Anderson Business Advisors Podcast

In this Tax Tuesday episode, Anderson attorneys Amanda Wynalda, Esq., and Eliot Thomas, Esq., explore the limitations of renting home office space to yourself as a sole proprietor and explain superior alternatives through S and C corporations that unlock better deductions and reimbursement opportunities. The attorneys provide detailed guidance on properly paying children through family businesses to maximize tax benefits while avoiding employment taxes, and discuss the complexities of transferring real estate to children through gift strategies. They dive deep into syndication investments, explaining passive income treatment, cost segregation benefits, and how real estate professional status can transform passive losses into active deductions. Other key topics include the master lease strategy for short-term rental owners seeking to optimize tax benefits, the mechanics and restrictions of 1031 exchanges, medical expense reimbursements through C corporations (including controversial deductions for specialty foods and safety equipment), and the proper setup timeline for nonprofit organizations. Tune in for expert insights on these advanced tax strategies and more! Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "Can I rent my home office to myself as a sole proprietor?" - No, use home office deduction instead. "I know an owner of a small business can pay their kids to work for their company. I've heard several different facts about how exactly to do that, which contradict one another. Can you please explain the proper steps?" - Pay kids W-2 from sole prop, avoid taxes. "We were advised to transfer real estate to our children up to a certain limit using the parent-child transfer provision form 709. Can you please discuss the advantages and disadvantages? Any limitations on the amount of equity transfer and any IRS requirements, etc.?" - Not recommended, complex bookkeeping, lose stepped-up basis. "I want to join a syndication as a limited partner. What tax implications do I face at the time of distribution of profits and how does it change if they do a cost segregation and bonus depreciation while I'm still part of this syndication? An additional fact is that this person has their own long-term rental." - Passive income, and cost segregation create offsetting losses. "Are you entitled to cost segregation benefits if you invest in a syndication with your IRA/401k funds?" - Yes allocated, but no tax benefit in retirement. "Please explain the C Corporation Master Lease strategy for short-term rental owners. I own a short-term rental but was unable to capitalize on the short-term rental loophole because I had used professional property management. Does this strategy provide any advantage to somebody in my situation or allow me to take advantage of the loophole in a different way? How would the tax breakdown work in this case if I created a management C corporation?" - C corp manages property, shifts income, enables reimbursements. "What is the downside of using a 1031 exchange to avoid taxes in a profit transaction? Are there any benefits?" - Strict deadlines, higher debt required, but defers taxes. "What are the medical expenses aside from doctor visits and out-of-pocket medications allowed as reimbursable from the C corp? A doctor has recommended including antioxidant foods in our diet to improve my spouse's diet due to a specific condition. Is it reimbursable if we buy foods that are not really on our regular grocery list? Only because our doctor suggested it. Additionally, the other day, my spouse slipped on one of the floor mats, so I had to buy rug grippers. Is this also reimbursable?" - Doctor's note rule applies, antioxidants questionable, grippers no. "I would like to know if I can start a business as a nonprofit before I begin doing the work. Or do I have to already be up and running?" - Set up a nonprofit entity first for protection. Resources: Schedule Your Free Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-to-legally-pay-your-kids-through-your-business&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-legally-pay-your-kids-through-your-business&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

In this episode of Tax Tuesday, Eliot Thomas, Esq. is joined by Anderson CPA Barley Bowler. They explain how transfer-on-death titles still provide beneficiaries with stepped-up basis advantages and clarify that short-term rentals don't qualify for real estate professional status. You'll hear proper entity structures for rental properties, recommending against holding appreciating real estate in C corporations. They thoroughly explain the 280A "Augusta Rule" that allows tax-free rental income from personal residences to your business for up to 14 days annually. With input from bookkeeping expert Troy Butler, they recommend QuickBooks Online for tracking rental property finances. Additionally, they cover Roth IRA conversions, tax withholding strategies, and 1031 exchange rules for deferring capital gains.   Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "When a house is under a transfer on death title, does the beneficiary still get a step-up in basis?" - Yes, they still get a stepped-up basis. "If I already qualify as a real estate professional rep status via short-term rentals and add long-term rentals to the mix. Can I lump the two kinds together? And does having an S corporation that manages everything affect my rep status?" - Short-term rentals don't qualify for REP status. S-corps generally don't affect REP status. "Where real estate properties are in individual LLCs, disregarded and owned by my C corporation, does the C corporation maintain one bank account and collect rent for all individual properties?" - Not recommended. Use a management company instead. "If you get started in wholesaling, should you file as an S corporation?" - Yes, use S or C corp. "What kind of bookkeeping is needed for rental real estate? Do you have any bookkeeping software to suggest?" - QuickBooks Online is recommended. Track properties separately. "When doing an IRA to Roth conversion, are there any limits? Are pre-tax conversions always treated as ordinary income? Is it true that the IRS does not know or care when the conversions were done during the year?" - No limits. Yes, ordinary income. IRS treats as earned throughout year. "How does tax work if a business owner is paying himself as an employee, do we have to tax twice? Once for the business income and once as an employee?" - No, payroll is deductible business expense. "How do I do a 1031 exchange? And how do I maximize real estate property depreciation after I do a 1031 exchange? Am I stuck with the previous depreciation rate and amount of the previous property?" - Use a qualified intermediary. Trade up for more depreciation. Resources: Schedule Your Free Consultation https://andersonadvisors.com/strategy-session/?utm_source=can-you-boost-depreciation-after-a-1031-exchange&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=can-you-boost-depreciation-after-a-1031-exchange&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

Clint Coons, Esq., interviews Kathy Fettke, founder of Real Wealth Network and a seasoned real estate expert with over 20 years of experience. They discuss current market conditions, with Kathy explaining how real estate's slow-moving nature provides stability compared to the volatile stock market. She shares that recent decreases in mortgage rates have already increased pending sales and mortgage applications. Kathy reveals her top investment markets, emphasizing the Southeast (particularly Texas and Florida) for growth and appreciation, while the Midwest (parts of Ohio and Indianapolis) offers better cash flow. She explains the importance of property type selection, market dynamics, and long-term strategy, highlighting how newer properties in growth markets typically outperform older properties in stagnant markets, even if the latter initially show better cash flow. Kathy also discusses the current opportunity with builders offering rate buy-downs on new construction, property management considerations, and the importance of avoiding markets with unfavorable landlord laws. This episode provides valuable insights for both new and experienced real estate investors looking to build wealth through strategic property acquisition. Kathy Fettke is Co-Founder of RealWealth.com, helping busy professionals acquire turnkey rental properties in fast-growing U.S. markets. She also leads RealWealthDevelopments.com, offering passive build-to-rent syndication opportunities. Kathy hosts The Real Wealth Show and Real Estate News for Investors podcasts, and co-hosts BiggerPockets: On the Market. She authored the bestsellers Retire Rich with Rentals and Scaling Smart with her husband, Rich Fettke. A frequent speaker and media guest, Kathy has appeared on CNN, CNBC, Fox News, NPR, and CBS MarketWatch. Highlights/Topics: Current real estate market conditions and mortgage rate sensitivity Top investment markets: Southeast for growth vs. Midwest for cash flow Importance of property condition in investment returns (newer vs. older properties) The danger of focusing solely on cash flow without considering long-term appreciation Current opportunity with builders offering interest rate buy-downs Millennial demographic demand driving rental housing needs The importance of proper property management selection Avoiding markets with unfavorable landlord-tenant laws Long-term vs. short-term real estate investment strategies Closing comments, final words of advice Resources: Real Wealth   Real Wealth Developments https://realwealth.com/real-estate-syndications/ https://www.instagram.com/realwealth/  https://www.instagram.com/kathyfettke/  Schedule Your FREE Consultation https://aba.link/RWN42025SS Tax and Asset Protection Events https://aba.link/RWN42025TAP Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Clint Coons YouTube https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w

In this episode, Anderson attorneys Amanda Wynalda, Esq., and Eliot Thomas, Esq., address several listener questions on a variety of tax topics. They cover the tax implications of selling stocks to purchase rental properties, explaining capital gains strategies and depreciation options. The duo discusses using LLCs and management corporations for rental properties, including how property management fees can generate tax-free income. They explore inheritance tax considerations for 401(k)s, the benefits of short-term rentals for generating tax losses, and the implications of moving back into a rental property. Other topics include setting reasonable salaries for S-Corporation owners, maximizing depreciation to offset W2 income, claiming natural disaster losses, depreciating remodel costs for rental properties, and properly implementing the 280A/Augusta Rule for tax-free home rentals. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "I would like to sell my stocks and use the money to help purchase a rental property. Is there a strategy to minimize or avoid paying taxes on capital gains or any other tax-saving advice?" - Loss harvesting and short-term rental tax benefits. "Would a rental property not in an LLC also be reported under the Management Corporation or a 1040?" - Report rental on 1040, management fee on 1120. "What would the tax implication be when a spouse passes and the surviving spouse inherits a 401k?" - Lump sum, continue distributions, or rollover options. "What would be the tax consequences concerning W2 income, depreciation, etc., of purchasing a rental property, using it as a short-term rental with material participation in the tax year that it was purchased, then selling it the following tax year?" - First-year losses, later depreciation recapture on sale. "What are the tax implications if I've moved back into my rental and use it as my primary residence? I'm not planning on selling anytime soon." - Reduced Section 121 exclusion, depreciation recapture later. "What is a reasonable salary range we should set for ourselves to remain compliant but still maximize our S Corporation Tax savings?" - 30-60% of net business income typically. "If a person is a W2 wage earner and wants to start real estate as a side job, what needs to be true when picking real estate options to maximize asset depreciation to help offset my W2 taxes owed?" - Short-term rentals with material participation (100+ hours). "If I experienced a loss from a flood that was declared a natural disaster in 2024, how do I take that credit on my taxes?" - Personal: federal declaration required. Business: none needed. "How do you depreciate remodel costs for an income property? So, a rental property. You purchased the property, for example, 10 years ago for 100k, and began depreciating it. This year, you put 30K into a remodel that included floors, paint, kitchen cabinets, and appliances." - Separate depreciation schedules for each improvement type. "I'm interested in using the 280A/Augusta rule rental of my home for an upcoming seminar that I'll be attending online. Am I allowed to use this strategy since I'm the only one attending? Also, I reviewed the document that Anderson put together for the 280A. It mentions getting three quotes. If I call a hotel and ask for a conference room quote for one person, I imagine I won't be taken seriously. Do you just request a small conference room for five people or less?" - One-person meetings allowed; request quotes for small groups. Resources: Schedule Your Free Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-to-sell-stocks-tax-efficiently-to-buy-rental-property&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-sell-stocks-tax-efficiently-to-buy-rental-property&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, welcomes David Pelligrinelli, a professional asset recovery expert from ActiveIntel. They dive deep into the alarming reality of employee theft and embezzlement in businesses of all sizes. David explains the "fraud triangle" concept—opportunity, pressure, and justification—that enables employee theft, sharing real-world examples of trusted employees who stole hundreds of thousands of dollars from their employers. They discuss essential prevention strategies like having owners open all financial mail, requiring employees to take vacations so others can review their work, and implementing proper checks and balances. The conversation reveals sophisticated theft techniques, including ghost vendor schemes and credit card fraud, while emphasizing that even trusted employees can succumb to temptation when proper controls aren't in place. David also shares fascinating stories about asset recovery investigations and explains how counter-investigation tactics can help those being investigated unfairly. Highlights/Topics: Introduction to employee theft and embezzlement as a common business problem The "fraud triangle" concept: opportunity, pressure, and justification Best practices for preventing employee theft (opening mail, mandatory vacations) Ghost vendor schemes and sophisticated theft techniques Long-term financial impact of embezzlement on business profitability Examples of elaborate asset concealment by debtors Employee dishonesty insurance coverage options Counter-investigation tactics and illegal investigation methods Share this with business owners you know Resources: Email: dave@activeintel.com https://actualhuman.com/ https://riskcoverage.com/ https://telemediator.com/ https://www.activeintel.com/ Schedule Your FREE Consultation Tax and Asset Protection Events Anderson Advisors Toby Mathis YouTube Toby Mathis TikTok Clint Coons YouTube

Tax season is in full swing, and in this Tax Tuesday episode, Anderson Advisors attorneys Amanda Wynalda, Esq., and Eliot Thomas, Esq., tackle numerous listener tax questions with practical advice. They discuss the Section 121 exclusion for primary residences, explaining how married couples filing separately can each qualify for the $250,000 capital gains exclusion. They outline strategies for converting personal residences to rental properties using S-corporations and installment sales to maximize tax benefits. Amanda and Eliot clarify 401(k) withdrawal rules, explaining when penalties apply and options like the Rule of 55 and hardship withdrawals. You'll hear recommendations on optimal entity structures for real estate syndications, explanations of the short-term rental "loophole" for active income classification, and when to use trading partnerships versus simple LLCs for investment accounts. The episode concludes with a breakdown of key Tax Cuts and Jobs Act provisions set to expire in 2025, including individual tax brackets, standard deduction changes, child tax credits, and bonus depreciation, highlighting potential impacts for taxpayers.   Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics:   "I understand that you can sell your primary residence and receive an exclusion from capital gains taxes on the first $250,000 if you're single and $500,000 if you're married filing jointly. However, I can't find any rules regarding if you're married filing separately. Could you please confirm if married filing separate also qualifies for the exclusion? Also, could you talk about how making improvements adds to the basis?" - Yes, both spouses filing separately can each get the $250,000 exclusion. Only one spouse needs to be on the title, but both must use it as a primary residence for 2 of the last 5 years. Improvements (new floors, additions, HVAC systems) add to your basis, which reduces taxable gain when you sell. "Can I use both cost segregation and bonus depreciation from an S-corp you sell your personal residence to for the Section 121 exemption? Also, what is the accounting treatment if you sold your personal residence to an S-corp using an installment sale?" - Yes to cost seg, no to bonus depreciation (not allowed for related-party transactions). For accounting, record the property as an asset on the S-corp with a liability for the note owed to you personally. You'll recognize all gain in year of sale (which is actually beneficial to utilize the Section 121 exclusion), and interest payments will be recorded as interest income. "Do I have to officially quit my job and be retired to take disbursements from my 401k? At what age can I take disbursements from my 401k? Are there any negative tax implications from taking early disbursements?" - You don't need to quit your job to take distributions if you're 59½ or older, though your specific plan may have different rules. Early withdrawals before 59½ incur a 10% penalty plus ordinary income tax, unless you qualify for exceptions like the Rule of 55 (if you leave your job at 55+) or hardship withdrawals for specific situations. "What is the best entity for tax purposes to invest in real estate syndications?" - A Wyoming LLC (disregarded) or partnership is typically best. This gives liability protection while letting income/losses flow directly to your personal return (important for using passive losses). Avoid S-Corps (reasonable wage requirements) and C-Corps (trap gains/losses on corporate return). "Regarding bonus depreciation and the short-term rental loophole, are either the 500 hours or 100 hours and, more than anyone else, material participation tests prorated for the year? For example, if a property is purchased and put into service in November, those hours would be difficult to achieve." - No, these hours are not prorated. You must meet the full hour requirements between purchase and December 31st. Consider using the "substantially all participation" test if you personally perform nearly all work needed, even if under 100 hours. "If I purchased an investment apartment and repaired windows, floors and incurred other miscellaneous expenses to make it ready for renters, can I write the expense off on my Schedule E? I didn't receive any income for that apartment as of yet." - You can only deduct expenses after the property is "placed in service" (available for rent). If not in service yet, these costs must be added to the property's basis and depreciated. The $2,500 de minimis rule lets you expense (not capitalize) individual purchases under $2,500, but only after the property is in service. "I'm starting to do wholesale investments. I'm still a W-2 employee, yet I will resign soon. Is it recommended that I start my LLC now, and why?" - Yes, start your LLC now for liability protection when entering contracts. Begin with a disregarded LLC in the state where you're wholesaling. Once established and generating consistent income, consider making an S-Corporation election to save on self-employment taxes. "I have a trading account, but I do not actively trade in it. Should I set up a trading partnership for it?" - If you're not actively trading, a simple Wyoming LLC for asset protection is sufficient. For active traders with significant expenses, consider the limited partnership structure with a C-Corporation general partner to shift some income and deduct expenses that aren't allowed on personal returns. Resources: Schedule Your Free Consultation https://andersonadvisors.com/strategy-session/?utm_source=the-best-entity-for-real-estate-syndications-and-maximum-tax-benefits&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=the-best-entity-for-real-estate-syndications-and-maximum-tax-benefits&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

