Anderson Business Advisors Podcast

Anderson Advisors Podcast

Tuesday Mar 19, 2024

How To Write Off Travel Expenses

Tuesday Mar 19, 2024

Welcome to episode #214 of the Anderson Business Advisors podcast. Today, experts Toby Mathis, Esq., and Eliot Thomas, Esq., explain tax strategies for common questions concerning how to write off business travel that includes personal days (hint: business days have to be more than 50% of your trip), how and when you can qualify as a real estate professional, investing in real estate from your investment accounts, and some of the helpful tax benefits of creating and using a Health Savings Account.
Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:

"Can I deduct travel expenses to rehab rent rentals that are in other states than my primary residence?" - Yes, but you have to spend more days doing work (more than 50%) than personal days.
"If we convert our traditional IRA to a Roth IRA with the same provider, do we have to file any forms with the tax return or otherwise? If so, what forms?" - You’ll receive a 1099R - the converted amount is taxable.
"Do we have to make the REPS election every year? And how do we make the election?" – That's real estate professional status. Does one spouse qualify? Is he/she spending 750+ hours on the business?
"Last year we neglected to register as real estate professionals. We ended up owing a substantial amount in taxes. Can we register as real estate professionals this year and carry over the expenses that were disallowed for 2022 and 2023?" –in '23, if we make the status and we, the real estate professional status and we aggregated, we got everything done properly in return, it's not gonna help us. for those prior losses.
"For Augusta rule payments, what documentation is required beyond meeting minutes? Do I just write myself a check? Should Augusta rule go in the memo? Do I need to send myself an invoice? I am the owner and employee of an S-corporation?" – You always want to send an invoice. I would recommend it. You want to have that paper trail.
"Can investment income be used to fund a health savings account? The deductibles are so high. We are always paying out of pocket." - So you don't need any type of specific income to fund an HSA health savings account. Limits for 2023 are 7750 for a family, 3850 for an individual.
"I plan to buy a rental property using my 401(k). I'm 65 and set up my solo 401(k) for rollover. My question is, if I convert to a Roth 401(k) and purchase the rental, does the rental income and future equity gain become tax-free?" – Yes, it does, that's a quick answer.
"Should I have my rental income funneled into an LLC, business, or corporation to save money in taxes?" - how is it taxed? And it can be what we call disregarded, which means it's taxed. Could be a partnership, could be an S corp, could be a C corporation, and all those have different answers.
"What are the tax and legal benefits of making an owner loan to my LLC rather than capital contributions?" - just like the last question, how is that LLC taxed? We would do something different, perhaps if it was a disregarded entity or partnership versus an S -corp or a C -corp. They can all have different outcomes depending on how we do it.
"Can you write off 100% of your trip to Las Vegas all expenses? I'm a realtor licensed in both Nevada and California. Any other tax deductions?" - You're going to have to qualify it as business travel. That means more days of business than anything else…

Resources:

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=write-off-travel-expenses

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

Email John Anderson for a consult

https://www.youtube.com/@ClintCoons

Thursday Mar 14, 2024

How to Form a Nevada Asset Protection Trust

Thursday Mar 14, 2024

In this episode, Toby Mathis, Esq. chats with fellow attorney John Anderson, Esq. of Anderson Business Advisors about the pros and cons of establishing trusts in Nevada. The discussion digs into Nevada trusts' specific functions and benefits, including the "seasoning period" and the role of trustees. Toby and John explore how a third-party trustee can offer protection, methods for withdrawing funds, and the power of appointment in Nevada trusts. Additionally, they touch upon safeguarding your home with a trust, using a trust for essential expenses, and the potential risks of insolvency and bankruptcy. The conversation highlights the likelihood of lawsuits settling against a Nevada trust while acknowledging the absence of tax advantages.

Highlights/Topics:

Trusts - to revocable or irrevocable?
Advantages to setting up trusts in Nevada and South Dakota
The “seasoning” period
Trustees and their functions in these states
Protection through a third-party trustee
Filing taxes and withdrawing money - Nevada trusts
Power of appointment
Protecting your home with a Nevada trust
Using an asset protection trust to pay for essentials
Risks of voluntary insolvency and bankruptcy
Most lawsuits will choose to settle against a Nevada trust
Tax advantages - there aren’t many
Pro-rata vs. non-pro-rata
A high-profile divorce case with a Nevada trust, and the outcome
Not subject to the Corporate Transparency Act
Setting up a Nevada trust, statute of limitations

Resources:

estateplanning@andersonadvisors.com

Anderson Advisors on YouTube

https://andersonadvisors.com/

https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-form-a-nevada-asset-protection-trust

Toby Mathis on YouTube

https://www.youtube.com/c/tobymathisesq

https://andersonadvisors.com/

Tuesday Mar 12, 2024

How To Wholesale Real Estate (Best Structure & Asset Protection!)

