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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
Thursday Sep 24, 2020
Thursday Sep 24, 2020
Who can or wants to work forever? If not, then learn how to invest in cash flowing rental properties as a passive way to make money.
Today, Clint Coons of Anderson Business Advisors talks to Kathy Fettke, co-CEO of Real Wealth Network and host of the Real Wealth Show and Real Estate News podcasts. Also, Kathy is the best-selling author of Retire Rich with Rentals.
Kathy is passionate about teaching people how to better understand real estate market cycles to thrive during booms and protected during busts. She helps people build passive income streams through high cashflow real estate investments.
Highlights/Topics:
- 1031 Exchange: Overcome fear of going other places to invest and make money
- Top Factors: Job growth, population growth, affordability plus infrastructure investment
- Appreciation: Find it anywhere and everywhere by getting ahead of growth and progress
- COVID: Massive migration accelerated to leave high-priced markets for new normal
- Landlord/Tenant Laws: Proposition 13 passed in California drives up taxes, kills profit
- Where to invest? Texas, Florida, and Alabama due to job growth and lower taxes
- Lack of Supply: When market collapsed, demand increased for affordable housing
- Rent Collection: People don’t want to get evicted; continue to pay for place to live
- Manipulated Economy: Nothing makes sense or is predictable
- Real Estate Survival Rate: Depends on what federal reserve does with interest rates
Resources
http://realwealthnetwork.com/
https://www.realwealthnetwork.com/category/podcast/real-wealth-show/
https://www.realwealthnetwork.com/category/podcast/real-estate-news/
https://www.amazon.com/Retire-Rich-Rentals-Ongoing-Forever/dp/1500881589
https://www.realwealthnetwork.com/learn/how-to-do-a-1031-exchange-rules-definitions/
kathyfettke@realwealthnetwork.com
Kathy Fettke’s Phone: 888.796.3896
https://www.californiataxdata.com/pdf/Prop13.pdf
Paycheck Protection Program (PPP)
https://www.sba.gov/funding-programs/loans/paycheck-protection-program
Extreme Success by Rich Fettke
https://www.amazon.com/Extreme-Success-Program-Succeed-Struggle/dp/0743223144
Rich Dad Poor Dad by Robert Kiyosaki
https://www.richdad.com/
https://andersonadvisors.com/clint-coons/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Sep 22, 2020
Tuesday Sep 22, 2020
Give your children a purpose, not money. Toby Mathis and Jeff Webb of Anderson Advisors answer tax questions related to passive versus active income reported on payroll for people of all ages to flipping properties and real estate investments. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- If I have a small business, do I need to make it an LLC to hire my children, or can I just be an independent contractor and hire them? LLC is not required for small businesses, but it is recommended for liability protection; your children’s wages should be run through payroll, even if they don’t have social security numbers
- I just bought a house, paid 30k in cash, and spent about $15k in rehab. What expenses of this deal can I write off, besides the rehab cost? Depends on whether you are flipping the property or using it as an investment property; capitalize all of it because you can’t write off the expenses as repairs
- If I am a real estate professional in 2020, can I offset previous years’ passive losses in this year? No, only for 2020 and only for years you were a real estate professional
- Can you put a primary residence into a land trust and/or LLC to maintain anonymity, if you have a commercial bank loan? If not, are there other options available? LLC or land trust is possible, but it’s not the best idea because it could impact homestead
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 Tax Toolbox (only $595; regularly $1,500)
http://aba.link/ttb920
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf
https://andersonadvisors.com/living_trusts/
https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions
https://www.irs.gov/credits-deductions/businesses/invest-in-a-qualified-opportunity-fund
https://www.irs.gov/forms-pubs/about-form-8996
Capital Gains Exclusion/Section 121
https://www.irs.gov/taxtopics/tc701
https://www.sbc.senate.gov/public/index.cfm/guide-to-the-cares-act
Individual Retirement Arrangements (IRAs)
https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras
