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On this week's episode, IRA Financial's Adam Bergman Esq. answers three more questions about the Real Estate IRA including the 1031 Exchange, reporting rental income on your tax return, and UBTI tax on a hotel investment.
On this episode of Adam Talks, tax attorney and IRA Financial's founder, Adam Bergman, Esq., discusses unrelated business taxable income, UBIT or UBTI, how the tax affects may your investments, and why it's not as bad as you might think.
EPISODE SUMMARY: Discover a world where financial education reigns supreme and product sales take a back seat, as we are joined by Bernard Reisz, CPA and chief education officer at Resurer Financial. Promise yourself a future where you are not just another number in the system, but an empowered individual making informed financial decisions. Through our conversation with Bernard, we shatter the illusion of financial products masquerading as advice and shed light on the transformational power of real estate, an avenue often underexplored by Main Street America. Venture into the realm of retirement accounts with us as Bernard demystifies their true potential. Understand how your IRAs and 401ks can be your secret weapon in breaking into real estate, steering clear from the lottery-like mentality prevalent in the market. Get ready to uncover the latent power of self-directed retirement accounts and the role financial institutions play in creating restrictions, urging you to assert control over your financial future. Closing our enlightening chat with Bernard, we tackle the vital role of financial education and knowledge. Pledge to take control and ownership of your investments, while acknowledging the necessary due diligence. Explore the idea of giving back through one's vocation and access the plethora of resources offered by Resure Financial. Finally, Bernard reveals a unique personal fact, teaching us a lesson in humility and commitment. Tune in, say goodbye to financial confusion and embrace the path to financial empowerment today. BERNARD'S BIO: Bernard Reisz CPA is Chief Education Officer at ReSure Financial, curating https://members.resurefinancial.com/ to help real estate investors understand how real estate title and tax tools - 1031 Exchange, Cost Segregation, 401k/IRA - can be used to turbocharge ROI and wealth growth. ReSure Financial caters to the tax needs of real estate investors, delivering Cost Segregation, 1031 Exchange, and SDIRA & 401k services. ReSure takes an education first approach, so that investors maximize the benefits of real estate tax tools. As a financial nerd that's guested on countless financial, tax, real estate, and legal forums Bernard delivers straight-talk and unique insight on nearly every aspect of real estate tax topics, including life insurance, real estate professional tax status, asset protection, financial planning, business entity selection, S-Corp, C-Corp, partnerships, 1031 Exchange, 453 Installment Sales, UBIT, UBTI, UDFI and advanced tax mitigation strategies. GET IN TOUCH WITH BERNARD: https://www.resurefinancial.com/ https://members.resurefinancial.com/ EPISODE CHAPTERS: (0:00:01) - The Importance of Financial Education Financial products, guidance, incentives, disincentives, and education are discussed to understand how real estate can transform financial profiles. (0:12:30) - Financial Advisors and Self-Directed Retirement Accounts Retirement accounts can be used to leverage other people's money for real estate investments, emphasizing the importance of effort. (0:16:20) - Retirement Accounts and Self-Directed Investing We examine 401k plans, non-discrimination testing, safe harbor plans, and financial institution restrictions to help those unable to access their money. (0:33:31) - Education and Financial Knowledge Importance Access to education and knowledge is essential for informed financial decisions, taking control and ownership of investments, and understanding Bernard's mission. (0:38:37) - Importance of Giving Back in Vocation We discuss how to give back through vocation, access services at Reshore Financial, and a unique personal fact. (0:50:32) - Exploring the 'Why' Behind Success Retirement accounts, 401k plans, education, and knowledge are discussed for financial decision-making. If you want to know more about Dr. Jason Balara and the Know your Why Podcast: https://linktr.ee/jasonbalara Audio Track: Back To The Wood by Audionautix is licensed under a Creative Commons Attribution 4.0 license. https://creativecommons.org/licenses/by/4.0/ Artist: http://audionautix.com/
★ Join Our Investor Club ★ https://forms.gle/AEpWgPg7krd8YzPU8Want investment opportunities that align with your goals? At Birch Prosper, our team considers your unique criteria to identify the best opportunities. Let's start the conversation! Just go to: https://calendly.com/birch-prosper/intro-meeting-15-min-clone --About the guest:Bernard Reisz CPA is Chief Education Officer at ReSure Financial, a firm focusing on helping real estate investors understand how real estate title and tax tools - 1031 Exchange, Cost Segregation, 401k/IRA - can be used to turbocharge ROI and wealth growth. As a financial nerd that's guested on countless financial, tax, real estate, and legal forums Bernard delivers straight-talk and unique insight on nearly every aspect of real estate tax topics, including life insurance, real estate professional tax status, asset protection, financial planning, business entity selection, S-Corp, C-Corp, partnerships, 1031 Exchange, 453 Installment Sales, UBIT, UBTI, UDFI and advanced tax mitigation strategies. Connect with Bernard Reisz: ReSure Site: https://members.resurefinancial.com/ Episode Highlights:✔️ Understanding cost segregation and bonus depreciation✔️ Why it's important to understand land allocation in your tax strategy✔️ The double benefit of leverage in real estate: (1) leverage on the purchase price, and (2) leverage on the tax deduction✔️ Recapture mitigation strategies✔️ When it makes sense to do a cost segregation study
In today's episode of the IC-Disc podcast, I have a great guest today, Hayden Kelly from Chicago. He is with Chicago Atlantic and they have a really interesting cannabis fund for accredited investors. They've identified a market inefficiency because endowments, institutions, and non-profits are usually prohibited from investing in cannabis. Additionally, these cannabis companies are typically not bankable for traditional debt. So Chicago Atlantic has a really interesting debt model for accredited investors, with great collateral coverage and attractive loan-to-value ratios. Hayden is a really interesting guy, and even if you're not investing, he has a really interesting update on the state of the cannabis business, especially east of the Mississippi. In fact, Hayden shares some background on cannabis legalization history and why states east of the Mississippi are more financially attractive. I hope you enjoy the episode. SHOW HIGHLIGHTS Chicago Atlantic leverages market inefficiencies in the cannabis industry to provide high-yield investment opportunities for accredited investors. Endowments, institutions, and nonprofits are typically prohibited from investing in cannabis, leaving a lucrative market for accredited investors. Chicago Atlantic's cannibus fund provides low-leverage loans to cannabis operators, offering attractive returns with high collateral coverage and loan-to-value ratios. Delayed draw term loans, low-leverage structures, amortization of loans, and floating rate loans are some benefits of investing in cannabis loans. Well-collateralized loans and the value of licenses as collateral add security to investments in the cannabis industry. There are two types of markets in cannabis: unlimited license models and limited license models, with the latter offering greater market control and higher valuations. The mispriced risk in the cannabis industry allows for higher investment returns, as operators prefer paying higher interest rates on debt rather than selling equity at depressed prices. Political uncertainties and regulatory hurdles in the cannabis industry contribute to the mispriced risk and present unique opportunities for investors. The black market for cannabis still exists due to high taxes and regulations in states like California, impacting legal operators and consumers. Chicago Atlantic's focus on high-collateral cannabis loans and low-leverage structures presents a unique opportunity for investors in the rapidly growing industry. LINKSShow Notes Be a Guest About IC-DISC Alliance About Chicago Atlantic GUEST Hayden KellyAbout Hayden TRANSCRIPT Dave Spray Hey, this is Dave. Welcome to another episode of the podcast. I had a great guest today, Hayden Kelly. He's with Chicago Atlantic and they have a really interesting Anibus fund for accredited investors. They've identified a market inefficiency because endowments institutions nonprofits are usually prohibited from investing in cannabis But additionally, these companies are not really bankable for traditional debt. So they have a really interesting debt model for accredited investors that has some really attractive returns with unbelievable collateral coverage and loan to value ratios. So Hayden is a really interesting guy And, even if you're not investing, he has a really interesting update on the state of the cannabis business, especially east of the Mississippi, as it relates to cannabis from a purely financial aspect. Hope you enjoy Well. Good morning, hayden. Welcome to the podcast. Hayden Kelly Thanks, david, appreciate you having me? Dave Spray Yeah, my pleasure. So what were you calling into? from today Are? Hayden Kelly you in Chicago. Despite the background, i'm actually in Miami, our offices are based out of Chicago. We have an office in Miami as well, but I made the move down to South Florida a little over eight months ago. Dave Spray OK, now are you so eight months ago? Sorry, are you a native of Chicago then, or how'd you end up in Chicago? Hayden Kelly Yeah, born and raised in Delaware. Actually, i spent two years in Chicago. I went to the University of Delaware, made the move to Chicago just in the beginning of 2020. I enjoyed the city. It's a great city. We just have a lot of clientele through South Florida and decided to make the move here for convenience. Whether that's a great place to be. Dave Spray OK, well, super. So let's talk about Chicago Atlantic real estate finance. So if I've got like a couple of single family homes that I want to rent out, are you getting