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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
Wednesday May 22, 2019
Wednesday May 22, 2019
Like all things in this world, it helps to know a few of the rules. Toby Mathis and Jeff Webb of Anderson Advisors are here to help. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- What rate am I taxed at for my LLC? It depends; you choose how it will be taxed on SS-4
- Can I buy personal items or pay off personal bills with my business credit card? Yes, but the entity type dictates how it’s taxed
- What investment opportunities can be considered that have no tax liability, minimum risk, and at least a 10% annual return? Doesn’t exist; try investment real estate, IUL insurance
- Can I deduct real estate education expenses, even though I don’t have any profits? Yes, it’s not necessarily about profits, but how long you’ve been in the business
- Can my LLC create its own self-directed IRA? No, vice versa; self-directed IRA would create LLC, or it’s a prohibited transaction
- What constitutes being a real estate professional? 750 hours of professional time in real estate and material participation in real estate activities
- Do you have to be a real estate professional to do a cost segregation at tax time? No, but if you have losses in excess of your real estate income, then be a real estate professional to offset your other income and pay less in taxes
- If I were to have an online health coaching business where people can complete purchase transactions through an automated Website, how will the income produced be taxed? It’s not always ordinary income; depends on what you’re selling
- How old does a child have to be before putting the business in their name? 18 years old
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
Index Universal Life (IUL) Insurance
Uniform Gift to Minors Act (UGMA)
Form 5695 for Solar Tax Credit
Form 4562 - Depreciation and Amortization
Saturday May 18, 2019
Saturday May 18, 2019
Cryptocurrency? Sounds almost top secret or like something you've heard about on the dark web. Actually, cryptocurrency is a fascinating form of digital currency that seems to be sweeping the nation. Today, Clint Coons of Anderson Business Advisors talks to Steve Streetman, an avid cryptocurrency investor and real estate speaker, teacher, coach, and agent. Also, Steve is the president of Streetsmart Investments LLC, where he leads acquisition, property management, and business development. Steve has worked in cryptography and high-end computer modeling for more than 30 years. He has successfully acquired multiple commercial properties and is currently active in self-storage, student housing, and assisted living projects. Despite its negative stigma, Steve believes that cryptocurrency is here to stay - at least for a few more years. He shares how real estate and cryptocurrency can work together to make a positive impact.
Highlights/Topics:
- What is cryptocurrency? Online digital token; every transaction goes on a Blockchain (series of blocks of data chained together to view future and past transactions)
- Actual vs. Cryptocurrency: Buying power of dollar gets less every year, but cryptocurrency isn’t intentionally devalued
- Types of cryptocurrency, and where they get their value:
- Currency Token:
- Bitcoin: Gets value from supply and demand
- Trade Options (Troptions): Coins designed to be barter currency
- Security Token: Representation of value and ownership via:
- Initial Coin Offering (ICO), or
- Initial Public Offering (IPO)
- Currency Token:
- Ways to invest in cryptocurrency:
- Mining: Requires advanced computers to perform “hash” function faster; winner-takes-all approach to get your block done first to get cryptocurrency
- Buy land/property; cryptocurrency appreciation is taxable
- Get loan secured by your cryptocurrency to buy real estate
- Use cryptocurrency as collateral to avoid tax event; escrow companies hold it
- Companies may accept cryptocurrencies to make rental properties appear cool, updated, and modern to appeal to millennials
- Collect Rent: Give your digital wallet address to tenant; they send you the cryptocurrency
- Exchange Currency: Just like you trade dollars for euros, trade crypto for crypto or Fiat
- Real estate is low-hanging fruit for cryptocurrency to make substantial improvements
Contact Steve for more information, as well as to enter to win a free copy of his soon-to-be available book, Cryptocurrency and Real Estate.
Resources
RealInvestors Real Estate Services
Laws that Govern the Securities Industry
Wednesday May 15, 2019
Wednesday May 15, 2019
Mike Finocchiaro started his first company when he was 18 years old. But wishes he wouldn’t have waited so long. Today, Toby Mathis of Anderson Business Advisors talks to Mike about his journey into entrepreneurship. How much earlier could he have started? In the womb, rocking out with his mom? There’s no time like the present. If you have an idea that you believe in, start a company and grow it. You can make anything happen, if you’re willing to take the lumps that come with it. The only limitation is if you could take what it is to keep moving forward, you’re going to get to where you want to be.
