Podcast appearances and mentions of anderson advisors

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  

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  

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  

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  

In today's episode of the Hospitable Hosts podcast, we're talking to Jeffrey Cottle, Senior Attorney at Anderson Business Advisors. Jeff and Miles dig into some key tax topics for short-term rental hosts in the US including how to decide on a business structure, how to maximize tax deductions, and some of the challenges that come with managing rentals across multiple states.Tax and Asset Protection WorkshopStrategy SessionSleep easy, host confidently with Hospitable. Automate your guest messages, sync your calendar across booking channels, and protect yourself from bad direct booking guests.Sign up today at hospitable.com/podcast and get 25% off your bill for 3 months.

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 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      

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

If you're an entrepreneur looking to maximize your tax savings and protect your assets for future generations, this episode is an absolute must-listen!

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/  

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 of Passive Income Pilots, Tait Duryea takes you back to one of the most downloaded episodes in the show's history with Toby Mathis from Anderson Advisors. Discover how tax laws can work for you through real estate investments, cost segregation, and bonus depreciation strategies. Toby breaks down the game-changing legal strategies high-income earners can use to reduce their tax burden and maximize returns drastically. If you're a pilot frustrated with taxes or looking to level up your knowledge, this episode is packed with powerful insights.Toby Mathis is a tax attorney, author, and principal at Anderson Advisors, where he has spent over 25 years advising investors and business owners on tax strategies. He is also a member of the Forbes Real Estate and Finance Council. As both an experienced real estate investor and a legal expert, Toby brings practical, actionable insights to the show. He specializes in helping high-income earners legally reduce their tax burden through real estate, business structures, and creative legal strategies. Toby is also known for his popular bi-weekly webinar, Tax Tuesday, and his #1 bestselling book "Infinity Investing," published by Forbes Books.Enjoy the show!Show notes:(0:00) Intro(01:13) Economic update and job market trends from the Federal Reserve Beige Book(05:03) Tax challenges for pilots and strategies to reduce taxable income(08:49) Debunking myths about LLCs and creating tax-deductible losses(12:57) Understanding income types: active, portfolio, and passive income(17:10) Can passive losses offset W-2 income for pilots?(19:30) Tax implications of owning a business versus owning real estate(23:11) Bonus depreciation and maximizing tax benefits with real estate investments(31:46) Real estate professional status: how pilots can qualify and benefit(45:31) Combining Airbnb with long-term rentals for optimal tax strategies(58:04) Cost segregation and accelerating depreciation for significant tax savings(1:10:05) OutroConnect with Toby:Company Website: https://andersonadvisors.com/ Website: https://tobymathis.com/ Youtube: https://www.youtube.com/@TobyMathis Free Tax Webinar: https://andersonadvisors.com/tax-tuesdays/ Toby takes a deep dive into taxes at Spartan Investment Group:Tackling the Toughest Tax Questions of all Time!https://www.youtube.com/watch?v=GX8rFZSGeVc — You've found the number one resource for financial education for aviators! Please consider leaving a rating and sharing this podcast with your colleagues in the aviation community, as it can serve as a valuable resource for all those involved in the industry.Remember to subscribe for more insights at PassiveIncomePilots.com! https://passiveincomepilots.com/ Join our growing community on Facebook: https://www.facebook.com/groups/passivepilotsCheck us out on Instagram @PassiveIncomePilots: https://www.instagram.com/passiveincomepilots/Follow us on X @IncomePilots: https://twitter.com/IncomePilotsGet our updates on LinkedIn: https://www.linkedin.com/company/passive-income-pilots/Have questions or want to discuss this episode? Contact us at ask@passiveincomepilots.com See you on the next one!*Legal Disclaimer*The content of this podcast is provided solely for educational and informational purposes. The views and opinions expressed are those of the hosts, Tait Duryea and Ryan Gibson, and do not reflect those of any organization they are associated with, including Turbine Capital or Spartan Investment Group. The opinions of our guests are their own and should not be construed as financial advice. This podcast does not offer tax, legal, or investment advice. Listeners are advised to consult with their own legal or financial counsel and to conduct their own due diligence before making any financial decisions.

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  

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  

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

Welcome back to Passive Income Pilots! In this episode we delve into essential tax strategies tailored specifically for pilots. With the expertise of Toby Mathis from Anderson Advisors, we explore five key ways you can reduce your tax liability effectively. Toby brings his depth of tax knowledge directly to our pilot audience, discussing everything from maximizing deductions to strategic asset management. Additionally, we'll cover an intriguing opportunity for pilots interested in aircraft ownership—how purchasing an airplane can not only serve personal and professional needs but also offer significant tax advantages. If you're looking to navigate the complexities of taxes with ease and make informed decisions that could save you thousands, this episode is your must-listen guide.Timestamped Show Notes:(00:00) - Introduction to the episode with hosts Tait and Ryan.(01:29) - Introduction of the guest, Toby Mathis, and discussion on tax and legal workshops.(04:02) - Explanation of tax brackets and progressive tax systems.(05:13) - Discussion on aircraft ownership, benefits, and deductions related to taxes.(10:24) - Detailed analysis of leasing aircraft and tax implications.(17:15) - Strategies for pilots to utilize aircraft ownership for tax advantages.(23:46) - Overview of various tax reduction strategies and charitable giving.(28:36) - Introduction to tax and legal workshops offered by Toby's firm.(32:02) - Five top tax tips for pilots including HSA benefits.(44:58) - Discussion on solo 401k benefits and other tax-deferred accounts.(53:15) - Conclusion and thanks to guest Toby Mathis.Resources Mentioned:Tax & Asset Protection WorkshopDallas Conference June 27-29Remember to subscribe for more insights at PassiveIncomePilots.com!Join our growing community on FacebookCheck us out on Instagram @PassiveIncomePilotsFollow us on X @IncomePilotsGet our updates on LinkedInHave questions or want to discuss this episode? Contact us at ask@passiveincomepilots.com See you on the next one!Legal DisclaimerThe content of this podcast is provided solely for educational and informational purposes. The views and opinions expressed are those of the hosts, Tait Duryea and Ryan Gibson, and do not reflect those of any organization they are associated with, including Turbine Capital or Spartan Investment Group. The opinions of our guests are their own and should not be construed as financial advice. This podcast does not offer tax, legal, or investment advice. Listeners are advised to consult with their own legal or financial counsel and to conduct their own due diligence before making any financial decisions. The hosts, Tait Duryea and Ryan Gibson, do not necessarily endorse the views of the guests featured on the podcast, nor have the guests been comprehensively vetted by the hosts. Under no circumstances should any material presented in this podcast be used or considered as an offer to sell, or a solicitation of any offer to buy, an interest in any investment. Any potential offer or solicitation will be made exclusively through a Confidential Private Offering Memorandum related to the specific investment. Access to detailed information about the investments discussed is restricted to individuals who qualify as accredited investors under the Securities Act of 1933, as amended. Listeners are responsible for their own investment decisions and are encouraged to seek professional advice before investing.

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. chats with fellow attorney John Anderson, Esq. of Anderson Business Advisors about the pros and cons of establishing trusts in Nevada. The discussion digs into Nevada trusts' specific functions and benefits, including the "seasoning period" and the role of trustees. Toby and John explore how a third-party trustee can offer protection, methods for withdrawing funds, and the power of appointment in Nevada trusts. Additionally, they touch upon safeguarding your home with a trust, using a trust for essential expenses, and the potential risks of insolvency and bankruptcy. The conversation highlights the likelihood of lawsuits settling against a Nevada trust while acknowledging the absence of tax advantages. Highlights/Topics: Trusts - to revocable or irrevocable? Advantages to setting up trusts in Nevada and South Dakota The “seasoning” period Trustees and their functions in these states Protection through a third-party trustee Filing taxes and withdrawing money - Nevada trusts Power of appointment Protecting your home with a Nevada trust Using an asset protection trust to pay for essentials Risks of voluntary insolvency and bankruptcy Most lawsuits will choose to settle against a Nevada trust Tax advantages - there aren't many Pro-rata vs. non-pro-rata A high-profile divorce case with a Nevada trust, and the outcome Not subject to the Corporate Transparency Act Setting up a Nevada trust, statute of limitations Resources: Email John Anderson for a consult estateplanning@andersonadvisors.com Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-to-form-a-nevada-asset-protection-trust Toby Mathis on YouTube https://www.youtube.com/c/tobymathisesq Anderson Advisors https://andersonadvisors.com/  

In this episode of Profit First for REI, we have Toby Mathis. He is a speaker, author, investor, and one of the founding partners of Anderson Advisers.Toby talks about the best ways to get the most from your rentals. He also gives breakdowns of processes for different mindsets and team members he had.How to become an actual real estate investor with the right mindset? Find out on this episode. Enjoy the show!Key Takeaways:[01:10] Introducing Toby Mathis[03:05] Establishing Anderson Partners[10:37] The hard part of scaling up[15:15] Why do investors live deal to deal?[24:24] Maximizing your properties[30:18] Toby's advice for first-time real estate investors[31:49] Connect with Toby MathisQuotes:[13:04] "You have to have a good team, it is non-negotiable."[18:00] "You might want to buy things that are highly profitable, generating income, and use that income to continue to buy more assets."[30:20] "Don't own things in your name."Connect with Toby:Website: https://tobymathis.com/  Tired of living deal to deal? If you are a real estate investor or business owner who is tired of living deal to deal and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. - David