https://www.irs.gov/retirement-plans/traditional-and-roth-iras
Small Business Administration (SBA)
https://www.sba.gov/
https://www.irs.gov/businesses/small-businesses-self-employed/am-i-required-to-file-a-form-1099-or-other-information-return
https://www.irs.gov/forms-pubs/about-form-w-2
https://www.irs.gov/taxtopics/tc554
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
https://www.irs.gov/businesses/cost-segregation-audit-techniques-guide-chapter-1-introduction
https://www.irs.gov/tax-reform
Healthcare Reform (Affordable Care Act)
https://www.healthcare.gov/
26 U.S. Code Section 469(c)(7)
https://www.law.cornell.edu/uscode/text/26/469
https://www.law.cornell.edu/uscode/text/26/280A
https://www.mileiq.com/
https://www.maralagoclub.com/
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://fred.stlouisfed.org/
Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster
https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/
Economic Injury Disaster Loan (EIDL)
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance
Paycheck Protection Program (PPP)
https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf
Paycheck Protection Program (PPP) Flexibility Act
https://www.investopedia.com/paycheck-protection-program-flexibility-act-of-2020-an-overview-4846944
https://www.irs.gov/credits-deductions-for-individuals
https://www.irs.gov/charities-non-profits/charitable-organizations
The Private Vault by Greg Boots
https://www.amazon.com/Private-Vault-Gregory-J-Boots-ebook/dp/B00G71IKNA
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Sep 15, 2020
Tuesday Sep 15, 2020
Do you and your family want to live a better life? Be intentional and deliberate. Most families and businesses don’t realize that the financial transformation they are seeking is not in alignment, but opposed to the transformation they desire.
In this episode, Toby Mathis of Anderson Advisors talks to Eric Dunavant, president and CEO of Paradiem. Since 2007, Eric’s leadership has guided multiple families and businesses to discover greatness, growth, governance, and generosity that makes an impact every day. Before Paradiem, Eric served as a vice president at Charles Schwab and was an associate at Fidelity Investments in charge of managing money market mutual funds.
Eric is a Certified Financial Planner (CFP), Qualified Kingdom Advisor, and Financial Planning Association affiliate. In addition to his certifications, Eric was named New Orleans City Business Money Maker, New Orleans Area Five Star Professional Wealth Manager, and Safe Harbor’s Real Man of St. Tammany Parish. Eric’s book, What If We’ve Been Doing It All Wrong, focuses on how your worldview often interrupts all your financial thinking and behavior.
Highlights/Topics:
- Meaning and Purpose: Paradiem means beyond the day, and Eric’s organization empowers families and businesses to live a better story by being more intentional.
- ROI: Return on investment versus return on intention, which is more important? Too many families focus too much on return on investment, not return on intention.
- Mission, Vision, Values: Culture eats strategy for breakfast, so make sure values are aligned to have a real direction that’s bigger than dollars.
- Business owners and families tend to take on trajectory building wealth, rather than no real purpose when stress and anxiety come along.
- Unintended Consequences: Start small, but over time, they lead to miscommunication, and eventually, addiction.
- Be Deliberate: Money doesn't cause problems and is not an issue. Money can magnify and expose all the areas being neglected and ignored inside your family and life.
- Finances Fragment Families: After Eric’s mom died, his dad pursued business growth and not doing what he was told—workaholic, not home, and not focused on health.
- Four categories of families should focus on to think beyond where they are today:
- Greatness: Why does your story matter?
- Growth: What is the ROI of your story?
- Governance: Who tells your story?
- Generosity: What can your family come together on to make a difference?
- Walk the Walk, Talk the Talk: Start conversations, voice opinions, gain feedback, minimize friction, and achieve buy-in to discover, build, and teach family values.
- How healthy is your family? Resources are available to transform your family.
- What are you willing to work on? There's not anything that's completely out of reach, if you're willing to do the work and go into the pain and darkness of it.