Highlights/Topics:
- Come Together Entertainment: A “big” company doing Hollywood parties, started by an 18-year-old working out of a row home and saving cash
- Music is the heartbeat of Mike’s production company; leveraged his experience setting up shows, concerts, and festivals efficiently and quickly
- Rock and roll ride into corporate world to tap into latest and greatest
- Legalese and Liability: Mike Finn Productions rebranded Big Fin Productions; create entity that’s larger than yourself in every aspect
- Mike’s Mistakes: The name thing, don’t wait to get things started, think before reacting
- Santa’s Roadies Charity: Real meaning of Christmas is not about gifts, but giving
- Companies and their charities can change lives; non-profit process is pretty simple
- Going forward, follow your gut; know right from wrong, and make anything happen
Resources
From Traumatic Brain Injury To Nonprofit VICTORY!
Saturday May 11, 2019
Saturday May 11, 2019
Do you know about RAL? What it stands for? You probably should because you or a loved one may need it someday. Today, Clint Coons of Anderson Business Advisors welcomes Gene Guarino of Residential Assisted Living (RAL) Academy. It’s never too late to start an RAL business, which provides a tremendous service and peace of mind for residents and their families.
Highlights/Topics:
- When and how Gene got into real estate business; no money down, no credit, no clue
- What’s not RAL? Old-folks home, hospital, skilled nursing facility, nursing home, or independent living
- What is RAL? Single-family home converted to house seniors who receive 24x7 care; about 98% of them are moving into the last place they will ever live
- Conversion can include grab bars, smoke detectors, wider doors, and other changes
- Real estate investor can lease home to an operator as a long-term, low-impact tenant
- Location, Location, Location: Buy new vs. repurposing existing property into RAL
- Do good, and do well; protect assets and generate income
- Finding a home to buy for RAL is easy; find the tenant/operator first
- How much can you earn with RAL? Avg. $4,000 per month/person to live in home
- Potential Risks and Liabilities: Do you operate properly? Do it right, don’t get sued
- Professional Liability Insurance Policy for RAL costs less than $1 per day/resident
- Dispelling RAL Myths: Doesn’t need to be multifamily or commercial setting; residential and commercial financing is possible
- 3 things needed: Senior-safe house, standard operating procedures (SOPs), and qualified manager
- 3-legged Stool: Residents, caregivers/staff, and business
Resources
Residential Assisted Living Academy
Wednesday May 08, 2019
Wednesday May 08, 2019
Toby Mathis and Jeff Webb of Anderson Advisors strive to provide educational and accurate answers to your tax questions to prevent or minimize fees from piling up. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- If you sell a flip, can you put the gain into your residential mortgage and avoid the taxes? No, you take the gain to make principal payments that have no effect on taxation
- Is interest income from the performing notes considered ordinary income? Yes
- What is an opportunity zone? TCJA gives tax incentives and benefits to invest in economically disadvantaged areas in the country
- Can you deduct meals eaten at home while working from home? Technically, yes, if there’s a business purpose
- Will I be penalized for not making estimated tax payments quarterly? It depends, if you’re required to make estimated payments; penalties will be charged
- Personal property, if I transfer to an LLC, are there tax consequences? No, unless there’s a lot of debt against it
- Are premiums for long-term disability insurance deductible as a business expense in an LLC? Yes, they can be reimbursed, but they are limited to amount and C Corp
- What are the pros and cons of having a holding LLC? Not a huge tax impact on your bottom line, but can make it tough for others to take holding LLC from you
- What’s the best way to pay your child’s tuition, if you’re running a profitable business? Three code sections deal with tuition: 117A, 127, and 132D, but there are other options
- Are self-directed IRA fees tax-deductible? No, may prefer to have 401(k) over IRA
- Can I purchase and sell real estate without selling or dissolving the LLC? Yes
- Does a living trust provide liability protection? No, the purpose is to ease distribution of your estate upon your death; there’s instructions on who to give your belongings to
- How can I protect my house, if somebody slips and trips on my personal residence? There are ways to protect your house; some states have unlimited homestead exclusion
- If I fund my LLC checking account with funds from my self-directed IRA, do I earn income on the business or have to put profits back? There’s no benefit; goes back into IRA
- How can I write-off a car to an LLC or S Corp? Two choices: Actual expense or miles method, or company will own it
- Can I write-off income we pay our nanny from a business account? No, it’s a personal expense; will probably have to pay household employee taxes for nanny
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
Publication 505 (2019), Tax Withholding and Estimated Tax
Code Section 117A for Scholarships and Grants
Code Section 127 for Education Assistance Program
Code Section 132D for Working Condition Fringe Benefits
Rollover Business Startup (ROBS)
Wednesday May 01, 2019
Wednesday May 01, 2019
Most real estate investors want to use other people’s money (OPM). Why use their own, when they can use OPM to put into deals? Why risk your own money, when you can push it onto someone else? Find real estate investors willing to lend money, especially to flippers. Today, Clint Coons of Anderson Business Advisors talks about lending with Paul Jackson and Rick Morgan of Residential Capital Partners.