Today, Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., discuss topics including navigating inherited IRAs and potential Roth conversions to understanding crucial deadlines for spousal and non-spousal inheritances. The questions explore filing for trading LLCs with expenses but no income, leveraging C-Corps for medical cost reimbursements, and addressing real estate tax considerations including depreciation recapture. Key insights include combining 1031 exchanges with 121 exclusions when converting investment properties to primary residences, maximizing education and travel deductions in real estate transactions, and utilizing strategic business entities, defined benefit plans, and 401(k)s to shelter active income. Send your tax questions to taxtuesday@andersonadvisors.com. Highlights/Topics:   “Can you roll an inherited IRA into a Roth IRA before the 10 year liquidation time limit is over? If so, will it be a taxable event?” - Typically no, especially for non-spousal inherited IRAs. “I took 2024 off, had no W-2 income, and did no trading.” “However, I had some trading expenses, monthly subscriptions. Do I need to file an individual 1040 return and/or Form 1065 for my trading LLC, even though I had no W-2 income and did no trading?” - Yes, file to account for trading expenses. “I am in the process of creating a trading partnership with the C-Corp. Due to an accident 20 years ago, I have high medical expenses and want to use the C-Corp to reimburse my out-of-pocket medical expenses. I have caregivers who work three hours per day. Can I reimburse myself for the salary? I pay them through the C-Corp. What other medical expenses can I reimburse?” - Yes, using Section 105 plan for reimbursements. “I have short-term rental property managed by a management company. Before the end of the year, I'm taking over management duties. Does the passive income switch to active or does the passive income stay passive?” - No, managing yourself doesn't change income to active. “When selling a rental property, do you have to pay 25% depreciation recapture tax on things that have been depreciated down to zero and have been gone or deleted for over a year?” - Yes, recapture applies to fully depreciated assets. “Can I apply both 1031 like-kind exchange and 121 exclusion to an investment property? Yes, with strategic planning for property transitions. “Can I sell my investment home, apply 1031, and make the replacement home my primary residence?” “When selling my primary residence, do seller concession expenses help stay within the $250,000 capital gain exclusion? Example, help buyer with closing costs, any repairs, et cetera. I have spent over $3000.” - No, concessions don't impact the exclusion directly. “I have spent over $3000 on different online real estate education programs. Can I deduct these as business expenses, or are only education expenses that are not online deductible?” - They are deductible only if related to continuing existing business education. “I attend a lot of investor's meetings in person, travel with my personal not business automobile. How can I deduct these costs as business expenses,” - Track mileage and use accountable plans for deductions. “How do I save on taxes when wholesaling properties?” - Use business entities and retirement plans strategically. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=inherited-iras-can-you-convert-to-a-roth-tax-free&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=inherited-iras-can-you-convert-to-a-roth-tax-free&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Today, Anderson Advisors attorneys Barley Bowler, CPA, and Eliot Thomas, Esq. discuss topics including how 401(k) funds can be borrowed up to $50,000 without tax penalties while confirming that backdoor Roth IRA contributions made in 2024 but converted in 2025 still allow for additional 2025 contributions. Eliot and Barley discuss why S-corporations cannot deduct wellness expenses through accountable plans unless medically prescribed, and confirm the 20% Qualified Business Income deduction applies across multiple businesses. For entity structures, they recommended against holding appreciating real estate in corporations, favoring disregarded LLCs for asset protection. Regarding trading partnerships with C-corporations, these need written contracts for guaranteed payments, and confirmed short-term rental owners can switch to self-management to claim material participation benefits and accelerated depreciation through cost segregation. Send your tax questions to taxtuesday@andersonadvisors.com. Highlights/Topics: "Are there ways to withdraw funds from a 401(k), a retirement account, without moving it into an IRA?" a sponsored plan versus an individual plan? "We're also starting a nonprofit business. And how can we avoid that 10% early withdrawal penalty?" - Take a loan from your 401(k) for up to $50,000 without tax/penalty. "I attempted to do a backdoor Roth IRA conversion. On December 24th, I did it at the end of the year. I'm a high-income earner, was not aware of the financial institution, and had made a temporary change. There was some hold time for the funds. We made a deposit contribution at the end of the year. The question here is, the $7000 post-tax contributed to the traditional IRA in December was not available to convert? We went over the past the end of the year to the 2025 tax year, and we're wondering how that's treated since the conversion was completed in 2025, but the contributed contribution occurred in 2024. Is another $7000 contribution allowed?" - Yes, you can make another $7000 contribution in 2025 for another conversion. "Can we use this to reimburse for gym membership, supplements, wellness plans, stuff like that?" - No, wellness plans aren't tax-deductible unless medically prescribed. "My S-corporation provides financial services." Another question. We're talking about the qualified business income deduction, that 199A. That's a pretty good deduction, 20%. Good chunk of deduction. "Can we take that if we have two different businesses? How does that work? What's that look like?" - Yes, you can take the 199A deduction for both businesses simultaneously. "I have two LLCs holding trading accounts, so a couple of different LLCs." We're going to talk about our trade structure a little bit differently. We also have just what we call a safe asset holding straight. If we have a brokerage account, high-value collectibles, or something like that. "Does putting a rental property into a disregarded LLC have any tax benefits?" "Can I transfer the interest of a disregarded to a holding company or to a living trust?" - Yes, with in-kind transfers; check with a broker; generally no tax consequences. "I have a trading partnership." "Do I need a contract?" We're talking about guaranteed payments here, a very unique payment to a partner. - Yes, need a written contract detailing services between a partnership and C-corp. "What are the pros and cons of holding real estate investments in a disregarded LLC, C-corp versus S-corp?"- Avoid S/C-corps for appreciating property; use disregarded LLCs with management entity. "We're buying our first short-term rental this year. Considering using a third-party property manager, can I manage the property next year with material participation?" - Yes, you can manage it yourself in year two and claim cost segregation benefits.   Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-to-use-401k-funds-to-start-a-nonprofit&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-use-401k-funds-to-start-a-nonprofit&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

Real estate visionary Neal Bawa, CEO of Grocapitus and MultifamilyU, returns to the podcast. Neal always presents a compelling data-driven forecast that should capture every investor's attention. Despite current market uncertainties, Bawa reveals a significant 5-million-unit housing shortage alongside plummeting inflation rates, positioning the US as the strongest performer among developed economies. Most notably, he predicts a dramatic surge in both single and multi-family rent growth during 2026-27, driven by high interest rates creating supply gaps. With homeownership projected to decrease to 60% within a decade, the rental market is poised for unprecedented strength. This perfect storm of undersupply, shifting demographics, and economic conditions suggests a golden opportunity for strategic real estate investors, particularly in the multi-family sector, with promising rent growth anticipated as early as late 2025. Highlights/Topics: Hard data trumps market fear: why the numbers tell a different story US economy dominates globally as inflation drops from 6% to 2.4% Rising national wealth meets housing crisis: housing investment opportunity New construction wave promises better prices for entry-level housing market Five million unit shortage creates perfect storm for 2026-27 housing gap Massive rent increases predicted across all housing sectors in 2026-27 Historic shift: Homeownership dropping to 60%, rental demand soars nationwide Real estate investments outperform during global inflationary cycles and market shifts 2025 forecast: Interest rates and delinquencies reshape investment landscape ahead Strategic opportunity: Significant rent growth predicted for late 2025 market Visit multifamilyu.com to dive deeper into these insights! Resources: MultiFamily Website https://multifamilyu.com/ Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=predicting-2025-real-estate-trends&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=predicting-2025-real-estate-trends&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/

We have now hit 237 episodes of Tax Tuesday! Today, Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., discuss topics including depreciation strategies, with detailed explanations of how bonus depreciation differs from cost segregation analysis. The conversation also covers real estate professional status requirements, home office deductions, and the strategic use of management C-corporations to maximize tax benefits. Other key topics included the limitations of 1031 exchanges for partnership interests, tax strategies for international property purchases, meal expense deductions under current tax law, and the benefits of a stepped-up basis for inherited properties. You'll hear practical strategies for leveraging existing properties rather than selling them and included insights on how to minimize tax exposure through various investment structures and borrowing strategies. Send your tax questions to taxtuesday@andersonadvisors.com. Highlights/Topics: In 2024, I spent most of my time managing rental properties under our LLC (not in a C or S management corp). I will claim real estate professional status for 2024 tax returns. What home office expenses can I deduct from rental income? Should we consider creating a management C corporation to maximize deductions? - You can deduct a portion of home expenses (mortgage interest, property taxes, utilities, etc.) based on either square footage or number of rooms method. Is 100% bonus depreciation available in 2025? Is this the same as cost seg? - Cost segregation breaks down property components into different depreciation schedules (5, 10, 15 years) while bonus depreciation allows immediate write-offs of qualifying components. If you meet 750 hours as a real estate investor and own both commercial/non-residential real estate property and residential rental property, could you use Schedule C or Schedule E on your tax return? - Generally, long-term rentals go on Schedule E regardless of real estate professional status. Schedule C might be used for short-term rentals (average stay less than 7 days) with significant personal services provided. Does selling a partnership interest in a hotel business qualify for a 1031 exchange? How can you save on taxes on capital gain when you sell your partnership interest? - A partnership interest generally doesn't qualify for 1031 exchange (though the partnership itself could exchange the building). If I inherit a property and now use the property as Airbnb, do I need to depreciate the value of the property? - You should depreciate the property because the IRS will assume you took depreciation when you sell and tax you accordingly (recapture). You'll get a stepped-up basis at inheritance value to depreciate from. Can you comment on food and meals? When can those be expensed and how much? -  Business meals are generally 50% deductible. Company-wide events like holiday parties or open houses with unrestricted attendance can be 100% deductible. Entertainment expenses are no longer deductible. I'm a full-time employee receiving W2 income and own two rental properties which I manage myself. Can I use the qualified business deduction (QBI)? - Yes, you can potentially qualify for the QBI deduction. The safe harbor rule requires 250 hours of rental services, but you may still qualify even without meeting this specific threshold if you can prove it's a trade or business. How can I avoid capital gains if I sell my rental home in the U.S. to purchase a multi-family home in Costa Rica? - Options include: living in the property for 2 of the last 5 years to qualify for primary residence exclusion, leveraging the U.S. property instead of selling, harvesting capital losses to offset gains, or investing in tax-advantaged opportunities to create offsetting losses. I have two rental properties in SoCal owned since 2009 using straight-line depreciation. If I 1031 exchange these properties into replacement properties of slightly higher value, can I start depreciation over and do it correctly? If I 1031 these properties into replacement properties of slightly higher value, does that mean I can start depreciation all over and do it correctly? Getting more tax benefit. How does this affect my basis? What about any recapture when I then sell later? - In a 1031 exchange, you'll have carryover basis from the relinquished property. The basis in the new property will be its purchase price minus deferred gain. Instead of selling, consider leveraging existing properties to buy additional real estate for more depreciation opportunities. What are the benefits of the step-up basis evaluation for a person's residence and investment property? - When inherited, properties receive a stepped-up basis to fair market value at death, allowing heirs to depreciate from the higher amount and potentially eliminate capital gains tax on appreciation that occurred during the deceased's lifetime. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=bonus-depreciation-in-2025&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=bonus-depreciation-in-2025&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis  

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, chats with Atticus LeBlanc, CEO of PadSplit. Toby and Atticus discuss the innovative approach PadSplit is taking to address homelessness and provide affordable housing. They dive into troubling statistics about homelessness in 2024 and how rising home prices and interest rates are impacting the housing market. PadSplit's model—offering multi-room rentals—provides a solution for both underserved communities and real estate investors, creating a two-sided marketplace. The conversation covers the operational benefits for landlords, the low turnover rates, and the impact PadSplit has on helping residents transition out of homelessness. Learn how this model offers affordable housing in 24-48 hours for under $300, while benefiting investors by reducing costs and increasing revenue. It's a win-win for both society and your investment portfolio! Highlights/Topics: Toby's PadSplit experience, frightening stats on homelessness for 2024 Increasing home prices, interest rates are not helping single-family residences PadSplit rooms are a great solution for the underserved, and for investors Reducing barriers to entry for the unhoused, revenue increases for landlords How PadSplit operates as a two-sided marketplace Different scenarios using PadSplit for multi-room home rentals Standard costs for a “turn” as a landlord, saving with PadSplit Early intervention for issues is easier with a PadSplit scenario Residents have thousands of options if they don't care for the room What are the eviction rates with PadSplit? What percentage of residents move from unhoused situations? This is the “invisible working population' - not people on the street with a cardboard sign. Residents can get a room within 24-48 hours, for under $300 So something good for society, and something good for yourself Share this with investors you know Resources: Atticus LeBlanc LinkedIn https://www.linkedin.com/in/atticus-leblanc-3960466/ PadSplit https://www.padsplit.com/ Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=1-real-estate-strategy-for-2025&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=1-real-estate-strategy-for-2025&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Welcome to Tax Tuesday. Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., tackle various tax-related questions. Topics include retroactively claiming real estate deductions and depreciation, handling health insurance premiums for an S-corp, understanding the rules around setting up a trading account under an S-corp, and how to qualify for Real Estate Professional (REP) status while working a W2 job. The attorneys also discuss deadlines for S-election, converting properties for tax purposes, alternative methods for substantiating business expenses, and more. Tune in for valuable insights on managing your tax strategies effectively. Send your tax questions to taxtuesday@andersonadvisors.com. Highlights/Topics: "I need to retroactively claim my real estate deduction or depreciation for my 2022 and 2023 taxes. I actively manage my own rental and have over 700-plus hours per year for real estate management. How do I claim accelerated depreciation for the past years?" - Yes, you can go back and retroactively capture previous depreciation, including accelerated depreciation or bonus depreciation, you do it n the current year. It's a form called 3115. "I didn't have my health premiums added to my payroll statements for 2024. I have an S-corp and pay myself and another employee but wanted to deduct health insurance payments. Is there anything I can do at this point? Regarding asset protection, we have a rental property. We'd like to move this to a trust and then to an S-corp. Would that work?" - If the S-Corp it paying the premiums, on our 1040, we can make an adjustment on Schedule 1 for the insurance premiums because we're considered sole proprietor. "I have seen some of your videos and had a question about setting up a trading account under an S-corporation. Is this correct? Can I pay my wife $15,000 from it and then match that amount toward a 401(k)? "My wife is a homemaker with low income. If we file just married filing jointly, are there any implications with this move? We are not traders but more investors."- Typically no, we would put it into an S-Corp. "My employer recently went through a restructuring. They offered me one year's pay as severance. My last paycheck will be January, 2026. I feel confident that I'll be able to fulfill the REP status requirement for time spent on material real estate management activities in 2025. I will not make more money from my real estate investments as compared to my severance pay. Can I still qualify for the REP status? I used my solo 401(k) to invest in a real estate deal as a passive investor. The bank recently foreclosed the deal. It was a total loss. Is there any deduction that I can take for the loss?" - It's a common misconception that you can't get REP status with a W2. It's about time, not how much you make. "When is the deadline to make an S-election for 2025? Can you switch back to sole proprietorship after you elect S-corp in the same year or future years? Do you have to run payroll as an S-corp LLC? What are good indicators or reasons to switch to an S-corp for taxation?" - there's something called late election, very common, we do it all the time. The IRS is very good about allowing it. To be safe it should be done by March 15th. "I'm converting a barn on my property to an auxiliary dwelling unit for realm purposes. I also have a separate building on the property that I use as a shop office for my construction business. How do I treat these properties for liability and tax purposes?" - the ADU, the Auxiliary Drilling and Dwelling Unit, that's going to be either a long-term rental or a short-term. You could use the shop office as an admin office. I'd wrap it in an LLC and strip the equity out. “My business doesn't have traditional receipts for its expenses. We primarily rely on bank statements to track our spending. What supporting documentation would I need to provide to the IRS or my tax preparer substantiate these expenses and ensure accurate tax deductions? Are there any alternative methods to proving these expenses without traditional receipts?" - A bank statement, credit card statements, can be used, proof of payments, cancelled checks, etc. "My business partner and I co-bought a condo in New York City by paying $900,000. He put in $700,000 and own 75%, and I put in $300,000 and own 25%.  I'm deeding my ownership to him for $0. What would be his cost basis for future resale?" - Basically this is a gifting, it wasn't, they didn't sell it. So for any amount, so you just carry over the basis. File a 709. Check out our free Emergency Binder on our website! Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-to-move-a-rental-property-to-a-trust-s-corp-for-asset-protection&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-move-a-rental-property-to-a-trust-s-corp-for-asset-protection&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