Resources
Family Impact Kit: eric@paradiem.org
Website: https://paradiem.org/
https://paradiem.org/
What If We’ve Been Doing It All Wrong by Eric Dunavant
https://www.amazon.com/What-Weve-Been-Doing-Wrong-ebook/dp/B0733WBKT5
https://www.drucker.institute/perspective/about-peter-drucker/
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Sep 08, 2020
Tuesday Sep 08, 2020
Besides guidance from the Internal Revenue Service (IRS) regarding U.S. President Donald Trump’s executive order to allow deferral of the employee portion of Social Security payroll tax, Toby Mathis and Jeff Webb of Anderson Advisors provide further clarification. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- If I sell a piece of land and keep the primary house, what is the 1031 valued at? Is it a $0 or 150k purchase price in 2012? Get each parcel of land appraised to identify value for the basis
- Can I write off an RV, if I use it for business travel? It is possible to write off the RV by using it 100% for business, not personal use as a second home
- How does a trust work in relationship to LLC in real estate? Provides anonymity for beneficiary and LLC
- Can you take depreciation on a rental condo? What do you use for the basis? Yes, you can take depreciation on a rental condo, if you own the condo, not as a renter
- Is there an option to give employees a bonus without being charged a luxury tax? You can give employees bonuses, but bonuses are subject to regular payroll 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 Tax Toolbox (only $495; regularly $1,500)
http://aba.link/ttb920
Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster
https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/
Internal Revenue Service (IRS)
https://www.irs.gov/
https://www.irs.gov/pub/irs-drop/n-20-65.pdf
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
https://andersonadvisors.com/living_trusts/
https://www.irs.gov/taxtopics/tc554
https://www.airbnb.com/
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf
https://www.irs.gov/forms-pubs/about-form-w-2
https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
https://www.sbc.senate.gov/public/index.cfm/guide-to-the-cares-act
Small Business Administration (SBA)
https://www.sba.gov/
https://www.irs.gov/businesses/cost-segregation-audit-techniques-guide-chapter-1-introduction
https://www.irs.gov/tax-reform
Healthcare Reform (Affordable Care Act)
https://www.healthcare.gov/
Individual Retirement Arrangements (IRAs)
https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras
https://www.irs.gov/retirement-plans/traditional-and-roth-iras
Capital Gains Exclusion/Section 121
https://www.irs.gov/taxtopics/tc701
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/forms-pubs/about-schedule-e-form-1040
Hobby Loss/Safe Harbor Provision
https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit
https://www.mileiq.com/
https://www.irs.gov/charities-non-profits/charitable-organizations
https://www.law.cornell.edu/uscode/text/26/280A
California Assembly Bill 5 (AB5)
https://www.investopedia.com/california-assembly-bill-5-ab5-4773201
https://www.ftb.ca.gov/
https://quickbooks.intuit.com/
https://www.adp.com/
Unrelated Business Income Tax (UBIT)
https://www.irs.gov/charities-non-profits/unrelated-business-income-tax
Unrelated Debt-Financed Income (UDFI)
https://www.irs.gov/pub/irs-tege/eotopicn86.pdf
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Events@andersonadvisors.com
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://andersonadvisors.com/tax-wise-workshop/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Sep 01, 2020
Tuesday Sep 01, 2020
How do you take an existing asset and find alternative ways to profit from it? Or, how do you buy more house than you can afford and live rent-free by building equity and cash flow? House hacking.
Today, Clint Coons of Anderson Business Advisors talks to Captain Kevin Brenner, co-host of the Active Duty Passive Income (ADPI) Podcast and head coach of Operation A.T.O.M. (Action Takers Only Mastermind). Kevin teaches military real estate investors how to build passive income through smart investments.
Kevin started his real estate investing journey in late 2018, after using his Veteran Affairs (VA) Loan Entitlement to house hack a quadplex in Savannah, Georgia. Through careful quality improvements, Kevin renovated each unit and raised the rents $500 per month/per unit. In July 2019, Kevin joined the ranks of the ADPI team and is dedicated to helping other service members and veterans.
