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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 Dec 12, 2023
Tuesday Dec 12, 2023
Welcome to another episode of Tax Tuesday, where tax experts Toby Mathis, Esq., and returning guest Jeff Webb, CPA, CFO of Anderson Business Advisors share their expert advice on writing off business expenses, end-of-the-year options for saving on tax deductions, inquiries about organizational vs. startup expenses, and how to borrow from your life insurance policy to invest in real estate. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- All my LLCs are disregarded…. I’m in the process of setting up…What are some of the write-offs for 2023? - You normally can’t write off until the business has begun operating, but the cost of setting up, you can grab that, but you have to have income to benefit from those write offs.
- Can I 1031 a long-term rental single-family residential.. into short-term AirBnB rental.. Then do a cost seg? - Yes, but there’s a timing issue…the long-term rental cannot extend into the next/same year.
- How do I write off biz expenses before the bix makes money? - There are ‘organizational’ and ‘startup’ expenses that you can write off, of $5K each….but it also ‘depends’
- If we are flipping a home within 6 months, can we write off depreciation, closing costs etc.? - The home is considered ‘inventory’..if you bought it with intent to sell, no matter how long you own it, it is ‘dealer property’
- My husband owns and operates an electrical business… if a client doesn’t pay, is it considered a loss? Is it tax deductible? - You don’t recognize income until it is paid to you. You can only write off expenses.
- Please discuss pros and cons of borrowing from my life insurance to purchase real estate? Is any of the interest tax deductible? – The interest on the property is deductible. Different policies have different ways of accounting for the loan. I don’t see a lot of ‘cons’.
- How do I offset passive losses other than increasing rents and paying off debt?.. What can I do before the end of the year so I can use this year’s taxes? At this time of year, there’s very little you can do, you only get the portion from now until the end of the year.
- I am a licensed contractor working part-time as a salaried employee… am I a real estate professional for tax purposes? - Yes… if you’re the owner, and you have 750+ hours working in the real estate business… more than 50% of your time.
- Can I create a 401k for my real estate biz? Will this affect my employer’s 401k- Yes, but you can only contribute the total amount allowed by the individual by the IRS. You have to have an ‘active’ business, not passive income.
- Is there an age limit for hiring our kids? We have 6 and 13-year-olds. - Yes, but you have to have them working on actual tasks to be paid. Sweeping, modeling, acting, etc. What is the market value of those tasks? Labor laws don’t apply - you can put YOUR OWN kids to work, and pay them, at any age.
Resources:
https://infinityinvesting.com/
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
https://www.youtube.com/@TobyMathis
https://www.tiktok.com/@tobymathisesq
https://www.youtube.com/@ClintCoons
Wednesday Dec 06, 2023
Wednesday Dec 06, 2023
In this episode, host Toby Mathis, Esq., welcomes regular guest Eliot Thomas, Esq., Manager of Tax Advisors at Anderson Business Advisors, to discuss several questions about taxation and S-Corps. Other topics include paying your children to work on your real estate properties, paying medical deductibles with your HSA, and of course minimizing capital gains taxes on stocks you’ve purchased. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Is there any differences between bonus depreciation and 179 depreciation and, if yes, what are the differences? - They are completely different, though easily confused, and you can use them together.
- if I set up my LLC for real estate investing but I have not bought anything yet, can I ride off the courses I have enrolled in to educate myself and equipment? - if it is true investing, then probably you wouldn't be able to deduct. There isn't any place in the tax returns to deduct something like that.
- Can I run a payroll payroll for my son, who was 18 years old, to manage my real estate properties? What is the maximum amount that I can pay him to support me in my business? - There isn't necessarily any limit. It's just that, whatever you have to be reasonable for the services that the child is providing.
- Can you pay the high deductible health insurance premiums from the HSA? - you can pay ANY deductible out of an HSA.
- I'm a Big Dog and I have lots of questions about forming my LLC for a fix and split business and how to effectively write off expenses for 2023. I haven't set up my LLC yet and I'm in the middle of rehabbing a house that we won't be able to put on the market until next year. Is it too late to set up the LLC and get those write offs for this year? Does it matter if I'm not making any money yet? Should my LLC be filed as an escort? But I would have to be earning income and paying myself something, right? Can you explain how it all works? - So lawsuits are all over a place when you're rehabbing. So get that set up. All your costs that you're incurring are inventory, which means we don't get it deduct anything until a year you sell it.