Today Clint Coons, Esq., sits down with Winston Templet, a seasoned real estate investor, developer, and contractor with over 20 years of experience. Based in Tennessee, Winston shares insights from his extensive career, including his early days as a reluctant real estate investor, where he began with trailer parks. They dive into the state of real estate investing in 2025, with Winston emphasizing the shift toward building rather than buying. Winston explains his approach to finding profitable properties, partnering with land sellers, and navigating complex regulations, zoning, and permits. He also offers valuable advice on selecting general contractors, financing options, and how to avoid common pitfalls, particularly for first-time investors. Throughout the conversation, Winston highlights the importance of education and building strong community relationships as keys to success in real estate. Winston Templet is a seasoned real estate investor, developer, and contractor with over two decades of experience in the industry. Based in Tennessee, he has built a substantial real estate portfolio, demonstrating a keen ability to identify and capitalize on lucrative opportunities in the market. Winston co-founded "The Real Estate Templet," a platform dedicated to educating and empowering individuals of varying experience levels on real estate investment and development. Winston's passion for real estate is matched by his commitment to educating the next generation of real estate professionals. It is his firm belief that education is the key to success. Highlights/Topics: Clint's introduction of guest Winston Templet A reluctant real estate investor - the trailer park story The state of investing in 2025, builds instead of buying How Winston finds properties, sharing wealth with land sellers, partnering for success Regulations, zoning, permits, etc. How to approach city and municipal offices, proposing zoning changes Key costs that must be considered - engineering fees, sprinkler systems, green energy requirements Financing recommendations, building relationships with community lenders, cash refi's from other properties Selecting general contractors - it is crucial to research, get referrals, and hire the right people, never pay money upfront! First-timer mistakes to watch out for Setting up protections from liability with the right business entities Closing comments, final words of advice Resources: Real Estate Templet on IG https://www.instagram.com/realestatetemplet/ The Real Estate Templet On YouTube https://www.youtube.com/@UCs57I294Kvkpwtw3PQoaXGQ Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=the-real-estate-investing-strategy-that-is-taking-off&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=the-real-estate-investing-strategy-that-is-taking-off&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Clint Coons YouTube https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w  

Welcome to the first Tax Tuesday episode of 2025. Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., discuss topics including whether hours spent on personal and rental properties count towards real estate professional status, the tax implications of using an LLC for a brokerage account that generates short-term capital gains, and how to handle HOA dues when calculating the cost basis of a condominium. They also discuss the consequences of failing to issue a 1099 to contractors, how to navigate a tricky 1031 exchange, and strategies to minimize capital gains taxes when selling a rental property. You'll hear about ways to structure personal and business finances for educational deductions, managing a 401(k) loan from a tax perspective, and tips for maximizing tax benefits as a 1099 medical professional. Send your tax questions to taxtuesday@andersonadvisors.com. Highlights/Topics: "I have a solo handyman business, do my hours performing services for homeowners and real estate investors properties count towards rep hours. Do my hours working on my residence count towards rep hours if I plan to move out and rent the house?" - Absolutely. That's exactly what you're supposed to do. That time is exactly what we're looking for to get over 750 hours of material participation in the management of your properties, et cetera. "I am selling weekly options and was advised to put my brokerage account into an LLC taxed as a partnership. Doesn't this expose me to the same tax liability I have now with no LLC? What is the best tax strategy for a brokerage account that is making a large profit that is all from short-term capital gains?" -No, you're not going to have the same tax liability by putting it in that type of partnership. But there's a lot of other things you can do. "When calculating the cost basis of a condominium, how does one identify and add the portion of HOA dues spent for capital improvements to the property?" - If it's your personal residence, we don't deduct HOA costs. "What happens if I don't issue a 1099 to an outside contractor? How do you spend a virtual assistant who made over $15,000?" - You can get penalized up to $600, perhaps more, if you don't get the 1099 out. VA's overseas, if not a US taxpayer, you don't need to send a 1099. "How many properties must I acquire to meet the real estate professional status?" - The number of properties is irrelevant. You could have one, you could have a hundred. It's how much time you put into it. "I have a rental property that I would like to sell. I purchased it in 1999 for $175, 000. The current value is $450,000–$500,000. How can I reduce capital gains taxes?" - The quick, real easy, no brainer answer, you could do a 1031-like kind of exchange. "I'm in a 1031 exchange gone bad. The funds are with the intermediary in the escrow account. The replacement property seller did not cooperate and the deal is falling through. Now what can I do?" - Quick answer, you can pay tax. You could try and make the payments in installments. "Can I structure and set up something through my business and nonprofit or personally that will allow me to deduct my child's college education expenses." "I'm aware of state-specific 529 programs." - You don't get a tax deduction for a 529 plan. "I currently have a loan on my solo 401(k) and I want to pay it off early and turn around and take out another loan. How do I handle that from a tax perspective?" - You need to check with your particular plan. I just throw that out there for people who are thinking maybe of doing the same. "I am a 1099 medical professional. What can I do from now on to properly prepare myself to maximize my tax situation? I'm on the payroll for my S-Corp and managing the 1099 income through the S Corp." "I don't know if I should be doing anything else." - Quarterly tax meetings. That's always the answer. Putting it in an S-Corp was the right thing. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-to-reduce-capital-gains-taxes-when-selling-a-long-held-rental-property&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=how-to-reduce-capital-gains-taxes-when-selling-a-long-held-rental-property&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

It's our last Tax Tuesday episode of 2024! In this episode, Anderson attorneys Amanda Wynalda, Esq., and Eliot Thomas, Esq., address several listener questions on a variety of tax topics. They cover the tax implications of moving into a rental property, including how it affects capital gains and depreciation. They discuss the possibility of using an LLC as a management company for rental properties, allowing for contributions to a personal IRA. Eliot and Amanda also explain how negative cash flow from rentals can affect deductions and tax filings, the importance of staying organized with rental property expenses, and the consequences of transferring ownership in a 1031 exchange. Other topics include options for offsetting passive income with retirement accounts, consolidating LLCs under a Wyoming holding company, deductions for 529 plans, and the stepped-up basis for gifted stocks. Tune in for expert advice on these and more! Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: What are the tax implications of moving into one of our rentals? Bought the property 13 years ago, have never lived in it, taken expenses and depreciation on the returns or should we just rent it from ourselves through our property manager? - Just moving in, no real tax consequence. Once you move in you're not paying capital gains. The 13 years will be considered ‘non-conforming use'. Don't rent it to yourself. I own three rental properties. Can I use that LLC as a management company? Take a 10 to 15% management fee and use that money as an earned income to allow contribution to my personal IRA. Would that contribution be deducted from my rental income as cost to the rentals and Schedule E? When is the deadline for the contribution. My LLC has some expenses too. If my net income is only $3,000, can I still contribute $7,000 to my personal IRA and deduct that amount? - You're running passive rental income through a mgmt company to make it ‘active' income, yes you can do this. You need a management agreement that you actually pay before December 31st. Can I use negative cash flow as a deduction towards income /capable gains? I'm in California and nothing cash flows for at least a few years. If I'm negative $1,000 or more cash flow, is this a deduction against passive income or capital gains? - Capital gains come in when you sell the property. You can pull passive losses from other properties you own. What expenses are incurred for rental properties or tax deductible and what is the best way to stay organized when keeping records of bills and expensive for rental properties to make it easier at tax time? - Google IRS Schedule E page 1. There is a list there to refer to. Good bookkeeping is essential. Can I transfer the ownership of a property owned by an LLC tax as a partnership that I purchased as a replacement property in a 1031 exchange or will that trigger a taxable event? - Yes you can transfer, but it will trigger a taxable event. My wife receives income from multiple sources, real estate rental, consulting, etc. We plan to set up a C Corp to consolidate the passive income and offset some of that income with retirement contributions into a solo 401 (k). Unfortunately, we did not set up the C Corp in time for the tax year 2024. What options do we have with respect to retirement accounts to offset her passive income for 2024. What can we still do? - Consulting is not usually passive income. Can multiple individual LLCs mix of small business and rentals be consolidated into one tax return under a Wyoming holding company? If so, is that a recommended practice? Adding in a small business? - For rentals this is a standard protection structure, one property per LLC. You can add the active, but we would not recommend it. How much can we deduct with a 529 plan for our kids?- Some states may give you a deduction, but at the federal level there is no deduction. If I gift my stock to my aging dad and become the beneficiary the stock when he passes will I get the stepped-up basis after I inherit them? - This is fantastic. Yes, you can do this. This is great, but they have to live for at least one year after the gift, and you have to make sure he's actually going to leave it to you upon his death! Resources: Schedule Your Free Consultation https://andersonadvisors.com/strategy-session/?utm_source=consolidating-llcs-under-a-wyoming-holding-company&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=consolidating-llcs-under-a-wyoming-holding-company&utm_medium=podcast Bookkeeping Packages from Anderson Advisors https://bookkeeping.andersonadvisors.com/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq

In this episode of Tax Tuesday, Anderson Advisors attorneys Clint Coon, Esq., and Eliot Thomas, Esq., discuss essential tax strategies for business owners and investors. Topics covered include late S election strategies, the best approach for payroll and officer compensation, and the benefits of Solo 401(k) plans over Roth IRAs. You'll hear about how to tackle tax implications for cryptocurrency staking, offshore trusts, and real estate professional status. Additional insights include structuring holding companies for real estate investments, deducting rental expenses, and handling business losses. Tune in for expert advice on navigating complex tax decisions.   Send your tax questions to taxtuesday@andersonadvisors.com. Highlights/Topics:  "I'm considering a late S election effective January 1st of 2024." Okay, so we're going back in time here for an LLC. "I understand it's late in the year to get everything in order. I've heard others recommend an option to avoid payroll for 2024 by issuing a 1099 miscellaneous as officer compensation in lieu of a late payroll, then get payroll set for 2025. Would you suggest this 1099 approach, or is there still time to get payroll done for all of 2024?" - We don't advise this here at Anderson. We want you to roll the proper W-2 payroll. Yes, there's plenty of time. “What type of businesses do I need to set up a Solo 401(k) or Roth IRA?” - Look at the Solo 401(k) and use the Roth component built into the Solo 401(k) versus doing a Roth IRA because it gives you a little more flexibility in the control of those funds. "Can you review the contribution rules for a Solo 401(k) and for an IRA in 2024? For instance, when you defer income at year end and make a company match, then also the IRA contribution if possible?” - You can contribute up to $23,000 as the employee, and then the employer can contribute up to 25% of your earned wages "I invested in a cryptocurrency a few years ago. I have been staking it directly on the network, and in return, I receive a staking reward. How is the crypto activity taxed?" - The staking is usually considered ordinary income. That means it's going to be taxed at ordinary rates and very likely is subject to employment taxes. “I've been considering opening an offshore trust that owns an offshore LLC that engages in forex day trading business in the Cayman Islands. I only pay taxes on distributions received from the trust that way, I can grow capital outside the US. Am I on the right path here? And are there other consequences that I should consider?” - The way the US taxes individuals is that when we say worldwide income, it's not the income you earn in your own name. It's also the income that you earn through entities that you hold an interest in. "I have a real estate professional status." (We call it REP status for short.) "I have invested in both traditional, rentals, and syndications, both use cost segregation and bonus depreciation. Can I claim the paper loss from real estate syndications together with our other rental activity after electing to aggregate all real estate activity? Is it allowed to claim all losses, or the ones from syndications disallowed?" - You have to work over 750 hours in a real estate trade or business that you ‘materially participate' in. That could be I sell houses, real estate agent, things like that. I manage houses, anything like that, and that has to be over 50% of your work week. Typically, it's difficult to do if you have a W-2 job.  "I own three separate holding companies, LLC taxed as a partnership for my real estate." We'd always recommend that, some oil, and mineral rights. "A second taxed as a partnership for active real estate flips." We might have an issue with that. "S-corporation for technology consulting." "I saw Anderson videos on holding a passive brokerage account, not active trading, in an LLC for asset protection. Where do you recommend I'd place this? Would it go into one of these other LLCs or some other holding company? I would prefer to avoid an extra annual federal tax filing if possible." - I would keep it completely separate because you've got this one set up for the oil, this one set up for the real estate, this one here is our active business. Putting your brokerage, your savings account into any of those entities just wouldn't make sense to me. "I have a primary residence that I plan to rent after one year, which would be in December. If I put it into service this year, can I deduct expenses that were needed to make it ready for that rental, such as a cost seg for this year?” - It's a question of when it is placed into service. If we've already placed it in the services and we start, depending on what we're doing to improve on it, if it is just an improvement, that's still just going to go to basis, and we would depreciate it now that it's a rental. “Clint recommends using a partnership holding company for residential real estate investment. "Do I need to start a new IRS filing submission with a partnership holding company or keep it on my existing Schedule E, personal IRS filing? I have 25 investment homes, so I'd like to minimize the amount of work for this change. I'm not sure how to do this accounting change." - You can write out 25 little boxes down here that all lead up to just one entity, Wyoming holding. We'll make them do all 25. "I have a relatively new corporation whose expenses exceed income," so we've got losses. "Can these expenses be used to offset income in 2025? If so, how would I indicate this on this year's tax return?" - If we have more expenses than income, it's a loss, it can carry forward into the next year. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=staking-crypto-how-are-rewards-taxed?&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=staking-crypto-how-are-rewards-taxed?&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis

In this episode of Tax Tuesday, Anderson Advisors attorneys Eliot Thomas, Esq., and Amanda Wynalda, Esq., dive into various tax strategies. You'll hear about renting property to your business, self-rental rules, and IRS grouping options. Then, we address the sale of a California primary residence, including the $500,000 capital gains exclusion for married couples. We'll explore cost segregation for landlords and the 1244 stock loss provision for individuals. We also have answers about tax implications for C Corps, including reimbursement rules for accountability plans and transitioning from LLCs. Lastly, we touch on Opportunity Zones, rental property sales strategies like 1031 exchanges, and the tax impact of converting a rental to a primary residence. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics:   So can I rent real property to my business? - Check self-rental rules, and the ‘grouping' option from the IRS Just sold our primary California residents in July for a million and ninety thousand dollars. We purchased it five years ago for six hundred and fifty thousand, with three hundred thousand down and a three hundred fifty-thousand-dollar mortgage. Any taxes due considering the 121 married filing joint exclusion of five hundred000 capital gains. - We're going to look at the sales price, less our ‘adjusted basis.' Could you give an example about cost segregation? Have you heard? I have heard you talk a lot about it and they're kind of confused. I'm thinking about becoming a landlord. How can I do a cost segregation on, for example, the appliances that come with a purchased property? - The building itself has straight-line depreciation over many years. Contents of the building are depreciated at different rates. Is the 1244 stock loss provision, a $50,000 tax credit, that is dollar for dollar, against your 2024 interest, social security and passive incomes on your 1040 for 2024. - 1244 is only applicable to individuals, as a deduction/loss. It reduces your taxable income. When using the accountability plan for a C Corp, do the charges have to be made from the employee's personal account to qualify, and what happens if those charges are made on the company credit card? - The individual needs to pay for them first personally of their own pocket for a reasonable business expense, then submit for reimbursement. We purchased our first commercial building this year. Even though I knew in the back of my mind the property was in an opportunity zone, it did not hit me until a couple days ago. Is there still an advantage for us to go into the opportunity zone route? I believe the only benefit at this point is a 10-year mark and step-up in basis. Is this correct? I believe there would be some elections we would have to make in a fund. Can you explain how it all gets set up and what we would need to do? - Once you obtain that property, a stopwatch starts, and you have 30 months to substantially improve it. You had to put the funds into the Opportunity Zone fund, which is the business entity, and then purchase the property there, not going to be able to back into it. We are changing our LLC from being disregarded to being a C corporation. Over the year we have moved substantial money from our LLC to our personal accounts as distributions. Do we need to relabel those as dividends and would we be able to transfer the funds back, or does the C Corp election only affect forms from the date of transition, meaning we'll file a split return 1040 for a disregarded entity, 1120 for the C Corp? Thank you for all the great media you guys put out. - Nothing happens with the previous activity, but going forward you can't take money out in the same way. We have rental property bought originally in 1991 as our residence. The current tenants want to purchase the property. What is the best way to approach this? To lower capital gains, we are considering using the funds either to purchase another property or invest in tax liens and deeds. - You have a lot of options. Installment payments, interest from seller financing, or 1031 exchange What are the tax implications of moving into a house that has been held as a rental for 12 years? They've never lived in it themselves. - What is your value/investment in the house? That becomes your adjusted basis when you move in, for future tax purposes. Many items are no longer deductible if they become your personal residence.   Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=demystifying-cost-segregationt&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=demystifying-cost-segregationt&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons    

n this episode of Tax Tuesday, Anderson Advisors attorneys Eliot Thomas, Esq., and Toby Mathis, Esq., tackle a variety of listener questions. Topics include strategies for managing cryptocurrency gains, converting a primary home to a rental without losing the 121 exclusion, and navigating the primary residence exclusion when selling a home. They also discuss the benefits of forming an LLC for consulting income, handling rehab costs for a fix-and-flip property, and meeting the Real Estate Professional criteria for tax purposes. Toby and Eliot dive into depreciation recapture, 1031 exchanges, and how to structure property ownership to avoid taxable events. Tune in for expert insights on real estate and tax strategies for investors and homeowners alike. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: By crypto, I bought $125,000, $24,000 invested $30,000 is now over $1 million, scared to sell because of the 35 % tax. Hold on until $125,000, $25,000 for 20%, but I'm scared the price is in my portfolio. How can I get around the 35 % legally? - If you will have other losses from other sales, you can use those to offset in the short-term… How do I convert my primary home into a rental without losing the 121 exclusion? - You can do this but you must meet the 5-year primary residence provision. My wife and I are selling our primary residence. We'll be listing the house for sale before we have lived in it quite two years. But assuming that closing takes about 90 days, it'll be over two years at the closing. Will this be acceptable for using the primary residence exclusion? - The clock starts when you have the title in possession, so the clock also STOPS when the new buyer takes possession of the title. I will be starting a consulting position in December. Is it better to create a LLC to receive wages or should I receive funds in my name? What are the benefits of creating the LLC? - If your employer agrees to pay you with 1099, you should have an S or C Corp LLC to protect your wages. We haven't sold our fix-and-flip property After one year and are considering renting it instead How should we handle the rehab costs and office expenses and our tax return? The property is held in a disregarded LLC. - First we have to establish your “intent” - if you weren't sure… you're ok to leave it in that disregarded entity. I've never been able to claim real estate professional due to a full-time W2 job. As of December 31st, 2023, I took early retirement. However, I was paid a severance until December 2024. During 2024, I have been leasing, advertising, physically rehabbing new property, responding to maintenance, etc. I'm also a licensed real estate broker in Kentucky where my properties are. I materially participate in 100 % of the rental activities. Can I claim real estate professional for 2024, even though I was being paid severance but not working my previous corporate job? - Yes, you can, as long as you meet the REP criteria. When calculating capital gain from the sell of a rental property is the gain from the depreciated cost basis or cost basis after the depreciation recaptured. It's the gain from the recapture cost basis or cost basis. For example, I bought at $100,000, sold at $200,000, that's how you're supposed to do it, had $50,000 in depreciation. Woo. Would it be $100,000 capital gains tax plus the tax on the $50,000 depreciation recovered or $150,000 capital gains? - The first 50,000 is what's subject to depreciation recapture…the 100K is “straight capital gain” I know it's a broad question, but would love for you guys to discuss depreciation recapture at sale after cost segregation has been formed on an investment property. If it helps, you could do, it could be a cost segregation on a pizza shop. - it depends on the different categories of whatever was in the building. Our rental LLC owned by a Wyoming holding LLC sold a Toronto property for a huge gain. We hear all these huge gains today. Like all you guys are making money, but we plan to 1031 rates. Our qualified intermediary informed us that the replacement party property should be under the name of the same LLC that sold the property. How can we move the ownership of the 1031 new property into a new LLC without triggering a legal and /or taxable event, how can we protect the assets of the new property if we can only be under the name of the old rental LLC? We want to dissolve the old rental LLC. - if you do this properly through a qualified intermediary, that's a neutral third party that handles all the funds, you may be able to defer all the gain. We are a group of four investors and we have an apartment rental complex, 12 units, and a separate single-family rental. We would like to exchange both of those properties and invest into a motel. Can we exchange the residential rental properties for a business real estate property?  - Yes is the quick answer, must be “used in a trade or business” Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=turning-your-home-into-a-rental-keeping-your-121-exclusion-intact&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=turning-your-home-into-a-rental-keeping-your-121-exclusion-intact&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, chats with Tyler Surat of One Tree Advisors. Tyler is a seasoned expert in tax mitigation and land conservation strategies, who is helping clients utilize conservation easements to preserve land while mitigating taxes. You'll hear the definition and benefits of conservation easements, the challenges posed by IRS scrutiny on certain easements due to misuse by "bad actors," and the importance of understanding state-specific tax laws. Tyler emphasizes the necessity of due diligence before pursuing an easement, considering factors like property registration and the differences between group and individual applications. Tune in for valuable insights into navigating the complexities of conservation strategies and tax implications. Highlights/Topics: Toby introduces Tyler, from CPA to CFO What is it, and what's covered under a ‘Conservation Easement'? The IRS is contesting some easements from ‘bad actors' in the real estate business Groups vs. individuals Is the property on a National Registry? Tax laws in your specific state need to be considered Audits can be a risk due to past individuals who have misused this tax break Due diligence is essential before requesting an easement Get in touch with Tyler at his email below with your questions Share this with new investors you know Resources: Connect with Tyler Surat Email: tsurat@onetreeadvisors.com tsurat@onetreeadvisors.com Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=conservation-easements-in-crisis&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=renting-out-a-property-without-an-llc&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

In this episode of Tax Tuesday, Anderson Advisors attorneys Eliot Thomas, Esq., and Toby Mathis, Esq., tackle a variety of listener questions related to tax deductions and property management. They discuss the implications of evicting tenants and the possibility of deducting repair costs, as well as how homeowners can deduct home office repairs. You'll hear about  the process for amending tax returns to include rental properties and explore the tax consequences of receiving large gifts from non-U.S. citizens. Additionally, they cover topics like the advantages of S-corp versus C-corp structures, the requirements for achieving real estate professional status, and the nuances of short-term property sales, including 1031 exchanges. Tune in for expert insights that could impact your tax strategy! Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "We rented our house last year due to damages caused by the tenant violations of the agreement. We evicted them." "The tenant abandoned the property with their belongings." "With proper judgment and the sheriff's help, we evicted them and cleaned the property. The tenant caused too much damage. Can we include the cost of fixing it on our taxes?" - yes, and we have two categories, repairs or improvements. "I work from home. I already take deductions for my home office. If there is a repair in the house like plumbing or an appliance repair, am I able to take a percentage of that repair off as a deduction?" - As a general matter, yes. "In 2022, I bought and rented a rental property, but I never put the property on my tax return. Can I now add this property to my tax return and take advantage of the tax deductions, cost of ownership, et cetera? Is there a limitation on how far back someone can amend a tax return or add a rental property purchase in the past?" - yes, you can. Is there a limit to how far back? Yes, I'll hit the limit first, three years from the date that you filed. "My parents live in Singapore and are not US citizens. They want to give me and my kids $200,000.”“They have not previously gifted us any funds. Will any of us need to pay tax on this?" - Generally speaking, I don't know of a tax necessarily if you have non-US citizens giving cash gifts over to their children or family. "Is there a different procedure to buy a residential multifamily with a pizzeria?" "Is there a different procedure to buy a multifamily with the pizzeria running downstairs?""We have our long-term rental properties with LLC. How should we proceed with this? Can we do a cost segregation study and take bonus depreciation on this type of property and take advantage of the passive deductions?" - For both, you can go ahead and do a cost segregation study, see if it would be in your favor—usually it is "What type of activities can I log toward REP (real estate professional) status, as a real estate agent? For example, working at home on my website, market research, advertising. Does having a home office mean my time driving to and from showings counts as time? Is education either required or optional?" - If you meet the criteria, then that turns it from passive to non-passive. if you spend over 750 hours in a particular trade or business "What are the tax consequences if I sell a property in less than a year of purchase? Does the same apply to manufactured homes? And would they be able to do a 1031 exchange if there's profit on the sale?" - What was your intent? Was it to flip? That is a different scenario than short-term gains. Manufactured homes need to look at state laws. "Why should I open an S-corp versus a C-corp?" - There are many differences to consider. "Can you please explain the 100-hour material participation in detail? You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual, including individuals who didn't own any interest in the activity for the year." "For example, if I materially participated in my rental activity for 100 hours during a tax year, can I claim 100% tax deductions on my losses, expenses, and my business activity under this test alone?" - No, it doesn't work that way. You need REP status. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=can-you-deduct-tenant-damage-and-cleanup-costs-on-your-taxes&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=can-you-deduct-tenant-damage-and-cleanup-costs-on-your-taxes&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons      

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, sits down with Mike Sullivan from Alliance Virtual Offices to discuss the evolving landscape of workspaces. Mike details five compelling reasons to abandon traditional office spaces, highlighting Alliance's impressive 40 years in the industry, with 20 years dedicated to virtual solutions. The discussion demystifies the concept of a "virtual office," likening it to the 'Airbnb' of office rentals. Listeners will learn about the array of services offered, including phone support, professional addresses, receptionists, and flexible meeting spaces—all for a budget-friendly monthly cost.   Virtual offices can mitigate risks associated with rising rent and personnel disputes, providing the flexibility needed for businesses to thrive. Ideal for those navigating talent needs or seeking cost-effectiveness, Alliance also offers rental agreements that start with a six-month minimum, transitioning to month-to-month options. Tune in to discover how virtual offices can transform your business strategy!   Highlights/Topics: Five key reasons to ditch your office space Alliance's 40 years in the business - 20 years virtual Ambiguity – exactly what is a “virtual office”? The ‘Airbnb' of office space Services available - phone number, operators, address, receptionist, meeting space, workspace Monthly cost of $50-$70 per month globally Rent on an as-needed basis, for example, attorneys are the largest percentage of renters Mitigating risk/credit - eliminating rising monthly rent, credit, personnel disputes or conflicts, separating business from personal Flexibility is key for hiring and cost-effectiveness Talent needs - if employees are unable to work from home Rental agreements - 6-month minimum, then month-to-month is available Utilizing space for private interviews Share this with new investors you know Resources: Alliance Virtual Offices Offer for Listeners https://www.alliancevirtualoffices.com/lp/anderson-advisors?gspk=YW5kZXJzb25hZHZpc29yczUyNDA&gsxid=YHqclhuYOPk8&pscd=ps.alliancevirtualoffices.com Schedule Your FREE Anderson Consultation https://andersonadvisors.com/strategy-session/?utm_source=5-reasons-to-ditch-traditional-office-space&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=5-reasons-to-ditch-traditional-office-space&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

This episode of Tax Tuesday with Anderson Advisors attorneys Eliot Thomas, Esq., and Toby Mathis, Esq., tackle pressing issues faced by business owners and real estate investors. From the implications of switching health care reimbursements from a C-corporation to an LLC, to short-term rental strategies, Eliot and Toby discuss the 100-hour participation test and how to select the right property. Other topics include the intricacies of real estate professional status, the deductibility of expenses for damaged properties, and the mechanics of Qualified Business Income (QBI) deductions. Finally, listeners learn about tax management for online businesses (at 46:17) and the potential tax liabilities of renting secondary homes through an S-corp. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "I currently reimburse myself for health care expenses through my C-corporation. I have another completely separate business that I run through an LLC registered in Wyoming. Are there any issues if I switch my health care reimbursement from the C-corp over to the LLC?" - It depends- who is it disregarded to? A C-corp can reimburse health expenses. "We want to take advantage of the short-term rental loophole strategy. If we buy a house in October and close in November, would I have enough time to reach the 100-hour test? What kind of house should we focus on?? - There are several different tests for material participation, one of them being at least 100 hours and more than anybody else. But there are 7 total tests. "Regarding real estate professional status, the code says you have to participate 500 hours materially or have been rep for the last five years." Actually, there are seven tests, but we'll get into that. "Does that mean if a spouse has been a rep for the past five years, he or she can be hands-off for the next three to five years and still claim rep to offset the other spouse's W-2?" - Long-term rentals are passive income normally, but REP status changes that, although it has certain requirements "We bought a small house. The house was in a fire and had a lot of damage. We spent a lot of money on structural engineering, services, roof, and other support of construction. This was needed for the safety of workers. They would not be able to work otherwise. My CPA told me I can't take any of those expenses as deductions because I have not rented the house yet. Please be so kind and tell me why I can't deduct structural engineering expenses of more than 12,000. My CPA told me I can only deduct utilities such as water and electricity. That's it." - The code is the code, you can't deduct for a rental until it is in service…the write-off comes over cost seg "Can you go over QBI in detail? And do I deduct 20% QBI from net or gross profit? Also, do I deduct 20% first, then my expenses, or do I choose either 20% or my expenses?" - First you find your net, then there are five different qualifications "If I sell a house on an agreement for deed, how are the monthly payments that I receive taxed?" - If you used it as a rental, you'll have depreciation recapture. “For deed” means you're selling it over time. [46:17] "I'm considering starting an online business. I'd like to know strategies and how to manage taxes as best as possible."- Start by putting it in an LLC, tax it as S or C-Corp, be aware of state requirements… "Could I have my S-corp rent my secondary home when the business takes clients on retreat? While this may create an expense on the business side, does it also create a tax liability on our 1040?" - How is the second home currently being used? If it's already a rental, you may hit some limitations… "Does changing the floor and painting the walls count as repair, or is it a renovation?" - Painting is usually a repair, you can write that off. Flooring has other requirements. "Can I take a six-figure distribution from my S-corp and have it not affect my social security? If the corporation shows a profit and I'm the CFO, will this affect my social security?" You have to take a reasonable wage in order to get that credit. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=tax-strategies-and-tips-for-starting-an-online-business&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=tax-strategies-and-tips-for-starting-an-online-business&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq

In this episode of Tax Tuesday with Anderson Advisors attorneys Eliot Thomas, Esq., and Amanda Wynalda, Esq., we dive into essential real estate investment strategies and tax implications for property owners. Discover why selling a rental property to your LLC is considered a prohibited transaction and learn how to protect capital gains from your primary residence using the 121 exclusion. We discuss the limitations of 1031 exchanges for properties flipped within a year and outline how to determine a reasonable salary from your S-Corp while considering payroll taxes. Additionally, we clarify the requirements for maintaining real estate professional status, the treatment of capital gains within an S-Corp, and the nuances of deductions for short-term rentals. Tune in for valuable insights to optimize your investments! Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: I just purchased a property through a self-directed IRA and LLC. I own a rental property. Will I be able to sell the rental property to my LLC? - No, you cannot personally benefit, this is a prohibited transaction. How can I protect the capital gains from selling my primary residence after adjusting the cost basis? And after taking the 121 exclusion and utilizing that money for investment purposes. - If the home was used as a personal residence for two of the last five years, you might be able to take some money off - it's 250,000 if you're single, 500,000 married filing joint. Can I use the 1031 exchange when flipping properties under one year of ownership? - The IRS looks at the property as “inventory.” So although it is being used in a ‘trade or business' you can't use the 1031. How do you determine the right pay for yourself? Is it worth the taxes you pay into Medicare and Social Security? So far, we've paid $30,000 in payroll taxes. Will that go towards our tax bill at the end of the year? - You have a ‘reasonable salary requirement' from an S-Corp. It ranges from 38% to 60%. What minimum must you do to maintain your real estate professional status and not be considered a dealer if you intend to flip a house? - REP status is when you spend 50% of your personal services time and at least 750 hours in your real estate trade or business. What happens with the capital gain from stocks or from the sale of a rental property when inside of an S-Corp? - It is not ‘ordinary income'- the building is under “separately stated”. What is the list of deductions with a STR that's a short-term rental for those of you in the know in the REI, as passive income when material participation is not met compared to a list of deductions when material participation is met? - There is no difference between passive and non-passive deductions. Google IRS PDF Schedule E. If I volunteer my work or time at a nonprofit, is this tax-deductible? - the short answer is no, but you can deduct things like mileage I have a W-2 and 1099 income. Bought a house to flip. How can I best take advantage of this financially to save on tax? - you may be able to run certain deductions against your income. How does rental property via an LLC affect personal taxes? - we get this question all the time recently. Set up in a disregarded LLC, no impact at all on your personal taxes. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/ss/ Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/  

Today Clint Coons, Esq., speaks with Aaron Kancevicius, the Lead 1031 Advisor/Director of Lending at Plenti Financial. Aaron takes us through the ins and outs of navigating the IRS' 1031 exchange guidelines for investment properties. Aaron and Clint discuss the essentials of setting up a 1031 exchange, the importance of consulting with a CPA, and the necessity of a qualified intermediary. Aaron clarifies the complexities of depreciation, depreciation recapture, and the "like-kind" property rule. He outlines the critical timelines, including the 45-day identification and 180-day closing periods, offering tips for effective portfolio diversification. Additionally, you'll hear advanced strategies like standard and reverse exchanges and transitioning properties to personal residences, making this episode invaluable for serious real estate investors. Aaron Kancevicius is from Plenti Financial, a leading 1031 exchange consulting firm in Southern California with over 20 years of experience in real estate finance. Aaron has helped countless real estate investors evaluate deals from as little as $100K to over $100 million. Highlights/Topics: Clint's introduction of guest Aaron Kancevicius How you can arrange for a 1031 exchange When in the process do you need to apply for a 1031? Debt, loans, timing Parameters for avoiding capital gains taxes Are there complications with cost segs on properties? Complexities of the “Like/Kind” IRS regulation Diversifying with a 1031, limitations Working with contractors on improvements Related party transactions Cash-out refi's Considering exchanges from US to International Drop-n-Swaps, reverse exchanges, selling multiple properties, combo exchanges Can you use a 1031 to purchase a primary residence vs. an investment properties? Other uncommon situations, mistakes Aaron has witnessed Closing comments - contact an expert before you embark on a 1031 exchange Resources: Plenti Financial https://www.startmyexchange.com/anderson Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=1031-exchange-for-real-estate-Investors-HUGE-TAX-SAVINGS&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Clint Coons YouTube https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w

In this episode of Tax Tuesday with Anderson Advisors attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., the pressing tax questions from listeners have a special focus on real estate issues. They dive into the complexities of tax benefits for short-term and long-term rental properties, addressing specific monetary scenarios. Toby and Eliot also explore the nuances of passive losses and real estate professional status, evaluating how a limited partnership investment and syndications impact tax strategies. Additionally, they clarify the effects of installment sales on capital gains tax, the tax implications of long-term capital gains for incomes below $93,000, and strategies for reducing tax liability as a real estate flipper. You'll hear about the mechanics of 1031 exchanges, the use of solar credits against passive income, and the treatment of repairs versus improvements on rental properties. Tune in for expert advice on optimizing your tax situation in the real estate world. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "Professor One has three short-term rentals, seven days or less." "He generates $20,000 of profit from each one, but each generates $60,000 of losses, cost seg plus bonus depreciation." "Can he use 20% QBI?" that's 199A. "Can you use it on the $20,000 profits, or will those be offset by the $60,000 losses, and the net will be $40,000 each?" –We can't. We have to take in the $60,000 loss that's associated with each of those buildings. We don't take QBI against the loss. No, QBI would not be available here. "Professor Two has four long term rentals, and he used line depreciation for all of them." "His wife is a real estate professional, but there's not enough losses to offset his $300,000 grand in income. The CPA suggests putting $200,000 in a syndication as an LP. K1 will generate $150,000 of losses. As long as his wife is REP, he can use those passive losses to offset his W-2. Is that true?" – Because we're introducing a syndication, and this is a limited partner, that's the LP here at K-1, we're going to have to meet that test, the 500-hour test. In other words, to get our REP status, if we didn't use the 500-hour test, we may not be able to do that. That's why I say it depends. "Professor Three has one passive long-term rental and just bought two short-term rentals with seven days or less with cost seg plus bonus depreciation. Next year, 2025, his wife plans to retire and claim real estate professional status. The plan is to keep those short-term rentals as Airbnb with eight days or more, a.k.a passive, and keep the long-term rental as is. The first question is, can the wife manage, clean those Airbnbs and claim the 750 hours without touching the third long-term rental that is far away and group them all together?" – I'm going to say no, because remember, a short-term rental isn't rental activity. It's the pizza shop, okay, that Toby keeps talking about. But we have other ideas. “The second question is whether we can still use the losses from the cost seg we conducted on those two short-term rentals this year." – Losses will stay passive into the future, so no. "I have a question about capital gains tax. I'm selling a property with an installment payment plan. Only two installments to be received. The first will be received December of 2024, the second and last payment will be January 2025. How will this affect my capital gains tax?" – Simplistically, it's just going to split them. "Paying tax on real estate long-term gain. If my net income is under $93,000 in 2024, will I owe taxes on long-term capital gains from the sale of real estate, a vacation rental? The gain itself is over $93,000." – if you are below approximately $94,000 in 2024, it's going to be taxed at zero. "How do I reduce my tax liability as a flipper?" – Do it in a C-Corp or S-Corp, besides just immediate tax deductions, we want to avoid dealer status. Reverse exchange 1031. "Please help us understand it. How do I choose a QI, which stands for qualified intermediary? Any recommendations for first-time 1031 exchangers?" – you're first buying the replacement property and then you're deciding within 45 days which you're going to give up. And so it's just the opposite direction. You have 108 days total from close to close. "Is it possible to use solar credits against passive income from real estate rent income?” – Yes. You can have a solar credit. You could do it on your personal home, which would create an ordinary loss. The nature of the activity that the solar is attached to might have something to do with its tax treatment. "How do you determine if a repair and a rental property can be treated as an expense in the current year or must be depreciated?" – If you're making the property more valuable by doing it, that's not a repair. You're making it more valuable. "Hi, my husband and I want to sell a new construction home business to become full-time investors and manage our five large commercial properties. In the past, we've had real estate professional status because we self-managed our commercial properties. If we sell our construction business, do we still qualify for rep status if we start a management company to manage our commercial properties and earn W-2 income from this new company? What type of entity would be best to set up a management company, LLC, S-corp, or C-corp? – using that management company that you own yourself, certainly you can use that towards your time. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=strategies-to-reduce-your-tax-liability-as-a-real-estate-flipper&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=strategies-to-reduce-your-tax-liability-as-a-real-estate-flipper&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq    

In this episode, Toby Mathis, Esq., of Anderson Business Advisors, sits down with Brent Nagy, a highly accomplished real estate investor with over 20 years in the industry. Brent, who retired by the age of 40 with a portfolio of more than 50 cash-flowing properties, shares his expertise around the critical importance of proper asset protection, cautioning against owning real estate outside of a formal LLC or entity. He discusses common pitfalls and liability issues associated with residential properties, highlighting that a well-structured investment strategy can significantly reduce stress and risk. With a wealth of experience, Brent underscores that good intentions alone are not enough—talking to other investors and understanding protection as a vital cost of doing business is essential for long-term success. Highlights/Topics: Toby introduces Brent, his back story and progression Making money passively, “Rich Dad Poor Dad”, becoming an investor Owning real estate outside of an LLC or entity - NEVER Proper structure and proper protection is paramount for investing in real estate Residential properties - liability examples and faulty advice So much stress can be avoided with the right structure in place Good intentions can never trump experience Talk to other investors, protection is the ‘cost of doing business' Share this with new investors you know Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=renting-out-a-property-without-an-llc&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=renting-out-a-property-without-an-llc&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq

Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., answer listener questions with a focus on various strategies for minimizing estate and income taxes. You'll hear about how to use non-profits or irrevocable trusts to avoid estate taxes, structuring an assisted care business with asset protection strategies, and setting up single-member LLCs taxed as S-Corps. For short-term rental tax deductions, it's clarified that a property can't serve both vacation and business purposes. The questions also address investment in qualified opportunity zones or QOZ's, 1099 tax options for truck drivers and other independent contractors, deducting home improvement costs, and alternatives to 1031 exchanges. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: What is the best way to avoid estate tax? - Setting up a non-profit, or an irrevocable trust. Currently, only estates over $13 million get a federal tax I'm a nurse. I'm interested in starting an assisted care business in my home. Any recommendations to use for taxes or startup strategies? - Focus on asset protection - separate your building vs. operations in an LLC. You'll need good insurance and other protections for anyone coming into your home. My wife has a single-member LLC engineering firm and it's taxed as an SCorp. I plan to open my own business. Would I be able to open my own single-member LLC tax as an S -Corp? My CPA advised me to run my business through hers so that only one 1120S is filed. - Yes to the SCorp and NO to running through your wife's LLC. If you get sued someone can take everything from you. Can I use my vacation home as a short-term rental to tax write-off? So how do we do that? - it's either vacation or it's business, you don't do both, okay? I hear a lot about seven average days, but there is a lot of confusion behind those seven days. - The only reason there's confusion is because people don't know how to read the regs… I've realized capital gains from an installment sale in 2023. I've not received capital gains up to my basis yet. I will have a chunk every year up to the next five years. Can I still invest in a qualified opportunity zone? - QOZ's are ending at the end of 2026 I would like to focus on 1099-related options. I'm a truck driver, and I feel I'm paying very high taxes. - This is broader than just truckers, but don't start a sole proprietorship, try a C or S- Corp to cut down employment taxes. Sold our investment property in 2023, which was previously our residence for 10 years. When we started renting out our property about five years ago, our CPA did not advise us on updating the cost basis because you don't. Right. We have done many upgrades to the house during the 10-year stay. So this year, when we file our taxes and report the sale, we will be using the initial cost basis for the home. My question is, any way to deduct the expenses we had when it was our residence? - See form 315 to capture that missed depreciation. I see different ads from others saying there are options other than a 1031 exchange to defer taxes. Looking for any viable options, please. - We can look for UPREITS, Umbrella, partnership, real estate investment trust, things like that. Being a senior over 70, I really enjoy the videos I watch on YouTube as it's never too late to learn and try to understand real estate investing in taxes. But even if I do pick up some of the things, I still would need experts to do the job for me. What would it cost for Anderson's group to follow my future investments? I want to do this for my daughter who is now in her second year of college. - If you want turn-key investing, come to infinity investing Resources: How to Avoid Taxes When Selling Your Rental Property Infinity Investing Schedule Your FREE Consultation Tax and Asset Protection Events Anderson Advisors Toby Mathis YouTube Toby Mathis TikTok

In this episode of Anderson Business Advisors, Toby Mathis, Esq., speaks with Jeff Mason and Chris Hammond from Redwood Retirement on the intricacies of $100,000+ cash balance retirement plans, focusing on how innovative solutions can benefit business owners. They explore the key aspects of these plans, including what can be paid and deducted, the hurdles involved, and the flexibility they offer. The discussion covers the effectiveness of Redwood's solutions, highlighting when payments are due for the tax year and showcasing best-case examples of significant tax savings achieved through cash balance plans. Chris and Jeff also clarify the differences between Cash Balance Plans and Defined Benefit Plans, explain the limits and maximum contributions, and introduce a sample plan for effective modeling. With insights into flexibility, payroll funding, and real-world case study outcomes, this episode is a comprehensive guide to leveraging cash balance plans for optimal retirement planning and tax efficiency. Highlights/Topics: Chris and Jeff intro, Redwood Retirement and their cash balance plans Liability - what you can pay and deduct, hurdles, flexibility Redwood's solutions, proof of effectiveness When are payments due for the tax year? Best case examples of cash balance plans and their tax savings Definitions and differences - Cash Balance Plan vs. Defined Benefit Plan Limits and maximum contributions Modeling a ‘Toby Mathis plan' What all this means for business owners Flexibility, funding with payroll Favorite case study outcomes If you want to speak with Jeff and Chris - click the link below to see if their services can help you! Resources: Do you want to discuss if a Redwood Retirement Cash Balance Plan Design is right for your company?