Tuesday Mar 12, 2024

Clint Coons, Esq. and Greg Helbeck from Velocity Home Buyers tear down the facade that wholesaling is a no-risk investment, exposing the legal snares and fiscal sinkholes that might just catch you off-guard. Hear about Greg's near-miss disaster when a contracted property burned to the ground, a story that underscores the need for bulletproof business strategies to safeguard your ventures against the unpredictable foibles of real estate.
Lastly, we traverse the digital landscape of virtual real estate, covering the essentials for managing sales and renovations without once stepping foot on the property. There's a treasure trove of insights on direct mail marketing too, proving the worth of printed marketing in a world enamored with digital solutions. Whether you're looking to hone your marketing tactics or fine-tune your remote investment strategies, this episode is a vault of expertise for any wholesaler eager to secure a fortune in the ever-evolving real estate market.

Highlights/Topics:

What is wholesaling and why is it so appealing?
Greg’s hair-raising wholesale tale of woe
Structuring deals through an LLC
Other risks in real estate contracts
Wholesaling across state lines
Motivation behind seller's decision
Direct mail marketing strategies for success
Success through uncomfortable actions

Resources:

Greg on IG

https://www.instagram.com/grego_37/

Velocity House Buyers

https://www.velocityhousebuyers.com/

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-wholesale-real-estate

Anderson Advisors Podcast

https://andersonadvisors.com/

https://andersonadvisors.com/podcast/

Podcast - Rich Doc Poor Doc

https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w

Thursday Mar 07, 2024

Investing In CASHFLOWING RENTALS (How To Get Started)

Thursday Mar 07, 2024

Clint Coons, Esq. speaks with Kenji and Letizia Alto, who are both MDs and founders of Semi-Retired MD. They share their journey from being high-income physicians to achieving financial freedom through real estate investing. The episode delves into the mindset shifts required to excel in the property market, overcoming common obstacles, and utilizing strategic tax benefits. The couple also introduces their new fable-like book, contrasting the financial paths of two couples. You’ll hear about building a strong investment team, identifying hidden equity, and leveraging techniques like cash-out refinancing and 1031 exchanges to maximize returns and accelerate the journey toward financial independence.

Highlights/Topics:

Kenji and Leti's journey from physicians to real estate investors
Mindset shifts essential for real estate success and tax reduction
Introduction to Kenji and Leti's book
Overcoming fears and hurdles in out-of-state multifamily investments
Building a strong team for informed decision-making in real estate
Hidden equity and trusting instincts for better returns
Real estate for significant tax benefits and wealth growth
Profiting from real estate through various streams like cash flow
“Lazy equity” via cash-out refinancing and 1031 exchanges
Fast FIRE concept for accelerated financial independence
Resources for high-income earners

Resources:

Book: Life on Your Terms

https://www.amazon.com/Life-Your-Terms-Investments-Themselves/dp/154453096X

https://podcasts.apple.com/us/podcast/rich-doc-poor-doc/id1506849313

Semi Retired MD FB

https://www.facebook.com/semiretiredmd/

Semi Retired YT

https://www.youtube.com/channel/UCibjmeDUNn568Egl5TppnPg

Semi Retired IG

https://www.instagram.com/semiretiredmd/?hl=en

Semi Retired Website

https://semiretiredmd.com/

Semi-Retired MD LinkedIn

https://www.linkedin.com/company/semi-retired-md/

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=investing-in-cashflowing-rentals

Anderson Advisors Podcast

https://andersonadvisors.com/

https://andersonadvisors.com/podcast/

Free Emergency Estate Planning Kit

https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w

Tuesday Mar 05, 2024

How To Report Income From A Short-Term Rental Property

Tuesday Mar 05, 2024

Today, experts Toby Mathis, Esq., and Elliot Thomas, Esq., explain valuable tax strategies for real estate investors, traders, and various income earners. You’ll hear about the optimal tax classifications for short-term rentals, using retirement funds for real estate investment, and the transition from W-2 to 1099 income for tax benefits. Additionally, Eliot and Toby discuss maximizing deductions through trading partnerships, the benefits of Health Savings Accounts, vehicle write-offs, and home office deductions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