Toby Mathis, Esq. welcomes Preston Knight, Esq., Senior Attorney at Anderson Advisors to the show to discuss some of the tax implications around crypto mining. You'll hear how and when transactions are taxed, how the IRS views crypto and mining as a business entity, and some tips and tricks for avoiding and minimizing short and long-term capital gain and other taxes. Highlights/Topics: Taxable events How the IRS views your work Capital gains hit when paying with bitcoin Short vs. Long term gains ‘Staking' and how it is taxed Working through an S-Corp How to use a Roth to avoid taxes Using depreciation Writing off business expenses Airdrops and forks - what are the tax implications? Tracking and bookkeeping Resources: Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=how-crypto-mining-sales-and-staking-is-taxed Toby Mathis on YouTube https://www.youtube.com/c/tobymathisesq Anderson Advisors https://andersonadvisors.com/

 Too many people look at separate places when choosing a CPA and an attorney.  Why not pick ONE company that can handle BOTH?Anderson Advisors is a top rated, Best Places to Work and Inc 5000 company that has helped clients all over the country to SAVE on taxes, PROTECT their investments AND create the best estate planning.Today's guest, Toby Mathis joins us to explain what him and his business partner do, how he got started and finally puts to bed many of the myths and fears when it comes to asset protection.Tip/Trivia – Wyoming is one of the BEST states to incorporate in, especially for privacy.  In fact, the state does NOT keep electronic records of the members or managers of an LLC!RESOURCES MENTIONED:Signup for my newsletter!Cover Your Ass(ets)Toby's Book - Infinity InvestingAnderson Business Advisor's podcast Olmstead v. Federal Trade Commission Iowa farmer sentenced for filing false returns in tax fraud caseIRS Publication 55What is Cost Segregation?CONNECT WITH TOBY AND ANDERSON ADVISORS:Toby MathisToby's YouTube ChannelSHOW SPONSORSFreedom FamilySimple Passive CashflowHero LendingFocus WealthVenturing into Fashion TechExploring the convergence of fashion tech, entrepreneurship, and fashion business. Listen on: Apple Podcasts SpotifySupport the show

We've reached quite a milestone - our 200th episode! For today's Tax Tuesday, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, Esq., CFO of Anderson Business Advisors share their expert advice on tax strategies and navigating economic uncertainties, with a focus on rental property and financial diversification. You'll hear about the complexities of non-recourse loans and taxation, myths and strategies for day traders, taxes on land flips, the best time to do a cost seg, and more. Three lucky listeners will receive copies of our ebook in the episode. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: Is there a minimum net income where it would be beneficial for a single-member LLC to file as an S corp rather than a disregarded entity? - It depends on individual circumstances, but if your income is quite low, you may be able to save a bit if you file as an S-corp. Can my rental income be directed into a self-directed IRA and what are the advantages to doing that? - Yes, rental income can be directed into a self-directed IRA which offers several tax advantages. I don't understand the difference between owning rentals as a real estate professional (REP) or non-REP. And what, if any, disadvantages are there when buying a rental inside a Solo 401k using a non-recourse loan? - REP status offers tax benefits, while non-REPs face limitations. Buying a rental inside a Solo 401k with a non-recourse loan can limit potential deductions. How is the land flip taxed? Does land have to be held for a year like a house? - Land flips are taxed as ordinary income and there is no requirement to hold for a year. Is it acceptable for the IRS to trade futures from a 501c3 or a family foundation entity? Does the entity need to pay capital gains? –Yes, futures trading is allowed but can carry unrelated business income tax implications. If you form an LLC for rental property, is it best to report the activity on Schedule C or E? –Generally, it is better to report rental activity on Schedule E for tax purposes. When is the best time to do a cost segregation study? – The best time is usually after renovations are complete but it depends on individual circumstances, some you don't have to wait on, like a pool. We fix and flip luxury homes and are thinking about keeping some to rent. We have held some in the past. We have an LLC but the accountant is saying to go to an S corp. - we disagree, investment property should not go into an S corp, it should go into a land trust/LLC. We are setting up a family trust in Florida and watch your video about trust Wyoming. The attorney says we don't need Wyoming, is this true? – The WY trust is a revocable trust. If you're working on a living/grantor trust, your attorney is correct. Transitioning to an S corp may provide tax benefits. What is the best way to pay my children who actively trade in our fix flips bookkeeping? – Consider establishing them as employees and paying them a reasonable wage for their work. I understand anyone can gift to anyone in a year an amount not to exceed $17,000 per person. Can I gift from a family limited partnership Units not exceeding that amount, giving them a percentage of the LP units each year? Does it avoid the generation-skipping tax? – Yes, but your gift from your interest in the LP…it can be a viable strategy for tax purposes. Send us your questions, and check out the event schedule listed in the resources section. Resources: Infinity Investing https://infinityinvesting.com/ Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/?utm_source=aba&utm_medium=podcast&utm_content=when-to-conduct-cost-segregation-studies Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq    

In today's Tax Tuesday episode, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, Esq., CFO of Anderson Business Advisors discuss a number of common tax topics including IRA to Roth conversions, real estate depreciation deductions, LLC's, S-Corps and Sole Proprietorships, gifting vs. inheriting property, and the title question about structuring your real estate business. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "If I move money from my SDIRA, which stands for self-directed IRA, to a Roth self-directed IRA, can I use bonus depreciation from real estate owned outside of my IRAs to offset the taxes I owe from the Roth conversion?" - It's really going to depend on where that depreciation is coming from. "I'm new to real estate investing and haven't purchased the property yet. Do I need to have an LLC to claim deductions this year on real estate–related expenses already incurred?" - An LLC really has nothing to do with taxes. It is strictly for liability protection, and asset protection. "I'm a small business owner with three other employees working for me. I'm trying to open a solo 401(k) or some other retirement plan for myself as an owner. I believe I need to offer the same to my employees as well, which I can but am not interested in offering any matching contributions to other employees. How does it work? What is the best way to set this up?" - yes, you can open up a 401(k) and have your employees participate assuming they're eligible to participate. However, you can't pay yourself a match and not pay them a match. You have to treat everybody equally. "I won $10,000 worth of furniture from a raffle or gaming event. How do I report this on my income tax?" - Whoever you won it from should be issuing you a 1099 miscellaneous with $10,000 of other income on it. You'll record it on your tax return as other income. "I'm a realtor operating as a sole proprietor. Should I be operating under a different entity to minimize taxes and liability? Over the years, I've received conflicting information and just don't know." - the math is 14.1% in addition to your state income taxes, in addition to your federal income taxes. The way you nix that is you run it through an S-corp or an LLC taxed as an S-corp. "At what point in my real estate operation should I move from a single-owner LLC to S-corp for tax purposes?" - If we're talking about investment real estate and rental properties, you don't ever want to put them in an S-corporation. It's a bad idea. "If I transfer my rental property into an LLC for the purposes of depreciation, will the LLC get a step up and basis to the current market value of the property? Or will the LLC inherit my lower basis? - If you contribute property to any kind of entity that you own, it gets your basis. “Do unrelated businesses have to have separate schedule Cs or LLCs, or can I rebrand myself on my Schedule C, DBA, JL Enterprises, and put everything together? What are the advantages or disadvantages?" -...most times I don't see a whole lot of advantage to grouping unless it's a real estate activity with an operation or something like that. "In my father's will, he's leaving me a house." Yes. "I've been living in it for nine years." "If he puts my name on the title now along with his name, will I have to pay more taxes? I prefer to do that now. What would the difference be? He does have a living will." - He would have to file a gift tax return for his basis in that half, or actually its fair market value on that half. I'm not a big fan of mixing things up under these circumstances… "We are fixing the downstairs area of our home to rent out as a short-term rental. Are there any expenses that can be used in tax deductions? Should we run it under an entity?" - The repairs that you're doing down there would be deductible. If you're doing improvements to the property, it would be depreciable. Send us your questions, and check out the event schedule listed in the resources section. Resources: Infinity Investing https://infinityinvesting.com/ Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

In today's episode, Toby Mathis, Esq. speaks with Karim Hanafy, Esq., about the top ten most common mistakes that are made when setting up a non-profit 501(c)3. From issues with state vs. federal requirements, to describing your charitable activities, compensation of your board, and the ever-important asset protection, Karim has seen every mistake possible and wants to help you have a seamless experience when setting up your non-profit organization. See the links below for a free workshop from Anderson Advisors. Highlights/Topics: Karim's background/expertise in non-profits Top 10 mistakes in no particular order Accidental setups in the wrong structure: For-profit, B-corps, LLC's State requirements for Articles of Incorporation vs. Federal Describing your charitable activities Incorrect terminology that triggers investigation and delays Public charity or private foundation? Compensation for directors and officers, board members Filing tax returns Donating different types of assets - professional appraisals and the correct forms Donor thank you letters and the IRS-required language Asset protection Resources: Start Your Nonprofit Plan in 45 Minutes For Free https://andersonadvisors.com/nonprofit-501c3/ Karim Hanafy LinkedIn https://www.linkedin.com/in/karim-hanafy-3561b71b0/ Email Karim Hanafy khanafy@andersonadvisors.com Toby Mathis on YouTube https://www.youtube.com/c/tobymathisesq Anderson Advisors https://andersonadvisors.com/