In this episode, Toby Mathis, Esq., of Anderson Business Advisors welcomes Erik Dodds- a seasoned financial planner, fiduciary, and active trader. Together, they delve into the anticipated pivot of the Federal Reserve from a hawkish to a dovish stance and its potential impacts on the market. Erik provides an in-depth analysis of historical trends and recent economic indicators to forecast future market movements, particularly focusing on the S&P 500 and its ETF proxy, SPY. He shares valuable investment strategies for both traders and long-term investors, including the use of covered calls, caller strategies, and understanding option Delta for optimizing strike selection and income generation. To stay informed and proactive, Dodds offers insights on how to prepare your portfolios for financial fluctuations and maximize returns amidst market volatility. Highlights/Topics: Toby introduces Erik Dodds to discuss the Federal Reserve's pivot What a Fed pivot involves, shifting interest rates Fed's current interest rate status and lack of recent changes Rate cuts might appear in September or December 2024 Market expectations for Fed rate cuts fluctuate with economic data Historical Fed pivots often lead to market downturns Options strategies can protect portfolios during market declines Wealthy individuals are most impacted by market volatility Long-term investors should focus on portfolio protection and consistent buying Advice for investors on protecting portfolios and managing risk Resources: Join our FREE Infinity Investing Basic Membership and get a complimentary digital copy of the Infinity Investing book! https://infinityinvesting.com/pricing/?utm_source=how-the-federal-pivot-could-shake-up-the-stock-market&utm_medium=podcast Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-the-federal-pivot-could-shake-up-the-stock-market&utm_medium=podcast MarketWatch Article https://www.marketwatch.com/livecoverage/stock-market-today-s-p-500-futures-inch-higher-as-ai-frenzy-continues/card/stocks-fell-21-on-average-after-first-fed-rate-cut-since-the-1970s-says-comerica-xr9yBoZ9PeIkFpOeqfE8 Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., answer listener questions with a focus on optimizing tax outcomes for real estate investors and crypto enthusiasts. We explore strategies for handling income through complex entity structures, such as using an LLC and a C-corp to manage staking income and fund a 401(k). We also discuss the timing of LLC formation for crypto investments and how flipping houses can be structured within a C-corp or S-corp to minimize taxes. Listeners will learn about managing losses on short-term rental cabins, the implications of renting out a portion of your home, and the nuances of filing multiple LLC tax returns. Plus, we address how to handle passive losses if you're a real estate professional. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "As a tax strategy, let's say let's say I set up a trading LLC entity and a C-corp entity that owns 49% of the trading LLC. If the trading LLC makes around $10,000 in staking income, and the C-corp gets its $4900 as a partner in the trading LLC, then can the $4900 be used to fund a 401(k) owned by the C-corp? Is the income considered earned income or ordinary income? If it is ordinary income, can it be used to fund a 401(k)?" - By doing this, putting in the structures, we kept $4900 off the personal return. That's a victory. "I currently invest in crypto. I anticipate selling some of it sometime in 2025 with gain over a hundred thousand dollars or perhaps far greater." It's crypto. You could quadruple in a day. "What would be the best move for me right now? If I were to create my LLC, would I be taxed when I moved my crypto to the wallet for the LLC, all crypto would've been bought more than a year prior to selling? Should I create an LLC this year or wait until next? - If this was just a disregarded LLC, meaning it doesn't file its own tax return, it's basically that taxpayer, either way, when we put the money in, it's not taxable. "How do I save taxes on flipping houses? We have three houses we are flipping in the next few months." "How can we reduce the taxable income on these properties?" - We often would put our flipping activity maybe in a C-corporation, possibly an S-corporation. Why? A lot of ways to mitigate taxes with reimbursements, corporate meetings, wages that you use to contribute to a retirement plan. "I bought a short-term rental cabin in May of 2022 using 1031 funds. Rentals are beyond disappointing at this point. If we sell for at least $200,000 loss more than the gain on the 1031 funds, how does this play out regarding taxes?" - we may not know exactly what our loss is. Let's just assume we do have that loss. When we have losses, one thing we don't have to worry about is depreciation recapture because we have no gains. "I have multiple LLCs. Do I have to file multiple tax returns?" - it depends on how the LLC is taxed. If it's a disregarded entity, means it doesn't file a return. If I have seven LLCs and you're doing seven different tax returns, that doesn't make a lot of sense when you could set up a single entity to own them all. "I've had my primary residence for the past 21 years. If I rent it for three years or more and sell it, would I be taxed on the depreciation I take over those 3 years, or would it be included in the 121 exclusion?" - If it was exactly three years, then they could take advantage of that 121 if they were to sell it and maybe even 1031. "If I have a two-level house and I live in the upper level but Airbnb on the lower level, can I deduct the depreciation repair management of the lower level? Does it need to be a legal unit and have its own address?" Same question, but what if it was a long-term rental? - Because you have rental income coming in, you will be able to take these expenses - the depreciation, repair, and management. It's just a matter of how much. "If I am a real estate professional with over 750 hours actively acquiring properties, and I sell my other long-term rentals non-real estate investments, such as stocks, private equity, and venture capital investments, can the losses from my active or passive real estate investments offset gains on my other long term non-real estate investments?" - if you have passive income, it's passive income. If you have losses, it's passive losses. You can only use the passive losses to offset other passive income. So you may get losses trapped. We call it suspended passive activity loss rules. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/strategy-session/?utm_source=how-to-save-taxes-when-flipping-housest&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

Today Toby Mathis, Esq. speaks with Lauren Robins, Esq., a senior real estate attorney with Anderson Advisors, about helping savvy investors use land trusts in the right scenarios. Lauren explains how land trusts act as a versatile tool for investors, likening them to a ‘Swiss army knife' due to their broad range of applications. We explore what land trusts can and can't do, including the intricacies of trust ownership and beneficiary roles. Lauren details how land trusts can help avoid unnecessary taxes, clarify sale clauses, and offer homestead exemption benefits. We also discuss equity stripping and how land trusts serve as a protective measure for investment properties. Additionally, Lauren sheds light on the Garn-St. Germain Act and how land trusts can be utilized effectively for flips, wholesaling, and ‘subject to' deals. Highlights/Topics: Land trusts - a ‘Swiss army knife' for investments What land trusts can and can't do Trust ownership, beneficiaries How land trusts can be useful Avoiding unnecessary taxes, sale clause confusion Homestead exemption benefits Equity stripping Land trusts as protection for investment properties The Garn-St. Germain Act Using land trusts for flips, wholesaling, and ‘subject to' deals Not all investors know about this extremely useful tool Share this episode with someone who might be interested! Resources: Schedule your FREE consultation  https://andersonadvisors.com/strategy-session/?utm_source=why-savvy-investors-use-land-trusts-for-real-estate-investments&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=why-savvy-investors-use-land-trusts-for-real-estate-investments&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast  https://andersonadvisors.com/podcast/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

Today Toby Mathis, Esq. speaks with Karim Hanafy, Esq., a leading expert on non-profit law at Anderson, to explore the intricacies of starting and managing a charity, be it a public or private organization. Karim shares invaluable insights on navigating IRS regulations, the differences between public and private charities, and the implications of donations and tax deductions. The conversation delves into privacy concerns for board members and family, the challenges of fundraising for public charities, and the complexities of annual filing and reporting requirements. Karim also discusses potential tax burdens, dissolution clauses, and prohibited transactions. Tune in for expert advice on effectively starting, running, and sustaining charitable organizations. Highlights/Topics: Get advice from someone who knows the IRS, like Karim Examining reasons for starting a charity Donations and tax deductions - public vs. private Privacy concerns - board members, family Dealing with making donations - public vs foundation Potential tax burdens and rates Dissolution clauses Fundraising can be a challenge in public charities Annual filing and reporting requirements Prohibited transactions Private operating foundations - museums Share this episode with someone who might be interested! Resources: Schedule your FREE consultation https://andersonadvisors.com/ss/?utm_source=8-differences-between-public-charities-and-private-foundations&utm_medium=podcast Email Our Team To Get Your Nonprofit Started nonprofits@andersonadvisors.com Start Your Nonprofit Plan in 45 Minutes For Free https://andersonadvisors.com/nonprofit-501c3/?utm_source=8-differences-between-public-charities-and-private-foundations&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=8-differences-between-public-charities-and-private-foundations&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis

Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., delve into listener questions including - how gains from crypto investments are classified as either ordinary income or capital gains. For property sales, we explore strategies to avoid capital gains tax, such as donating to a private foundation, and we clarify the impact of marriage timing on capital gains claims. We also cover tax implications for rental property expenses, including the timing of write-offs for losses and the criteria for short-term rental deductions. Additionally, we touch on medical reimbursements for C-corps, renovations for Airbnb setups, and backdoor Roth IRAs. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "What are the basic principles to keep in mind with gains derived from investing in crypto?" - gains from a “personal asset” need to be identified as ordinary income or capital gains "Is there a legal way to sell a property through a charity to avoid a capital gain and have the charity provide us with a small monthly retirement amount?" - If you already have a private foundation, you could still do this transaction as long as you gave the property to the private foundation. "My fiance and I purchased a property together. He is selling his property that he has owned for over 10 years. We are not married yet, but intend to get married this year. If we get married after he sells his property, can we still claim status for capital gains? He will have a significant amount of capital gains on his property. His property will sell in August, and we weren't going to get married till October. We just want to make sure we're okay to claim status for capital gains." - I think what we're getting at here is the 121 exclusion, if you meet the criteria. "I purchased a duplex and we'll list it as a short-term rental in August." I want to buy furniture and supplies and do both major and minor repairs before the listing is active. Can I write off these expenses before the Airbnb listing is active?" - Generally speaking, no, you're not going to write it off before it's active. "I bought an investment property for $260,000. It's only worth $200,000. If I sell it, can I take a $60,000 loss?" - If we bought it as investment, maybe it was a flip or something like that, we can take it as an ordinary loss. "For short-term qualification, do we need to add it to Airbnb or Vrbo, or can we just rent it out to friends and family for three rentals of less than a week and still qualify for the deduction?" If yes, how do we show proof?” - there's no requirement that you specifically set up an Airbnb or VRBO, but you can't rent to friends and family or “related parties” - that's personal use. "Can you reimburse medical costs if organized as a C-corp?" - Simple answer, yes, if you have a medical reimbursement plan. "Can I make renovations to my personal residence to establish an Airbnb and write off the costs?" - yes you can, depreciated over time. It must be in service to deduct. "What is a backdoor Roth?" - You can put it in the Roth after you pay taxes on it, if you make an income over the typical limit for Roth contributions. "What is a good way to plan when converting a primary residence into a rental property and have a tax-wise setup for the transition? Do we sell the property to the LLC or transfer sign the loan to the LLC? How will the capital gains be treated?" - you could do either one. Resources: Schedule Your FREE Consultation https://andersonadvisors.com/ss/?utm_source=loss-on-rental-if-i-sell-it&utm_medium=podcast Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/?utm_source=loss-on-rental-if-i-sell-it&utm_medium=podcast Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

In this episode, Toby Mathis of Anderson Business Advisors welcomes Neal Bawa back to the show for another eye-opening appearance. Neal is the founder and CEO of Grocapitus, a commercial real estate investment company, and CEO of MultifamilyU, an apartment investing education company. Neal reports some jaw-dropping stats: 18 million families are priced out of homeownership due to salary versus mortgage disparities. Landlords are poised with a peak supply of 673,000 apartments in 2024, but the market will experience a shortage and price hikes in 2025-2026. The Federal Reserve's interest rate policies aim to balance inflation and affordability concerns, potentially influencing market dynamics. Investors are advised to target multifamily properties and land purchases, focusing on 5-unit properties over smaller units and considering assumable loans for strategic advantages in the current market landscape. Highlights/Topics: Market progress since Covid Increases - Salaries vs. Mortgages 18 million families have been priced out of home ownership Opportunities for landlords - supply is peaking - 673,000 apartments in 2024 2025-2026 will see extreme apartment shortages and price hikes Interest rates and the Fed Inflation vs. rate cuts, affordability may improve Possible zig-zagging market price fluctuations What should investors do “right now”? Current advantages in the multi-family market, land purchases Why you should be looking at 5-unit properties, not 1-4 units Look for assumable loans Time is your friend in today's market Resources: Gro Capitus Website https://www.grocapitus.com/ MultiFamily Website https://multifamilyu.com/ Watch Neal Bawa “Feds Broke the Bank- Is Real Estate Safe?” March 2023 https://www.youtube.com/watch?v=v-zObxj7NPk Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Clint Coons YouTube   https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w  

Welcome to another episode of Tax Tuesday. Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., delve into listener questions around various tax and business strategy questions. Topics include the active vs. passive income classification for S-corp distributions in a physical therapy home health business, the optimal timing for cost segregation and bonus depreciation in short-term rental activities, and the tax implications of transitioning from short to long-term rentals. Other discussions delved into Opportunity Zones, S-corp taxation for owner draws, classification of employees, IRA to foundation transfers, tax-saving strategies for property flips, overlooked investor deductions, 1031 exchanges for rental properties, and the feasibility of lease options in Roth IRAs. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "We are starting an S-corporation for physical therapy home health business. My wife and I will be the only shareholders. My wife will run the business and see patients. I only plan to invest into the business. We'll be a limited partner. Will my distributions from the S-corp be considered as passive income since I am not materially participating in the business?" - No. It's all going to be active income. "If you started short-term rental activity in November 2023 when the property was purchased, can you use cost segregation and bonus depreciation in 2023, or is it still better to wait until 2024?" - more than likely, you're going to be better off in 2023. "If I buy a house in September, use it as a short-term rental for a month until October, and then do long-term rental starting in November for the STR, short-term rental, I or my spouse will actively manage the property, can I still take the bonus depreciation in first year and offset my W-2 income?" - It's all going to look at how much time did you rent it and what was the average stay. "If I put money into an opportunity zone and then sell after 10 years, does it all come out tax-free or just any growth? - If you've had capital gains, you sold some stock, sold some property, you have true capital gains, you can invest them in what's called an Opportunity zone fund. "If you are an S-corporation and pay yourself a regular salary, but also take money from what Intuit calls ‘owner draw', how is that taxed?" "Do all employees have to be W-2 employees under an S-corp, or can they be contractors?" - the W -2, as we pointed out earlier, that's going to be subject to employment tax. All of this income is subject to income tax, whatever your bracket's at, both streams. "Can an IRA balance be transferred to a foundation tax-free and also allow the owner a tax deduction? Can I create the foundation and operate the foundation receiving the contribution?" - there's two ways to do it. I receive the money, pay tax on it, then contribute to a charity and I would take a deduction. Or I could put up to $100,000 a year of my distributions directly into the charity and now I don't pay tax on it, "We sold our first flip at the beginning of the year and would like to know if there is any way at this moment to save as much as possible from being taxed, i.e. invested in the next flip or something else to avoid the "loss". Also, if we have a loss for our S-corp in 2023, could we see that capital gain to be offset in 2024?" -it's easy to get these things kind of mixed up. Flips are ordinary income, not capital gains. "What are typical operating and general expenses you've seen overlooked when investors file deductions?" - The way you avoid missing deductions is you have good bookkeeping, okay? "Can I move into a rental house I have for 15 years? Does it still qualify for a 1031 at a later date? I assume you mean when you move into it, it says a primary residence. Does it qualify for a 121 exclusion after two years?" - if we've moved into it, I'm assuming we made it our primary residence, it's no longer in a trader business, So you lose 1031 capability. 121 is for a personal residence. "Can you do a lease option assignment in a Roth IRA? Can you do a sandwich lease option in a Roth IRA?" - Yes and yes. if we have a true option, true sandwich leases option, my understanding is yes, you can do them. Resources: Schedule Your Free Consultation https://andersonadvisors.com/ss/ Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Today Clint Coons, Esq., speaks with Christian Allen and Rod Zabriskie from Money Insights about the strategic use of life insurance policies for real estate investments. Learn how to maximize your financial resources by putting money to work through optimized contributions and leveraging the tax-free advantages of life insurance. Explore the flexibility of funding ranges tailored to your goals and discover how quickly you can access funds. Understand the process of taking loans from your policy to invest and the impact of simple versus compounding interest. Christian Allen is the founder and CEO of Money Insights. He launched Money Insights in 2014 after working in the financial services industry for over a decade. Christian's mission is to help high-income earners accelerate their wealth building, optimize their investing, and find new and innovative ways to go from high income to high net worth! He is passionate about entrepreneurship and helping others. He enjoys playing pickleball, watching sports, and spending time with his wife and children. Rod Zabriskie is the President of Money Insights working directly with clients and the team to create an enjoyable environment for all. He has worked in financial services since 2009, after a decade of working in small businesses for others. He holds an MBA, with an emphasis in entrepreneurship, as well as an undergraduate degree in Marketing Communications. Rod is married to Jodi, and they have 7 amazing children. Highlights/Topics: Don't just save money to invest, put it to work Utilizing the tax code, life insurance as a vehicle Optimizing contributions to your policy Flexibility - creating funding ranges for a policy How soon can someone access these funds? How to take out a loan from your insurance policy to invest Simple v Compounding interest in this scenario Examples of how this concept can work and ‘what if's' Utilize up to 95% of your policy amount - think of it as a line of credit! Money Insights can easily help you structure these setups Tax-free benefits Phase two of the investment optimizer - creating tax-free income What happens if you actually DIE? Case study - wild client story Contact Money Insights to get started Resources: Money Insights https://moneyinsightsgroup.com/aba Schedule Your FREE Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=the-most-profitable-self-storage-investing-strategy Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Clint Coons YouTube  https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w Anderson Advisors Tax Planning Appointment https://andersonadvisors.com/ss/  