Is short -term Airbnb and VRBO (short term rentals) under Schedule C or Schedule E? - if it’s just bare oversight management, etc. That might put it on Schedule E. Schedule C is if you have more substantive activity you're putting into it.
I was told I could use my company assets of 401k to loan money to buy real estate investment. Is that true? If so, how? - its true, one is allowed to take a loan out by law, if your plan allows for it. If you don’t pay it back it becomes taxable income.
How how can I position my child's college tuition as a business expense? - let's say your child's handling the bookkeeping for your corporation, and they're taking accounting classes, then you can deduct the classes related to what that child's already doing in the corporation.
What percentage of gains do I need to pay tax on if I trade for it, if I trade forex and if I put money into a holding LLC? Can I minimize it? - often it's gonna be section 1256, and You get a treat 60% as a long-term capital gain, and the other 40% is gonna be short-term capital gains, which means you're at your ordinary tax bracket rates.
How do I deduct expenses if I have a W2 and a 1099? - generally speaking, on a W-2, there's nothing you can deduct business-wise against. If you had expenses that you incurred in order to get your W-2 income, they took that section away with the Tax Cut and Jobs Act back in 17.
I just started my small business of being a mortgage broker. I own a single family rental about an hour from my house. Can I take a tax deduction for mileage expenses if I use my vehicle for both businesses? What about taking deduction on one car for mortgage and take deductions on the other car for the rental property? - We're going to recommend your vehicles be titled in your personal name. Usually we're going to deduct that mileage.
If I purchased a property to rent it and I have it as an Airbnb and I did a lot of work in 2023, can I claim all the expenses for 2023 tax year, even if the house was not rented at all in 2023 because of work is estimated to be complete in quarter one of 2024. - You can in 2024, but we can't go back to ‘23, when the expenses were incurred, because it wasn't placed in service yet.
Can I make charitable contributions from my business LLC income and take it as a business tax deduction? Due to the standard deduction, I can't deduct them from my personal return. - If it's a C corporation, then the C corporation can deduct up to 10% of its net income. Used to be 25% during the CARES Act but they've moved it back to the traditional 10% of your net income
Started regular 15-year depreciation for capital improvement of rental property in 2021, didn't know any better. I switched to bonus depreciation and claimed the remaining amount in 2023. Are any home improvement projects tax deductible? - At its base level, no. But if you happen to have a home office, and you have a C corporation or an S corporation, then any your home improvement projects, yes, they will be deductible in the sense that if it's directly related to the office

Resources:

https://aba.link/nzj

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-report-income-from-a-short-term-rental-property

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

https://www.youtube.com/@ClintCoons

Thursday Feb 22, 2024

Profit First and Beyond: Mike Michalowicz Unveils 'All In' Strategies and Success Stories

Thursday Feb 22, 2024

Have you ever wondered how flipping the script on profit can revolutionize your business? Mike Michalowicz joins Toby Mathis, Esq., to dissect his innovative 'Profit First' formula, a game-changer for entrepreneurs swimming against the tide of traditional financial management. Mike, the sage behind several seminal business books, engages in a no-holds-barred discussion about the essentials of a prospering business—prioritizing profit, pinpointing pressing needs, and strategies for organic growth. You’ll also hear the details of Toby’s own multi-million-dollar tumble and the invaluable lessons that journey taught me, all of which dovetail with Mike's profound insights.

Highlights/Topics:

Mike intro and background
Books by the guest and their basic message
Past failures, “face plants,” losing millions
Competitive advantages in today’s market
Camps in the sports industry - employers should take note
Home Depot’s employment recruiting ‘camps’
Examples of offering education for recruitment
What is ‘collective psychological ownership’?
Using these techniques as an employee
Company culture- diversity builds community

Resources:

All In by Mike

https://allinbymike.com/

Mike Michalowicz Bio

https://mikemichalowicz.com/bio/

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=profit-first-and-beyond

Toby Mathis on YouTube

https://www.youtube.com/c/tobymathisesq

Request a Free Cost Segregation Study

https://andersonadvisors.com/

Wednesday Feb 21, 2024

Are Educational Courses Tax Deductible?

Wednesday Feb 21, 2024

This episode of Tax Tuesday, Toby Mathis, Esq., and Eliot Thomas, Esq., cover topics including paying your children from your business, when you can write off meals as “business” - (hint: it all comes down to ‘intent’), and how often you should meet with your CPA. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