- What are the benefits of taxing my beauty salon as an S-corp? -you can write off like the percentage of the use of the home under many different theories. You could be using net square footage, you could be using the room methodology, you could be using gross square, or whatever is your best interest.
- Can you roll over money from a current 401k account into a solo 401k account to invest in real estate? Can you please explain the taxes I would be responsible for paying on any gains made on a real estate investment using money in a solo 401k? - typically you can’t move it if you’re still employed. There aren’t any taxes.
- what is the tax way to invest in the stock market and protect capital gains to minimize them? - we like to set up a partnership, put the trading into the partnership, and that partnership will be composed of a portion that goes to the individual, maybe 80, 90%, the rest to a C corporation.
- I own rental properties and manage them myself Currently. I don't need the income right now. That's a great situation to be in. What are some strategies to get that income into a retiring account such as a solo 401k, since it's not earned income? - if it's a rental, you're going to want to hit in your 1040, which means it's probably a partnership.
- I am looking for tax treatment benefit of a DST Stands for Delaware statutory trust, not a deferred sales trust, delaware statutory trust. It would be done through a 1031 exchange, so I understand that part, but it sounds like not only would I get a new depreciation schedule, but I get more. Granted, I should get more just due to the new asset purchase price. Right, what are the flags for a DST investment? - What are red flags? I think the things we always talked about is - it's just not very liquid when you have that Delaware statutory trust.
Resources:
Tuesday Dec 05, 2023
Tuesday Dec 05, 2023
In today’s episode, Toby Mathis, Esq. welcomes Shane Sams, CEO and Co-Founder of Flippedlifestyle.com. Shane is one half of the dynamic duo at FlippedLifestyle.com with his wife Jocelyn. The Sams Family built an online membership business that generates hundreds of thousands of dollars per year in profit, while only requiring a few hours of work per week. Now they help other people build & grow online memberships of their own.
Highlights/Topics:
- Shane’s path to finding his own side gig
- Librarians and their challenges
- Selling what you know and solving problems
- Startup costs and hosting platforms
- The moment Shane decided to change paths
- Yard sales to get start-up money
- The Toddler Apocalypse blog
- Some great monetization ideas
- What are people charging per month?
- Crazy ideas that worked - chickens and needle felting
- You can probably achieve your goals with an online business
- First steps to take
Resources:
https://www.flippedlifestyle.net/a/2147732658/ZQEgEiNx
https://www.youtube.com/c/tobymathisesq
Infinity Investing
https://infinityinvesting.com/
Friday Dec 01, 2023
Friday Dec 01, 2023
In this episode, Clint Coons, Esq. speaks with Seth Williams and Neil Clements, experienced real estate investors who are joining us to discuss land investment deals that may be a little off the beaten path. From sending out blind offers by mail, to water and mineral rights, to subdividing parcels, Seth and Neil give you the inside track on challenges and opportunities within this lucrative space in real estate investing.
Seth Williams is the founder of REtipster.com; an online community that offers real-world guidance for real estate investors.
Neil Clements is an avid real estate investor who builds his wealth by capitalizing on investment opportunities no one else pays attention to. He is passionate about teaching wealth-building strategies through real estate and how to find opportunities off the beaten path.
Highlights/Topics:
- What’s the state of land deals today?
