two of my rental homes, even though the real property deeds have not yet been transferred/filed/recorded to said LLCs? It depends on how the LLC is being taxed. If they're disregarded to you personally, report them on your 1040. If it's going through an entity, they're not titled to that entity, that's more problematic. You still have to file the taxes.
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:
The Build Back Better Framework
https://www.whitehouse.gov/build-back-better/
https://www.irs.gov/tax-reform
https://mileiq.com/
Uniform Gifts to Minors Act (UGMA)
https://www.investopedia.com/terms/u/ugma.asp
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Monday Feb 21, 2022
Monday Feb 21, 2022
How do you get started in real estate investing outside of your local area? Are you struggling to get started in a different state? Trying to figure out how to find properties outside the area in which you live?
Today, Clint Coons of Anderson Business Advisors talks to Gary Beasley, Co-founder and CEO of Roofstock, a leading real estate investment marketplace. Gary explains how to start investing in real estate that is not in your local area, but in markets where you get higher cap rates and properties without having to put in hundreds of thousands of dollars.
Gary has spent most of his career building businesses in the real estate, hospitality, and technology sectors. Before starting Roofstock, Gary led one of the largest single-family rental platforms in the United States through its IPO as Co-CEO of Starwood Waypoint Residential Trust, now part of Invitation Homes.
Highlights/Topics:
- Numbers Game: Sizable portfolio with multiple properties for multiple cash flow streams
- Roofstock: Unlocks asset class for investors to break down geographic barriers
- Result: Real estate investors buy homes with tenants to create efficient marketplace
- Differences between Roofstock, Redfin, and Zillow when it comes to property research
- Risk-Reward: What returns will be generated and what risks are you willing to take?
- Where to get properties? Organically, customer acquisition, PR, educational content
- Rent Ledger: Access data in the system and view tenant payment history
- Best of Both Worlds: Opportunity to buy it now and all returns are based on that price
- Roofstock Academy: Sign up and get proprietary access to experts who help you
- Different Sellers, Motivations. Some want to sell quickly, and some are more patient
Resources
https://www.linkedin.com/in/gary-beasley-956647
https://www.roofstock.com/
https://www.roofstockacademy.com/courses
The Remote Real Estate Investor
https://podcasts.apple.com/us/podcast/the-remote-real-estate-investor/id1502473360
https://www.greatjones.co/
https://www.salesforce.com/
https://andersonadvisors.com/clint-coons/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Feb 08, 2022
Tuesday Feb 08, 2022
Are you going to inherit a house from your parents? Also, how will the new IRS rule on third-party payer apps, such as Venmo and Zelle, affect a landlord to collect rental payments? Beware of gift taxes from real estate, 1099-K and 709 forms, and other tax implications.
In this episode of Tax Tuesday, Toby Mathis and Jeff Webb of Anderson Advisors discuss gift taxes from real estate and new IRS rules on CashApp as well as answer additional tax-related questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- I am from Dallas, Texas. My parents have a primary home and rental house. They want to give me their rental house, but they owe $42,000 to the mortgage company. What’s the best way to inherit the house, how do I deal with the gift tax, what tax implications do I need to be aware of, and how can I avoid the taxes if possible? If you are gifted an encumbered property, it decreases the gift amount. Take over the loan, or if you are not able to pay off the loan and the parents continue to pay it, then that would be considered a gift. Otherwise, do nothing.
- Can one circumvent the $16,000 maximum yearly gift tax exclusion by giving $16,000 to multiple persons who in turn also give $16,000 to the same single final recipient? No, you can't do this step transaction, a collapsible transaction. The IRS looks at what happened from the beginning to the end and will find that you actually made that gift yourself to that single recipient.
- How will the new IRS rule on third-party payer apps, such as Venmo, Zelle, etc., affect a landlord to collect rental payments via a phone number or email linked to one bank account. The landlord will get a 1099-K for payments received, which is personal income, but taxable revenues are split amongst rental entities. What’s the best way to handle this? If all the properties are in your name, it will not make any difference. If you have one party collecting for yourself, partnership, or S Corp, then it can create an issue.
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:
https://www.irs.gov/businesses/understanding-your-form-1099-k
https://www.irs.gov/forms-pubs/about-form-709
Unrelated Business Income Tax (UBIT)
https://www.irs.gov/charities-non-profits/unrelated-business-income-tax
Unrelated Debt Financing Income (UDFI)
https://www.irs.gov/charities-non-profits/unrelated-business-income-from-debt-financed-property-under-irc-section-514
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Jan 25, 2022
Tuesday Jan 25, 2022
How are taxes calculated when renting only one room in your home for Airbnb? How are the expenses calculated, such as cleaning fees, lawn care, pest control, maintenance, snacks, and other amenities offered to guests?
In this episode of Tax Tuesday, Toby Mathis and Jeff Webb of Anderson Advisors discuss calculating Airbnb taxes and answer additional tax-related questions.
Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- What are your thoughts on using a nonprofit that is funded with cryptocurrency? The cryptocurrency will need to be converted to cash and appraised when donating it.
- When purchasing a self-storage facility, should it be in it’s own LLC and can it be combined in an LLC that already has a property within its entity? It’s recommended to put it into two LLCs: Property in one and business in the other. Always separate them.
- How are taxes calculated when renting only one room in your home for Airbnb? How are the expenses calculated for amenities offered to guests? Depends on if it is a rental or for a business. There are two kinds of expenses that need to be calculated - direct (only applies to specific rental space) and indirect (utilities, mortgage interest, homeowners association fees, etc.).