the guys I call to get that financed? There's a little more to it than that. Hayden Kelly Yeah, no, absolutely, it's a little bit different. So we do operate as a REIT. Our public vehicle is a publicly traded mortgage. Right now, what I specialize in and where I work with is our private funds, which is very similar to the REIT the extent of the industries in which we invest in the collateral we we obtain as collateral towards loans. We make direct loans, and Chicago Atlantic as a whole is credit oriented. We're an investment platform that focuses on making loans to industries that for maybe some reason, banks won't lend to. Maybe it's one industry that we've really specialized in over the last four years is the US medical and recreational cannabis industry. So, ok, we started making loans in 2019. We have a public REIT on Nasdaq, we have a private credit fund, we have an equity fund and a variety of vehicles and our goals to get outsized returns to investors with very limited downside risk, and we're an industry where there's very limited competition. Dave Spray OK, i'd love to just dive into that cannabis industry. You know, kind of the last I looked at it, geez, four or five years ago, it seemed like because of the of us being a listed drug. Is it listed? What's the correct technical term? It is still a scheduled substance. Scheduled substance, yeah. So it created this hodgepodge thing where they couldn't use credit cards, they couldn't have a bank account, everything was in cash. Is that evolved in the business or is that still the case? Hayden Kelly So a few are still the case, still scheduled. You have an industry that is, for that reason, unbankable. So the big banks, the insurance companies, the endowments, the pensions, the institutions of the world that are typically the big check writers, the big investors in any traditional industry, are shut out from investing due to that lack of federal legalization, where the federal government has said you know, at states, you decide what you want to do. There's 22 states with recreational programs, meaning anyone over the age of 21 can consume cannabis and purchase it like alcohol, and then 38 with some sort of medical program where, if it's chronic pain, sleep apnea, etc. You can acquire cannabis with a note from a doctor and a prescription to be filled at a dispensary. Now your point on the card is completely right No credit card processing in dispensaries, and now what they do have is ATM obviously withdrawals, which is easy for cash transactions, but also you have debit card processing in a good chunk of dispensaries. What we've seen, though, is a big misconception on operators. Everyone thinks operators can't get bank accounts. They're paying us off through amortization payments for our loans and cash and trash bags account. The reality is there's probably anywhere from two to six state chartered banks. These are local banks that will take deposits, open up bank accounts for operators That's how we get comfortable potentially making loans And we require operators that bank accounts for at least a year and a half before we would consider a loan. So to that extent there are bank accounts in the space, but there definitely are a lot of regulatory hurdles at the operators' face. Dave Spray Okay. So I suppose I think it was Zig Ziglar that said every obstacle contains the seed of an equal or greater opportunity. So it kind of sounds like that's how you guys are looking at this. Instead of seeing all the obstacles right You can't use credit cards, can't get big institutional investing you're choosing to see the opportunity in it. it sounds like Absolutely, david. Hayden Kelly So I'll give you just a little bit of a background for us. It started a little over four years ago For one of our founders, tony Cappell. He worked at a traditional lending shop in Chicago called Stonegate And, being in Illinois, you had a super robust medical program. So when it flips recreational, all those patients were already consuming. You had a wholly new addressable market that was interested in cannabis. Maybe they were using it on the black market side and wanted to now try it from dispensaries etc. So when that state flipped recreational, you had what are now the billion dollar publicly traded companies like GTI, presco, barano, spinning out of the state And they were actually coming into the offices of the Stone Gates and the other credit shops of the world and saying listen, guys, the banks won't give us a loan. We'll give you whatever you need to get comfortable. You can take our real estate as collateral. We'll pledge you all of our assets. We'll even personally guarantee the loan. You can charge us 20%. We'll give you a little piece of the company, just give us debt. Because of that point in time there are equity valuations of skyrocketed. They didn't want to sell any more equity in their company, so what they wanted was debt. They were willing to pay an arm and a leg for it. But unfortunately, even Stonegate was a shop that said listen, we can't do it. We have leverage from a bank. We have a few institutional investors who are not comfortable with cannabis. We can't make these loans. And being the head of credit, which was where Tony sat, he said why not make these loans when you have very limited competition, an industry that is growing 20% year over year? You can charge whatever you want And it's way more secure than anything else we're doing. And that's pretty much how Chicago Land it came to be. He got together with two of his classmates at the University of Chicago. They did their executive MBAs together at Booze And it's solid to just really understand the industry travel state by state. And that's at that point is when we launched the fund. Dave Spray Oh, wow. That's really cool, and can you share approximate like size of the cannabis portfolio that you guys have or any kind of metrics? Hayden Kelly Yes, so between our public reach, our two private funds and LP call investments that would lead underwriter on and lead collateral agent on. we've deployed a little over 1.8 billion into cannabis, or the largest vendor in the space. Dave Spray Wow, and so help me understand, like, is that like a couple dozen clients, or is that tens of thousands, or is that something in the middle, you know kind of what's? could you maybe kind of walk me through just like a typical you know sort of deal structure, as much as you're able to, you know, without giving away your secret sauce. Hayden Kelly No, absolutely. Well, it's closer to the earlier part, which is that I've done about 60 loans. Okay, we have some very large loans, one to a company called Verano Holdings who is a billion dollar publicly traded operator. That's a $350 million line of credit. We have 30 million in our REIT, 30 million in our private fund. Verano is probably, in my opinion and you can look at it anywhere is probably one of the top five operators in the world today. Well, we will go in. We will do a loan anywhere from 10 to 30 million in size. We like to structure the loans as delayed drawl term loans, where we lend It's very accretive, so the operator is either building something or buying something. So we can structure the note to be delayed drawl term, which says we'll maybe give you the first tranche of 10 million upfront Once you get a permit to build your new cultivation or you're awarded the license, maybe we'll unlock the second member of that loan. So not putting all the cash up front is great from a downside protection standpoint. We like to lend anywhere less than two times and two and a half times senior debt to EBITDA. Dave Spray When in traditional businesses. Hayden Kelly You typically see people lending maybe at five, six, seven times senior debt to EBITDA. So very low leverage. The loans amortize. We prefer our operators to be amortizing monthly. So that is actually paying down the principal of the loan rather than just paying its interest. For the big balloon to a maturity, that loan principal amount is getting smaller and smaller every single month. And then one thing that we've done since early on, and we're very happy we did, was focus on floating rate loans. So where you've seen these increased rates and this inflation hedge and it affecting big credit shops, big publicly traded mortgage rates, it hasn't affected us, not in a negative way but in a positive way. Where our cost of capital right now is the best of expectations. We don't use leverage So we're not relying on a bank to ultimately lend to us. That rate would have gone up Where when we make a loan to a borrower, the rates based on crime. As capital becomes more expensive to borrow and crime rate goes up, our loan gets more expensive, making the return for investors higher. So we have a portfolio right now in one of our private funds that has 37 loans. The gross on levered yield on that vehicle is over 18%, which is phenomenal and it continues to rise. Dave Spray Yeah, and especially given the well collateralized nature of the loans. Hayden Kelly That's something we haven't even touched on yet, which is the most important part. A typical loan when there's real estate coverage, we're getting a mortgage or deed of trust. So the operators and where we're lending is primarily on the East Coast, where all agopolis exist. You have indoor warehouses, 15,000 square foot grow operations where the operator has various grow rooms and they're growing cannabis indoors. That's how they can control climate and ultimately grow in a state like New Jersey, pennsylvania, west Virginia, ohio, because you can't do it outside like you can in California and Oregon. We're getting all asset UCC one lean. So the company's assets, the receivables, cash on hands, security, interest on their inventory, equipment, lights, receivables, etc. But the real hammer, david, is we're actually getting what is called a stock pledge of the subsidiary that owns a license. One thing that I did not get the touch on it, which is super important, is there's two types of markets in cannabis. You have unlimited license models and you have limited license models, where some of the early adopters the California's, the Oregon's, the Washington's of the world said cannabis is great, let's issue as many licenses as we can, people love it, we're generating great tax revenue. But what happened was, over time, too much competition entered the state. When that competition entered the state, it created, at first phenomenal, a lot of cannabis coming online, a lot of people consuming it. But over the years