- Make sure you have a ‘pivot’ once you purchase
- Parent and child land parcels
- Sending offers by mail, text, and ringless voicemail
- Perc tests, subdividing, water and using AI
- Mineral rights in TX land deals
- Some typical numbers on recent deals
- Time frames on turning deals
- Explaining ‘entitlements’
- Due diligence
- Doing land deals remotely, Land ID mapping software
- Blind offers, how to find the right agent
- How Neil and Seth started working together
Resources:
https://retipster.com/
neil@swiftlandoffers.com
https://www.rliland.com/
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=land-investing-demystified-proven-strategies-for-finding-lucrative-deals
https://andersonadvisors.com/
https://andersonadvisors.com/podcast/
https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w
Tuesday Nov 21, 2023
Tuesday Nov 21, 2023
Did you know you could be sued if your tenant’s dog bites someone? In this episode, Toby Mathis, Esq. welcomes Shawn Woedl, President and CEO of the National Real Estate Insurance Group. Shawn is an industry-recognized speaker and educator with an emphasis on Commercial Property and Premises Liability, and shares the top four lawsuits his company sees every day. From slip and falls to discrimination and dog bites, tune in to find out how to protect yourself from these common scenarios.
Highlights/Topics:
- Top lawsuits as seen at National Real Estate Insurance Group
- Lawsuit sizes - how much is being paid out?
- The cost of carrying insurance and deductibles
- Submitting claims and potential policy increases
- Umbrella and excess coverage
- Tenant discrimination
- Dog bites and “vicious breed” exclusions
- Renovations and contractors
- Mold
Resources:
https://affiliate.nreig.com/Anderson
Download the PREMISES LIABILITY Policy PDF
https://drive.google.com/file/d/16iz1d8almLd2sgENkWFXQUA-sxe3vI6x/view?usp=sharing
https://www.youtube.com/c/tobymathisesq
https://andersonadvisors.com/
Tuesday Nov 14, 2023
Tuesday Nov 14, 2023
In today’s Tax Tuesday episode, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, CPA, the CFO of Anderson Business Advisors, discuss some interesting tax questions including questions around gifting your home or property to your children while you’re still alive (tip: don’t do it), passive vs. active income on rental properties, and how/when you’re able to use a loan from your investment accounts to purchase real estate.
Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- "Could I still qualify for the Qualified Business Income Deduction for rental activities even if they do not have the real estate professional status?" – Qualified Business Income Deduction, 199A. Could you still qualify for QBI for rental activities even if you don't have real estate professional status? The answer is yes.
- "I have a question about incurring expenses and paying them with my personal credit card. How do I recoup that money that was used for my business but charged to my personal credit card? My LLC is less than a year old." The simple answer is yes, you can pay for stuff with a personal credit card and deduct it in your entity.
- "Suppose a Florida LLC has a piece of land bought three years ago and hired a construction company to build a single house when the house is sold." Can I allocate part of the profit to the sale of the land, long-term capital gain, and the other part to ordinary income?" - You've now converted it into inventory that you're selling, so no. As a matter of fact, it doesn't play off against ordinary income, it is ordinary income. The entire sale of this property is ordinary income.
- "How do I use my 401(k) or IRA to invest in real estate?" - If it's an IRA, you need a self-directed IRA, where you're pretty much the custodian.
- "My husband's father wants to sign his house over to us. My husband's sister also owns 65% of the property." What tax advantages are there for us, his dad, and his sister? And what tax issues does it raise for us? Should we start an LLC or some other structures?" - I'm not a fan of signing over a principal residence to my children. If Dad gives it to you before he passes, he just made it all taxable.
- "What is the best way to use funds from my S-corp to pay taxes? Since the corporation taxes flow through to my personal taxes, I understand I need to pay my personal taxes for my personal account, but the money is really in the business account. Can I use a distribution? And is there a dollar amount limit for such a transaction?" – if you're profitable and distributing money, you really need to pay some kind of salary.
- "If I elect to aggregate rental properties into one activity, for example, managing, operating single-family homes as rentals and limited partnership interest in a multi-family syndication. What happens if years down the road, one of the assets is sold from the aggregate group? What are the tax and legal implications?" - If I sell a property that I've aggregated with other properties, just treat it like any other sale of property.
- "Is it tax-wise to pass on single-family rental home properties before my death to my kids? We have plenty of income, and passing on a few of them to our two kids might even lower our tax bracket. Each rental property is in a separate LLC, and we've owned them for 7–8 years now." - Based on the way we answered the previous question about gifting, I think it's a bad idea, especially if you had it for seven or eight years.
