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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 Apr 27, 2021
Tuesday Apr 27, 2021
Looking for land? It’s tough to find.So, where do you find the niches to find the riches to invest in raw land?
Today, Clint Coons of Anderson Business Advisors talks to Seth Williams, founder of REtipster, an online community that offers real-world guidance for real estate investors.
Seth discusses how he realized that land is probably the better way to go. It’s easier to find deals on land than houses and it costs a lot less.
Highlights/Topics:
- Raw Land Investments: Low liability, low risk, no tenants, and property taxes are cheap.
- What’s worth buying or not? Vacant land is simple, but is not easy.
- Always Ask: Is the property zoned right? Are there restrictions? What are the setbacks?
- Environmental Due Diligence: How much is spent on raw land development? A fortune.
- DataTree: You can get most of the information you need without spending a fortune.
- How to get started? Identify market, location, seller financing, state laws, and tax rules.
- Where? New Mexico and Southwest—less complex and fewer variables to understand.
- Invest to Sell: Market property with Facebook Marketplace, Craigslist, and Zillow FSBO.
- Leads: Pros and cons of using direct mail, automated offers, and not knowing markets.
Resources:
https://retipster.com/
http://retipster.com/youtube
http://retipster.com/datatree
https://retipster.com/category/land-investing/
https://retipster.com/land-flipping-lifecycle
The Truth About Land Investing
https://retipster.com/truthaboutlandinvesting
https://www.landwatch.com/
https://www.landandfarm.com/
http://www.mls.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 Apr 20, 2021
Tuesday Apr 20, 2021
With all the lack of tax knowledge going around and politicians being pushed by their parties, get your tax questions answered by Toby Mathis and Jeff Webb of Anderson Advisors. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- When you have a PLLC, what do you put on a personal or business credit card? If you have a business credit card that’s great, but a lot of the credit card companies are not willing to issue credit cards to new small businesses; use a personal credit card and make sure to separate personal and business expenses
- How do you claim the solar credit on your personal residence? Use Form 5695
- Should I file a return with my kids as dependents or should they file their own return if they are paid from the family business? If they are dependents and not supporting themselves, they are still dependents on your return; however, the children can file their own return as well and claim the standard deduction up to the amount of their earned income plus $300
- I have a rental property in California. When I go there to work on it, can I use per diem plus mileage rather than actual receipts for housing and meals? Depends if you are self-employed or you have the rentals owned personally, you cannot use the per diem for housing but can use it for meals
- I haven’t done taxes for 2020 and I’d like to know how to write-off bills for my emotional support animal. Can that be done with business taxes? Maybe, depends on the IRS’ primarily for and but for tests
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:
Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis
http://aba.link/infinitybook
Anderson Advisors Tax and Asset Protection Workshop (April 24)
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://www.irs.gov/charities-non-profits/charitable-organizations
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics
https://www.energy.gov/sites/prod/files/2020/01/f70/Guide to Federal Tax Credit for Residential Solar PV.pdf
Form 5695 - Residential Energy Credits
https://www.irs.gov/forms-pubs/about-form-5695
https://andersonadvisors.com/entity_formation/
https://andersonadvisors.com/retirement_plan/
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.mileiq.com/
https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction
Old-Age, Survivors, and Disability Insurance (OASDI) Program
https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf
https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act
https://andersonadvisors.com/using-cost-segregation-residential-real-estate/
https://www.investopedia.com/terms/d/depreciationrecapture.asp
Section 162 - Trade or Business Expenses
https://www.irs.gov/pub/irs-drop/rr-99-7.pdf
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
https://www.law.cornell.edu/uscode/text/26/168
https://www.irs.gov/taxtopics/tc553
Americans with Disabilities Act (ADA)
https://www.ada.gov/
https://www.hhs.gov/hipaa/index.html
Small Businesses Affected by Border Closures
https://andersonadvisors.com/podcast/small-businesses-affected-by-border-closures/
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Apr 13, 2021
Tuesday Apr 13, 2021
People don’t like to talk about taxes or being separated from their money, especially because of the country’s complex tax system. So, how do the rich get richer? Learn a lesson from the super-rich about minimizing taxes and maximizing income and infinity investing.
In this episode, Toby Mathis of Anderson Advisors talks to Mike Consol, Editor of Real Assets Adviser – one of seven titles published by Institutional Real Estate, Inc. (IREI).