you've seen a decline in wholesale cost. You've seen an increase in competition. You have operators that it's very difficult to be profitable and they're not making any money. What that's done at the state level is the states are now losing out on tax revenue because they're charging excise tax And the way to optimize your excise tax is to keep wholesale prices high. So the new states that have been adopting the Pennsylvanians, the Ohio's, the West Virginia's, the Florida's, the Illinois's of the world. They said we're going to issue limited amount of licenses, where maybe they issue 20, 30, 50 licenses. Doing so creates oligopolies. Doing so keeps wholesale prices high, limited competition, very easy to regulate. And with that not only do you have a market where cannabis is trading at 2,000 or even $2,800 a pound in some states, you also have now created this license that is very valuable. You can sell the license, you can transfer the license. Now what is the most important thing with our loans is when we focus on these east coast operators We're getting. That license is collateral. The Pennsylvania licenses are valued anywhere between 15 and 25 million dollars. You saw a license itself for over 90 million dollars. So it's a very attractive piece of collateral on our loans and with the licenses, the real estate, the leans, even personal guarantees. When we consider LTB's of the enterprise value of these companies, we typically say under 25% of an additional lending environment. Dave Spray Wow, that's, that's amazing. Can you kind of walk through like an example? I mean, this can just be What's the word I'm looking for an amalgamation of, like, yes, some different clients. You're sort of a Hypothetical scenario. Just kind of walk us through, maybe what it looks like like let's just pick a state and let's maybe, you know, maybe think of a particular deal you've done You can just talk about anonymously or something close. I know a lot of our listeners are, you know, financially oriented, so could we kind of just sort of walk through what a deal might look like. Hayden Kelly Yeah, absolutely, david, and I'll share what I would consider is one of our most reputable loans. It's a publicly traded company called Brano Holdings, and Brano is a 1.1 1.2 billion dollar Publicly traded operator. There's been quarters of the company doing over a hundred million dollars in EBITDA quarter. That is a 350 million dollar loan, meaning we're less than one time senior, that TV, that and that loan is at the cost of an all-in Just over 14 percent. Where seniors are cured on the deal, we're fully collateralized by real estate, all-acid lean stock pledge devices. No personal guarantees in that loan. It is a publicly traded company and no warrants in that deal. But that is just shows the The industry, the holes in the industry where there is very much so mispriced risk. If Verano was a Widget manufacturer or they were in the tire business Generating that type of revenue and having that type of dominance in the market, they would be at the cheapest cost of capital possible. But just given the lack of the institutional money in space, the banks not being willing to lend to the sin industry, which is cannabis, were able to charge a company of that magnitude north of 14 percent, which just speaks to This industry and how they're truly is mispriced risk. Ultimately, every single state to David, so they're all across the board. We've exposure through various states and many different markets just with that that one company. Dave Spray Okay, yeah, and they're happy to pay the 14 percent because their margins are substantially higher than that, obviously. Hayden Kelly Yeah, and there's a few other factors. There is a capital super creative to them. But what's more important to understand is you've had these cannabis equity markets. You have some operators that are performing very well whose equity valuations are still getting crushed. Now They're not going to inject equity and raise equity To dilute existing equity holders. They're not gonna, you know. I see, when they know their values are higher than they're being betrayed Today, which is ultimately why they're willing to pay for more expensive debt. Dave Spray Sure. So paying 14 percent for debt is still far cheaper than selling equity at a depressed price. Hayden Kelly Absolutely and it won't last forever, i can't tell. You will be able to generate 12% cash paying returns, a gross on every deal of over 18% forever. But I think we have a four to seven year window and the reason being is you have An issue right now with the Democratic Party as well, where originally the Democratic Party is ever in a league-class cannabis. It's great. We can generate significant tax revenue, we can implement social equity, we'll get back to the people that were harmed on the war, on drugs and incarcerated etc. And what happened as time kind of progressed is the Biden administration You know the runoff to the Senate ever thought it would happen and the cannabis equity market skyrocketed. If you look at a chart, i like to use MSOS. It's an ETF of the ticker to some of the largest publicly traded cannabis companies and You see this boom right following election and over the last few years It's just gone directly right back down, nearing all-time lows. And it's not because the companies can't perform. It's the loss of faith that there's gonna be any reform, any real meaningful impact and to get institutional investors involved. And it's because half the Democrats like it for tax revenue, half like it for tax revenue and one implements social equity. There's something going on in New York right now where, you know, potentially implementing 150 licenses for Dispensaries to ex-devicted felons. Now I think it's great if you want to, you know, get back to those who have been wrongfully incarcerated for something that is now legal. It makes sense. But what doesn't make sense is Having these operators now be the ones that are going to control the cannabis trade in the state, maybe individuals that don't have as much business experience or operating experience. So you see, issues like that the Republicans aren't too favorable of that. Some of the Democrats don't love it, which is why we've seen what is the safe banking act been shut down at the Senate level for a great time now. Dave Spray Oh, wow, okay, And so help us understand. like what a smaller deal looks like, like do you have any operators? or just like a single location. Was that too small? Hayden Kelly No, but location is everything. So we'll do individual deals. Anywhere from 10 to 30 million in size is our sweet spot. It might be an operator in a state like Pennsylvania or Ohio or Maryland where this limited license model exists. It might be a smaller operator, but the goal there and the thesis there is you're in a state like Pennsylvania where there's 25 cultivations, or in a state like Maryland where there's 50 cultivations and you're forced to be vertically integrated because if you have a cultivation you get three dispensaries. So having one of those licenses is super valuable Now, where the operator might not be printing as much cash as a Verano, a GTI or a Crestor or a big operator. They're in an industry where they don't need to do anything in an instant. Be attractive. They don't need to have the best brand, they don't need to have the best product, they just need to be able to operate. They need to be able to grow cannabis, open up their dispensary on time, have employees in the shop And, given the soledopathy that exists, they're very much able to be very profitable and have very attractive licenses, which is I break this flat as well. Dave Spray Okay, that makes sense. What makes me think of something here in Texas. There's a Texas ice cream company called Bluebell in about an hour northwest of Houston, in Brenham, texas, and supposedly if you go to the manufacturing facility they just have ice chest full of like single serving ice cream for the employees to just sample at will throughout the day. I'm guessing that some employees at cannabis operations think it's going to be a similar setup, but I'm guessing it's probably not like that, right? Is this the dream job for somebody who's a regular cannabis user? or they can just consume while they work? Is that, or is that just probably a myth? Hayden Kelly Yeah, no, it's definitely a myth. Now, a California, Washington, oregon grow operation or dispensary, that might be very, very all common, just given the lack of regulation, the very cheap wholesale prices, the oversupply, that is very much real Now in a state like Pennsylvania or Illinois and Ohio these states that keep looting to you can't do that in your rooms, you can't do that Your dispensary is, and then what you stand to lose is the ability to operate. So if you're consuming product in your cultivation, it's not a good idea. We don't advise on it. We haven't seen any of our operators doing it. But there's something to consider. Right, if you're working that close to the plant, you might have an affinity to the product. At Chicago Atlantic we don't have an affinity to the product, we just like the sufficient markets And it might happen. But from our perspective it's a big no-no and you stand to lose much more than you stand to gain by consuming product during the workday. Dave Spray Sure No, that makes sense. Hey, do you know one of the theories of one of the benefits of legalizing a cannabis was that, as I understand it, when you have a black market there's a huge premium that the consumers paying because of the risk of the whole supply chain being illegal. And part of the theory was that by legalizing it you could really dramatically reduce that premium to where the black market really wouldn't exist, because there would be kind of no economic aspect to it. Are you familiar with any of those dynamics, like in California, let's say? has the black market effectively been either eliminated or kind of made irrelevant? Hayden Kelly So it's interesting, ultimately the actually the opposite is happening in a state like California, where you have a very robust tax regime in a state like California where it's already hard to be profitable, no matter what business you're operating in. Now you're in a state that is overbuilt supply so dramatically that it is so hard to be profitable that some of these legal operators have adjusted and started doing black market activity shipping and product over state lines, maybe selling cannabis, you know, out of the shops