Tim  and Lisa are excited about talking with Toby Mathis, Tax Attorney, RE Investor, and Founding Partner of Anderson Advisors. Toby has all kinds of great knowledge to share about how to maximize the benefits of RE investments from a tax perspective.  We talk about cost segregation studies, what it means to be a real estate professional, and other important considerations about taxes.Connect with Toby and Anderson Advisors hereYouTubeWebsiteInstagramConnect with us:Schedule a call with TimSchedule a call with LisaSchedule a call with JeanLearn more at thereiconcierge.com

Are you passionate about making a positive impact through purpose-driven investing? On today's episode, we talk to Toby Mathis about purpose-driven investing and how it provides much-needed housing for underserved areas of society. Get expert advice on using grant money and other social benefits for your investments, as well as tips on house hacking to increase net operating income. Don't miss this chance to learn from experts how to make the most of your real estate investments!   Toby Mathis is a 25-year tax attorney and founding partner at Anderson Advisors, whose career has focused on how to save money and how to make money. As a result of Anderson's tax work with tens of thousands of successful investors, Toby has pieced together their methods to building wealth and now educates on the surprisingly simple processes.   [00:01 - 05:59] Opening Segment • Purpose-driven investing and how investors can do that • How individual investors can focus on something that matters to them Tax benefits, social benefits, or emotional benefits tied in with housing   [06:00 - 11:46] From Trauma to Recovery • Providing the National Association of Recovery Residents criteria for homes • It costs much less to house them in a drug court setting • Neighbors often embrace the idea of housing people in need   [11:47 - 16:17] Closing Segment • How investors can get started with purpose-driven investing   Connect with Toby:   YouTube: Toby Mathis Esq | Tax Planning & Asset Protection Website: Anderson Advisors  Instagram: @andersonadvisors Facebook: Anderson Business Advisors   Key Quotes:   “You can go out and get grant money if you want. There are so many different opportunities when you decide to do social good.” - Toby Mathis   WANT TO LEARN MORE?   Connect with me through LinkedIn.   Or send me an email at sujata@luxe-cap.com   Visit my website, www.luxe-cap.com, or my YouTube channel.   Thanks for tuning in!   If you liked my show, LEAVE A 5-STAR REVIEW, like, and subscribe!

Can you take control of your financial destiny and build a solid investment portfolio? Today, Toby Mathis provides insight on how to think long-term when it comes to investing and emphasizes the importance of cash flow. He outlines five categories of income that can be invested in passive income streams and shares tips on budgeting money wisely. Tune in as we explore these ideas further!   Toby Mathis is a 25-year tax attorney and founding partner at Anderson Advisors, whose career has focused on how to save money and how to make money. As a result of Anderson's tax work with tens of thousands of successful investors, Toby has pieced together their methods to building wealth and now educates on the surprisingly simple processes.   [00:01 - 07:03] Opening Segment • How Toby has helped investors and small business owners for 25+ years Individual properties ranging from apartment complexes to commercial to single • Cash flow is the key for successful investors, not appreciation   [07:04 - 13:45] The Fool's Air of Appreciation • People often fall into the trap of looking for appreciation due to impatience and wrong information • Toby introduces his book "Infinity Investing." How life treats you in terms of financial planning • Most active traders lose money, while people who focus on cash flow tend to be more successful   [13:46 - 20:22] Unlocking the Secret to Financial Freedom • five types of income to invest in for passive income Rents, royalties, dividends, interest, and short-term capital gains on the sale of options • Live off 70% of what you bring home, give 10%, pay down debt with 10%, and invest 10% • Be patient and let investments mature and compound   [20:23 - 27:16] From Cash Flow to Legacy • Single-family home market correlates more with the economy than commercial real estate • How commercial real estate can be designed to operate through a down period • 1.2 million new units are needed per year, but only half of that is being built • Why small businesses need to be deliberate about budgeting and investing money   [27:17 - 34:04] Achieving Success Through the Two Mountains • Focus on cash flow rather than raises or asset value • Why Toby looks for companies that have been increasing dividends for at least ten years • When investing in real estate, look for a positive cash flow of 6% or higher   [34:05 - 40:20] Closing Segment • Believe it is possible to create a legacy that will last 200+ years • Check out The Second Mountain   Connect with Toby:   YouTube: Toby Mathis Esq | Tax Planning & Asset Protection Website: Anderson Advisors  Instagram: @andersonadvisors Facebook: Anderson Business Advisors   Key Quotes:   “Start spending more on your investments and live less. Let's just go take a look at your scenario and see where you're overpaying on things that we can immediately shift into the investing side.” - Toby Mathis   “You have to let your investments mature. You have to let them compound. You have to let them do what they're designed to do.” - Toby Mathis   “If you want to be happy, be a voracious giver and help other people, and you'll find satisfaction in that; that money just cannot buy.” - Toby Mathis   WANT TO LEARN MORE?   Connect with me through LinkedIn.   Or send me an email at sujata@luxe-cap.com   Visit my website, www.luxe-cap.com, or my YouTube channel.   Thanks for tuning in!   If you liked my show, LEAVE A 5-STAR REVIEW, like, and subscribe!

In this episode of Tax Tuesday, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, Esq., CFO of Anderson Business Advisors discuss various tax strategies for real estate, stocks, and nonprofits. Online we have Ander, Dutch, Sergei, Ross, Jared, Elliot, Troy, and all kinds of staff to help answer all your Tax Tuesday questions. Toby and Jeff cover topics such as 1031 and 721 exchanges, the Section 121 Exclusion, employee stock options, and the tax implications of short-term rentals and Health Savings Accounts (HSAs). They also discuss best practices for reimbursing personal contributions to a business. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "Section 721 and 1031 differences” - It has the same effect as 1031 but you don't pay tax on the sale, But you're not exchanging one property for another…it's a tax-free exchange, but it's a one-and-done. "Tax benefits of a foundation versus a nonprofit organization?” - The easiest way is - a nonprofit (public charity) DOES stuff, a foundation funds stuff… "I have two houses I'm selling this year and or at the same time, both were residences for two years at the last five years consecutive. I have just lived in the latest house for the last two years and I've been preparing both to sell. Will I have a problem claiming both of them as residences two of the last five years and I'm selling them at the same time.” - So of the last 60 months, 24 of them you had to have lived in it as your primary residence. That met, then you can exclude, if you're single, $250,000 of capital gain. If you're married, you could exclude up to $500,000 of capital gain. DO NOT SELL AT THE SAME TIME. “How are stock options taxed?” - Tax treatment varies depending on the type of stock option (ISO, NSO, RSU), time held, and exercise/sale timing. "LLC taxed as S-Corp with brokerage account….anything similar to trader status?” - I have not seen anything that says any entity can make a mark to market section 475 election. If you're making a mark-to-market election because you're losing so much money in the market, get out of the market and go do something else. "Does California's 571L form business property tax apply to short-term rentals? - Yes, as short-term rentals are considered active trader businesses and subject to tax. “Who can qualify for an HSA?” - Eligible individuals must have a high deductible health plan (HDHP) and not be covered by another non-HDHP plan. Can I open an additional HSA with my LLC business? - No, you can only have one HSA per individual, but your LLC can contribute to your existing HSA. "Anderson made me a C-Corp, I put money in from my personal account to pay expenses. I have to take out the initial $7K … How do I legally and ‘tax-friendly' take the $7,000 back that I need for my personal reimbursement? - If the initial $7,000 was a loan, you can withdraw it tax-free as repayment; if a capital contribution, the process is different. Send us your questions, and we do about 50 events a year - check out the event schedule listed in the notes. Resources: Infinity Investing https://infinityinvesting.com/ Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq    

When it comes to maximizing tax benefits while minimizing legal risk, it is crucial to adopt a strategic and prudent approach. Engaging in legal tax planning allows investors to take advantage of available deductions, credits, and exemptions within the boundaries of the law. By thoroughly understanding the tax laws and utilizing legitimate tax planning techniques, investors can optimize their tax positions while staying within legal boundaries. This includes proper record-keeping, timely and accurate reporting, and adherence to all relevant tax regulations. Toby Mathis is a 25-year tax attorney and founding partner at Anderson Advisors, whose career has focused on how to save money and how to make money. As a result of Anderson's tax work with tens of thousands of successful investors including preparing over 100,000 investor tax returns, Toby has pieced together their methods to building wealth and now educates on the surprisingly simple processes.Toby Mathis has helped Anderson grow its practice from one of business and estate planning to include a thriving tax practice and registered agent service with tens of thousands of clients nationwide.In this Episode, Vinki & Toby chat about⁠:⁠-Business Structuring and Tax Planning -Understanding Syndication Structure -Role of Passive Investors in Deal Participation -Impact of Cost Segregation and Bonus Depreciation on Limited Partners -Depreciating a Property TwiceContact Toby: https://www.linkedin.com/in/tobymathis/If you've liked this episode, please leave us feedback through a five-star rating and comments below! Also be sure to like, share, and subscribe!The Real Estate Vibe Show!Follow us @https://twitter.com/loombainvesthttps://www.instagram.com/loombainvesthttps://www.facebook.com/Loombainvesthttps://www.linkedin.com/in/vinkiloomba#realestate #realstateinvesting #multifamilyinvesting #passiveinvesting

You don't need to be a real estate agent to want to know how to save on taxes, invest in real estate, prepare for retirement, and better manage your money…   But if you are a real estate agent and want to know how to do all those things, then this very information-packed episode of the Tom Ferry Podcast Experience is for you. I'm talking with tax attorney and investor Toby Mathis about how to save on taxes and much more, including: The best business structure to file The benefits of investing vs. saving 1031 exchanges Passive capital gains Finding investment deals   This is an episode you'll want to take notes on and then send to whoever does your taxes. When tax season rolls around, check in with that person to make sure they watched it and are able to check off everything on the list.   And if you're looking for some hands-on tax and investment advice from some of the best advisors in the business, check out this link to sign up for a Free Consultation with Anderson Advisors! This 45-minute call will cover everything you need to know about tax savings and asset protection on your investments – a $750 value!