Mike is responsible for the magazine’s editorial content and production and has been a professional journalist since 1983. He has spent his entire career working for business publications. Mike joined IREI in 2012 as editor of Institutional Real Estate Americas. Prior to IREI, he spent 17 years with American City Business Journals (ACBJ), the nation’s largest publisher of metropolitan business journals with 40 weekly newspapers.
Highlights/Topics:
- How does the tax code system work in the United States where the rich get richer and the people of average means stay right where they are? There is a misunderstanding of what assets and liabilities are, and people end up buying more liabilities than assets.
- Assets put money in your pockets. Every year, does it increase what’s in your bank account that you can buy groceries with, or does it take it away, like does it cost you money? If you use that analysis, you won’t be misled.
- Tax Code Highlights: Incentivizes investing in specific types of assets and punishes you if all you have is ordinary income.
- Social Security: Regressive taxes hurt the poor worse than they hurt the rich. The 15.3% tax is embedded in all earned income. Make other types of income that are not subject to that regressive tax. That’s your unearned, passive, and portfolio income.
- Things written in the tax code are specific to an individual company or industry and given extremely gracious treatment. Sometimes, investments are not made based on fact and reason, but tax efficiency or tax break.
- Cheat by Copying: What do rich people do? Diversification, which involves rents, royalties, dividends, interest, and short-term capital gains on sale of options.
- Zero Corporate Tax: Don’t tax corporations but people. When the United States lowered its corporate tax, other countries followed. It created tremendous worldwide growth, but pushed wealth into the hands of very few people.
- What is infinity investing? Changes the way you think of your net worth. How many days can you survive without working? Consider passive income sources so you never have to work again.
Resources:
https://aba.link/mike
Institutional Real Estate, Inc. (IREI)
https://irei.com/
https://irei.com/real-assets-adviser/
A lesson in what the super-rich know about minimizing taxes and maximizing income
https://irei.com/video-and-podcast/lesson-super-rich-know-minimizing-taxes-maximizing-income/
Paycheck Protection Program (PPP)
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program
https://www.law.cornell.edu/uscode/text/26
https://www.irs.gov/charities-non-profits/charitable-organizations
Real Estate Investment Trust (REIT)
https://www.investopedia.com/terms/r/reit.asp
https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
https://www.irs.gov/tax-reform
David Cay Johnston (former New York Times tax reporter)
https://www.nytimes.com/by/david-cay-johnston
The Gospel of Wealth by Andrew Carnegie
https://www.carnegie.org/about/our-history/gospelofwealth/
https://home.treasury.gov/policy-issues/cares
https://andersonadvisors.com/living_trusts/
Infinity Investing: How The Rich Get Richer And How You Can Do The Same
https://www.amazon.com/Infinity-Investing-Rich-Richer-Same/dp/1950863271
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 Apr 06, 2021
Tuesday Apr 06, 2021
Don’t be a fool in April! Make sure to get your tax questions answered by Toni Covey and Jeff Webb of Anderson Advisors. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Do wholesalers of land need to pay self-employment tax? If you are wholesaling that is going to be ordinary income, so if it’s reported on your personal tax return, it’s subject to self-employment tax; instead put it in a corporate entity
- If I run my real estate business from home, can I deduct a portion of all home expenses (i.e. property tax, utilities, and insurance)? Yes, but there are a few rules that need to be followed such as for a home office deduction and Schedule C
- Startup S-Corp has no revenue yet. If I file taxes jointly with my spouse, any concerns? No, but make sure to file a tax return to prove profit motive
- What is the best way to pay my children (teenagers) when they work in my business? Payroll? Cash at time of service? Year-ending 1099? To pay your children, consider what they are capable of doing and what they are going to be paid, which can be done via W-2 or 1099
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:
Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis
http://aba.link/infinitybook
https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065
https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.irs.gov/charities-non-profits/charitable-organizations
https://www.irs.gov/forms-pubs/about-form-1099-misc
https://www.law.cornell.edu/uscode/text/26/168
https://www.section179.org/
https://andersonadvisors.com/entity_formation/
https://andersonadvisors.com/using-cost-segregation-residential-real-estate/
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://andersonadvisors.com/living_trusts/
https://home.treasury.gov/policy-issues/cares
https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction
https://www.irs.gov/tax-reform
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
https://www.irs.gov/forms-pubs/about-form-1040
https://www.irs.gov/forms-pubs/about-form-8829
https://www.law.cornell.edu/uscode/text/26/280A
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Mar 30, 2021
Tuesday Mar 30, 2021
While sitting poolside, Pace Morby discovered the insane power of social media. Now, he has a huge following and landed three major clients by posting before-and-after photographs of his construction work on Instagram.