And, david, there's actually kind of to an extent exist in New York too, because there's really no crackdown, there's no real push to let's incarcerate, let's shut down these black market operators that are selling out of trucks. You can go into a bodega, buy an e-cigarette, a sandwich, a soda and actually buy cannabis from someone behind the counter, and they might even put it on a credit card for you. So there's a lot of black market activity. In Houston it's not heavily regulated. Now in Pennsylvania, in Maryland, in Florida et cetera, you'll absolutely see that where. Why go to the black market dealer to purchase an eighth of smokable flour when it's going to cost maybe 30 to $40 from the black market dealer? That same eighth might be $35 or $50 in a dispensary. It's not dramatically more expensive. You get to know where it's grown. You get to see all the metrics of the cannabis how much THC, cbd, everything that's in the product. It's sealed, it's labeled, it's sold at a licensed dispensary. It's much safer. Now you even have a new adoption of people that maybe would never consider smoking cannabis if you're buying it in a bag from a black market dealer outside of a shopping center et cetera. Where, if you go into a dispensary, you see it's labeled, you see it's secure, you have the child-proofing packages, big brands, real customer service. You might have that housewife or that house husband that was once drinking a glass of wine or a beer before bed, now eating an edible or smoking a vape cartridge to relax. So it's definitely happening. Now in the more unlimited licensed states, the opposite's happening, because the operators can't be profitable, they're a little bit more desperate and they're turning towards a black market product. The states east of the Mississippi is where I typically go. They're really very much doing it right when it comes to issuing licenses and regulating licenses. Dave Spray Okay, and like is California, like one of those states where somebody can grow their own marijuana for personal consumption too. Hayden Kelly There's over 6,000 licensed grows in California, which is crazy. It's very easy to grow, It's very easy, obviously, to consume and then purchase and sell Where in some of the limited states it's very difficult to get a license. I mean an application process in a limited license state costs anywhere from $100,000 to $300,000 just to submit a good application and potentially be considered to be a worthy license. Dave Spray Wow. Well, we spent a fair amount of time in Colorado And my understanding of the Colorado law is it's actually legal, i think, maybe three plants per adult or something like that, where you can actually grow it completely unlicensed, unregulated, for personal use. Do you know if California or Oregon has that kind of stipulation too? Hayden Kelly I'm not exactly sure. I'm sure it does To the extent operator. both consumers want to grow their own cannabis, as long as they're not trying to open up a dispensary near positive. Dave Spray It's the same way in Oregon and California, because it would seem like that would also create another black market, because I'm guessing in California the tax rate on the cannabis is probably higher than just the standard sales tax rate. I'm guessing it's a pretty significant number. You know what that is. Hayden Kelly Absolutely. It's very high In California, one of the worst tax regimes. obviously in the US there's a premium associated with cannabis even in Illinois. Tax revenue generated from cannabis in Illinois just last year, for the first time ever, actually was larger than tax revenue generated from alcohol. It's not because there was more sales in alcohol, it was because the rate is higher. That just shows the magnitude of tax revenue from the product. States ultimately aren't legalizing it because they say you know what, david, this is better for you than buying Advil from Walgreen. This is better for you than getting prescription bill. It's ultimately to generate tax revenue where there are significant health benefits to cannabis. States are really being pushed and urged to legalize cannabis due to that tax revenue generation. Dave Spray Yeah Well, it would also seem like that would also further depress the price, the black market. Even if all you're doing is eliminating the tax, that creates a significant difference. Because I can just imagine somebody who's maybe been illegally growing their own cannabis for a long time. There's just a little small operation for them, a couple of their buddies, very low key. Now all of a sudden it's legal and they can have I don't know, it's either three or six plants, i think in Colorado You can grow them outside, i believe. Now all of a sudden they're like hey, just like in the past, i produce a little more than I need, so I can just sell it to my buddies. I'm actually selling it to them cheaper than I used to because I don't have to charge the incarceration risk premium. Now all of a sudden they're able to buy it from me for half the price that cost them to go to a dispensary. You only have one strain but they come over anytime they want. They can kind of see the operation. I would also think that would be another downward pressure phenomenon on pricing as well, although it may not be material and quantity. Hayden Kelly Yeah, that's. The latter is the most important part. Not only these plants aren't going to produce enough cannabis ultimately if you have three plants to supply many people with the product. But growing is not that easy. It's not like planting a tree where you can just put it in the backyard or somewhere or water it once in a while. It takes sophistication. It takes very significant nutrients, soil, water, lighting. The process is difficult where, if I was an advocate for cannabis and even just for some reason I couldn't buy from a dispensary, which would be the first place I would go. I'm much more likely to find a black market operator who would chip it to me from California, oregon or Washington because, a it's probably even cheaper than trying to grow it yourself and B the new sense of growing is it's not easy. It takes anywhere from six to 12 to 24 months to have a clone producing cannabis. That's smokable. It's not something that is ultimately too reputable or even it's not that easy to do. It takes someone that really understands it. There is definitely an existence. It's not going to have too much of an effect on wholesale pricing at the dispensary level. Dave Spray Okay, well, thanks for that industry background. Now you mentioned that in your $1.8 billion you have deployed that you haven't had access to the traditional equity markets, institutions and insurance companies. In that, because of this awkward age that we're in with cannabis, how are you all raising your funds? because it doesn't sound like you're borrowing money. It sounds like it's all equity investment from nontraditional sources. Is that correct? Hayden Kelly Correct. When I speak with anything here, it's in regards to our private funds. But our private funds are completely unlevered. We do not take on debt. We don't go to a bank and say let us borrow $50 million, $100 million, we'll mix it in the fund with LP equity. It'll actually sit on top of the LP equity, which means in a waterfall scenario or something goes wrong, the bank gets paid back before investors are considered. That's in the traditional investment world private credit. REIT et cetera. We are completely unlevered. It's no bank debt, it is all LP equity and traditional investors of ours are qualified purpose-served investors where you have to have $5 million or more in assets. Our typical minimum check is anywhere from $250,000 to $1 million. It's ultra-hine-worth individuals, It's family offices, It's private investors that want great opportunity for clients that offers quarterly income. Dave Spray How is the investment very liquid. What's the typical tie-up if an investor does choose to team up with you? Hayden Kelly guys. The investment has. A two-year lockup is the standard. Investors can get out at one year at a 10% discount if they need early liquidity. The standard two-year lockup has no discount associated with it. We make redemptions on a quarterly basis. But, if investors are interested in the fund, you come in immediately, diversified across 37 loans. 15 of those loans have some sort of equity kicker, which means about a third of the deals are actually able to get some sort of piece of the business if the company goes public or gets acquired, which is alluded to in the past significant markups. We've had years where equity kickers are worth an additional 200-300 basis points. We've had years where they've been worth nothing, but they're solely gravy and they can help bolster returns at the investor level. Dave Spray Okay, that explains how you lend the money at 14%. You pay your overhead, but your investors are capturing a greater than 14% return because of the equity kickers. Hayden Kelly To an extent that's correct. The only thing I'll say is that 14% that's to one of the best billion-dollar publicly traded companies, oh okay, the cost of capital is well over that. Dave Spray I've got you. Okay, That makes sense. So, accredited investor. if an accredited investor is listening to this and wants to learn more, where would you direct them to? Hayden Kelly There's two ways You can check out our website. You can read about the team I oversee, our investor relations team. We have about 500 line-item investors. If you have any interest in learning more talking about the cannabis industry, maybe you are pursuing debt for cannabis operation. If you're looking for income alternatives in these uncertain markets, I'm happy to talk to you about potential investment opportunities. Dave Spray Okay, should I just email you? That would be great. What's the email address? Hayden Kelly It is HKelly at ChicagoAtlanticcom. That is HTELY at ChicagoAtlanticcom. Dave Spray Okay, and then the website ChicagoAtlanticcom ChicagoAtlanticCreditcom Correct. Okay, chicagoatlanticcreditcom. Well, this has been really interesting. Is there anything that I didn't ask you, that you wish I had? Hayden Kelly No, i think we covered a good chunk of it. We covered a little bit of everything. You know what makes this different I think it's important because there are some other lenders in the space is both were largest by a pretty significant multiple but it's where we focus we said early on, we want to stick east of the Mississippi. We want to focus, for allogopolis