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:
How Women Achieve Financial Freedom With Stocks & Real Estate (Feb. 5, 2022)
https://infinityinvesting.com/infinity-women-investing/
https://www.irs.gov/taxtopics/tc409
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/forms-pubs/about-form-709
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Jan 11, 2022
Tuesday Jan 11, 2022
Should you use your personal name as a beneficiary of a Lady Bird Deed or should you set up a new entity to receive ownership?
In the first Tax Tuesday episode of 2022, Toby Mathis and Jeff Webb of Anderson Advisors discuss how to set up a beneficiary deed and answer additional tax-related questions.
Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Are the profits from my real estate syndication investment considered passive income? It’s highly likely that your syndication income is passive in nature for two reasons - you’re probably a limited partner and it’s real estate, which are both passive activities.
- Should I use my personal name as a beneficiary of a Lady Bird Deed or should I set up a new entity to receive ownership? Medicare can take a real estate asset to pay for care, but a Lady Bird Deed is an enhanced life estate allowed in five states for a beneficiary to protect their home as an inheritance.
- How does a C Corp pay me (the homeowner) for the use of part of my house as office space? Don’t report it on your 1040. It’s a tax-free reimbursement. However, if you rent your home to the corporation, then it is taxable income.
- Can we still rollover a regular IRA to Roth? For now, you can still do a Roth conversion.
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:
https://www.medicaidplanningassistance.org/lady-bird-deeds/
https://www.irs.gov/businesses/small-businesses-self-employed/business-structures
Coronavirus Aid, Relief, and Economic Security (CARES) Act
https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf
https://andersonadvisors.com/retirement-plan/
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Jan 04, 2022
Tuesday Jan 04, 2022
Weather the retirement storm by strengthening your business with an 831(b) plan. It’s legal and highly effective for tax deferral today to address tomorrow’s risks.
Today, Toby Mathis of Anderson Business Advisors talks to Ed Bryan, Director of Business Development at SRA. Ed has more than 20 years of sales and operations management experience and brings a consistent history of leading high-performing sales teams and operational excellence.
Ed is responsible for developing business strategies to improve representative and client relationships. He works closely with Field Marketing Representatives to identify opportunities and provide education to keep them abreast of industry news and latest product knowledge.
Discussed in the Episode
- 831(b): What it is and how it compares to 401(k) and other retirement accounts
- Options: Allow money to grow, declare a qualified dividend, or realize investment gains
- COVID Claims: Making employee retention credit retroactive has hurt businesses
- Where people go wrong - they don’t share risk and/or operating principles of insurance
- Typical Clients: From builders to doctors - there’s no shortage of risk in any industry
- What can be insured? Threats to business cash flow (brand, cyber security, other risks)
Links
ed@831b.com
https://www.831b.com/
Captive Insurance: The BIG Business Tactic YOU Want To KNOW!
https://andersonadvisors.com/podcast/captive-insurance-the-big-business-tactic-you-want-to-know/
Internal Revenue Service (IRS)
https://www.irs.gov/
FAQs: Employee Retention Credit under the CARES Act
https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act#:~:text=The%20Employee%20Retention%20Credit%20under,financially%20impacted%20by%20COVID%2D19.
https://www.irs.gov/credits-deductions/businesses/opportunity-zones
https://andersonadvisors.com/entity-formation/
https://tobymathis.com/
https://andersonadvisors.com/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Dec 28, 2021
Tuesday Dec 28, 2021
Happy Holidays! In the last episode of the year, Toby Mathis of Anderson Advisors goes through a long list of tax questions from listeners to give quick answers, such as whether you can turn a 1031 exchange property into your primary residence. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- When you gift more than $15,000 a year to one family member, do you have to pay tax on it? Any individual can give $15,000 to another individual without having to submit a gift tax return, but a gift tax return is required if the amount exceeds $15,000
- How do I pay taxes on rental properties that I own in Canada while I am in the United States? The United States accepts Canadian LLCs, but still charges you tax on all income generated from any properties anywhere in the world
- Can I turn a property that I acquired through a 1031 exchange into my primary residence? Yes, you can convert it under Section 121
- What is the difference between a family trust and living trust? Same type of document, but a family trust is irrevocable and for the descendents; a living trust can be revocable and changed
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:
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
Real Estate Professional Requirements
https://www.aicpa.org/resources/article/tax-rules-for-real-estate-professionals
https://andersonadvisors.com/entity-formation/
https://www.irs.gov/taxtopics/tc409
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Dec 14, 2021
Tuesday Dec 14, 2021
Toby Mathis and Ian Hanuscin of Anderson Advisors talk about how to deduct taxes when purchasing a home and answer other tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- How can I eliminate paying capital gains? I recently sold my rental property because I needed the cash to pay off a divorce settlement. What are my options? Since you already sold the rental property, doing a 1031 exchange is no longer an option, but a qualified opportunity zone is an option to defer the tax
- Which is better? A 1031 exchange with limited time and capital availability or paying capital gains with unlimited time available and no restrictions on capital? Depends on your income bracket, so before doing a 1031, talk to your tax person
- After receiving a sizable amount of money, how soon after do taxes need to be paid? Usually, it’s 90% of the current year’s income or either 100 or 110% of last year’s income for tax liability
- If I register a vehicle under my company name, is this tax deductible? If it’s 100% business use, yes; if not, determine the percentage of use and deduct that amount
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:
https://www.irs.gov/taxtopics/tc409
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
Real Estate Professional Requirements
https://www.aicpa.org/resources/article/tax-rules-for-real-estate-professionals
https://www.irs.gov/credits-deductions/businesses/opportunity-zones
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/