In this episode, Toby Mathis of Anderson Advisors talks to Pace Morby, who has done more than 7,000 renovations and built more than 150 new homes from the ground up.
Pace owns several businesses, including American Home Offers, which does 150 wholesale transactions per year, and Blue Acorn Development, which does 50 fix-and-flip deals per year. He owns about 130 single-family homes purchased through SubTo and Seller Finance; ConstantClose transaction coordinator business; Title Alliance of Phoenix title company; VAhub virtual assistant business; SubTo creative finance education business; BombCRM software business for new investors; and Driving for Dollars BatchDriven software business.
Also, Pace has three successful podcasts, Sunday Service, Wholesale Hotline, and Get Creative; a YouTube channel; and negotiating with A&E Television for a six-year contract to do a renovation TV show.
Highlights/Topics:
- Creative Finance: Content that double, triples, and quadruples conversion rate
- Day in the Life of Pace: Just a guy who wants to help everybody–come along for the ride
- Estate Planning: Who do you trust to inherit and manage your properties?
- Zero Equity, Loan Pain: Reasons seller sells at a discount or on seller finance
- REI: Replace expenses with income
- Ways to Wholesale: Direct to seller, referrals, and reviving dead leads
- Previous Sellers: Where Pace gets private money to invest in more deals
- Pace’s Three Choices: Live on cash flow, reinvest, or pay down lender
- Art of Storytelling: Craft and tell a story from experience, not the shame of not knowing
- Frequency Illusion and Full Picture: To see it, it has to be relevant for anyone doing it
- The Challenge: With no resources, money, or food–get a real estate deal in 30 days
Resources:
https://www.subto.com/
https://shor.by/gT0I
https://www.instagram.com/pacemorby/?hl=en
https://www.facebook.com/pacemorby/
https://www.youtube.com/pacemorby
https://www.opendoor.com/
https://www.zillow.com/
https://www.offerpad.com/
https://homevestorsfranchise.com/
https://www.hud.gov/
https://www.investopedia.com/terms/d/depreciation.asp
https://www.irs.gov/pub/irs-news/fs-08-18.pdf
Using Cost Segregation in Residential Real Estate
https://andersonadvisors.com/using-cost-segregation-residential-real-estate/?highlight=cost%20segregation
https://www.irs.gov/charities-non-profits/charitable-contributions
https://wishatl.com/pages/thegallery
Estate Planning - Living Trusts
https://andersonadvisors.com/living_trusts/
https://www.amazon.com/Private-Vault-Gregory-J-Boots-ebook/dp/B00G71IKNA
Brain Teaser: Can you count the Fs in this sentence? Finished Files
https://sharpbrains.com/blog/2006/09/10/brain-exercise-brain-teaser/
https://www.developgoodhabits.com/crabs-bucket/
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 Mar 23, 2021
Tuesday Mar 23, 2021
Are you lucky to be alive and taking care of your taxes? Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- If a non-profit (NP) organization opened a trading account and got options income less than $50,000, does the NP file an income tax return (besides a 990-N)? If you have gross receipts less than $50,000, you only need to file a 990-N (e-Postcard)
- Are losses from gambling deductible? If you have gambling losses, they are deductible on Schedule A as long as you have gambling winnings on tax return
- I have a rental property that is owned by my self-directed IRA. Does it need to be in an entity or is it safe in the IRA? Individual owner of an IRA is always personally reliable for the acts of the IRA, so put in an LLC or self-directed IRA
- How do you claim the solar credit on your personal residence? Use Form 5695 - Residential Energy Credits; put in how much you paid for solar and multiply times percentage credit (26%)
- Doing a cost segregation on a condo that was purchased out of my inherited trust to pay off other beneficiaries. Can I take bonus depreciation? Yes, and you can write-it off twice if you inherit it
- Can I include my roof replacement for the solar tax credit? You can write-off roof if for dual usage; roof replacement is not part of the solar installation and labor