In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Toby Mathis, a 25-year tax attorney and founding partner at Anderson Advisors. Mathis advances his client's interests by combining expert tax advice with his personal experiences investing in over 200 real estate projects in the US. His expertise reaches many others through his award-winning publications, including Tax-Wise Business Ownership and Infinity Investing: How the Rich Get Richer and How You Can Do the Same.In this episode, you will learn:What it means to infinity invest, including the five infinity sources of passive income.The top asset categories that Toby has seen make the biggest returns.How dividend kings provide decades of growth.How covered calls work and how to use them.And more!Resources:Episode Transcript & Blog | Tax-Wise Business Ownership | Infinity Investing: How the Rich Get Richer and How You Can Do the Same | Toby Mathis' YouTube Channel | ​​tobymathis.com/podcast | infinityinvesting.com | Schedule an Introductory Call | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000

It's Tax Tuesday again, and today we're mixing it up – this episode is hosted by Anderson Advisors' Michael Bowman, Esq, who welcomes two of Anderson's expert tax pros, Eliot Thomas, Esq., and Kurt Bergfjord, Esq. And as always we've got our talented and experienced tax advisors manning the chat questions in the office. On today's episode, the guys review all the documents and receipts that you should be gathering up in preparation for filing your taxes, and answer multiple listener questions around the pros and cons of C-Corps, S-Corps, Partnerships, and the audit magnet - Sole Proprietorships. The discussion also covers our episode title question - are there benefits to putting your primary residence in a trust - which is really only for asset protection and estate planning - there are no tax benefits to doing so. If you have a tax-related question for us, submit it to taxtuesday@andersonadvisors. Highlights/Topics: "Even if I show income on my tax return from rental and business activity as a sole proprietorship, and self-employed but no taxable income because I use my large net operating loss to cover all taxes, is my income still considered income or will it be a hindrance as far as getting an investment loan or home equity line?" – It depends - Some are going to look at this, it will ding you, and you won't be able to get a loan. Others will take it into consideration and analyze the tax return. "I currently have two LLCs in California that I file as a partnership. Should I create another LLC as a holding for both LLCs? And should that be disregarded or filed as a partnership as well? Of course, there is the additional cost of $800 for California as well. What's your suggestion?" – from the legal point of view, it might be a better idea to have that holding company and all those assets coming into it. "How can a full-time LP investor in private equity in real estate syndications as well as stock investor utilizing options for income, structure such as to offset income of these activities with expenses, syndication conferences, to vet sponsors, subscription services, travel for investment briefings, computer equipment, expenses, et cetera? Assets are held in a Wyoming LLC and property trust for the stocks. Would a management C-corp make sense having one ‘client?' I am aware of people in my circumstances that write off expenses on their schedule C, but I recall Anderson doesn't recommend that." – If we could utilize that management corp, maybe we can capture some of those benefits that you otherwise wouldn't be entitled to. "How is REPS applied to a tax return?" – If you are a real estate professional (REP)for all intents and purposes, then you can actually turn that otherwise passive income into non-passive income. I's going to be on Schedule E page one or Schedule E page two if you have a K-1 "We have seven rental properties set up with the ABA structure. My husband works full-time for the government. I manage our home and rental properties. Two properties are mortgaged, the rest are paid for. Now, both in our 50s, we're financially comfortable with a large cushion. We got retirement funds, mutual funds, properties, kids, education funds, et cetera, but we are getting killed in taxes every year. I feel like we are working to pay taxes. We don't live extravagantly, and still drive the same cars for 10–15 plus years. Taxes feel like a punishment for saving when we were younger." - Ideas to save on taxes include becoming a REP, depreciation, cost-seg study, there's even a nickname- “short-term rental loophole” "What are the tax benefits of putting my primary residence in a trust?" There is no asset protection, but if it's in the right kind of revocable trust, then we still get to take advantage of our section 121 of tax exemption from gains on the sale of your primary residence—$250,000 single, $500,000 married filing joint. "I want to be as anonymous as possible. What is the best business structure and ways to submit taxes? I do not want the tax info to flow down to my personal taxes." - When we talk about anonymity, anyone looking at your personal tax return is really not going to have too much of a purview into your business activities. “Should I do a cost seg for a condo?” It depends - Have you had it for a while? are you a REP? Are you renting it out? Have you been appreciating for a while? "What is the best corporate structure to have in place that can also allow for tax savings?" We've covered this - C-corp, S-corp, partnership, and then the worst would be sole proprietorship. "What tax incentives are there for real estate investors to not have to pay an absurd amount in taxes?" - REP status, short-term rentals, cost seg studies, 1031 exchange, keep good books! "As a real estate investor opening my first LLC, which is the best for me to use, S-corp or C-corp? - it depends - do not put appreciating property in a C-Corp, but C is good for short terms or flips. "I started my LLC last year to begin my search for buying a business or real estate. Currently, I am a W-2 employee while I get started. My question is, can I write off any expenses since I did not make any money in my LLC? We've incurred expenses, but I don't have any income.” - was it open for business, or are you in the exploratory phase? timing on when to deduct may be more important. Resources: Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/

If you enjoyed this episode, or are enjoying the Scalable REI show overall, show your support by buying the Scalable REI team a cup of coffee: https://www.buymeacoffee.com/scalablereiToby Mathis is a 25-year tax attorney and founding partner at Anderson Advisors, whose career has focused on how to save money and how to make money. As a result of Anderson's tax work with tens of thousands of successful investors including preparing over 100,000 investor tax returns, Toby has pieced together their methods to building wealth and now educates on the surprisingly simple processes. Toby Mathis has helped Anderson grow its practice from one of business and estate planning to include a thriving tax practice and registered agent service with tens of thousands of clients nationwide. Toby also advances his client's interests by combining expert tax advice with his personal experiences investing in over 200 real estate projects in the United States. His expertise reaches many others through his award-winning publications, including Tax-Wise Business Ownership and Infinity Investing: How the Rich Get Richer and How You Can Do the Same. Toby continues his crusade daily to help investors and business owners preserve their wealth, protect it from lawyers, snoops, and Uncle Sam, and create amazing legacies for future generations.Best Way to Contact Toby:Andersonadvisors.comHelpful Links:tobymathis.com/podcastshttps://infinityinvesting.com/https://www.youtube.com/c/tobymathisesq7 Super Powers of Land Trusts in Real Estate Asset Protection => https://www.youtube.com/watch?v=uARhp_OJ-I0BEST CRM THAT WE USE: Looking for the best all-in-one CRM to scale your real estate investing business? Use the link below to sign up today: https://www.gohighlevel.com/main-page?fp_ref=scalable-reiBEST PHONE SYSTEM THAT WE USE: Looking for an optimal online phone system that can forward to your cell phone, directly integrate to your CRM, and be leveraged for your remote virtual assistant team? If so, use this link to save $20 today when you open a new account: https://openph.one/referral/NpnZPxXCOFFEE!!! If you feel this episode provided a ton of value, show your support by buying us a cup of coffee: https://www.buymeacoffee.com/scalablereiLET'S DO SOME DEALS!!! Contact Mason to JV/partner on deals or passively invest by either emailing him at mason@scalablerei.comSchedule a call with Mason by using this link here: https://calendly.com/mason-klement/30minFollow Mason on Instagram to learn additional real estate investing tips and tricks: https://www.instagram.com/mason_klement_scalablerei/NOTE: This description might contain affiliate links, which may pay our podcast a commission at absolutely zero cost to you.  Any commissions go toward the cost of producing each episode so we really appreciate your support.  In addition, depending on the vendor, you actually might even save money by using these links that you wouldn't have access to if you went directly to the vendor's website. 