Highlights/Topics:
- What is house hacking? Easier way to reduce, eliminate, or cash flow mortgage
- How to take advantage of house hacking? Seek properties where you can rent out bedrooms, separate spaces, and more areas
- What is a carriage house? Separate space or apartment that’s part of a single-family property that you can rent out to pay your mortgage while living in the main house
- What is the ideal property for house hacking? Depends on number of units, not number of bedrooms; look for the right property and strategy
- How can a house hacker level up? Start with roommates, then live a life of luxury in the comfort of your own home paid by others
- Where are the best places to house hack properties? Depends on market and occupancy regulations, but college towns and tourist destinations tend to be popular
- Do you have to house hack with people? No, there are other options to create cash flow, such as renting out your garage for storage space
- What type of insurance coverage is needed? Contact insurance provider about short-term rental and supplemental policies
- When, where, and how to research rental agreements? Ask for advice and reach and to other investors and attorneys to find out their processes and precedence
- What are some differences between conventional residential, VA, FHA, and other loans? Down payment percentage, occupancy regulations, and mortgage insurance
- What are potential house hacking pitfalls to avoid? Work and responsibility are still involved, so consider managing your own property if you’re wise in real estate
Resources
kevin@activedutypassiveincome.com
https://gramho.com/media/2042907707006247179
https://www.facebook.com/kevin.brenner.16
https://www.linkedin.com/in/kevin-brenner-pmp-783471b6
Active Duty Passive Income (ADPI)
https://www.activedutypassiveincome.com/
Active Duty Passive Income (ADPI) Podcast
https://www.activedutypassiveincome.com/podcast
Operation A.T.O.M. (Action Takers Only Mastermind)
https://www.activedutypassiveincome.com/sales-page-action-takers-only-mastermind-atom
https://www.activedutypassiveincome.com/#cb09368810
Military Real Estate Investing Academy
https://www.activedutypassiveincome.com/sales-page-military-real-estate-investing-academy
http://risewithnimbus.com/
https://www.airbnb.com/
https://www.va.gov/
https://www.neighbor.com/
Federal Housing Administration (FHA)
https://www.hud.gov/buying/loans
https://andersonadvisors.com/clint-coons/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Thursday Aug 27, 2020
Thursday Aug 27, 2020
What are ETFs and why have they become so popular as a way to invest in your favorite companies? These days, ETFs represent a multi-trillion-dollar industry.
In this episode, Toby Mathis of Anderson Advisors talks to William Rhind, founder of GraniteShares, an independent exchange-traded fund built for investors seeking simple, cost-effective access to differentiated investments. It is backed by leading fintech venture capitalists, such as Bain Capital Ventures and Clocktower Technologies.
William has built and managed businesses in the ETF market for almost his entire career and previously served as CEO of World Gold Trust Services, which is the largest commodity fund in the world.
Highlights/Topics:
- Exchange-Traded Fund (ETF): Fund listed like a share on the stock exchange that becomes new technology in the asset management space.
- Right Place, Right Time: People are embracing ETFs as a significantly low-cost alternative to mutual funds.
- Active or Passive Management: Mutual funds are active, ETFs tend to be passive.
- ETF Advantages: Low cost, and buy and sell whenever you want.
- Challenges for Investors: What is in the portfolio? What do you own? It’s a secret.
- Follow Index: The set of rules govern how the ETF has to be managed, how many shares must be included, what types of shares they are, and how often they rebalance.
- Management Fee: Small percentage of a fund’s assets that’s calculated on a manual basis and typically run from 0.17 to 0.7 percent.
- Some people still invest in mutual funds because the majority of mutual fund assets are held in 401(k) retirement accounts.
- GraniteShares: Focuses efforts on real assets, income, and large-cap equity investing.
- Wall of Worry: COVID crisis and economic collapse encourages as much investing and liquidity as possible.
- Moral Hazard: In the past, people that caused the banking crisis benefited from it. Now, people aren’t blaming banks or companies but specific people and countries.