- "If I elect to aggregate rental properties into one activity, for example, managing, operating single family homes as rentals, limited partnership interest in a multifamily syndication, and electing all of my investment real estate as one activity,” which you can do, it's called an aggregation election, “what happens if years down the road, one of the assets is sold from the aggregate group? What are the tax and legal implications?" - you wouldn't aggregate into those circumstances. If you’re going to be selling it soon, but you don't lose the loss carry forward, you use it against passive income.
- "We have two newly opened short-term rental Airbnbs. We want to do cost segregation and do bonus depreciation for the 2023 tax year. We're logging our time for the 500 hours rule. I heard that a small business should be taxed as S-corps to save on self-employment taxes, but others say don't put Airbnbs in an S-corp because they're passive. What to believe?" - Short-term rentals are a trade or business. If you are materially participating in them, then it's active ordinary income or loss.
- Send us your questions, and check out the event schedule listed in the resources section.
Resources:
https://infinityinvesting.com/
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-use-your-401k-or-ira-to-invest-in-real-estate
https://andersonadvisors.com/
https://www.youtube.com/@TobyMathis
https://www.tiktok.com/@tobymathisesq
Tuesday Oct 31, 2023
Tuesday Oct 31, 2023
In today’s Tax Tuesday episode, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, CPA, CFO of Anderson Business Advisors, discuss the usual mix of complex and simple tax questions including questions around paying minor children through your LLC, gifting vs. inheriting property, structuring your stock trading business, and how and when to use cost segregation to get the biggest tax benefits. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- “When dissolving a C-Corporation with a single share holder and having a net operating loss, does the loss go on the shareholder’s personal return and can the loss be offset against personal income?” No, because that C-Corporation is its own entity. However you probaby finance some of those losses. Anything that you invest in the company that you don’t get back will be a capital loss to you.
- “I jointly-own an inherited property that is currently on the market. Can the expenses that I have (utilities, staging, maintenance, repair, taxes) be added to the cost value?” It depends on how the property is being used once you inherit it.
- “Can I deduct expenses for working at home and what forms can I use?” That depends. If you’re an employee, then no deduction anymore for employee work expenses.
- “My wife’s father wants to sign his house over to us and her brother. What tax advantage is that to her dad? And what tax issues does it raise for us? Should we start an LLC or some other structure?” No tax advantages for Dad. When dad transfers the property over, it’s a gift. And when you give an appreciated asset you receive the basis of the gifter. If it is an investment, it is best to start an LLC.
- “When you have a C-Corp (no income at this point, a Wyoming LLC that owns two LLCs with rentals), which entity pays for general expenses like memberships, cell phones, internet, education, etc?” When you have an LLC with rental (C-Corp), then you pay the C-Corp and management fee. The C-Corp then covers all the expenses.
- “How does paying for your child (under 18) help with taxes, if any?” If under 18 through LLCs, there is no employment tax.
- “Can you benefit from cost segregation at any time?” The longer you wait, there’s nothing left to depreciate. A tiny benefit, if any.
- “Need to move from sole proprietorship to some form of business entity. [...] C-corp? Something else?” Jeff is not a fan – there’s a lot of landmines out there. If you’re doing well, you want the capital gains. Put your cash in an LLC with an 80/20 split. Watch how to structure a trading business!
- “I currently own a home in one state (Oregon) and I am looking to purchase an investment property in another state and plan to do so using an LLC or an S-Corp. [...] What would be the easiest way to go about this?” Do not own in an S-Corp! Buy the AZ property in a land trust and LLC. Have someone guide you through this process
- “If I invested $30,000 in a marketing class to start a marketing company, do I have to amortize it over 15 years to see any of it back? Can it be a business investment and get it all back?” The only ones that can do this are C-Corps.
- “Is 1245 property subject to depreciation recapture if the rental property is sold with capital gain?” Gain is subject to recapture. You’re going to pay ordinary income tax.
- Send us your questions, and check out the event schedule listed in the resources section.