It's Tax Tuesday again, and Toby Mathis, Esq., hosts, with special guest Eliot Thomas from Anderson Advisors, and they are here to help answer your questions. On today's episode, Eliot and Toby answer listener questions including what can be written off as far as expenses for the preparation costs of setting up an LLC, several questions (as usual) around short- and long-term rentals, real estate investments, passive vs. active income connected to your properties, and quite a bit of information about cost segregation – who to work with, what you can deduct, the timelines, etc. If you have a tax-related question for us, submit it to taxtuesday@andersonadvisors. Highlights/Topics: "If I put a short-term rental in operation in October or November, does the bonus depreciation get prorated accordingly?" We're looking at whether or not we prorate from October November for the rest of the year, or how do we handle that? – It doesn't matter whether you bought it in January or December, you put it into service before the end of the year, not prorated. "Useful strategies for pulling money out of a small business tax-free, not being double taxed?" - The only time you ever worry about a double tax is when you have a C-corp because they're taxed at the corporate level. "Mileage deduction in a partnership, does this go on a Schedule C?" - No, it doesn't. Number four, "Is the expense related to the preparation of your LLC tax deductible such as travel costs to go see a property, et cetera?" – The expense relating to the preparation of your LLC is absolutely deductible. It's going to be an organization expense up to $5000 for the year, and that includes the state fees, the registered agent fees, accounting fees, attorney's fees. "Please talk about the $25,000 deduction for real estate investing. Where does it apply and where doesn't it? I have only one rental single-family home at this time." - When you have passive losses, normally, they only offset passive income. One of the exceptions is this $25,000 active participation. "How should I set up my taxes on my properties?” – We're looking at an LLC (Limited Liability Company), probably one that's what we call disregarded. Disregarded means it just doesn't file a tax return. “I have two rental properties in California I've been managing full-time since 2021. I have been working more than 700 hours per year. Do I qualify for real estate professional status? If so, what is the process at the time of filing the 2022 taxes?" – It's 26 USC 469(c)(7). You can go straight to it. You need to aggregate those two properties as one activity. Otherwise, you have to meet that test for each property. "What is cost segregation?" - Cost segregation is a fancy way of saying you're breaking a piece of property that's real estate into its pieces, as opposed to just treating it as one uniform structure. (Picket fence, sidewalk, driveway pavers, new carpet, new appliances, etc.)...you need to do what's called a cost segregation test or report, which is what cost segregation refers to, which means having an accountant pop out to the house, and break these down into their pieces. "Is it more beneficial as an LLC owner to pay myself as a W-2 or 1099 employee?" - There's no such thing as a 1099 employee, The correct term is a W-2 employee or a 1099 independent contractor. I would say it depends on how that LLC is taxed. If you are an LLC that's disregarded and your sole proprietorship, you cannot pay yourself a salary. "What are some creative ways to save money on the gains from real estate investing?" - Here are some cool ones - (1) The low-lying fruit, 1031 Exchange and you defer the gain. (2) You can also still do this thing called a qualified opportunity zone. Lastly, "Hi. How are crypto gains taxed? When? At the time of selling the crypto to convert back to cash? I have been doing short-term trading with my own account. Please advise the best strategies to minimize taxes. My hubby is W-2 and I'm a real estate professional with three rentals. Thank you." – Once you own the crypto, it's when you sell it or when you convert it, or trade it for something else of value. Protect it with a partnership LLC, or put it in a Roth, or deferred retirement account. Rapid-fire chat questions answered at the end of the show Resources: Cost Seg Authority Website https://costsegauthority.com/ Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Toby Mathis YouTube https://www.youtube.com/@TobyMathis Toby Mathis TikTok https://www.tiktok.com/@tobymathisesq  

Welcome to another Tax Tuesday show. Toby Mathis, Esq., hosts, with special guest Eliot Thomas from Anderson Advisors, and they are here to help answer your questions. On today's episode, Eliot and Toby dig into some listener questions surrounding the differences between an LLC and S-Corp and the pros and cons of each, avoiding capital gains taxes, and the usual assortment of questions about short-term rental properties (ie AirBnB), cost segregation, and qualifications to claim Real Estate Professional status. If you have a tax-related question for us, submit it to taxtuesday@andersonadvisors. Highlights/Topics: "If I choose cost segregation, do I have to apply the cost seg to all properties purchased in the same year, previous years, and future years? What are the disadvantages—tax aspects and non-tax aspects—of doing a cost segregation?" – If you do a cost seg, you're not required to use it on your other properties. That's very specific to one property. "I bought an apartment to fix it and put it up in Airbnb and to get the advantage of new business tax deductions. But now that we are thinking of renting it to regular tenants, this will be an investment instead of a business, correct? What are some of the deductions that we can take advantage of if we rent it to regular tenants instead of Airbnb such as renovations, expenses, travel expenses, furniture, and so on and so forth?" – Turning it into a long-term rental, you pretty much get some of the same deductions you would as a long-term versus short-term. They're the same. "Is it beneficial to set up an LLC versus an S-corp? And are you able to pay yourself a reasonable salary through an LLC?"- There are rules behind that. If you don't choose a tax status forth, the IRS will choose for you the basics… like Eliot said, it depends on how the LLC is taxed. "How should I hold my stock positions? What is the best way to deal with high capital gains consequences?" - We often talk about setting up a trading partnership, that might be one option. "My husband will work as a real estate agent to qualify for the IRS' definition of real estate professional, and potentially use the passive losses from our rental property to offset my W-2 income on our joint return. The IRS rule says my husband has to own at least 5% interest in the real estate company employing him. Does he need to form an S-corp to sign the contract with the brokerage firm so that he owns at least 5% interest?" - Yes, that's exactly right. You're going to want to have his earnings, if you will, from there being paid through an S-corporation that he owns, theoretically 100%, hopefully. "I sold an investment property on October 21 and paid a very heavy capital gains tax. Can I get some of that back if I buy another investment property today or now?" - No. We missed the boat on that. We can't carry back on any of these items at this point in the code. Maybe that'll change in the future, but right now, we don't have the ability to go back and change anything. "How many years can we go back without showing a profit?" - If you have too much of a loss, the IRS could come in and say, hey, is this really a for-profit business venture that you have going on here? "Is it okay to do your own taxes as a business owner if you had a CPA for 20 years?” Why is it a questionable call there? - We just had a massive overhaul of our tax code. You're going to want a CPA, somebody who does taxes, EA, tax attorney, whoever it is, to walk you through some of those things. "I bought a single family rental in November and am still repairing. No income yet. How do I record depreciation and costs for 2022?" - If we didn't have it available for rent in 2022, there isn't any deduction to take in those as far as operational, depreciation, or anything like that. "How to save taxes by flipping and renting houses?" - We're going to recommend a C -Corp probably as a management company so you can do all your activities that you're overseeing of your rentals through a C-corporation. "I just started my business in August of 2022. I would like to understand what from a tax perspective should be on the top of my mind as we prepare the first returns." - It depends on your business, but you're going to want to categorize and have an idea of what expenses are, to determine whether it's a net profit or net loss. Lastly, "If an investor purchases a property that is lower in value than the property sold in a 1031 exchange, will the IRS disqualify the exchange entirely?" – No. What's going to happen is you just may not have full deferment of the capital gains, but they're not going to disqualify it on that premise. Work with a qualified intermediary! Email us with your questions, and be sure to subscribe to our podcast. And if you are already a subscriber, please provide us a review of what you thought! Resources: Email us at Tax Tuesday taxtuesday@andersonadvisors.com  Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/  Anderson Advisors https://andersonadvisors.com/  Toby Mathis on YouTube https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ 

Tax Tuesday is here again. Toby Mathis hosts, with special guest Eliot Thomas from Anderson Advisors, here to help answer your questions. On today's episode, Eliot has grabbed a bunch of great questions for us to answer. Toby and Eliot will talk about the Augusta rule, easy tax deductions against W-2 income, cost segregation, bonus depreciation, real estate professional status, active participation, S-Corp, C-Corp and partnership advantages.  Online, we have Ander, Patti, Ian, Dana, Matthew, Jared, Piao, Tanya, Troy, and Dutch, a multitude of CPAs, by the way, in our Q&A. If you ask questions in Q&A, you're going to get really, really smart people answering that question. Toby sends out a a huge public thank you to all these talented people. If you have a tax-related question for us, submit it to taxtuesday@andersonadvisors. Highlights/Topics: "I'm selling a property that was willed to be in 2019. I've been renting this property out since receiving it. It will sell for a profit of over $360,000. Would I pay taxes on the full profit or the difference between value at the time the property was willed or do I pay taxes on the difference between the profit and $250,000?” - You inherited it in 2019. It says you've immediately started renting it out, so it's an investment property. It's not going to qualify for the capital gain exclusion of living in our primary residence for two of the last five years. "What are some simple easy things that can be done to reduce taxable income and reduce taxes paid on each of my paychecks?” Donate to charity in large chunks, HSA, IRAs, etc. "Options for tax write-off, reducing tax burden if I have rental real estate, but I am not a full-time real estate professional. Both my wife and I have W-2 jobs that we don't foresee leaving anytime soon to become real estate investors." - See the answer to previous question, and also you want to look at if your AGI (adjusted gross income) is a little bit lower, maybe under $100,000, you can take up to $25,000 of the passive losses. "Augusta Rule: We have put our properties in a Wyoming entity and the Texas series LLC in late December of 2022, but have not started using it yet. Can we use the Augusta Rule in 2022 throughout the year for our business purposes, even though we've not completed setting up the business?" Augusta Rule, that's just what we call 280A most often. That's the ability to rent out your home. Dwelling is the proper term for no more than 14 days a calendar year. The income you receive, you don't have to pay tax on. “When a rehab required property acquired for long-term hold, when is the right time to do the cost segregation study? Before the rehab or after?" - Once you purchase a property or after the rehab, you could do it either way. If you don't do what's called a cost seg study, the IRS will let you treat it all as 27½ years… "Anderson created my S-corp entity in November of 2022. I've only had expenses for the year-end 2022, but no income or property purchases yet. What am I required to file for my S-corp regarding the expenses I've incurred?" – You're going to have to file your tax return for that S-corp. It is what we call an informational return. In other words, your S-corp doesn't pay any tax, but it does have a tax return called an 1120-S. "I created my two LLCs both with real estate assets with rental income in 2022. Also, I created a holding company that holds both the LLCs. I have a W-2 job. When do I file the tax for the holding company? Is it one tax filing that combines all the LLCs and my W-2?” - We recommend that the holding company becomes a partnership. Also, it helps from a lending standpoint. Typically, lenders are able to lend more to you being that the property is in a partnership than if it had been in a direct disregarded LLC. "Curious to hear an open discussion about one and how to utilize section 179 and/or bonus depreciation for vehicles." - Why not just do mileage reimbursement? It's like 65.5¢ a mile right now. It's your car. You can use non-commercial insurance. It could just be your car that you use. If you let employees use it, that goes out the window. "What are the steps to take in order to withdraw money from a C-corp account? Are there any tax consequences involved?" - With a C-corporation, the first thing I'd like to look at are the reimbursements… "How to save taxes as S-corp, and is it better to do an STD deduction?" - The S-corp has a lot of advantages to it to save on taxes. Standard deduction is huge for most people. But “it depends”. "Can you please touch upon what depreciation recapture is and how it impacts taxes?" - Basically, when you have an asset that's been used in a trade or business, we don't deduct the full cost of it immediately. We take a little bit over time, we call it depreciation. Then when you resell, you might have what's called depreciation recapture on that depreciation that you took over the years. It does depend on what kind of asset it is. "I work from my home office. How do I claim this?" - If you have a sole proprietorship, you can take a deduction for basically the percentage square use of that house, that's an easy way to describe it. If you could get reimbursed, then it could be 20% of your house. By the way, that includes mortgage interest, property taxes. If you have somebody coming in cleaning your house, your utilities. Be sure to subscribe to our podcast. And if you are already a subscriber, please provide us a review of what you thought! Resources: Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