Highlights/Topics:
- Expertise, knowledge, and relationships with investors and banks allowed Rick and Paul to offer a lending service to make profits vs. doing the buying and flipping themselves
- Accounting is the language of business; dollars are going out and coming in
- Residential Capital Partners: Originated in 2009, during the downturn when banks sold bad assets and took in Troubled Asset Relief Program (TARP) money
- We Buy Ugly Houses: HomeVestors attract new franchisees and grow its business; Rick and Paul use franchise to underwrite debt acquisition of single-family distressed paper
- Millenials want to rent, instead of buy a place
- Problems for Property Flippers: Hard money lender puts deal together; shock sets in when money for rehab isn’t available
- Residential Capital Partners offer consistent delivery, clear communication, description of how money is priced and structured, and do what’s promised
- Keeping the cash in borrower’s pocket is key to staying healthy in fix-and-flip business
- Residential Capital Partners primarily do cosmetic types of rehab loans
- Residential Capital Partners’ Loan Process: Citizens profit, protect, and act as collateral
- Why do flippers fail? First rule of business: Whatever happens, live to fight another day
- Take this to Heart: Paul and Rick want people to be profitable and successful
Resources
Wednesday Apr 24, 2019
Wednesday Apr 24, 2019
Tax Day on April 15 has come and gone. Were you hit hard this year? Don’t give up or lose hope. According to Toby Mathis and Jeff Webb of Anderson Advisors, there’s still time, and things, you can do to recover. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- I am an S Corp and ordained minister. Can I take housing allowance? Minister's housing/parsonage is excludable from gross income, but not self-employment taxes
- Do you have to pay back home office depreciation when you sell the house? Yes, unless accountable plan is in place for reimbursement
- To report installment income on Form 6252, do you also need to submit Form 4797? Yes, along with Schedule D
- Are there any advantages to moving software business into designated opportunity zone? Not really, if you have an existing business
- Did Tax Cutting Jobs Act (TCJA) help big businesses more than small businesses? Yes, it cut corporate taxes almost in half, but only gave small businesses a 20% deduction
- What’s the difference between big and small business? Big business does at least $100 million in revenue and has multiple owners
- Should I use my tax refund toward paying estimated quarterly taxes for 2019? If I overpay the estimate, will I have to pay taxes on future refunds? Never hurts to overpay estimates; include first-quarter payment when making extension payment
- What’s the Rollover for Business Startups (ROBS) structure for investment property construction? Partnering with your own retirement plan has to be a C Corp; don’t use with investment property
- Can you defer taxes on capital gains on the sale of property, if you put it toward an existing residential mortgage? No; only way to defer capital gains is via 1031 exchange
- When I record an expense, maybe an office desk for S Corp, do I need to record the sales tax? If you buy a desk for your business, you're paying sales tax on it
- Can you depreciate a property used for short-term rentals, like AirBNB? No, if average rental is seven days or less; yes, if more than seven days
- Can LLC owned by spouses be a disregarded entity? Yes, if in a community property state; both spouses can be owners, and it’s treated as a disregarded entity
- Can we take unreimbursed accountable plan expenses, office space against W2 income? No, TCJA removed unreimbursed business expenses on Schedule A
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
Ministers' Compensation & Housing Allowance
Cost Segregation: Increased Tax Deductions for Commercial Property
Net Investment Income Tax (NIIT)
Partner's Instructions for Schedule K-1 (Form 1065)
Rollover Business Startup (ROBS)
Wednesday Apr 17, 2019
Wednesday Apr 17, 2019
Toby Mathis of Anderson Business Advisors welcomes Raghee Horner, who started investing at an early age thanks to her mother. When Raghee’s father passed away, her mother realized that the stock market was a way to be financially stable. So, Raghee’s mother became a market timer and active investor. Raghee followed in her footsteps. She is now a trader, investor, author, and mentor.
Highlights/Topics:
- How to be a Good Investor: Read, look, and buy more for a better deal
- Why Raghee loves markets and Jack Bogle; “Being an investor and keeping an eye in the market keeps you young.”