exist. We've never done a direct loan in California, which speaks magnitude, because most people the first thing in the first state they think of when you hear cannabis is California. It's where started, it has this, you know, feeling to it. If you go to California, that's where cannabis is, etc. We really focus on these allogopolis and one thing that makes a significant be different, david, is we focus on direct originations. We directly originate our loans from ground up. We have eight direct originators that are in the field, looking for new deals, uncovering new opportunities, staying current with borrowers for introductions and up sizes, which gives us a competitive edge. But we're actually seeing a lot of these deals before anyone else has the opportunity to even talk to the operator. So that's us. I'm happy to chat with anyone more in depth. There's a lot we can go into and I look forward to it. Dave Spray Yes. So one last question. So is there any? you know, given the muddy waters during the federal and the states, if somebody has like Qualified retirement dollars They're looking to deploy, are there any prohibitions against that? I mean, if it's in a qualified retirement, you know, an IRA, roth IRA, or does it have to be, you know, outside that type of vehicle? Hayden Kelly No, great question. We included an offshore feeder on our Second fund, which is available to investors. That eliminates what is called UBTI and ECI, which are on favorable, favorable tax treatments for Qualified plans like a self-directed IRA. Now, if the individual is no longer employed with the firm that maybe they had a 401k with Like we heard is they can roll it into a self-directed IRA and invest. We take self-directed ira's, traditional ira, we take foundations etc. So you can use taxes and dollars. Very attractive from that perspective, given the high yield. Dave Spray Yeah, well, super Well, hey, this has really been. This has really been fun And I appreciate your kind of opening our eyes to an interesting Opportunity that sounds like it may not be around forever, because it was just kind of this unique, influenced of events that's created this opportunity. I heard this quote by Sam Zell. Do you know, sam, the famous Chicago? I think he invented the read. Basically, i think he did. I Heard him speak at a conference. In fact, it was that same conference in Miami where I first met one of your colleagues Earlier this year and Sam, i didn't hear this from him then. Sam spoke at that conference, but I heard him on a podcast and he said when somebody asked him what his occupation is, he said I'm a professional Opportunist, so this sounds like a great opportunity for a professional Opportunist absolutely. Hayden Kelly I think I need to send Sam an email and let him know what we're working on. A Chicago Atlantic, that sounds great. Dave Spray Well, hey, thanks again for your time. Really appreciate it. Have a great day. Thank you, david. Hayden Kelly Bye. Dave Spray There we have it another great episode. Thanks for listening in. If you want to continue the conversation, go to ic disc show dot com. That's ic D is C showcom and we have additional information on the podcast, archived episodes as well as a button to be a guest. So if you'd like to be a guest, go select that and fill out the information And we'd love to have you on the show. So that's it. We'll be back next time with another episode of the ic disc show. Special Guest: Hayden Kelly.
Bernard Reisz, CPA is a financial strategist and educator at ReSureFinancial.com who helps real estate investors elevate their ROI and wealth growth by leveraging real estate title and tax tools. He serves as the Chief Education Officer at ReSure Financial, where he curates a website to educate investors on topics like 1031 Exchange, Cost Segregation, and 401k/IRA. Bernard's expertise in financial, tax, real estate, and legal topics has made him a sought-after guest on numerous forums, where he shares his straight-talk and unique insights on various aspects of real estate tax matters. He is well-versed in advanced tax strategies such as UBIT, UBTI, UDFI, 453 Installment Sales, and more. Are you looking to create long-lasting wealth through real estate investment? Do you want to learn about the benefits of diversification and how to make cash-flowing deals? Then this episode is for you. Our experts discuss the importance of thoughtful and unbiased financial advice, and why diversification is key to maintaining your lifestyle. We cover various types of investments such as residential and multi-family properties, farmland, mineral oil and gas, and affordable Class C properties. Our speakers also emphasize the importance of real estate tax tools like 1031 exchange, cost segregation, and self-directed retirement accounts to help you maximize your returns. We also discuss the value of charitable giving and the optimal amount of taxation. Tune in to this episode to learn more about creating long-lasting wealth through strategic financial planning and education in real estate investment. [00:01 - 06:08] The Importance of Diversification and Tax Tools for Financial Success Diversification is crucial to achieving financial success Investments in various assets like oil and gas, farmland, and residential real estate can provide a safety net There is no one-size-fits-all approach to investing Thoughtful and unbiased advice is important [06:09 - 12:22] Real Estate Tax Tools and Financial Freedom People prioritize safety once they reach financial comfort Diversification is key to maintaining lifestyle and progressing Good tax advice is necessary for complex tax situations Legitimate deductions should be claimed without fear of the IRS [12:23 - 18:45] Insights on Tax Strategies and Private Charity There is no patriotic duty to arrange affairs to benefit the treasury Organizing transactions to create the lowest tax burden is crucial Private charity is more effective than government bureaucracy [18:46 - 20:04] Closing Segment An optimal tax amount exists, and additional taxation has decreasing benefits Listeners can visit resurefinancial.com and members.resurefinancial.com to learn more about Bernard and his work Tweetable Quotes: “A red flag is only something to fear, if you've got something to hide.” – Bernard Reisz “The first indication that you're dealing with people that are thoughtful and unbiased is when there is no one size fits all.” – Bernard Reisz You can connect with Bernard Reisz through his: Email: bernard@resurefinancial.com Social Media: LinkedIn LEAVE A REVIEW + help someone who wants to explode their business growth by sharing this episode. Are you confused about where to start? Join our community and learn more about real estate investing. Head over to our Facebook Page, Youtube Channel, or website https://www.theacademypresents.com/jointhesummit36848306. Connect with Lorren Capital, LLC. for syndicated multifamily investments, https://lorrencapital.com/. To learn more about me, visit my LinkedIn profile, and connect with me.
Bernard Reisz, CPA is a financial strategist and educator at ReSureFinancial.com who helps real estate investors elevate their ROI and wealth growth by leveraging real estate title and tax tools. He serves as the Chief Education Officer at ReSure Financial, where he curates a website to educate investors on topics like 1031 Exchange, Cost Segregation, and 401k/IRA. Bernard's expertise in financial, tax, real estate, and legal topics has made him a sought-after guest on numerous forums, where he shares his straight-talk and unique insights on various aspects of real estate tax matters. He is well-versed in advanced tax strategies such as UBIT, UBTI, UDFI, 453 Installment Sales, and more. Are you a real estate investor looking to optimize your taxes and maximize your deductions? In this episode, we bring together industry experts to explore the complex world of taxes and how they impact your real estate investments. From land allocation in cost segregation studies to understanding tax rates and state conformity to federal bonus depreciation, our speakers discuss key factors and share strategies like 1031 exchanges and cost segregation studies to mitigate taxes. They emphasize the need to work closely with CPAs and tax professionals to prepare for complex taxation issues, and even touch on retirement accounts and the impact of bonus depreciation. Whether you're a new investor just starting out or an experienced pro looking to hone your skills, tune in to this episode to stay up-to-date on best practices for optimizing your taxes. [00:01 - 07:55] The Importance of Cost Segregation Land allocation is a key factor in cost segregation studies Actual tax rates and state conformity to federal bonus depreciation affect the true benefit of cost segregation deductions Time value of money is crucial in real estate investing, and tax planning can help maximize returns [07:56 - 16:16] Maximizing Tax Deductions in Real Estate: Strategies and Risks to Consider Tax deductions can be used to offset gains in real estate investments Buying bigger assets creates even bigger deductions Not claiming allowable depreciation can lead to recapture in the future Adjusted tax basis is important in calculating true gain from a property sale [16:17 - 24:49] Understanding the Impact of Cost Segregation and Bonus Depreciation on Retirement Accounts Land does not depreciate, so only allocated amount remains Short-term gains taxed at ordinary income rates, long-term gains have varying rates Bonus depreciation may or may not benefit retirement accounts [24:50 - 29:09] Closing Segment Cost segregation is a no-brainer for syndicated deals Listeners can visit resurefinancial.com and members.resurefinancial.com to learn more about Bernard and his work Tweetable Quotes: “The cash flow comes into the retirement account.” – Bernard Reisz “Every investor is gonna be impacted by cost segregation differently based on our tax plan.” – Bernard Reisz You can connect with Bernard Reisz through his: Email: bernard@resurefinancial.com Social Media: LinkedIn LEAVE A REVIEW + help someone who wants to explode their business growth by sharing this episode. Are you confused about where to start? Join our community and learn more about real estate investing. Head over to our Facebook Page, Youtube Channel, or website https://www.theacademypresents.com/jointhesummit36848306. Connect with Lorren Capital, LLC. for syndicated multifamily investments, https://lorrencapital.com/. To learn more about me, visit my LinkedIn profile, and connect with me.