- How is the in-home office deduction being treated since most of us have been working from home? Still a red flag for realtors? If you are an employee, there is no home-office deduction; the home office is only for sole proprietors and if you’re being taxed on Schedule C and receive a 1099, then you can deduct reasonable expenses
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 Workshop (Free 1-day virtual event on March 27)
http://aba.link/MarchTAP
Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis
http://aba.link/infinitybook
IRS - Coronavirus (COVID) Tax Relief
https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments
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/charities-non-profits/charitable-organizations
https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard
https://www.law.cornell.edu/uscode/text/26/168
https://www.section179.org/
https://andersonadvisors.com/retirement_plan/
https://www.investopedia.com/terms/s/self-directed-ira.asp
https://andersonadvisors.com/entity_formation/
https://andersonadvisors.com/using-cost-segregation-residential-real-estate/
https://andersonadvisors.com/living_trusts/
Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics
https://www.energy.gov/sites/prod/files/2020/01/f70/Guide to Federal Tax Credit for Residential Solar PV.pdf
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction
https://www.investopedia.com/terms/s/section1245.asp
https://www.investopedia.com/terms/u/unrecaptured-1250-gain.asp
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
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-k-1-form-1065
https://home.treasury.gov/policy-issues/cares
72t - Substantially Equal Periodic Payments
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-substantially-equal-periodic-payments
Setting Every Community Up for Retirement Enhancement (SECURE) Act
https://www.investopedia.com/secure-act-4688468
https://turbotax.intuit.com/
Form 5695 - Residential Energy Credits
https://www.irs.gov/forms-pubs/about-form-5695
https://www.law.cornell.edu/uscode/text/26/48
https://www.irs.gov/forms-pubs/about-form-8829
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Mar 16, 2021
Tuesday Mar 16, 2021
When the COVID-19 pandemic hit, the Canada/U.S. border closed, putting great stress on businesses and families on both sides who depend on international traffic.
In this episode, Toby Mathis of Anderson Advisors talks to Lars Jacobson, a businessman and entrepreneur who has owned and operated his own businesses for more than 20 years.
Lars and his family left southern California and moved to the panhandle of Idaho. He expected to semi-retire, buy 100 acres of land, and become a farmer. However, plans changed. In June 2019, Lars and his family acquired the “Little Town of Porthill, Idaho” that includes a convenience store, gas station, restaurant, and package depot on the Canadian border.
Highlights/Topics:
- Picking up Packages: People don't want to ship packages from the United States to Canada because it's so expensive to get them across the border.
- Starting a Business: After living in southern California, Lars shared things by learning, travelling, and teaching entrepreneurialism.
- Forget about Retiring: After a year or so, God told Lars to buy a town. Wait, what? Pray about it and make it a family adventure.
- God is Good: Business was fantastic and awesome, but when the coronavirus hit, the border closed, and God gave Lars a challenge. Whatever happens, persevere.
- How much longer until the border opens? Remain hopeful and keep calling because nobody seems to have a clue.
- What about the Americans? The closest town nearby has a couple of supermarkets, gas stations, and fastfood, but is about a half-hour away and costs much more money.
- Got Money? The Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) was supposed to be given to people and businesses that needed it.
- Was it enough? No, Lars’ business is losing more than $10,000 monthly and still cutting back. All the employees were laid off except a maintenance person. Everybody’s gone.
- Financial and Emotional Impact: Consider every option and do everything possible after losing what you worked so hard for all your life. Get yourself and your assets and liabilities structured, organized, and prepared.