Resources
https://www.graniteshares.com/
https://twitter.com/graniteshares
https://www.linkedin.com/in/william-rhind-5434367
https://www.baincapitalventures.com/
Clocktower Technology Ventures
https://www.clocktowerventures.com/
https://www.gold.org/news-and-events/press-releases/world-gold-trust-services-names-william-rhind-ceo
https://www.blackrock.com/corporate
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Aug 25, 2020
Tuesday Aug 25, 2020
As COVID-19 and tax-related relief questions continue, Toni Covey and Jeff Webb of Anderson Advisors answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- Due to the AB5 Law, my clients can no longer hire me as an independent contractor. Instead, they are hiring out-of-state contractors. Do I need to switch to an S Corp or move my company out of California? It depends and offers various options, such as a worker must be customarily engaged in an independently established trade occupation
- For a preschool that received Coronavirus relief, will the PPP loan forgiveness amount, the grants, and the EIDL advance be taxable as income? PPP loan and grants are not considered taxable income, however, an EIDL of $10,000 will not be forgiven or tax-deductible from PPP
- I have solely owned a second home long-term in New York. Do I need to file taxes separately from my wage-earning wife to minimize my capital gains tax considering my present income is limited to Social Security? No, but it primarily depends on how much the wife is earning
- My wife and I own several rental properties and manage/maintain them mostly ourselves with no other employees. Does setting up a corporation to manage the rental properties (each on their own LLC) make sense from a tax standpoint? Consider a corporation to manage the rental properties or manage the LLCs that hold the rental properties
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:
Uniform Transfers to Minors Act (UTMA)
https://www.investopedia.com/terms/u/utma.asp
Economic Injury Disaster Loan (EIDL)
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance
Paycheck Protection Program (PPP)
https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf
Paycheck Protection Program (PPP) Flexibility Act
https://www.investopedia.com/paycheck-protection-program-flexibility-act-of-2020-an-overview-4846944
Small Business Administration (SBA)
https://www.sba.gov/
Internal Revenue Service (IRS)
https://www.irs.gov/
https://andersonadvisors.com/living_trusts/
Individual Retirement Arrangements (IRAs)
https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras
https://www.irs.gov/retirement-plans/traditional-and-roth-iras
https://www.irs.gov/taxtopics/tc554
Unrelated Business Income Tax (UBIT)
https://www.irs.gov/charities-non-profits/unrelated-business-income-tax
Unrelated Debt-Financed Income (UDFI)
https://www.irs.gov/pub/irs-tege/eotopicn86.pdf
California Assembly Bill 5 (AB5)
https://www.investopedia.com/california-assembly-bill-5-ab5-4773201
https://www.ftb.ca.gov/
Capital Gains Exclusion/Section 121
https://www.irs.gov/taxtopics/tc701
https://www.irs.gov/charities-non-profits/charitable-organizations
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf
https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf
https://www.irs.gov/forms-pubs/about-form-8805
https://www.irs.gov/forms-pubs/about-form-1040-nr
Passive Activity Losses (PALs)
https://www.investopedia.com/terms/p/passive-activity-loss-rules.asp
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/pub/irs-drop/rr-03-102.pdf
https://www.irs.gov/tax-reform
https://www.law.cornell.edu/uscode/text/26/280A
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
Healthcare Reform (Affordable Care Act)
https://www.healthcare.gov/
https://www.irs.gov/credits-deductions-for-individuals
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://andersonadvisors.com/tax-wise-workshop/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Aug 18, 2020
Tuesday Aug 18, 2020
What type of expense do you prefer to deduct? There are deductions that you recapture, there are deductions that you don't. There's bonus depreciation, and there are flat out expenses. They're all different.
In this episode, Toby Mathis of Anderson Advisors talks to Warren Dazio, Executive Vice President – Business Development for Cost Segregation Services, Inc. (CSSI). The engineering-based consulting firm focuses on the tax law for commercial buildings.
As a natural leader, Warren brings ethics and integrity into every aspect of his life and work. He spent the first 20 years of his career in ministry and has a degree in theology. Later, he pursued an advanced degree in business and received an MBA.