"Does my S-corporation where I am the sole owner and sole employee have to issue a 1099 to me as an individual?" - In general, you're S-corporation, you're an employee, so you would get a W-2. It's what we call reasonable income.
"If my husband and I, both shareholders of our C-corp, discuss business over dinner, are we able to be reimbursed for our meals? Is there a list of reimbursable expenses for employees/owners of C-corps that is easier to read than the tax code?" - If the intent was to talk about business, then generally speaking, you can deduct it
"Can I sell my solo 401(k) held property, do a 1031 into another investment, and then buy the property back with an LLC?" - first of all, we wouldn't have a 1031 going on with a solo 401(k). We don't have deductions, we just have cash in cash out with our retirement plans.
"How are taxes handled differently with capital assets versus repairs, maintenance, and labor of rental properties?" - Every time you lay out cash for one of these repairs or labor, that's going to be an immediate deduction for the full amount.
"How do I get tax benefits from paying my children for doing work in the business?" - basically you can just pay them out whatever entity you have.
"Are the costs of education specifically related to starting a business deductible, specifically paid webinars or courses taken online. I've read that they are, but apparently many say they are not. Is there some special way to categorize them so that they are deductible?" – If its in a C-corporation or an LLC taxed as a C-corp, we're allowed to deduct the training as training our employees, which you would be an employee of.
"I recently purchased a small camper trailer to rent out, my camper rental side hustle per se. "Does this type of rental count as an STR, short term rental, as far as taxes are concerned? Some suggest filing Schedule C while others say Schedule E might be more appropriate. We are not going to use this camper personally. It is for rentals." - If you rent it for 14 days or less, you don't have to report it. It's covered under 280A subsection G2. If you rent it for more than 14 days, it is an investment property.
"If I put my rental properties into an LLC, do I have to file both personal taxes and business taxes?" - how is that LLC taxed? It can be a sole proprietorship. It can be a partnership if we had another member, two or more members. It could be an S-corp, could be a C-corp. All those make a difference.
"How often should I be meeting with my CPA a year?" - I'm going to really recommend having quarterly meetings with your CPA just to make sure everything's on track.
"Can I file my taxes for my LLC as a corporation to get a lower tax percentage? I run short term rentals. I host short term rentals for other owners. I also run short term rentals in the properties I own. I have an S-corp with my husband and I work from home. My accountant said, I cannot deduct my home office expens - we never want to put appreciable real estate into a corporation, S or C, if we're holding onto it for a long time.
"Can someone file their taxes through your company?" - Yes, you can. You have to be a tax client

Resources:

https://andersonadvisors.com/CSA/

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=are-educational-courses-tax-deductible

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

Request a Free Cost Segregation Study

https://www.youtube.com/@ClintCoons

Tuesday Feb 06, 2024

Are Gifts To Clients And Employees Tax Deductible?

Tuesday Feb 06, 2024

This episode of Tax Tuesday with Toby and Eliot is brimming with strategies to supercharge your financial savvy. From unlocking the mysteries of deductions and depreciation to turning real estate activities into a tax-saving powerhouse, we dissect the fine print of the tax code and transform it into actionable advice. The episode covers various topics including handling missed 1099 deadlines, gifting to clients and its tax implications, maximizing deductions, the benefits of cost segregation studies, combining short and long-term rentals for tax advantages, and the intricacies of aircraft depreciation for a flight instructing business. Remember, knowledge is power, especially when it comes to dealing with Uncle Sam. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

Do I have to get a 1099 to every sub who worked on a single family home we are rehabbing? Do I have to send a 1099 to them? And if we do have to get 1099s to parties, I'm assuming we have to get a W-9 from them first? - the duty to send a 1099 is when you pay $600 or more to a contractor.
Hi, I am new to setting up a business for real estate investing. My taxes will be startup and training fees. At what percent can I expect there to be write-offs to the business? – If it's a business expense, you'll be able to deduct 100% of that expense.
I hadn't claimed depreciation in earlier years, thinking that I wouldn't have to have my basis reduced in the future sale. Is there a way to claim those earlier years that it hadn't been taken, or did my 27 years just begin when I started taking it? - form 3115 can catch all that depreciation back up.
Is it too late to do a tax seg on a previously purchased rental property for tax year 2023? And what would be the advantages of doing it for 2023 versus 2024? - It can be done all the way up to the time your return is due the next year with extension.
How can I use real estate profits to pay for kids’ college without paying taxes? - If it's in an entity, an LLC, just pay them directly from that business.
Are gifts to clients, vendors, employees, and members tax deductible,” “If yes, what is the threshold that we can spend on gifts? - it's such a horrible rule. People really don't believe me when I say it's a $25 limit, and yet that's what it is.
My tax preparer died a few years ago." "I have not been able to find someone to help me with my taxes. Can I file 2023 before I file 2021 and 2022? Or do I have to file their tax returns in order? - There's no rule out there that you have to do this return or that return.
Can you aggregate short-term rentals and long-term rentals together in your portfolio to meet material participation requirements for REPS? - as they are, no, they're two different things. A short-term rental is a different type of business. It's actually not a rental activity, it's just a trade or business.
Our LLC installed a $84,000 solar system on a rental property in 2023. Can we take the 30% energy tax credit and deduct the entire 59,976 basis? 84,000 minus 50% of the 30% in 2023 using bonus depreciation. - Quick answer, yes. I did check, $25,200 is correct at 30%
Started a small flight instructing business in 2023 and purchased a plane in 1223 Finance. What depreciation options are there, and what would be the best approach if the income stream will not begin until 6/24? - It'd be a 2023 asset, and you can do the bonus depreciation we've talked about.