Today, attorneys Toby Mathis, Esq., and Amanda Wynalda, Esq., delve into listener questions around topics like the benefits of LLCs for real estate investors, income-shifting tactics, and the implications of the Tax Cuts and Jobs Act on small business owners. The conversation also delves into the complexities of Qualified Business Income (QBI) deductions, using self-directed IRAs for real estate investments, and the tax implications of transferring appreciated property into LLCs. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: Have you attended an in-person or virtual Tax and Asset Protection Workshops? Anderson Advisors has done a great job of creating all the pieces of my estate, but I have no idea how to put it all together. All right, that's a great first one. In particular, how do the holding LLCs flow into my personal tax return and how does the LLC tax as a C-corp get reported on my personal returns? - if your entire structure is disregarded and you're reporting your rental properties on your Schedule E, page one, you would continue to report that exact same thing on Schedule E, page one. Can I expense my breeding stock as a dog breeder rather than do depreciation? - They have a seven-year useful life, as “business property” Can you please speak about QBI and how it is often missed by business owners? W-2 employees are not allowed to use it. Who else? On the one hand, S-Corps can claim 20% right away. Is this true? - C-corps are separate entities, this is geared to the small business owner As a real estate professional, can I also take the depreciation expense from syndications? How do I use my self-directed IRA to invest in real estate? - if you have a self-directed, then you can invest in what's considered, I guess, non-traditional types of investments, including real estate What is the tax impact of moving an appreciated property into a LLC? - you have like four choices disregarded partnership, S-corp, C-corp. But there's no such thing as LLCs for tax purposes. So we need to know a little more information. What are the differences between an HSA and an HRA Health? - HSA is a health savings account and an HRA is a health reimbursement account. So there's actually a number of differences. I have been depreciating my rentals for tax purposes. How can I benefit or switch to cost segregation? - They're business property and so residential real estate is depreciated on a 271/2 year useful life and commercial is 39 years. How should I set up my stock investing to avoid huge tax penalties? Penalties, yeah, don't worry about the penalties, it's the tax liabilities of making too much money. Do you have to be an LLC to get all the tax benefits from purchasing investment properties? - If we're talking about all the tax benefits, probably. But you don't have to have an LLC to own rental property. Resources: Schedule Your Free Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=how-to-use-your-self-directed-ira-for-real-estate-investing Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Have you ever worried about protecting your wealth during a volatile election year? Wondering what the rest of 2024 holds for the market? In this episode, Toby Mathis, Esq. chats with Kevin Simpson, founder and chief investment officer of Capital Wealth Planning, LLC. Kevin is a $10.3 billion wealth management expert, and shares insights from his book "Walk Toward Wealth" on navigating market uncertainty. Learn how to manage risk, write covered calls to hedge against volatility, and discover the surprising truth about election year performance. Kevin will also delve into the Madoff scandal, helping you identify a trustworthy custodian for your hard-earned money. Don't miss this opportunity to gain valuable advice and protect your financial future! Highlights/Topics: Market volatility in an election year Predictions for the market through the end of 2024 What's driving the earnings? Statistics around the economy Capital Wealth manages $10.3 Billion Managing risk Writing covered calls, managing volatility How presidential elections affect the market Stories from Kevin's book “Walk Toward Wealth” What duty should you be looking for? The Madoff scheme, finding a reputable custodian Advice for Kevin's younger self Send us your questions and ideas for future show topics! Resources: Schedule Your FREE Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=investing-with-confidence Kevin Simpson Capital Wealth https://capitalwealthplanning.com/team/kevin-simpson/ Book: Walk Toward Wealth https://www.kevinsimpson.com/walk-toward-wealth/ Anderson Advisors https://andersonadvisors.com/ Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Toby Mathis on YouTube https://www.youtube.com/c/tobymathisesq  

Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., delve into listener questions around topics like borrowing from your QRP (Qualified Retirement Plan) without it being considered income, utilizing depreciation from syndications as a real estate professional, and writing off Airbnb setup costs. Learn how to establish accountable expense reimbursement plans for your C-Corp, handle taxes for disregarded property holding entities, and calculate depreciation post-1031 exchange. Discover efficient strategies for paying kids in your small business and choosing between S-Corp and LLC structures. Simplify the complexities of C-Corp taxes and learn how to invest in real estate via self-directed IRAs without UBIT implications. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: I am 65. If I borrow $30,000 from my QRP, would that be considered earned income?- No. You have to pay back with interest, but it is not income. As a real estate professional, can I also take the depreciation expense from syndications against my spouse's K-1 income? - Generally yes, if you are a REP, and it's non-passive activity, if there was an overall loss, it can go on your return. Can expenses for building and outfitting an Airbnb spent this year be written off next year when the unit is rented? - yes, but it can only be written off after it has been “placed in service” How do I establish an accountable expense reimbursement plan for my C -Corp and a medical reimbursement plan? - Have a corp meeting, and adopt the plans with documentation of that meeting. If a disregarded property holding entity isn't taxed when our individual property expenses like taxes, insurance maintenance, and depreciation considered for income taxes? - Any income/expenses must be reported, flowing up into your 1040. How do I calculate depreciation after a 1031 exchange? - It's your original property purchase price, plus any improvements, less depreciation. This again is on the original building you had, the one that we're going to relinquish. I want to include my kids as employees for my small business and I want to pay them in a lump sum annually. What would be the most efficient way to structure that? - If they are under 18 there's no employment tax, if you are paying them through a partnership or a disregarded entity. Is it beneficial to be an S-corp or an LLC if making under a certain amount of money? - You want to be in some kind of entity, to protect yourself from lawsuits. What are the tax differences between an S and a C corporation? How hard are a C corporation's taxes to do? - Yeah, so the biggest tax differences between an S and a C then in a synopsis is the S corporation doesn't pay taxes, it passes it to its owners. How can I use my self-directed IRA to invest in real estate deals without being subject to UBIT? - don't buy any real estate with any debt or anything like that and make sure it's a long-term rental, and not a flip. Resources: Schedule Your Free Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=the-main-tax-differences-between-an-s-corporation-and-c-corporation Tax and Asset Protection Events https://andersonadvisors.com/live-tax-and-asset-protection-workshops/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq

Today Clint Coons explores the evolving landscape of the self-storage industry with guest Ryan Gibson, CIO of Spartan Investment Group. Topics include shifts in customer demographics, such as millennials becoming the largest segment, and the impact of the 4 "D's" (death, divorce, dislocation, and downsizing) on demand. They also discuss rising rents despite a decrease in demand, innovative revenue streams beyond traditional storage, and the crucial role of facility management in investment success. Technological advancements and future investment opportunities, alongside considerations like market conditions and customer needs, round out this insightful exploration into the future of self-storage. Ryan Gibson serves as the co-founder and Chief Investment Officer (CIO) of Spartan Investment Group, specializing in acquiring and developing self-storage facilities. With a track record of organizing more than $200 million in private equity, Ryan oversees investor relations and capital raises for SIG projects. His expertise extends to managing complex developments in diverse markets. Alongside his role at SIG, Ryan brings extensive experience as a commercial airline pilot and holds a bachelor's degree in Business from Mercyhurst University, with concentrations in Marketing, Management, and Advertising. Highlights/Topics: Changes in the self-storage industry, changes in the 4 “D's” Specials for first-timers, increases in rent Industry stats - less demand, but more revenue Millennials are the largest customer segment Other revenue streams in self-storage Logistics and timing around building new facilities Considerations - the market, your customers, raising rents Clint's self-storage investment - facility management is key Flipping storage properties Challenges and failures, interest rates, Tech advancements in the industry External access vs. internal buildings in the same facility Looking to the future for investing Resources: Spartan Investment Group Clint Coons YouTube Schedule Your FREE Consultation

Today on Tax Tuesday, Anderson attorneys Eliot Thomas, Esq., and Amanda Wynalda, Esq. delve into listener questions around inheritance taxes on property and stocks, strategies to minimize capital gains when relocating homes, and the intricacies of 1031 exchanges and syndication investments. Additional topics include LLC taxation, depreciation on rental properties, and the choice between independent contracting and LLC formation in Florida. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: Is there any capital gains tax when my son inherits my property or stock? - It depends. With traditional stock it's fair market value when you pass. There's no tax to transfer it. I'm selling my home in South Florida soon and we like to relocate to North Carolina. I would like to reinvest a portion of a rental property into a rental property and another smaller home when I move to North Carolina. What's the best way to pay the least amount of capital gains taxes after selling my Florida home? - We're assuming a primary residence, and considering the 121 exclusion. If you lived there 2 of the last 5 years…. How does a 1031 exchange work? What about a reverse 1031?- If you have an asset used as a rental, not being flipped, you want to defer the gain by buying a “replacement”. Time frames are very strict- 45 days. You need a qualified intermediary. If I'm selling a property, all the investors wanna roll their money into a future investment through a 1031 exchange. Is there a legal way to still do a 1031 for the investors that want to participate? - If this is a partnership, that partnership owns the property. It could be changed to a ‘Tenancy in Common'…. I have recently opened my Wyoming LLC, got up a bank account, a business bank account for the LLC,and funded the LLC out of my personal account. I have since used the deposit of funds to make a limited partnership investment in a syndication, very popular investment. How do I best document these transactions for tax purposes? - Everything goes back to bookkeeping. Troy from our bookkeeping dept says with any capital contributions to the “equity account” for a syndication, you will receive a K1, that you can adjust at tax time based on the loss or gain of the company. If my LLC distributes dividends to the partners, do the partners pay tax from the money they receive from the LLC? Should I take depreciation on a rental property if I don't have a tenant that year or should I wait until finishing repair? Although it is habitable. I'm a licensed realtor by the way. - When you purchase the property, the building can be depreciated a little bit each year, but land is not depreciable until it is sold. Check out cost segregation and bonus segregation. When it is advertised or posted as “Available for Rent” and truly rentable, that is when you MUST begin taking depreciation. As a realtor, you may aim for Real Estate Professional Status… Is it better to work as an independent contractor than to have an LLC in Florida? - Those two things are not opposites. When you're talking about from the tax side, you're usually looking at it being paid as an independent contractor versus being an employee. We look at the pros and cons of this question. Would a new start-up with no revenue for the first two years file taxes for those years or only when the third year when the revenue was generated? - If it's a partnership or C Corp, you may not have to pay taxes if there's no income. It depends on how your business is set up. Additional Q&A listener chat questions are addressed Resources: Schedule Your Free Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=how-to-avoid-paying-capital-gains-tax-on-inheritance Bookkeeping Services from Anderson https://bookkeeping.andersonadvisors.com/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Welcome to another Tax Tuesday episode of the Anderson Business Advisors podcast. Today on the show, attorney Toby Mathis, Esq., is joined by Scott Estill, Esq., a former senior trial attorney with the IRS. Scott and Toby dive into how to defer capital gains taxes on real estate with a 1031 exchange and discover the best way to leverage your LLC for tax savings. You'll hear about maximizing contributions to solo 401ks, deducting startup costs, and the tax implications of fix-and-flipping properties. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: 1031 exchange - What are the other options besides investing in one single property and how do I find them? - a 1031 is basically just a way to defer taxes and with proper planning. Up to 200% of the amount is what you can identify as other potential properties. As a 1099, what is the best way to leverage my LLC to save money on taxes. How can I save on self-employment taxes? - We need to know what type of LLC you have set up. If you set up an S-Corp, your salary can take out the employment taxes. I have a C-Corp that allows reimbursements for medical expenses. Is there a limit to the scope of the type of medical expenses eligible for reimbursement? I plan to reimburse for monthly premiums, plus out-of-pocket co-pays for annual procedures, checkup, etc – Your C-Corp is correct, and you're limited to what the IRS Pub 502 lists out. (No weed, no cosmetic surgery!) I've just set up my entity with you guys, but I've already been doing business. Will I be able to write off startup costs that predate the actual formation of my entity? - You can write off $5K first year, and amortize the rest. How do I pay myself from my LLC if it is taxed as a partnership? In other words, what tax forms do I fill out to show the IRS that my LLC paid me for my work? - In a partnership you don't issue a W2, but you get a “guaranteed payment” - You use a K-1, not a 1099. Can you use credit card statements as proof of expenditures? - Be prepared, the statement itself is not sufficient for the IRS, you need an itemized list. Write notes on all your business expenses so you have a record if audited. When calculating employer contribution to solo 401k, how does bonus depreciation affect the number? What if I do cost seg and wipe out most my income? Can I make an employer contribution? - Not sure how these elements are related, but the employer could contribute up to whatever you got as wages, period. But they can only deduct 25%. Would I be able to donate a property to a nonprofit organization and get the tax right off the sale year if the property was purchased in the same year? - So you have to look at any donation. the calculation here is fair market value on the date of the donation. What tax implications, inefficiencies do I need to keep in mind when doing a fix and flip?- There are some pretty serious tax implications if I don't structure the business properly. If you're doing multiple, you're a dealer, and you will have self employment tax. Resources: Schedule Your Free Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=how-do-i-pay-myself-from-my-llc-taxed-as-a-partnership Scott Estill, Esq. https://scottestill.com/ Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=what-is-the-best-tax-efficient-way-to-purchase-an-existing-business Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Are you tired of struggling to open a bank account for your business or personal needs? In this podcast, Clint Coons addresses this common challenge and offers a better solution with Barry Sloane, Chairman and CEO of NewtekOne. Before becoming a part of NewtekOne, Mr. Sloane served as the Managing Director at Smith Barney, Inc., overseeing the operations of the Commercial and Residential Real Estate Securitization Unit. Clint and Barry will shed light on the benefits of opening an account with NewtekOne as the premiere banking option built for businesses. Learn why NewtekOne stands out as a superior choice, offering specialized services tailored to the needs of entrepreneurs, real estate investors, and business owners. Accelerate your journey towards savings goals with a specialized business account tailored for growth. Learn More about NewtekOne https://partners.newtekone.com/andersonadvisors/ *Annual Percentage Yields (APYs) advertised are valid as of April 30, 2024, and are subject to change at any time without prior notice. Certain accounts require a minimum and maximum deposit amount required to open an account. Penalties may apply to early withdrawals. Fees may reduce earnings. To learn more, visit NewtekBank.com. If you are a current Anderson Advisors Platinum Member and would like information about setting up a bank account with Newtek please reach out to your team.    