Highlights/Topics:
- What is cost segregation? Accelerated depreciation on building to reduce income taxes.
- Why is self-storage so popular with investors? Self-storage is a strong investment option because of TPR, cost segregation, and sometimes, 179D.
- Can tenants be a pain to deal with? People still deal with tenants, but automation means doing less with those tenants.
- What’s more beneficial from a tax standpoint, build or convert self-storage buildings? Converting existing buildings into self-storage gets massive deductions from cost segregation. Building a self-storage facility from ground up has tax benefits, as well.
- Besides the cost segregation, are there tax credits that are like cash? Yes and no. A deduction that self-storage can qualify for is 179D. Research and development is a credit for credit, and a 45L associated with residential rentals is a credit.
- Is there a dollar amount with 179D that you get per square foot? Yes, it's anywhere from 30¢ to $1.80 per square foot. Focus on the building envelope, HVAC, and LED lighting.
- Is that subject to recapture? Gains are under other deductions on your tax return. If it's a deduction, it may be subject to recapture. Tangible property regulations don't have to be recaptured, but bonus depreciation does.
- If you’re building a self-storage facility or making a modification, if you do it right, you can get major tax relief, correct? Yes, you probably already covered the associated TPRs, and might have covered partial asset disposition (PAD).
- Is there a PAD available? Have you talked to your CPA about it? If your CPA is not aware of it, call a firm that helps you put a dollar amount to the write-off to gain from it. CPAs may not be qualified to do this work.
- Can you capture qualified improvement property? Can you capture a bonus? You can capture Section 179, which is a bit different from 179D. Section 179 and bonus are similar. 179D is the energy piece.
- What are the different types of cost segregations? The gold standard is the engineering-based method that captures accounting and construction dollars.
Resources
Cost Segregation Offer: https://bit.ly/CSSIGREGBALL
Warren Dazio’s Phone: (225) 241-9823
Warren Dazio’s Email: daziow@costsegserve.com
Cost Segregation Services: https://www.costsegregationservices.com/
179D Commercial Buildings Energy-Efficiency Tax Deduction
https://www.energy.gov/eere/buildings/179d-commercial-buildings-energy-efficiency-tax-deduction
https://www.section179.org/section_179_deduction/
https://www.kbkg.com/45l
https://www.irs.gov/tax-reform
https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065
Tangible Property Regulations with Toby Mathis and Kevin Jerry
https://andersonadvisors.com/podcast/tangible-property-regulations/
https://andersonadvisors.com/tobymathis-2/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Thursday Aug 13, 2020
Thursday Aug 13, 2020
Is right now, the right time to buy and invest in real estate? Where should you put your money? Is it safe to put it into single-family, commercial, or multifamily real estate?
Today, Clint Coons of Anderson Business Advisors talks to Matt Faircloth, a full-time investor who has successfully completed projects involving dozens of fix and flips, office buildings, single-family homes, and apartment buildings.
Matt is a regular contributor and podcast guest on BiggerPockets and has an active YouTube channel dedicated to educating investors. Also, Matt’s the author of Raising Private Capital, How to Build Your Real Estate Empire with Other People's Money. He started with a $30,000 private loan and has completed more than $40 million in transactions using private money.
Highlights/Topics:
- What’s Matt seeing in the market, right now? Affinity for multifamily assets, not A+ markets, but more tertiary working-class markets.
- How has COVID changed the market? So many deals and a new market that addresses financial distress and willingness to change from a pre-COVID to post-COVID price.
- Are funding sources starting to dry up and pull back on access to capital? Yes, people got caught at the wrong time. Closings were canceled during the COVID shutdown.
- What is a bridge lender? Someone who takes dilapidated real estate and helps you bridge where you stand today to where you can refinance them out to agency debt.
- What’s the criteria for a bridge loan if you don’t have multifamily experience? Produce a balance sheet. Lenders want $2-$3 million deals and may require an equal net worth.
- What are the typical terms? How long are they? Are there prepayment penalties? You’ll bridge into Fannie Mae or Freddie Mac to not be your amortized long-term lender. You may have to pay additional interest and an exit fee at closing.