- Surrounded by Screens: Multiple monitors increase productivity for traders/investors
- Timeframe (short or elongated) dictates type of market participant
- Trump’s Tweets: Do you play them? No way to time tweets, hide under the desk a minute
- Move toward momentum based on scheduled events, earnings, and economic data
- Trader vs. Investor: What’s the difference? Ownership or buying and selling
- What would Raghee tell her younger self about investing and trading? Keep it simple
- Importance of understanding macroeconomic rate of change of money supply, monetary policy, growth, and inflation
- Fear of Forex Market: Forex is trading money for money, not about understanding stocks to invest in them
- Awful Data: Breaking down a rated change when looking at wage inflation colliding with lower revenue is a perfect storm for disaster
- How do you hedge? Pay the piper; convince companies to reinvest, not in buybacks
- Financial market is like a playground; specializing in a market or symbol forces trades and investments
- Patience, Cool Down to Contracting: Risk of interest rates being pulled back or hiked up
- Raghee recommends protection via long gold, silver, real estate, and REITs
Resources
Raghee Horner on SimpleTrading
Wednesday Apr 10, 2019
Wednesday Apr 10, 2019
Is your 2018 personal tax return ready to be submitted to the Internal Revenue Service (IRS) by April 15? Or, are you still hungry for Toby Mathis and Jeff Webb of Anderson Advisors to answer your tax questions? They bring tax knowledge to the masses; although sometimes they would rather bring tacos. It’s like Taco Tuesday, but with tax. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.
Highlights/Topics:
- When’s your personal tax return due? April 15, but you can file an extension to submit it on October 15
- What’s the penalty for not filing a 5500 first solo 401(k)? About $750
- I have a C Corp with no business; do I still need to file? Yes; if filing as a corporation that exists, you are required to file a return, but partnership rules are a bit different
- What’s the $250,000 of income are total asset value? Total value of all assets; not for an IRA, but a 401(k)
- What deductions can I take as a W2 contractor? Most employee reimburse expenses were removed; take standard deduction, or itemize without reimburse expenses
- Can I reimburse health insurance from the S Corp I own? Yes, but you account that as wages, so you're paying tax on it
- How do you report and issue a 1099 MISC? Report payments of more than $600 made to others that are not corporations on the 1099 MISC form with the vendor’s name on it
- What’s required to move an existing business to an opportunity zone? You can’t take something you already own and make it into an opportunity zone property, unless somebody's investing in it that's not related to you
- What's the difference between an opportunity zone and 1031 exchange? 1031 exchange is for real estate only, and you have to exchange property for more real estate
- Where do I find areas that are opportunity zones? Is there a Website? Yes, just search for Opportunity Zone Heat Map on Google
- Can we write off repair expenses, like roof shingles for personal hall? No because It is personal property; you can’t write things off for repairing your house
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
Extension of Time To File Your Tax Return
Tax Cuts and Jobs Act, Provision 11011 Section 199A - Qualified Business Income Deduction FAQs
Wednesday Apr 03, 2019
Wednesday Apr 03, 2019
Toby Mathis of Anderson Business Advisors welcomes Meg Busing, founder of the Midwest YouCan Foundation. During her freshman year of high school, she sustained a traumatic brain injury (TBI) that put her in a coma and on life support. Eventually, Meg recovered physically, but had some mental challenges. About 10 years later, while at nursing school, she started having seizures. She shares her long journey of dealing with epilepsy and not being able to find a cure with medications. She had brain surgery to remove part of her brain and scar tissue from the TBI. Meg’s personal experience inspired her to give back by creating Camp YouCan for kids and teens to help them discover what they can do, despite their epilepsy.
Highlights/Topics:
- Traumatic events that occur in life either shape you, or you use it to shape yourself
- Meg’s TBI was the main reason why she wanted to be a nurse; she saw how much of a positive impact nurses can have on patients
- Different types of seizures occur with epilepsy; they can occur at any time, and you have no control over them - emotional impact of epilepsy is as bad as the physical part
- Meg’s camp brings kids with epilepsy together to do regular camp activities, including the zip line, rock wall, shooting bow and arrows, catching fish, and being on a boat
- Camp YouCan benefits parents; allows them to leave their kids in a safe environment
- Initially, Meg asked a local organization to help publicize the camp, which allowed her to operate it under another non-profit and use the other foundation’s tax ID number
- Meg parted ways with the other non-profit and achieved a 501(c)(3) status for Camp YouCan to control decisions on what to do with money raised and what activities to offer
- Start with an idea, believe in yourself, and find the right people to help you achieve your goal; don’t bombard yourself with limiting beliefs and learn from your failures
- Tax reasons to do a non-profit; you can give or raise money and time
Resources