In this special episode of Anderson Business Advisors, Toby Mathis speaks with Jim Richardson and Diane Lawson of Front Porch Co-Housing about a growing issue in our country - the lack of independent, affordable housing opportunities for neurodivergent adults. This is an opportunity for our listeners to help solve. There are 5.4 million autistic adults in the U.S. today, and 87% of these individuals live with their parents. It is crucial that there be a plan for those adult children when their parents are gone.  Investing in real estate used for this purpose is an amazing opportunity to be “more than a landlord” and the non-profit status of the Front Porch Co-Housing organization can also offer the investor certain advantages. Highlights/Topics: Diane's experience with a neurodivergent son being denied housing Jim's background - also has a son with autism who was denied housing The scope - millions of adults with neurodivergent issues A unique approach - co-housing neurotypical and neurodivergent adults - “neuro-inclusive living” Millennials (22-40), are experiencing unprecedented levels of loneliness and isolation The expansion plan for Front Porch Housing Costs for neuro-inclusive living - planning for an entire lifetime No state funding assistance – not classified as a ‘group home' Real estate investors can help their communities and be more than “just a landlord” Sponsoring a neurodivergent person in your community - visit the Front Porch link below Donations can also be land, real estate, vehicles to sell, and other assets - email Jim with the link below Resources: Front Porch Co-Housing Website https://frontporchcohousing.org/ Donate to, or Support Front Porch https://frontporchcohousing.org/support-us/sponsor/ Email Diane diane@frontporchcohousing.org Email Jim jim@frontporchcohousing.org Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

In this episode of Anderson Business Advisors, Toby Mathis speaks with Eliot Thomas, Managing Tax Advisor at Anderson Business Advisors. There are lots of people helping to answer questions online - Patti, Ander, Matthew, Troy, Jared, Piao, Ian, Dutch, and Dana are on. There are so many people here. You have a whole bunch of tax professionals that are here to answer your questions. You can just go into the Q&A and put in a question. You'll hear Toby and Eliot discuss several listener questions around how to report capital losses in the stock market, a few questions on real estate and business LLCs vs. S-Corps, C-Corps, and Sole Proprietorships, disregarded entities, entertainment meals vs. business meal write-offs, and an in-depth discussion about a real estate contractor not filling out a W-9 and all the difficulties that might present. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "Hey, I'm looking to start a new business. I need to choose a correct business entity in order to maximize my tax benefits, so I need to know if starting the business as an LLC and potentially working the business out of my home would be the best option for me." – by all means, you want the LLC for that asset protection, but the S-corp or the C-corporation—have those great reimbursements. "Can I write off my stock holding loss at the end of the year to reduce my W-2 earnings?" Yes, but we're limited potentially just to $3000 of capital loss that will offset against ordinary income, that being your W-2. "What are the rules for HSAs for people over 62?" – For 2023, the amount is going to be $3850 if you're single, and I guess it'd be $7750 for a family plan. If you are on Medicare, you can not contribute tax-free to an HSA. "I became a real estate professional in 2021 and have a significant net operating loss due to depreciation. What are the limitations of carrying the NOL backward in 2020 and 2019 to use that to lower taxes in the previous year?"-- As of right now, we don't get to carry back NOLs. We just carry them forward. "If my partnership LLC did not conduct any business this year, do I still need to file a Form 1065? -- You don't have to file 1065 for that first year. I'm in the process of setting up my real estate business. I already have a Wyoming LLC as a holding company. It's treated as a disregarded entity, but I have no investment in real estate yet. If I file my taxes this year before I acquire an investment property, what is the process for changing the filing election of the LLC from disregarded to a partnership for the new property?" – You don't have to do anything but file that return, or you could file the Form 8832 and declare it as a partnership. "I am new to real estate flipping and started my first flip last year. Construction was completed this year, and it closed this year. I asked my contractor if I need to complete a W-9 last year, and he told me not until the project was complete. Now, I'm realizing that I should have had him complete the form in 2021 for the amount I paid him and again this year. Can I now ask him to complete the W-9 and file the form for 2021 and 2022? The other issue is I had issues with this contractor for faulty workmanship he did on the flip and in the process of filing suit. What if he refuses to complete the W-9?" If you're dealing with a contractor who's organized as a business, chances are you still want that W-9 to prove that they're a business. "What forms do I need to fill out for my accountant to show capital loss in the stock market?" – Usually, you're going to get a 1099-B from your brokerage house. They can just use that, and that's really all you need. "As an owner-operator trucking company designated as an LLC, can you write off 100% of the operating fuel costs?" – If the truck that was burning that fuel was used 100% for business, absolutely. "I am a lender on a note to an LLC. What are the best practices for collecting payments and tracking interest payments for reporting purposes; separate bank account for the payments or create an end-of-the-year interest statement for myself?" - I like the separate bank account. Keep it separate from your personal obviously. "I attended your Las Vegas event. Please confirm if we are to refrain from listing items as entertainment when filing taxes." - They're probably referring to the Tax Cuts and Jobs Act getting rid of entertainment. There is no deduction for entertainment. If you are getting a meal that is for entertainment purposes, you cannot write it off. Business meals only for 2022. "I'm looking to convert from an LLC-S to a C-corp in 2023. Should I stay on a calendar or fiscal year schedule? What are the pros and cons?" – I like the fiscal year for C-corp because it tends to give you more flexibility, especially when it comes to payroll items or contributing to, say, Solo 401(k)s or something like that. Visit us at andersonadvisors.com. Grab one of the free events. We're going to do a ton of them this year. Resources: Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

In this episode, Toby Mathis of Anderson Business Advisors welcomes Jose Luiz Morales, a self-made wealthy real estate professional who made many sacrifices at a young age in order to build a lifetime of wealth. Jose is a Real Estate Advisor with Morales Group, Brokered by eXp Realty, he has a podcast called “The Residual Real Estate Agent, and he belongs to a number of mastermind and mentoring groups based around investing and real estate. You'll hear the inspiring story of how Jose decided to stop hanging around with “knuckleheads” at age 23, and his life changed focus. By sacrificing a lot of the fun and frivolity most young people have in their 20s, Jose became a millionaire and built a foundation of assets that will not only allow him and his family to live a comfortable life, but they could feasibly even retire before age 40. Highlights/Topics: Jose's origin story Jose's parents taught him the most valuable lessons, but never helped him financially At age 26 Jose's monthly income was $6000 Making sacrifices at a young age allowed for building wealth Moving out at age 27 Everything Jose put on his vision/dream boards came to fruition Coaching, mentorship and mastermind groups Advice for young people - don't hang around with knuckleheads Reach out to Jose to learn more about his methods and successes Resources: Jose Luiz Morales on LinkedIn https://www.linkedin.com/in/joseluizmorales/ Jose on TikTok https://www.tiktok.com/@joseluizmorales805 Jose on YouTube https://www.youtube.com/@joseluizmorales Jose on Instagram https://www.instagram.com/joseluizmoraies/ The Residual Real Estate Agent Podcast https://podcasts.apple.com/us/podcast/the-residual-real-estate-agent-show/id1560901602 EXP Realty https://exprealty.com/ Collective Genius https://www.collective-genius.com/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw  