Resources:
https://infinityinvesting.com/
taxtuesday@andersonadvisors.com
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/
https://andersonadvisors.com/
https://www.youtube.com/@TobyMathis
https://www.tiktok.com/@tobymathisesq
Thursday Oct 26, 2023
Thursday Oct 26, 2023
Toby Mathis, Esq. welcomes Jason Zundel, Esq., an asset protection and estate planning attorney with Anderson Business Advisors. Jason and Toby discuss all the aspects of lawsuits, including getting served, things to worry about, protecting yourself, being actively involved, and possible outcomes. Protect your assets with Anderson’s asset protection services.
Highlights/Topics:
- You need to receive a Service of Process for an actual lawsuit
- Default judgements
- Case studies from Toby and Jason - suits can haunt you for decades
- Next steps when responding to a suit
- Timeline to expect
- Pursuing YOUR rights with a lawsuit- first steps
- The ‘hurry up and wait’ period
- Initial discovery can last 6 months to a year
- Make sure you’re involved every step of the way- don’t be passive
- Reminder - first, take a deep breath!
Resources:
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=what-steps-to-take-when-facing-a-lawsuit
https://www.youtube.com/c/tobymathisesq
https://andersonadvisors.com/
Wednesday Oct 25, 2023
Wednesday Oct 25, 2023
In this episode of Anderson Business Advisors, Toby Mathis, Esq., welcomes Anderson Attorney Jonathan Evans, Esq., to dig into the ins and outs of using the IRS’ 1031 exchange in your real estate investment toolbox. Jonathan shares what a 1031 exchange is, how it works, what types of real estate investments you can exchange, the potential pitfalls, using a qualified intermediary (QI), and more.
Highlights/Topics:
- Light/kind or 1031 exchanges
- Using 1031 as a tool – only for trading real estate investment properties
- Carrying out the transfer - using an intermediary or ‘accommodator’
- Other rules and requirements - timeframe and number of properties
- Debt and the 1031 - mortgage boot
- Pitfalls and potential problems - what you can’t do
- Qualified intermediaries - check references
- Intent vs. hard rules
- Drop-n-Swaps, multiple owners/syndicates, LLCs
- Have a structured game plan before entering a 1031
- Share and subscribe
Resources:
https://andersonadvisors.com/
https://www.youtube.com/@TobyMathis
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-use-the-1031-exchange-to-avoid-taxes-in-real-state-investing
Learn Next Level Passive Income Strategies Through Real Estate & Stock Investing
https://infinityinvesting.com/infinity-investing-workshops/?utm_source=aba&utm_medium=podcast&utm_content=is-airbnb-dead-the-numbers-nobody-is-discussing
Tuesday Oct 24, 2023
Tuesday Oct 24, 2023
In this episode, Clint Coons, Esq. speaks with Shannon Robnett, a 4th generation real estate professional who has built his deal network by being THE BEST resource for ‘connections.’
For more than 30 years, Shannon Robnett Industries (SRI) has built a strong reputation as a leading commercial real estate investment group by investing in multi-family properties in the Treasure Valley. Their family of subsidiaries, including My Vertical Equity, Phoenix Commercial Construction, and Executive Management Services (EMS) Property Management, have grown to become a substantial earner in multi-family real estate syndication, investing in and around Boise, Idaho.
Highlights/Topics:
- Robnett’s family generations of real estate professionals
- How Shannon built his source list and later diversified
- Building your network - be everyone’s best resource for connections
- Learning from more experienced investors
- Cash flow, deal parameters, long-term debt
- Solving the seller’s problems
- Moving up to bigger deals, becoming part of a bigger machine
- Finding deals in non-local markets - how to drum up referrals through experts
- Questions to ask when vetting realtors, leveraging out-of-state connections
- Money or deals, which comes first?
- Aggregating capital first - creating your investor list
- Helping to structure the deal - creative financing, options for sellers
- Learning this process, the jargon, doing the homework
- Reach out through his website to get on to Shannon’s calendar!
- The 2008 crash could have been averted if we had these podcasts at that time
Resources:
https://shannonrobnett.com/
Robnett’s Real Estate Rundown Podcast
https://open.spotify.com/show/0JiVrqBwzZQinfzD3DReef
Tax and Asset Protection Events
https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-elevate-your-real-estate-investing
https://andersonadvisors.com/
https://andersonadvisors.com/podcast/
https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w