Resources:
https://jakeslandingusa.com/
GoFundMe - Save Jake’s Landing
https://www.gofundme.com/f/save-jake039s-landing?utm_medium=copy_link&utm_source=customer&utm_campaign=p_lico+share-sheet
Economic Injury Disaster Loan (EIDL)
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans
Paycheck Protection Program (PPP)
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
https://www.allsearchinc.com/
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 Mar 09, 2021
Tuesday Mar 09, 2021
Don’t be embarrassed or feel like an idiot when it comes to taxes. You’re not alone. A little knowledge goes a long way. Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- What are the requirements for being a real estate professional, and what are the benefits? Either you or your spouse must have 750 hours and greater than 50 percent of personal services in real estate, and both spouses must materially participate per property unless the aggregation election is selected; and the benefits are that you get to write off losses that you typically wouldn’t be able to write off as a landlord
- I have a fully depreciated rental in a high-tax state. Can I do a 1031 exchange and buy some farmland in a different state and not pay taxes to the high-tax state? Yes, temporarily, unless or until you sell the farmland property
- I have an S-Corp business. I hired my 12-year-old son to work and he gets a W-2 with an annual income of about $1,400. Does he need to file a tax return? If he does not file a tax return, will that increase my chances of getting an audit for my business? If your son makes less than the standard deduction, he does not need to file a tax return, and your business is unlikely to be audited
- Can I write off my monthly car payment if it’s financed and in my corporation’s name? Write off the expenses and interest, but depreciate the car if in the corporation's name; you may have more income from that vehicle than the vehicle is worth–track and reimburse your mileage
- I have a rental property that is owned by a self-directed IRA. Does it need to be in an entity or is it safe in the IRA? Having the property in an LLC within the IRA is preferred, especially if there are other assets in the IRA
- On a “subject to” deal, who pays capital gains and who pays depreciation recapture when the owner grants the deed to the “subject to” buyer? Seller takes care of their own capital gains and depreciation recapture; buyer resets basis and starts depreciation
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:
Infinity Investing Workshop (Free 1-day virtual event on March 13)
https://andersonadvisors.com/
https://andersonadvisors.com/taxtoolbox/
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
https://andersonadvisors.com/entity_formation/
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.law.cornell.edu/uscode/text/26/469
https://www.irs.gov/pub/irs-news/fs-08-18.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.mileiq.com/
https://andersonadvisors.com/retirement_plan/
https://www.investopedia.com/terms/s/self-directed-ira.asp
https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
https://www.irs.gov/charities-non-profits/charitable-organizations
https://www.irs.gov/forms-pubs/about-form-1120
https://andersonadvisors.com/using-cost-segregation-residential-real-estate/
https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065
https://www.fha.com/fha_loan_requirements
https://andersonadvisors.com/living_trusts/
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Tuesday Feb 23, 2021
Tuesday Feb 23, 2021
It’s never a good idea to gift things to somebody. Instead, make them work for it. Take care of yourself, your family, and your taxes. Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- How do I gift my son a fully depreciated rental property without causing a tax consequence? Typically, gifts do not cause tax consequences; however, it is not always wise to do so
- We are considering purchasing a vehicle, which will be used about probably 75% of the time for our real estate business. Should we purchase it in the LLC (an S Corp) or personally? What are the advantages and disadvantages of both? Consider liability, tax consequences, cost factor, and value of vehicle; unless it’s a maintenance or utility vehicle, put it in your personal name and get reimbursed for the mileage because commercial insurance is much more expensive
- Excluding the 1031 Exchange, is there any way to legally avoid paying depreciation recapture tax when you sell a rental property? Don’t have a gain on your sale
- I have several vendors refusing to give me their W-9, and I have to threaten to withhold payments. When should I collect and not collect W-9? Vendors need to complete the W-9, but you are not required to issue them 1099s—although you should anyway
- Can we sell our home on an installment sale to an Intentionally Defective Grantor Trust (IDGT) and then lease it back? And at the same time, have the depreciation and other costs flow to our return because of IDGT taxation rules? IDGT is an irrevocable trust that is not actually irrevocable because of adding ‘Grantor’ wording to make it intentionally defective for tax purposes
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:
Tax and Asset Protection Workshop (Free 1-Day Virtual Event on Feb. 27)
http://aba.link/TAP227
https://andersonadvisors.com/living_trusts/
https://www.mileiq.com/
Real Estate Professional Requirements
https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf
https://www.entrepreneur.com/encyclopedia/doing-business-as-dba
https://andersonadvisors.com/entity_formation/
https://www.irs.gov/pub/irs-news/fs-08-18.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.irs.gov/forms-pubs/about-form-w-9
Intentionally Defective Grantor Trust (IDGT)
https://www.investopedia.com/terms/i/igdt.asp
https://www.irs.gov/taxtopics/tc701
https://www.fha.com/fha_loan_requirements
https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0
https://www.irs.gov/forms-pubs/about-form-1099-misc
https://andersonadvisors.com/retirement_plan/
https://www.investopedia.com/terms/s/self-directed-ira.asp
Unrelated Business Income Tax (UBIT)
https://www.irs.gov/charities-non-profits/unrelated-business-income-tax
https://www.conservationeasement.us/what-is-a-conservation-easement/
Solar Investment Tax Credit (ITC)
https://www.seia.org/initiatives/solar-investment-tax-credit-itc#:~:text=Quick%20facts,large%2Dscale%20utility%20solar%20farms.