In this episode of Anderson Business Advisors, Toby Mathis speaks with Trent Lee of First Choice Business Brokers (FCBB). You'll hear Toby and Trent discuss all the ways you can slice and dice the numbers to value a business. From EBITDA to discretionary earnings, normalizing value over the past few Covid years, using the SBA database, etc.  Trent shares many stories from his experience both good and bad about how to value, run, and sell a business – from a small $70K pizzeria, to larger operations valued in the tens of millions, Trent is the expert in the business broker space. Highlights/Topics: Trent's the number one business broker in the country by volume The SBA database as a tool Seller's discretionary earnings Recasting financials to normalize for Covid years Using multiples for valuation A few success stories from Trent's experience Showing profit in your business for valuation vs. saving money immediately with tax write-offs The pizzeria story Matching business purchases to the background of the buyer Don't touch anything on a profitable business for at least 6 months The mistakes - leaving value and profit on the table If you want to buy a business, call Trent Resources Trent Lee Email trent@fcbb.com FCBB Website https://fcbb.com/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

Today's Tax Tuesday episode is your 2022 send-off with a series of rapid-fire questions around year-end tax situations. Toby Mathis hosts with a few staff available to answer online. In this episode, you'll hear our advice on combining multiple businesses and making sure they are incorporated and isolated from you personally which protects you from liability, opening a 401(k) by the end of the year vs. before the tax deadline, purchasing cars under a business umbrella to make income with Turo, and various other valuable end-of-the-year tips on tax strategies that you should do before January 1st, and a few that you can still take care of in early 2023 before the tax deadline. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: “Last year was the first time I wasn't able to take investment real estate depreciation or deduction due to AGI over 150. I don't have too many necessary losses or even losses that I don't know or don't think will get back up, but it seems like a way to reduce my AGI. How do multiple-unit landlords do it? I'm thinking five houses without stock could get you up over the limit." - You've probably been phasing out, you just didn't realize it. Maybe your loss was small enough.You could do certain things to lower your AGI. Harvesting capital losses is one of them. "My husband and I have full-time corporate jobs, but also have small side businesses—remodeling, party rentals, and online sales—which are really diverse, that are in different categories. How is it best to structure everything for easy accounting and tracking of funds from all of these? - The general rule is you want to isolate any business that's doing business with somebody else. You probably want to isolate them from each other. Keep your structure simple and have one set of books, just have one business. I would have it as an LLC. Isolate it from YOU. "Do I have to open a 401(k) by the end of the year to make contributions?" – If its your salary deferral, yes, if its employer, you can do it after the next year starts. "My CPA has suggested I take the late election of an S-corp. C-corp was formed on June of 22. I've had plenty of expenses building the foundation of a wholesaling business, but no deals yet. With tax filing, I assume I do a late election of an S-corp. Will my taxes be filed as an S-corp or as a C-corp? And how does that impact the business startup expenses I've had since March of 2022?" - My suggestion is that C-corps are a trade or business the day that they started. "How can I make sure our Utah-based kids pay minimal tax on the sale of our property in California when we die? We know it will be stepped up in value. When I sold my own dad's property in California when he died recently, we paid a big tax on it to California as non residents. Should we sell it and do a 1099 exchange?" - California doesn't have an inheritance tax, period. They haven't had one since the 80s, so I'm trying to think of how they taxed you. Send us an email I would like to find out more and answer this! "I lived in a condo for nine years and bought a house last year with a 5% down payment. The condo was rented out. If I sell it now, will I have to pay capital gains tax? If so, how can I avoid paying capital gains tax?" 26 USC 121 - It says that if you lived in a property as your primary residence for two of the last five years, if you're single, you get a $250,000 capital gain exclusion. If you're married, you get a $500,000 capital gain exclusion. "Looking for the best ways to protect net profits. I've seen 401(k) contributions, IRA contributions, investment and materials equipment, owner distributions, We are uncertain of future events and would like to keep what we've earned without paying it all to the government." - If it's net profit from the business- use all the business expenses. Look at a defined benefit plan, charity, accelerated depreciation...a lot of things you can be doing. "If I'm using a private lender to buy a property and borrow $10,000 more than my purchase price, is the additional $10,000 taxed as income?" The answer is no. You can always borrow money, and it's not taxable to you. "This year, we made a little more money and wanted to know if your service will help us offset anything with my somewhat new business before the end of the year is over. I currently have a massage, esthetician business that I opened in October 2018. Then the pandemic hit in March of 2019, in which my state licensing demanded we stop all services or we'd get our license taken away causing me to go in the red for 2019, 2020, and 2021. Moving forward, my business has been slowly coming back but still struggling. During the pandemic, I went back to school getting certified to work in the holistic health care setting. I'm in the process of adding that business to my existing, so I wanted to get advice on the best way to set things up if I have multiple businesses." That's a question I cannot answer for you. But make sure they are isolated from YOU like my previous question. "My husband and I are wanting to take advantage of the equity in our home and would like to invest into some rental properties to start to dabble in real estate investing and Airbnb. I also wanted to know if your company will be there for us on any financial advising and legal advising in our planning on this new venture." This is exactly what we do. Rental properties are different from Airbnb. As it is all real estate - probably want to isolate A, B, and C from each other, and we want a structure that allows us to get the maximum tax benefit in isolating that liability. "We are dabbling in Turo. So far, it's been doing well. We're interested in expanding it with more cars to add in. However, we now would like any new cars we added to be purchased under the business name." - Depending on the type of car, it could be a deductible in one year. If you're doing this in your name, you're exposed. You have a ton of exposure. You need a business name on it. There are a lot of things that are not time-ish critical before the end of the calendar year, but the big ones are salaries, reimbursements, charitable giving. Check our YouTube channel for more on end of the year tax strategies. We hope you have a great start to the new year! Resources: Email us at Tax Tuesday taxtuesday@andersonadvisors.com  Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

Today's Tax Tuesday episode answers several listener questions around end-of-the-year strategies for reducing taxes. Toby Mathis hosts with special guest Jeff Webb, CFO of Anderson Business Advisors. Online we have Ian, Troy, and Eliot helping answer your questions. In this episode, you'll hear our advice on the following: selling stock and how you can minimize capital gains taxes, setting up trusts - including dynasty trusts and how estate taxes are assessed there, buying a vehicle for business use and the requirements for writing off depreciation and mileage, and as always there are listener questions about real estate investments and tax scenarios, including LLC's, partnerships, and long and short term rentals. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "What is the best strategy for hiring your kids?" - If your kids are under 18, you do not have to pay withholdings or Social Security. If less than $12,950, it doesn't matter whether they're my dependents or not. They don't have to file a tax return. "How was a 'dynasty' set up so it is not taxed at the estate rate after the death of the creator? Are both the trust and the beneficiary taxed in any year funds are distributed?" - The answer is probably not if you're distributing all the funds. If I just own a bunch of stock and I don't sell any, there's no income. There's no tax. They don't care what you sell it for. What they care about is what its fair market value is on the date of your passing. "I have substantial credit card debt and private debt amounting to $120,000. I own a few rental properties. Currently own six long-term incomes and two Airbnbs. Two properties are mortgage free, and one of the current long-term tenants wishes to buy the property." They're asking for an opinion here. "Should I sell and pay off consumer debt? Should I owner-finance? If I sell and owner-finance, can I avoid capital gains?" - I would sell and pay off the consumer debt. It's probably costing a lot of money. Or, I might just refi it and pay off my consumer debt. HELOC would work. "We want to sell some stocks to pay off some debts, but we know that if we do, we're looking at a huge capital gain. What can we do to lessen the tax that we have to pay on the capital gains?" - If you have stocks, especially stocks with big gains, there's a good chance that your brokerage house will give you a line of credit against those stocks. But, I'm probably not going to do it right now just to pay off debts. But I could borrow tax-free against those same stocks and do it. "Is Anderson Advisors training recommending to have an operating agreement that allows the non-pro-rata and discretionary authority to make distribution on a regular timeframe or amount? For a multi-member LLC, how do we deal with yearly taxes in this case?" - We want to make sure that we have an operating agreement that says, I get to decide if I distribute money or not. "What options are there to save money on taxes if you own an LLC? Can passive income be used to fund a retirement account such as a solo 401(k)?" – you have to get wages of some sort to fund a Solo 401(k). You cannot have wages out of a sole proprietorship. If the sole proprietorship is a passive activity, there's no way to convert that. "I'd like to take advantage of Section 179 before the end of the year and buy a business vehicle. Can you talk in more depth about Section 179 and how depreciation and bonus depreciation work? Also, what kind of vehicles qualify for this?" – If it's under a 6000 GVWR (gross vehicular weight rating) vehicle, your limitation is $19,200 of depreciation in that first year. That includes bonus depreciation. If it is over 6000 pounds, then your bonus depreciation is pretty much unlimited. It all comes down to are you actually using it for business? And what percentage? "What is the best way to get money from my entity, a C-corp, while limiting the amount paid in taxes personally and as a corporation?" - Repay your shareholder loans. That's the best way to get money out of your C-corp if it already owes you money. "If my bill would be over $500,000, what can I do before the end of the year to reduce this?" - Look at retirement plans and advance retirement plans, charitable donations, and cost segregation. "I'm looking to attain two or more rental properties within the next year or so. Is it better to create an LLC for each property or take title under my current S-corp? I have an S-corp retail classification that I am considering dissolving. Should I just reclassify my S-corp as a real estate investment and take title in the name of the S-corp?" - Since this company was already in existence doing something else, I do not favor reclassifying. I would dissolve it. Send us your questions, and we do about 50 events a year - check out the event schedule listed in the notes. Resources: Clint Coons' Book on Amazon https://www.amazon.com/Next-Level-Estate-Asset-Protection/dp/1950863883 Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