Bernard Reisz, CPA is a financial strategist and educator at ReSureFinancial.com who helps real estate investors elevate their ROI and wealth growth by leveraging real estate title and tax tools. He serves as the Chief Education Officer at ReSure Financial, where he curates a website to educate investors on topics like 1031 Exchange, Cost Segregation, and 401k/IRA. Bernard's expertise in financial, tax, real estate, and legal topics has made him a sought-after guest on numerous forums, where he shares his straight-talk and unique insights on various aspects of real estate tax matters. He is well-versed in advanced tax strategies such as UBIT, UBTI, UDFI, 453 Installment Sales, and more. Are you interested in real estate investing, but feeling overwhelmed by the various tools available? In this episode, we sit down with Bernard from Reshore Financial to learn about the importance of title and escrow in real estate transactions. From clearing title to settlement statements, Bernard emphasizes the need for expertise, communication, and responsiveness during the closing process. But that's not all - we also dive into the world of depreciation deductions and cost segregation studies, exploring how investors can take advantage of accelerated depreciation in year one. Whether you're a beginner or a seasoned pro, this podcast will give you valuable insights into the tools available for real estate investing success. Tune in now! [00:01 - 06:28] What are The Different Tools in Real Estate Investing Understand the different tools in real estate investing, such as cost segregation, 1031 exchanges, retirement accounts, and title and escrow Expertise and responsiveness are crucial in resolving title issues and closing deals on time [06:29 - 12:45] Understanding the Importance of Settlement Statements and Title Insurance in Real Estate Transactions Disbursements involve lender funds to escrow, dispersing funds to the seller, and buyer deposits going through the disburser Settlement statement is key for determining depreciation deductions for real property and tangible personal property [12:46 - 19:17] Maximizing Tax Benefits through Cost Segregation Study and Proper Allocation Analysis A clear settlement statement leads to a cost segregation study Bonus depreciation is 100% if property was purchased and placed in service in 2022 [19:18 - 26:42] Closing Segment Cost segregation study buckets items by their usable life for accelerated depreciation Listeners can visit resurefinancial.com and members.resurefinancial.com to learn more about Bernard and his work Tweetable Quotes: “Real estate provides awesome depreciation deductions.” – Bernard Reisz “So a key part of tax strategy and to be able to claim depreciation deductions if you wanna get them for the current year, is make sure that it's at least available to rent.” – Bernard Reisz You can connect with Bernard Reisz through his: Email: bernard@resurefinancial.com Social Media: LinkedIn LEAVE A REVIEW + help someone who wants to explode their business growth by sharing this episode. Are you confused about where to start? Join our community and learn more about real estate investing. Head over to our Facebook Page, Youtube Channel, or website https://www.theacademypresents.com/jointhesummit36848306. Connect with Lorren Capital, LLC. for syndicated multifamily investments, https://lorrencapital.com/. To learn more about me, visit my LinkedIn profile, and connect with me.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about setting up an LLC for multiple retirement accounts, what to do with an old Solo 401(k) plan, and UBTI exemption for a sale leaseback.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about the difference between an IRA transfer and rollover, the audit risk of a Self-Directed IRA, and how many real estate transactions you can have before triggering UBTI.
The Investor Relations Real Estate Podcast Episode 41 - When You Invest - The True Power Is The Compounding Host: Jonny Cattani Guest: Bernard Reisz Producer: April MunsonJonny Cattani is joined by Bernard Reisz to discuss: Real estate tax tools: SDIRA, QRP, 401k, 1031 Exchange, Cost SegregationUnderstanding where your money is really going Defining terminology Lead Strategist & Educator @ ReSure Financial, Delivering Investor Tax Tools and Transforming Financial ParadigmsBernard is CEO - Chief Education Officer - @ resurefinancial.com/& @ members.resurefinancial.com/ delivering self-directed investor tax and financial tools for alternative investing using Checkbook Control IRAs, QRPs, Solo 401(k)s, and 1031 Exchange services. ReSure also provides objective advisory services for QRP, SDIRA, UBIT, UBTI, UDFI, 1031, LLCs, entity structuring, financial products, tax strategy & planning, installment sales, financial advisory, estate planning, investing... all of these must be navigated expertly & integratively.Linked material referenced during the show: Book: Antifragile: Things That Gain From Disorder - Nassim Nicholas Talebhttps://www.amazon.com/Antifragile-Nassim-Nicholas-Taleb-audiobook/dp/B00A2ZIZYQ/ref=sr_1_1?crid=OFA63A1BGXO7&keywords=Saint+Nicholas+taleb+series&qid=1653339014&sprefix=saint+nicholas+taleb+series%2Caps%2C87&sr=8-1Connect with Bernard!As a guest on numerous financial, tax, real estate, and legal forums Bernard delivers straight-talk and unique insight. Many of these are accessible at: https://www.resurefinancial.com/checkbook-control-retirement-learning-center/self-directed-financial-podcasts/Website: https://members.resurefinancial.com/ Website: https://www.resurefinancial.com/ LinkedIn: https://www.linkedin.com/in/bernard-reisz-cpa/Connect with Jonny!Cattani Capital Group: https://cattanicapitalgroup.com/Invest with us: invest@cattanicapitalgroup.comLinkedIn: https://www.linkedin.com/in/jonathan-cattani-53159b179/Johnny's Instagram: https://www.instagram.com/jonnycattani/IRR Podcast Instagram: https://www.instagram.com/theirrpodcast/TikTok:https://www.tiktok.com/@jonnycattani?lang=enYouTube: https://www.youtube.com/channel/UCljEz4pq_paQ9keABhJzt0AFacebook: https://www.facebook.com/jonathan.cattani.1
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about Backdoor Roth IRA conversion, UBTI tax in a real estate leaseback, and purchasing a vehicle with a Self-Directed IRA.
We get asked a lot about Self-Directed IRAs (“SDIRA”). An SDIRA is a type of individual retirement account (IRA) that can hold a variety of alternative investments that regular IRAs can't. For example, it can hold precious metals, crypto, commodities, and most people use it to hold real estate. In terms of the annual contribution limits, it works just like any other Traditional IRA or Roth IRA, the “self-directed” part the ability to invest in alternative investments. Please remember, not all custodians allow for SDIRAs, as a matter of fact, most major custodians do not. Please pay attention to the fine print of rules and hidden fees. Some important details to know about SDIRAs: 1) it's strictly for investments; if you use an SDIRA to buy real estate, it can't be your primary residence or any type of personal use; 2) are you comfortable with the concentration? People usually are not OK with spending $500k on a single stock, and yet, when it comes to real estate or trendy new investments like NFTs, or crypto, they suddenly don't think of concentration and risk; 3) if the SDIRA owns real estate, it's going to have to act like an operating account - if the real estate in the SDIRA needs a new roof, do you have enough cash in this account to cover it? It might be too late for you to make a contribution to cover it because of the $6000 annual limit ($7000 if you are 50 or older); 4) There are tax consequences, depending on how you structure it; please learn about UBTI and if it affects you before you jump in and purchase assets. Overall, like Nathaniel and Tim said: read the fine print! Just because SDIRAs are super popular with billionaires right now, doesn't necessarily mean it's for everyone. Please do your own research!
IRA Financial's Adam Bergman Esq. discusses the Unrelated Business Taxable Income (UBTI) rules and how they apply to Solo 401(k) investments.