Resources:

https://andersonadvisors.com/CSA/

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=are-gifts-to-clients-and-employees-tax-deductible

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq

https://www.youtube.com/@ClintCoons

Tuesday Jan 23, 2024

How to Structure a Residential Assisted Living Business

Tuesday Jan 23, 2024

Welcome back to another engaging session of Tax Tuesday from Anderson Business Advisors, where your pressing tax queries meet expert insights! In this episode, host Toby Mathis, Esq., welcomes regular guest Eliot Thomas, Esq., Manager of Tax Advisors at Anderson Business Advisors. This week, we explore the benefits of strategic corporate partnerships in investments, the allure of residential assisted living businesses, and the unique tax considerations for collectibles like wine. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

If I purchase a vehicle in 2023, primarily for my business, is there a percentage I have to use for business versus per personal to deduct the amount I paid for I paid cash. and how will that affect other depreciation and such for my business? I guess I'm asking what is the best way to deduct this? -the better solution for our clients is often using just a standard mileage reimbursement and that or deduction in the case of a sole proprietorship.
With bonus depreciation being reduced to 40% next year and 20% the year after that, then ending in 2027, what are the alternatives for investors who have been using bonus depreciation through real estate purchases to reduce taxable income? - the first step before you get there is you're doing cost segregation.
I have an LLC C Corp with an accountable plan including medical reimbursements good. I have a high deductible insurance plan and an HSA better. Would it make sense to use the medical reimbursement from the C Corp for uncovered medical expenses instead of paying With the HSA, letting the HSA continue to grow? - So the simple, direct answer is yes and yes, you can do that. You can have the medical reimbursement and an HSA.
I have owned a residence for 10 years. I lived in it for the first year and then rented it out. We have recently moved back into it and want to live there for at least two years so as not to pay tax when we sell it. I will potentially profit about 350,000 and am married. Is this a wise action of 76 years old? I plan on moving into our other rental at that time and perhaps selling it after two years there. - Remember you did rent it out for nine years. You had depreciation and if you didn't take depreciation you will be treated by the tax code as if you did.
I am a real estate professional and bought many real estate homes the rental homes from 2018 to 2022. My account and encouraged me not to use my real estate professional status to depreciate faster. Now I regret it. Should I just do amended returns? I paid a lot of taxes that I could have avoided in those years. - There's a form 3115 and that has to be done on a timely file original return. So we can't amend and go back and do that. But what we can do is go back and look at the related cost segregations
I have a partnership set up with my stock trading management company. Does it still make sense to distribute income to my trading management company, structured as a C-corp, for taxes if most of my trading gains this year will actually be long-term capital gains and therefore would actually be taxed at a lower rate than the corporate rate? - we don't know specifically with your situation, but more than likely there's still benefit to doing so.
How do you determine the best structure for a residential assisted living business that will be located in Florida and Georgia, buying the home and running it to the business? –if we had the business and it owned the home, you always run the risk of having someone like me being in that business and I sue you and I take the whole thing. I take the house and the business. So we separate.
What are the tax implications of investing in wine? This is for clint. Yeah, that's going to say it doesn't count if you drink at all. Right, all right. For example, like using a platform like vino vest, I made 20-something percent last year in my whiskey, yes, and I don't even drink much. Is One able to write off losses from the sale of wine or offset these losses against taxes owed? Any sort of tax loss harvesting way interesting. - this is a 28% bracket and it's called collectibles. This is gonna be your art, your fine alcohols and things like that, and so there actually is a unique category of capital gains for this…
Is there a difference between filing taxes with an October deadline Versus an April deadline? If yes, what are the advantages or disadvantages of each? -we are always gonna recommend that you extend, and that would extend your April deadline out to October. Gives you more time to clearly see what's going on and it gives you more time to get all things properly put into place.

Resources:

https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-structure-a-residential-assisted-living-business

https://andersonadvisors.com/

https://www.youtube.com/@TobyMathis

https://www.tiktok.com/@tobymathisesq