In this episode of Anderson Business Advisors, Toby Mathis speaks with attorney Jonathan Evans from Anderson Advisors. You'll hear Toby and Jonathan discuss all the pros and cons of LLCs – they are expensive in some states, more affordable in places like Wyoming and Delaware, they don't provide the stock tax breaks that other entities do, and there are some investment restrictions.  However, the name itself shows one of their greatest benefits which is “Limited Liability” and separating you personally from your business entity. They are flexible, offer a lot of choice, and in the end, are still a good option for setting up your business. Highlights/Topics: Jonathan's background The problems with LLCs - expenses in certain states LLCs don't have stock - but there are huge tax breaks for businesses that DO have stock - the 1244 and the 1202 Olmstead v. The FTC in Florida's Supreme Court - opening single -member LLCs to creditors Wyoming is a leader for affordable asset protection Investment restrictions in LLCs vs. corporations LLCs and international investors Disregarded entities and active businesses Some redeeming qualities of LLCs - “Limited Liability” being number one Flexibility and choice in operations with LLCs The LLC is still a valuable entity for your business - work with a professional Resources: Jonathan Evans LinkedIn https://www.linkedin.com/in/jonathan-evans-a3640895/ Email Jonathan jonathanevans@andersonadvisors.com  Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

Today's Tax Tuesday episode answers several listener questions on HSAs, S-Corps vs. LLCs, and reducing your taxes with rental properties. Eliot Thomas hosts, along with Jeff Webb, CFO of Anderson Business Advisors.  Online we have Dana, Dutch, Piao, and Troy - all kinds of resources there to help answer some of your questions. In this episode, you'll hear our advice on the tax benefits gained from being an LLC, S-Corp or C-Corp, and we'll answer a couple questions concerning HSAs - their contribution limits and investing with that HSA money. There are also some questions answered about home offices, ITIN numbers, bitcoin and of course a little bit about short and long-term rental properties and their tax implications. Submit your tax question to taxtuesday@andersonadvisors. Highlights/Topics: "Can you please explain the difference between an LLC, a C-corp, and an S-corp? Can an LLC also be a C- or an S-corp? I understand that C-corps and S-corps are tax elections, but are they also a type of entity?" –LLC is a legal entity, it is not a tax entity. If you want anything else like an S-corporation or C-corporation, you actually have to tell the IRS that, make an election. "Are the limits for contributions a monthly or annual amount? On irs.gov, the limit as listed is $3200 for single and $7200 for family." - the contribution limits are annual amounts. "My accountant thinks I should switch from an S-corp to a Schedule C," that's a sole proprietorship on the 1040, "because my profits are below $80,000–$90,000, and the S-corp is expensive, and I'm just one person, so I do not want to grow any bigger, and I'm happy with the sales. My question is, what is best for me, not the company? What happens if I switch? What is better for retirement and social security as I am 56 years old?" - You are going to pay for a tax return to the S-corporation that you wouldn't have to pay for extra on Schedule C. There's some work to do to put that Schedule C together. Your 1040 may get a little more expensive. If you have a health insurance plan for yourself that you're paying for, that should be paid for by the S-corporation. It will save you a good deal of money. "Can you convert a personal vehicle into a business vehicle if you only use it for business? What if you only own one vehicle? Can you deduct mileage, gas, or anything else?" - You can do that, but you have to actually contribute the vehicle to the business. Because what we don't want is any personal use of this vehicle. The solution is to track your mileage. If you are one who drives a lot, the more you drive, the more mileage, the better this comes out - keeping it in your name as a personal vehicle. "Can I reduce my W-2 taxes for my job by owning rental property?" – If you are materially participating in your short-term rental—it's not really a rental to trade or business—yes, the losses from that could reduce your W-2 income. It's plausible, but you're going to have to be within these parameters, short-term rental, or long-term rental and meet the criteria for it. "I have a C-corp staffing business. Since Covid, I've been using my home office. The home is in mine and my son's name. How can I count for the space used as an office for a tax deduction? “What is your advice for a small business owner on employing people who only have their ITIN number pending the social security number?" -Basically, you're not allowed to have people with an ITIN as employees. They have to have a social security number and be registered in the US to be here. "Can you discuss the step-by-step process of completing a 1031 exchange? - The forward 1031 makes more sense, because keep in mind, you cannot touch the cash. You also need a Qualified Intermediary. Determine if you want to do a forward 1031, a regular 1031, or do you want to do a reverse? "I have a question regarding investing with my HSA. Does an HSA function like a Roth IRA in terms of paying UBITs (unrelated business income tax)? In other words, if I invest my HSA in crowdfunding or syndication, for example, will I have to pay UBIT?" - You need to be very careful with the investments that you're going into. To your question, yes, it's subject to your HSA, it's subject to UBIT. If you invest in a real estate syndication, those typically run for four to five years. That money's going to be locked up in a hard asset that you can't get to. "Can I write off a loss selling my bitcoin with a $10,000 loss? I bought it at $26,000 and bought it right back at $16,000." - It's not allowed for you to recognize a loss on that. You've got to wait 30 days. "My understanding from a tax perspective, an LLC taxed as a C-corp and a traditional C-corp receive the same benefits such as medical reimbursement, administrative office, retirement plan, et cetera. (1) Can you explain the positions of the LLC taxed as a C-corp? Do I still need a president, vice-president, treasurer, secretary, or just member managed? - Those positions are usually required by state law. It has nothing to do with how they're taxed. It has to do with how they're formed. (2) Why would anybody form an LLC taxed as a C-corp over a regular C-corp? If there is no plan to take it public, why choose one over the other? Cost to maintain, paperwork required, et cetera?" - Yeah, easier form, less criteria behind it, a C-corp is required to have certain meetings, et cetera. You don't necessarily have that with the LLC. "Is it best to start an Airbnb business now or wait until the beginning of the next year for tax purposes? What do you think the best options are?" – You don't need to do cost segregation. It's not going to help you, unless you're renting this property out for a lot of money, like it's a beachfront property and a primary or something like that, and you're getting $10,000 a week for it. I would conserve it or save that cost seg for potentially 2023. Check out our events coming up later this month. Resources: Email us at Tax Tuesday taxtuesday@andersonadvisors.com Tax and Asset Protection Events https://andersonadvisors.com/real-estate-asset-protection-workshop-training/ Anderson Advisors https://andersonadvisors.com/ Anderson Advisors on YouTube https://www.youtube.com/channel/UCaL-wApuVYi2Va5dWzyTYVw

There's a wealth-building technique the riches use to make their wealth last while growing exponentially, and Toby Mathis is with us today to discuss it. He talks about his top buying strategies, cash flow generation, and property taxation. Tune in to discover more about multiplying your revenue!Key Takeaways to Listen forWhy you should start investing in companies that pay dividendsThe concept of creating a legacy through perpetual income streamsIdeal investments for first-time asset buyersThe process involved in IRS assessment before taxing your propertyPeople you should listen to and follow when investing in real estateResources Mentioned in This EpisodeWarren BuffettFree Apartment Syndication Due Diligence Checklist for Passive Investor About Toby Mathis Toby Mathis is a 25-year tax attorney and founding partner at Anderson Advisors, whose career has focused on how to save money and how to make money. As a result of Anderson's tax work with tens of thousands of successful investors including preparing over 100,000 investor tax returns, Toby has pieced together their methods to building wealth and now educates on the surprisingly simple processes.  Toby Mathis has helped Anderson grow its practice from one of business and estate planning to include a thriving tax practice and registered agent service with tens of thousands of clients nationwide. Toby also advances his client's interests by combining expert tax advice with his personal experiences investing in over 200 real estate projects in the United States.  His expertise reaches many others through his award-winning publications, including Tax-Wise Business Ownership and Infinity Investing: How the Rich Get Richer and How You Can Do the Same. Toby continues his crusade daily to help investors and business owners preserve their wealth, protect it from lawyers, snoops, and Uncle Sam, and create amazing legacies for future generations. Connect with TobyWebsite: Toby Mathis | Anderson Business PartnersYouTube: Toby Mathis Esq | Tax Planning & Asset ProtectionConnect With UsPlease visit our website: www.bonavestcapital.com and please click here, to leave a rating and review!SponsorsGrow Your Show, LLCThinking About Creating and Growing Your Own Podcast But Not Sure Where To Start?Visit GrowYourShow.com and Schedule a call with Adam A. Adams.

You can't get rich overnight because it takes time to implement long-lasting strategies that lead to financial independence. The guest in today's episode, Toby Mathis, founding partner of Anderson Advisors and author of Infinity Investing: How The Rich Get Richer And How You Can Do The Same, is a gifted storyteller and a clear-eyed researcher who spent years studying successful investors who built their wealth by creating a plan and sticking to it. Toby shares his build-wealth-slowly approach based on patient investing and money management practices to reach financial freedom. Most investors try to make money through activity, but most successful investors make money through inactivity. Tune in to hear Toby and Jim Pfeifer discuss these topics and much more in this episode on Passive Investing from Left Field Podcast!To see the full show notes and transcript, click here.