- How does Matt compare what’s going on now to what went on in 2008-2010? The 2008-2010 crisis was related to debt. Loans were poorly underwritten, badly created, or should have never happened. In 2020, it’s an income crisis that supports those loans.
- What type of jobs do tenants hold? If they’re in workforce housing and work in the service industry, it’s going to be slow to recover. If tenants can work from home and stay productive, they keep going.
- Are there certain areas that are overbuilt or underbuilt? A-Class markets need to entice renters, while B- and C-Class markets are underbuilt. There’s a need and shortage for housing in middle-of-the-road markets, but a glut of housing in higher-end markets.
- What are common mistakes? Jumping in, being cavalier, and taking uncalculated risks.
- Who wants to get into multifamily space? Everybody thinks it’s a key to financial freedom. It’s a great asset for fundamental reasons, but not everyone should do it.
Resources
http://www.derosagroup.com/
Raising Private Capital, How to Build Your Real Estate Empire with Other People's Money
http://www.biggerpockets.com/privatemoneybook
DeRosa Group’s Insiders Community
http://www.derosagroup.com/insiders
Free Resources: Text DeRosa to 66866
https://www.fanniemae.com/
http://www.freddiemac.com/
https://www.crowdstreet.com/
Investment Securities & PPM with Dugan Kelly
https://andersonadvisors.podbean.com/e/investment-securities-ppm/
https://andersonadvisors.com/clint-coons/
https://andersonadvisors.com/
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
Tuesday Aug 11, 2020
Tuesday Aug 11, 2020
Knowledge is power when talking about taxes. The more you know, the more tools you have to be successful. While Toby Mathis is taking some much needed rest and relaxation after Tax Day on July 15, Michael Bowman and Jeff Webb of Anderson Advisors answer your tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- Does it make sense to use an LLC as the property manager for self-managed rentals? Separate and isolate rentals to protect assets; consider Inc. instead of LLC
- If I put my property in a land trust, will it be difficult to sell? Land trust is basically a revocable trust with a grantor; land trust should sell the property but not via turn of title
- What is the best entity to do wholesaling? Disregarded LLC down to a corporation
- Property Aggregation: What is it and what are the reasons to do it or not? Primarily used with real estate professionals for material participation to combine multiple properties
- What’s the difference between a tax deduction and a tax credit? Tax deduction reduces your taxable income; tax credit reduces your actual 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:
Anderson Advisors Tax and Asset Protection 1-day Event
http://aba.link/TAP88
Healthcare Reform (Affordable Care Act)
https://www.healthcare.gov/
https://andersonadvisors.com/living_trusts/
https://turbotax.intuit.com/
Individual Retirement Arrangements (IRAs)
https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras
https://www.irs.gov/retirement-plans/traditional-and-roth-iras
https://www.irs.gov/taxtopics/tc554
Capital Gains Exclusion/Section 121
https://www.irs.gov/taxtopics/tc701
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://www.investopedia.com/terms/d/depreciationrecapture.asp
https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html
Internal Revenue Service (IRS)
https://www.irs.gov/
https://www.irs.gov/forms-pubs/about-schedule-c-form-1040
https://www.irs.gov/pub/irs-prior/p520--1995.pdf
https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real%20Estate%20Professionals.pdf
https://andersonadvisors.com/podcast/cost-segregation-with-brett-hansen-replay/
https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500
https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf
https://revenue.support.tn.gov/hc/en-us/sections/200549025-Franchise-Excise-Tax
https://www.irs.gov/credits-deductions-for-individuals
https://www.irs.gov/pub/irs-drop/rr-03-102.pdf
https://www.irs.gov/charities-non-profits/charitable-organizations
https://andersonadvisors.com/michael-bowman
http://tobymathis.com/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Events@andersonadvisors.com
Anderson Advisors Tax and Asset Protection Event
https://andersonadvisors.com/asset-protection/
https://andersonadvisors.com/tax-wise-workshop/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/