IRA Financial's Adam Bergman Esq. discusses Bitcoin mining and whether or not the process rises to the level of a trade or business, which might subject you to the UBTI tax.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about transferring an IRA to IRA Financial, tax withholding on an IRA rollover, and UBTI and hedge funds.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about UBTI and a non-recourse loan, moving XRP to IRA Financial, and holding American Eagle coins in an IRA.
IRA Financial's Adam Bergman Esq. discusses UBTI and UDFI, and how taxes may apply to certain retirement account investments.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about holding securities in a Roth IRA, seller financing and UBTI, and owning S Corp stock with an IRA.
When we think about IRAs, we think of getting income without having to pay taxes at the time the income is earned. Listen to this episode to learn the most important things you should know about the UBIT tax and self-directed IRAs. Key takeaways to listen for An overview of Self-Directed IRAs What is UBTI in an IRA How to assess which transactions trigger the UBTI Tax Resources mentioned in this episode CamaPlan Connect With Us To learn how to consistently buy real estate working just 5 hours a week, click here. Follow Mike on Social Media Facebook: Mike Butler LinkedIn: Mike Butler Instagram: @mikebutlerusa Twitter: @MikeButlerUSA
IRA Financial's Adam Bergman Esq. discusses real estate flips within a Self-Directed IRA and why you need to be aware of the Unrelated Business Taxable Income (UBTI) tax.
From Bernard Reisz: QRP, SDIRA, UBIT, UBTI, UDFI, 1031, LLCs, entity structuring, financial products, tax strategy & planning, installment sales, financial advisory, estate planning, investing... all of these must be navigated expertly & integratively. The people that you talk to about financial tools & strategies all have something to sell you, making objective info hard to find. Get objective info from a guide that knows every neck of the woods and has nothing to sell you, delivering unbiased expertise. Be EMPOWERED with clarity, certitude, & control. Join the FREE member zone: https://members.resurefinancial.com/ My goal is to empower you to optimize your finances, using proactive and innovative strategies. 401kCheckbook.com: Gives investors direct control of tax-favored funds for real estate equity and debt opportunities using Checkbook Control IRAs, QRPs, Solo 401(k)s, and Checkbook Life Insurance. Delivered with the expertise & integrity, and accounting for the nuances of your personal tax profile and the tax rules applicable to tax-sheltered accounts. Implementation, compliance advisory, & tax strategy for Checkbook Control Retirement Accounts, including SDIRA, QRP-LLC, IRA-LLC, IRA-Trust, QRP, & Checkbook 401k plans - nationwide. Self-directed retirement accounts are not one-size-fits-all and have far more tax nuance than promoters want you to know. Prior to founding ReSure, Bernard served as Director of CoMetrics Partners, managing an array of engagements involving financial consulting and due diligence. Bernard advised owners of closely-held middle-market companies on advanced tax mitigation strategies. Please add any links you want me to share in the episode's description, including your social media. https://www.linkedin.com/in/bernard-reisz-cpa/ https://members.resurefinancial.com/ https://www.facebook.com/BernardReiszCPA/ https://www.401kcheckbook.com/ https://www.instagram.com/resurefinancial/ _____________________________________________ #RealEstatePodcast | #RealEstateAdvice Wanna know more about Barri Griffiths and the WWRE Podcast: https://linktr.ee/wrestlingwithrealestatepodcast The WWRE Podcast is available on all platforms
From Bernard Reisz: QRP, SDIRA, UBIT, UBTI, UDFI, 1031, LLCs, entity structuring, financial products, tax strategy & planning, installment sales, financial advisory, estate planning, investing... all of these must be navigated expertly & integratively. The people that you talk to about financial tools & strategies all have something to sell you, making objective info hard to find. Get objective info from a guide that knows every neck of the woods and has nothing to sell you, delivering unbiased expertise. Be EMPOWERED with clarity, certitude, & control. Join the FREE member zone: https://members.resurefinancial.com/ My goal is to empower you to optimize your finances, using proactive and innovative strategies. 401kCheckbook.com: Gives investors direct control of tax-favored funds for real estate equity and debt opportunities using Checkbook Control IRAs, QRPs, Solo 401(k)s, and Checkbook Life Insurance. Delivered with the expertise & integrity, and accounting for the nuances of your personal tax profile and the tax rules applicable to tax-sheltered accounts. Implementation, compliance advisory, & tax strategy for Checkbook Control Retirement Accounts, including SDIRA, QRP-LLC, IRA-LLC, IRA-Trust, QRP, & Checkbook 401k plans - nationwide. Self-directed retirement accounts are not one-size-fits-all and have far more tax nuance than promoters want you to know. Prior to founding ReSure, Bernard served as Director of CoMetrics Partners, managing an array of engagements involving financial consulting and due diligence. Bernard advised owners of closely-held middle-market companies on advanced tax mitigation strategies. Please add any links you want me to share in the episode's description, including your social media. https://www.linkedin.com/in/bernard-reisz-cpa/ https://members.resurefinancial.com/ https://www.facebook.com/BernardReiszCPA/ https://www.401kcheckbook.com/ https://www.instagram.com/resurefinancial/ _____________________________________________ #RealEstatePodcast | #RealEstateAdvice Wanna know more about Barri Griffiths and the WWRE Podcast: https://linktr.ee/wrestlingwithrealestatepodcast The WWRE Podcast is available on all platforms
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about the mega backdoor Roth 401(k), the Gemini Self-Directed IRA, and UBTI tax on a real estate investment.
IRA Financial's Adam Bergman Esq. discusses the many benefits of opening a Solo 401(k) if you are self-employed, including high contribution limits, the UBTI exemption, and the loan feature.
IRA Financial's Adam Bergman Esq. discusses how UBTI impacts Self-Directed IRA transactions when seller financing is involved, such as a sale leaseback.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about brokerage accounts in an IRA LLC, mixing personal funds with IRA funds to invest and recourse loans and UBTI.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about Solo 401(k) contributions, the UBTI tax in a real estate investments, and Solo 401(k) requirements for those with multiple owner-only businesses.
In this week's episode, IRA Financial's Adam Bergman Esq. answers questions about holding IRS-approved coins at home, getting a Solo 401(k) nonrecourse loan and if a storage facility investment would trigger UBTI.
IRA Financial's Adam Bergman discusses the UBTI Tax and how it can affect the tax efficiency of your IRA or 401(k) plan., depending on how you invest.
The Real Estate CPA podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax dvice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests. Always consult your own tax, legal, and accounting advisors before engaging in any transaction. -- Today we're joined by Brian Eastman, principal and Sr. Consultant at Safeguard Advisors. Safeguard Advisors is an innovative provider of Self-Directed retirement plans for individuals and entrepreneurs who want to take control of their own wealth building future. Learn more about Brian and his work: www.ira123.com To learn more about our Year-End Tax Planning service visit www.realestatecpa.com/yearend/ and fill out the short form and we'll get back to you in 1-3 business days for an initial consultation. For more education about optimizing your tax position, use this guide as a resource for just about every topic that applies to you as a real estate investor: www.therealestatecpa.com/the-ultimate…te-investors To sign up for our Virtual Workshops visit: www.therealestatecpa.com/virtual-workshop/ Subscribe to our YouTube channel: www.youtube.com/c/therealestatecpa Like us on Facebook www.facebook.com/realestatecpa/
"A deep dive"...That's what you can expect from this episode. Tune in to hear our guest - Brian Eastman of Safeguard Advisors deliver a wealth of deep insights on self-directed IRAs and 401(K) plans. Having advised thousands of independent investors over the years, Brian has truly "seen it all" when it comes to SD IRAs and 401(K)s. Apart from those areas, he's also knowledgeable on hiking the Rocky Mountains, a topic which you'll hear about later in the show. To hear that & more, click "Play" in iTunes now!
IRA Financial's Adam Bergman discusses the options you have when using your Self-Directed IRA to invest in an Airbnb property and whether or not you're subject to the UBTI rules.
IRA Financial Group’s Adam Bergman discusses the 1031 Exchange and how it can be a nice solution for Self-Directed real estate investors.
IRA Financial Group’s Adam Bergman discusses the 2018 Unrelated Business Taxable Income (UBTI or UBIT) rates and what impact it will have on your retirement accounts.
IRA Financial Group’s Adam Bergman discusses dealing with UBTI on a Self-Directed IRA Real Estate Investment.