Taxpayer Certainty and Disaster Tax Relief Act of 2020
https://www.finance.senate.gov/download/section-by-section_-taxpayer-certainty-and-disaster-tax-relief-act-of-2020
https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.
https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf
https://www.irs.gov/charities-non-profits/charitable-organizations
https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions
Rollovers as Business Start-Ups (ROBS)
https://www.irs.gov/retirement-plans/rollovers-as-business-start-ups-compliance-project
http://tobymathis.com/about-toby-mathis/
https://andersonadvisors.com/
https://andersonadvisors.com/all-events/
Anderson Advisors Tax and Asset Protection Workshop
https://andersonadvisors.com/asset-protection/
Anderson Advisors Tax-Wise Workshop
https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/
Anderson Advisors Infinity Investing Workshop
https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/
https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ
https://www.facebook.com/AndersonBusinessAdvisors/
https://andersonadvisors.com/podcast/
Thursday Feb 18, 2021
Thursday Feb 18, 2021
What’s the difference between 831(b) and 401(k) planners? Not much, just a different tax code. Both allow clients to put away profits today to weather tomorrow’s storms.
In this episode, Toby Mathis of Anderson Advisors talks about captive insurance with Van Carlson, CEO and founder of Strategic Risk Alternatives (SRA).
Van has more than 25 years of experience within the risk management industry. He began his career with Farmers Insurance Group as an agent. Now, he focuses SRA on risk management primarily and facilitates SRA to assess and solve for clients’ risks. Van’s primary goal is to continue the upward growth of SRA and develop new products to bring to market.
Highlights/Topics:
- S. Tax Code and Americans: The tax code is used for tax planning, but should be used for its original purpose to be a risk mitigation tool.
- Umbrella Policy and Casualty Insurance: You find out how good of a policy you have when you need it. An umbrella policy isn’t over the top, but it doesn’t cover everything.
- COVID-19: Read the fine print of policies and seek advice from agents. Pandemic coverages are not considered a coverage under the Business Interruption Endorsement.
- Captive Insurance: Set up your own insurance company—you own it and you're paying premiums you deduct. The insurance company doesn't have to pay tax on premiums.
- Who is it for and what type of risk could it insure? Risk is not a problem. Business owners that are advanced in their thought processes and more forward-thinking recognize and understand asset protection and the risk it takes.
- Actual Physical Loss: Business Interruption Policy pays for your employees and building loans, unless it doesn't have direct physical loss.
- Right to Defend on Liability Policies: Even if there's no coverage but you get sued, general liability policies cover the legal defense. Lawsuits are going to be the next big thing when people, guests, and patients, not employees, contract COVID.
- Rules and Regulations: Two tax codes allow you to defer income out of your business. 401(k) for the retirement of yourself and employees, and 831(b) to build up reserves, take profits today and in the future.
- Four-Part Test: Do transfer risk, risk distribution, insure only things that can happen by accidents (not business risks), and act in a principal’s insurance to elect under 831(b).
- Gross Revenue: Cap it because if your gross revenue goes up, your premium increases. The more gross revenue you have, the more exposure you have for claims.
- Cancel Culture: Detrimental to businesses; have cash on hand because banks aren't going to help you out all of a sudden.
- Declare a Dividend: Take it out as a long-term dividend rate and shut it down, pull out capital gains, or put it to work.
- Investment Agreement: What can be done with the reserves? There are rules, but for the most part, clients just leave it to the bank and go forward with the risk.
- Brand Damage: Dependent on third-party vendors, you can’t go and unlock your door, open it, and open for business. Get there, reach in, and obtain client information.
Resources:
Strategic Risk Alternatives (SRA)
https://strategicriskalternatives.com/
mailto:info@strategicriskalternatives.com
https://www.captive.com/articles/the-basics-of-the-831(b)-election-for-captives
https://www.irs.gov/retirement-plans/401k-plans
Business Interruption Insurance Policy
https://www.investopedia.com/terms/b/business-interruption-insurance.asp
https://www.investopedia.com/terms/e/errors-omissions-insurance.asp
Health Insurance Portability and Accountability Act (HIPAA)
https://www.hhs.gov/hipaa/for-professionals/privacy/laws-regulations/index.html
Paycheck Protection Program (PPP)
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
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