Welcome to another Tax Tuesday episode of the Anderson Business Advisors podcast. Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., delve into listener questions around how real estate investors can maximize their returns and navigate the often-overlooked tax benefits associated with oil and gas investments within retirement accounts. They also share valuable tactics for employing family members in a business to shift income and save on taxes. A significant portion of the discussion is dedicated to flipping properties, as they clarify the tax implications of this active income, debate the benefits of cost segregation studies for flips, and advise on the best entity structures to minimize tax burdens. Additionally, the episode covers charitable giving, exploring the differences between donor-advised funds and family foundations, and offering strategic insights for philanthropic tax deductions. Submit your tax question to taxtuesday@andersonadvisors.com Highlights/Topics: "After seeing one of Toby's videos on five overlooked deductions, my interest in oil and gas investments was piqued. I am wondering if you can use your 401 (k) or a Roth to participate in a partnership. If so, would you get the tax benefits on the front end in year one? If you can do this in a tax advantage account, how is the 15 % depletion credit treated? - Oil and Gas and a retirement account - depreciation wouldn't really be a factor. Loan the money to yourself. “Are US notes bought at a discount in an aftermarket offering exempt from California income taxes?” - Yes they are What is the best way to pay your children for a small business owner?“- Pay them from a disregarded entity. What are the tax implications when flipping a property, is it? There's three. Is it active income taxed at the ordinary income tax bracket? Another old company Took a while and is there? Stop it. And is there self-employment tax? Where is it? is it beneficial to do a cost segregation study for bonus depreciation for a flip? What is the best entity structure for flips? - Generally, flipping is active/non-passive income. It depends on your material participation. How can we offset a W-2 income and lower AGI through real estate investing in rental properties that are potentially fixer-uppers? Can we claim property repair expenses, investments, mortgage interest taxes, et cetera, against W-2 income to lower and offset taxable income?- I did a cost segregation study on a fixer property I purchased and rehabbed in 2023, but haven't used it yet because I heard 100 % bonus depreciation might be reinstated. How long is the cost seg study good for since I had it completed in December of 2023? - The cost seg is based on 2023 never expires, you'd be eligible for at least 80%. Can I do cost segregation study on Airbnb in a foreign country? - Different countries have different tax rules, but for US tax purposes, it may not benefit you the way you think. I want to utilize rental property depreciation to the maximum. However, I held a property for five years and then did a 1031 exchange. I barely get any depreciation to use now. Please explain why what occurs to depreciation when I do a 1031 exchange. Will the original basis carry over to the replacement property? If so, is it accurate to say I get the most depreciation benefit when I buy straight up, not doing a 1031? - the original basis doesn't carry, but the adjusted basis does. What's the best way to transfer the ownership of my investment property to my son before my death? - You can gift it, but we don't recommend it because they won't get the stepped up basis to the fair market value. Put it in a living trust. How does a donor advice fund differ from a family foundation? - Both are great tools if used for the right purpose. You can invest up to 60% of your AGI in a DAF, or 30% AGI for a family foundation. Resources: Schedule Your Free Consultation https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=how-to-choose-the-best-entity-for-flipping-real-estate Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=what-is-the-best-tax-efficient-way-to-purchase-an-existing-business Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

Have you ever been caught off guard by the fine print in an insurance policy? Clint Coons, Esq. and Shawn Woedl of National Real Estate Insurance Group uncover the often overlooked details of property insurance that could spell disaster or salvation for your investment portfolio. We dig into the labyrinth of insuring your LLCs and land trusts, as we scrutinize landlord insurance and why it's a whole different ballgame from your typical homeowner's policy. From accidents on vacant lots, fentanyl-related incidents, dog bites, and even snakes in the rafters, Shawn's expertise sheds light on some wild scenarios where the tailored solutions offered by National Real Estate Insurance Group will have you covered. Shawn Woedl is the President of National Real Estate Insurance Group. He is an industry-recognized speaker and educator with an emphasis on Commercial Property and Premises Liability. He brings over 12 years of professional and personal experience in real estate, business, and insurance to NREIG's unique, investor-oriented brand. Highlights/Topics: How is landlord insurance different than a homeowner policy? Some common policy exclusions you may not know about Fentanyl-related claims, toxic mold may be excluded Dog bite coverages, breed exclusions, snakes in the rafters! Injuries/coverage on vacant land lots Beyond primary liability - umbrellas and additional liability coverage Coverage for LLCs and land trusts “Subject to” property transactions Don't go in ‘blind' - do your due diligence, or have NREIG do it for you! Request a coverage estimate from NREIG with the link below Resources: Request a coverage proposal NREIG https://affiliate.nreig.com/Anderson Shawn Woedl LinkedIn https://www.linkedin.com/in/shawnwoedl/ Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=why-landlord-insurance-is-vital-for-real-estate-investors Anderson Advisors https://andersonadvisors.com/ Anderson Advisors Podcast https://andersonadvisors.com/podcast/ Clint Coons YouTube https://www.youtube.com/channel/UC5GX-U6VbvMkhSM1ONBiW8w

On today's Tax Tuesday episode of the Anderson Business Advisors podcast, Eliot Thomas, Esq., is joined by Anderson CPA Barley Bowler. Barley and Eliot will cover some listener questions including strategies around deducting startup costs and choosing a business structure for loan eligibility, tax breaks like depreciation and claiming real estate professional status, paying taxes as a contractor on 1099 NEC forms, and when capital loss carryover deductions can be taken. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "I joined Anderson and Infinity Investing in 2023, I established my first real estate investment, C-corporation, in December of 2023 for an official 2024 start date. What, if any expenses, membership, fees, et cetera, do I submit for 2023? ”We started to form the company in 2023. Do I hold out to list everything including the courses, business cards, opening expenses after the fact, or do I add these expenses to 2024?" - After the date of incorporation, everything's expensed as usual. “Pre-incorporation or pre-startup” costs are allowed to be deducted as long as they don't exceed $50,000 "I've heard we want a pass through real estate holding company that produces a K-1." That'd be a partnership. To enable easier lending on properties in the future. We talk about lendability. How do we get the most favorable lending criteria? Of course, it comes down to the bank, but we're certainly going to be covering that as well about bonus depreciation. We're trying to get a loan on a property. Depreciation is one of these expenses we have to pay attention to.” - in a partnership, as they mentioned here, You're allowed on the federal lending guidelines to have up to 70% of value. "We got cost seg and bonus depreciation to offset. Can it offset 1099 income and your social security income?" - If we're talking about a traditional long-term rental, we first need the real estate professional status, then material participation. "Hey, my tax is so high. What can I do? How can I reduce it?" - We potentially want to incorporate the business if the numbers are right, then we just look for all available deductions. "Why did I have to pay employment taxes when receiving a 1099 NEC?" "I knew I'd have to pay, but it wasn't taken out during the year. I don't have a business, so why do I have to pay taxes?" - an independent contractor form, 1099 NEC, is subject to ordinary income and employment taxes. "When selling an investment house like a rental property with some gains, what's the best way to protect our gain without sharing a good part of the check with the IRS?" - This is going to be your 1031 exchange, like-kind exchange. "Can capital loss carryovers be chosen when to use?" "Can we pick and choose when we do our losses?" - With capital losses, you can use them up to the amount of capital gains you had plus $3000 that will go against ordinary income. "Can I reduce my income tax from capital gains from selling stocks by using a loss in a real estate income or loss business? - If you have your real estate going on, some losses from there perhaps and expenses from that, there are some times where we can use that and times where we can't. I just created a business at the end of March." When is it a preferred time to contact a tax specialist and set up a meeting to ask questions, have things explained, and see if we were a good fit for this individual? - If you need some specific guidance or calculations, that's when we may push you to do a billable tax consult or tax planning. In the meantime, hop right into the Platinum knowledge room. Resources: Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-can-a-1099-contractor-reduce-taxable-income Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons  

Welcome to another Tax Tuesday episode of the Anderson Business Advisors podcast. Today, attorneys Toby Mathis, Esq., and Eliot Thomas, Esq., explain tax strategies for listener-submitted questions. The conversation digs into S-Corp vs. C-Corp for property management, understanding Unrelated Business Income Tax (UBIT) for non-profits, qualifying for Real Estate Professional status, and cost segregation and bonus depreciation for rentals. Submit your tax question to taxtuesday@andersonadvisors.  Highlights/Topics: "Is it better to have an S-corporation or C-corporation as your property management company managing your land trust and property held in your disregarded LLC? Are you required to have payroll with the S-corporation?" - With the management corporation, S or C, I personally like the C-corporation better. “Where and when does UBIT apply to real estate investing and generally to alternative investments? - You're going to run into this when you have exempt groups or we'll call them entities, nonprofits are also exempt. Does an accountable plan have identical benefits when comparing a C-corporation versus an S-corporation for a new business?" - being a new business or not shouldn't change too much. It's just a C Corp versus S Corp. "How do you know how much you can convert into a Roth IRA from a traditional one without getting pushed into a higher tax bracket when you don't know what your investment gains will be?" - we don't look at the taxable gains - whatever your tax bracket is, that's what's going to determine. “Augusta rule. I am my own real estate broker office scene out of my home. I just hosted a large client appreciation party at my house using rooms in a garden that are not my office. Can I apply an Augusta rule to it? If yes, could applying the Augusta rule increase my chances for an audit and to what percentage? - Augusta rule is 288. You can rent out your home up to 14 times a calendar year. This is entertainment, you could maybe deduct 50%, I wouldn't use Augusta for anything entertainment. “My question is I've never been able to take real estate professional status due to full-time employment as a W-2 employee. I took early retirement on January 2nd of 2024 of this year. I am still being paid the remainder of 2024 biweekly, but not actually working. I'm a licensed real estate broker and spend a lot and most of my time on real estate rentals, subdivision development, et cetera. With this payout biweekly for the remainder of the year, can I qualify as REP (real estate professional) status for 2024?" - The prohibition to having W2 income is if you are actually working at your W2 job. Here, we're not doing any work for that check. You're just getting paid free money for 2024. You can go out and put your time into real estate. “Given the time of the year that we're getting into with taxes being due especially in the fall, what are the first three steps in the tax planning process, and how does one approach the process differently for clients that earn less?" – Start with having excellent bookkeeping, identify where you are today, and plan where you are going in the future. "What is the best way to purchase an existing business for tax purposes?" - You're going to buy the assets, you want to buy the assets because now you're going to be able to get those at your fair market value that you pay for them. We call it stepped-up basis in your assets… "If I buy a short-term rental and do a cost seg the next year, I bought it, and listed it on Airbnb, can I rent it long-term for the following year or would that interfere with the cost seg done the prior year?" –This is a common strategy, there's nothing wrong with that - you want to at least rent it once in year one as a STR. "If I claim bonus depreciation on my rental property, do I need to return or reverse it when I sell the property? What happens with bonus depreciation when I sell a rental property, or I necessarily have it in current?” - It depends on the transaction. If you sell a property then you have to have gain. If you don't have gain on the sell, there is no depreciation recapture. Resources: Get Your Free Emergency Binder https://andersonadvisors.com/emergency-binder/ Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=what-is-the-best-tax-efficient-way-to-purchase-an-existing-business Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons

In this episode, Toby Mathis, Esq. chats with Jeffrey Cottle, Esq., Senior Attorney at Anderson Business Advisors, about the world of house flipping, with a focus on how to handle the tax implications. It emphasizes the importance of avoiding "dealer" status with the IRS and explores strategies like asset protection. Toby and Jeff discuss limitations placed on frequent flippers and analyze the pros and cons of different business structures like LLCs, C-Corps, and S-Corps. It concludes by examining the most common scenarios Jeff encounters at Anderson Advisors when working with house flippers. Highlights/Topics: Jeff Cottle intro Flipping all comes down to ‘intent' with the IRS Avoid “dealer” status, and consider asset protection when flipping 1031 exchanges, installment sales are not available to dealers Flipping risks increase with each new property you purchase Pros and cons to LLCs, C-Corps, S-Corps What is the “typical” scenario Jeff sees for flippers? Send us your questions and ideas for future show topics! Resources: Schedule Your FREE Strategy Session https://andersonadvisors.com/ss/?utm_source=aba&utm_medium=podcast&utm_content=how-to-structure-your-real-estate-flipping Jeffrey Cottle LinkedIn https://www.linkedin.com/in/jeffrey-cottle-019a75a2/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis on YouTube https://www.youtube.com/c/tobymathisesq  

In this episode, Toby Mathis, Esq., and Eliot Thomas, Esq., bring more of their tax knowledge to the masses, answering questions on HSA contributions, employing your children in your business, and keeping your assets in a self-directed IRA. Be sure to check out our FREE virtual events happening this month. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "For an LLC that opted to be taxed as an escort is it better to not just. the profits and let retained earnings grow on the balance sheet and invest retained earnings in stocks or other investments in the name of the LLC? - the profits are automatically going to come down to hit your return. You're going to have to pay tax on those "I am considering signing up with Anderson and contemplating having you amend the last three years as I don't think my CPAs or TurboTax gave me all the write-offs that I was eligible for as a real estate investor.I think I may qualify for a greater return, but also don't want to automatically trigger an audit. - the “triggering an audit” that's, I think, a really common scare tactic that's out there…amending is not going to create an audit. "Can I continue funding an HSA account if I am no longer employed by the company that offered it but still have the account? Does it make sense to place it into a HSA investment account? - You certainly can continue with that HSA. Even if it's an employer-sponsored HSA, it is the employee's property, should they choose to leave. "I have a K1 that will be late from the sale of an apartment complex in Georgia. I am a married filing separately tax payer. I will do an extension but still have to pay tax in April How do I know how much to pay without the K1? I Went through a similar sale last tax season and had to pay a late fee due to the late K-1. I'd like to avoid that again.- There is a safe harbor. If you've paid in at least 90 % of what will be due during your time period before April 15th, "What are the benefits of having children as employees? Are there education expenses eligible for payment by the company? - if kids are paid underneath the standard deduction for that particular year, then there's no federal income tax on it. There are many benefits to shifting income to your children. "If we live in our rental house for two of the prior five years to avoid full taxation on capital gain, take advantage of the $500,000 exemption for married joint-filing, can the remaining amount that we, remaining amount we will pay in taxes be offset? Can the remaining amount we will pay in taxes be offset by losses in our other rental properties? Capital if we qualify as real estate professionals during the year for filing. For example, if we purchase another property, and cost seg it, can those potential deductions be used to offset the taxes paid on the primary residence sale? - As long as they're in there for two of the last five years, they are eligible for ownership and use. "How long do I need to have a property in service to rent to be able to deduct bonus depreciation from a cost segregation study? - you want to be reasonable, probably a reasonable amount of time, but if it was available for rent. That's it! "My asset is in a self-directed IRA, so when you see SDR at IRA, that means self-directed. I am assuming if I sell it, the money is considered income and I'm taxed on it like any other income. Also, if I use the money from the sale of that property for the purchase of a different property, not kept in the self-directed IRA, can I avoid taxes? What is your suggestion in this type of situation? - there's a whole lot of misconception going on in this question. So no, we are not taxed on it like any other income. It's quite the opposite. "Just started an ink taxes as C Corp What is an accountable plan? Is it something I need to join before I can get the benefit of it? Can any reimbursement be an expense with my personal name and get reimbursement like health dental vision cell phone, etc Do I need to have my cell phone account in the business name? - an accountable plan just means reimbursement. It's a fancy IRS term. "Does the assignment of beneficial interest in a land trust count as an installment sale for tax purposes? Who's responsible for the property taxes in such a transaction? - another one with some misunderstanding here. Resources: Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=can-i-contribute-to-my-health-savings-account-after-leaving-my-employer Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons    

Today Toby Mathis, Esq. speaks with Karim Hanafy, Esq., Anderson's non-profit expert, about the top ten types of non-profits you can form to access tax benefits for your charitable activities. These range from familiar causes like humanitarian aid (both domestic and international) to education (including scholarships) and even combating social issues through activities and therapy animals. Research, veteran/elderly assistance, and various housing needs rank high, as well as animal welfare, environmental causes, and empowering communities. Finally, the importance of supporting other nonprofits, regardless of their specific cause, is also an option. Highlights/Topics: Karim's background/expertise in non-profits Top ten types of nonprofits Humanitarian relief - domestic/international - food, clothing, shelter, medical care, housing Education and scholarships- trade schools etc. Activities to combat obesity, depression, and isolation - social and outdoor activities, therapeutic animals Research - medical and financial support Assistance for veterans and the elderly- medical, counseling, jobs, housing Housing - this used to be number one - recovery from abuse, elderly, vets, under-resourced Animals - sanctuaries, animal therapy programs Miscellaneous - pollution, ministries, waste reduction, empowering the underserved, disaster relief International giving - orphanages, food, clothing, shelter, animal sanctuaries, clean water Supporting any of the above activities, or supporting other organizations that provide the previous support Resources: Email Our Team To Get Your Nonprofit Started Schedule Your Free Strategy Session Tax and Asset Protection Events Anderson Advisors Anderson Advisors Podcast Toby Mathis YouTube Clint Coons YouTube

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: Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=write-off-travel-expenses Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq Clint Coons YouTube https://www.youtube.com/@ClintCoons