IRA Financial Group’s Adam Bergman discusses how to understand Unrelated Business Taxable Income (UBTI).
IRA Financial Group’s Adam Bergman discusses Unrelated Business Taxable Income and how it relates to Self-Directed Retirement Funds.
IRA Financial Group’s Adam Bergman continues his discussion on Unrelated Business Taxable Income and how it relates to Self-Directed Retirement Funds.
Mat Sorensen is the CEO of Directed IRA and Directed Trust Company, a lawyer, a best-selling author, and a national speaker and expert on self-directed retirement accounts. DIRECTED IRA Mat is the CEO of Directed IRA & Directed Trust Company, where they establish and serve as custodian for all types of self-directed accounts (IRAs, Roth IRAs, HSA, Coverdells, solo Ks, custodial accounts) for self-directed asset classes such as real estate, private company/private equity, IRA/LLCs, precious metals, and cryptocurrency. Accounts can be opened on-line at https://directedira.com/ AUTHOR Mat is the author of The Self Directed IRA Handbook, Second Edition: An Authoritative Guide for Self Directed Retirement Plan Investors and Their Advisors. The Self Directed IRA Handbook has received numerous distinctions. Over 20,000 Copies Sold. The most-widely used and referenced book in the self-directed IRA industry. Endorsed or used for training by nearly all major self-directed IRA custodians. Used by the national association for the industry (RITA) as part of industry certification. A Five-Star Rated Amazon Best-Seller. LAWYER Mat has advised thousands of clients with self directed retirement plan investments and has established IRA/LLCs, partnerships, private offerings, corporations, and other investment structures with self directed IRAs and 401(k)s. In addition to account owners, his clients have included trust companies, financial institutions, insurance companies, hedge funds, investment sponsors, and third party administrators. Mat regularly consults self directed IRA owners on IRC 4975 and the prohibited transaction rules, on UBTI and UDFI taxes, and has represented self directed IRA owners before the IRS Appeals Office and the U.S. Tax Court. Mat is a partner at Kyler Kohler Ostermiller & Sorensen, LLP in its Phoenix, AZ office.
Lynn Nichols Federal Tax Update Podcast October 08, 2018, edition Listen as Lynn Nichols provides commentary on 9 Items pertaining to current developments in U.S. tax law. This week’s topics include: Measly Offer in Compromise Doesn’t Prevent Approval of Levy on Home The Eighth Circuit affirmed a district court decision that upheld an IRS levy on an individual’s home to satisfy her half million-dollar tax liability, finding that the individual was incorrect in her belief that reg. section 301.6334-1(d)(1) provided that the court couldn’t approve the levy until the IRS responded to her $1,000 offer in compromise. [ Brabant-Scribner, Debora; CA 8; No. 17-2825; 8/17/2018] Non-Grantor Trusts Still Useful in TCJA Planning Although Treasury effectively shut down tax avoidance strategies that used multiple trusts to take advantage of the new passthrough deduction, setting up at least one non-grantor trust is likely allowed and could still have numerous benefits. [Tax Notes Today; 8/21/2018; Article by Eric Yauch] Fees Paid to Shareholder-Employees Were Disguised Distributions The Tax Court held that purported factoring fees and most of the management fees paid to five individual shareholder-employees of C corporations were not deductible expenses of the C corporations but instead were disguised distributions of corporate profits, finding that the factoring fees lacked economic substance and the management fees constituted unreasonable compensation for services. [Pacific Management Group et al. v. Commissioner; No. 6411-07; No. 6412-07; No. 6413-07; No. 6414-07; No. 6494-07; No. 6498-07; No. 6499-07; No. 6592-07; No. 6593-07; No. 6594-07; No. 6596-07; T.C. Memo. 2018-131; 8/20/2018] [See also attached article by Kristen A. Parillo . . . DOC 2018-33960] IRS Open to Change of Partnership Treatment in Bonus Rules The IRS and Treasury Department addressed the outstanding partnership issues in the proposed bonus deprecation regulations, but that doesn’t mean they can’t be persuaded to change positions in the final rules. [Tax Notes Today; 8/22/2018; Article by Eric Yauch] IRS Issues TCJA Guidance on UBTI for Separate Trades or Businesses The IRS has requested comments and provided interim guidance and transition rules regarding section 512(a)(6), which requires an exempt organization with more than one unrelated trade or business to calculate unrelated business taxable income separately for each trade or business. [ Notice 2018-67; 2018-36 IRB 409; 8/21/2018] Basis Limitation in 199A Regs Creates Compliance Conundrums Taxpayers with property that is no longer depreciable could face headaches in navigating the basis limits on passthrough deductions in the proposed section 199A regulations. [Tax Notes Today; 8/23/2018; Article by Eric Yauch] Accounting Method Guidance Modified for Some Terminated S Corps The IRS has modified the automatic changes list for accounting methods to reflect the addition of section 481(d) by the Tax Cuts and Jobs Act (P.L. 115-97), which provides rules on adjustments required by section 481(a)(2) that are attributable to some revocations of S corporation elections under section 1362(a). [Rev. Proc. 2018-44; 2018-37 IRB 426; 8/22/2018] S Corp Termination Guidance Offers Clarity on Method Changes Some terminated S corporations that change from a cash method to an accrual method of accounting may take into account positive or negative adjustments ratably over a six-year period under a new IRS revenue procedure. [Tax Notes Today; 8/23/20`18; Article by Marie Sapirie] IRS Clarifies Interplay of SALT Credits, Federal Tax Rules The IRS has announced the release of proposed regulations (REG-112176-18) that clarify the relationship between state and local tax credits and the federal tax rules for charitable contribution deductions. [IR-2018-172; 8/23/2018] Proposed SALT Regs Require Reductions to Charitable Deductions The IRS has published proposed regulations providing that a taxpayer who makes payments or transfers property to an entity listed in section 170(c) must reduce their charitable contribution deduction by the amount of any state or local tax credit the taxpayer receives or expects to receive. [REG-112176-18; 83 F.R. 43563-43571; 2018-37 IRB 430; 8/27/2018] Tax Court Reins In Couple Using Horse-Breeding to Create Losses The Tax Court held that a couple that tried to offset all their income with horse-leasing expenses prepaid with sham loans was not entitled to loss deductions as part of a horse-breeding operation. The court found their purported horse-breeding activity was not a trade or business and sustained section 6662(a) penalties for two of the three tax years at issue. [Householder, Scott A.; No. 19150-10; No. 6541-12; T.C. Memo. 2018-136; 8/23/2018]
Mat is a partner at KKOS Lawyers, and serves clients nationwide from its Phoenix, AZ office. Mat's practice areas include self-directed IRA law, business entity formation, tax law, real estate, and securities law.Mat is the best-selling author of the First and Second Editions of The Self Directed IRA Handbook: An Authoritative Guide for Self-Directed Retirement Plan Investors and Their Advisors. The Self Directed IRA Handbook, Second Edition was released in May 2018 and First Edition was the #1 Hot New Release on Amazon/Kindle in January 2014 in the retirement planning category, and #3 overall Best Seller in January 2014 in the same category. It has sold 20,000 copies and is the most widely used book in the SDIRA industry. Mat's practice has a particular emphasis on self-directed retirement plan law. Mat has assisted over 1,000 clients with self-directed retirement plan investments and has established IRA/LLCs, partnerships, private offerings, corporations, and other investment structures with self-directed IRAs and 401(k)s. Most of Mat's clients are self-directed retirement account owners structuring investments in real estate, into IRA/LLCs, or into private companies. Mat's clients also include trust companies, financial institutions, insurance companies, hedge funds, and third party administrators. In addition to his legal practice, Mat also serves as an instructor for the Retirement Industry Trust Association's (RITA) Self Directed IRA Professional certification program. RITA is the premier national association representing the self-directed retirement plan industry. Mat regularly consults self-directed retirement account owners on IRC 4975 and the prohibited transaction rules applicable to self-directed retirement account investments, on UBTI and UDFI taxes, and has successfully represented SDIRA owners before the IRS Appeals Office and the U.S. Tax Court.Visit https://www.sdirahandbook.com to learn more.
Bloomberg Tax’s Joe Ecuyer and Kate Adcock discuss the new rules for nonprofit organizations calculating UBTI and UBIT.
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