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Tax Tuesday w Toby Mathis – Oct 29, 2019 EP 103

Tax Tuesday w Toby Mathis – Oct 29, 2019 EP 103


(bright, digital music) – [Toby] Hey guys, this is Toby Mathis. – [Jeff] And Jeff Webb. – [Toby] Hopefully you
guys can hear us all right. Maybe you guys can get
a little confirmation. First off, happy Halloween week. I think, yeah it is, isn’t it?
– Yeah. – [Toby] Gosh, it’s coming up quick. This year’s just flying by, first off. Well look at this. New screen, old screen, yeah,
we were having some fun stuff. Sometimes we try to keep
you guys on your toes by coming in as different people and showing you guys stuff. All right, so. Hopefully you guys can
see it now, here we go. Loud and clear, hear you, happy Halloween. Lots of Halloween stuff, good. Well we’re gonna jump in,
we got a lot to go on. I decided to bite off a big chunk, and so we have a lot of
questions to go through. Hell you kicked this off first, what? Hear you guys. You didn’t like us since
we got disconnected. Oh, somebody got disconnected, all right. So hopefully everybody’s back in. I really like the provided list, perfect. Let’s go through some stuff. First off, Jeff’s gonna have to wear his, look at that you’re like a little witch. – [Jeff] Oh, I see that, yeah. – You wear it well.
– Thank you. – [Toby] And there’s a pumpkin. So that’s about as good as
we’re gonna get into the, I hate (chuckles), that’s not very nice. People are being mean to me already. So let’s go into it. First off, we’re gonna just do a couple (chuckling) of reminders. We have, obviously, our YouTube
channel, on our Facebook. Feel free to join
whenever you feel like it. Sherry’s asking already, yeah
we have a book coming out. The Tax-Wise book is gonna be coming out. I’m also gonna be coming out with an “Infinity
Investing,” probably by June. One thing at a time as I have
to finish up all the changes on the tax code with Tax-Wise. Concepts are always, I try to use things that are easy to follow,
that don’t change, ’cause Congress loves to change some of the little rulings here and there, some of the rules. So I try to stick with things
that are gonna be consistent, like you’re not gonna have to relearn over, and over, and over again. Obviously Congress is Congress, they do some weird stuff sometimes. I have a feeling that we have
some people that we kicked off when we had to change things out, so there’s a few stragglers. We’ll go back in here. Okay, I already paid mine too (laughs). We’ll make sure that we get
you guys all that fun stuff. Let’s kind of go over rules, and I’m gonna change things
up a little bit tonight. Because some of you guys
are always yelling at me. Every event I have somebody come up and just give me a lashing about
not using the slides right. They say, you’re answering
all these questions that aren’t on the slides. And I’m always saying,
that’s because we’ve get live questions that I do not post. So I’m gonna try using a screen that says, we’re answering live questions now, so you’re not wondering whether the slides are not advancing. It only took us a
hundred and some episodes to make that change, but
hey, slow learners, right? – [Jeff] Right. – [Toby] You can always
send in your questions via Tax Tuesday to Anderson Advisors. We are through, I think it’s the 15th. We have most of the
questions that you guys asked that we’re grabbing that were longer ones. So we are about at a two week lag. So some people come up and say, “Hey I emailed you a question, “I didn’t hear it last time.” Well, there’s a good chance that, we are gonna reach out
to you no matter what. But when we’re selecting
questions to be answered, we have quite literally hundreds. And we’re going through
them in the order received. So we select which ones
would the best for the group, meaning that they’re general. They’re not, here’s my
scenario, I make this much, and this much, and this
much, can I write this off? And da-da-da-da-da. So we try to use things
that are more general. So that being said, if
you do submit something that is a very specific question for you, you’re going to have to
be a platinum client, or a tax client. Otherwise, we’re not gonna go
through and answer two hours of questions for you, just because. And then this is fast,
fun, and educational, we want to make sure that you
guys start getting the gist. I meet people all over the
country, it’s really fun. This week I spoke in, where did I go? We were in California and in Nevada, we did a nice class in Nevada with a bunch of real estate
investors, which was really fun. And I met a bunch of
doctors down in Los Angeles, which is an investor group. Believe it or not, these doctor groups are
actually really cool. It’s a bunch of doctors who figured out that real estate investing
is very lucrative, and you don’t have to work
80 hours week to do it. So it becomes attractive
for a lot of those folks. But every time I go out and do these, you get people that have
been listening to these for a while, and they’ve gone through a number of the Tax Tuesdays, and they’re saying, “Hey, I can start
answering the questions.” And that’s the whole
point, is that you’re able to start answering these
things once you get the gist. And that gist just comes with time. And that’s why we do
it, it’s a lot of fun. Let’s go over the questions we’re gonna be answering tonight,
speaking of so much fun. Here’s some opening questions. We’re purchasing our first
buy and hold property through an LLC, all the
loan documents request our personal name, info and signatures. Thought an LLC was to help with protection via anonymity of personal information. How does one sign for an LLC purchase? We’ll answer that. How can I minimize taxes
for someone with no kids who under the new tax law
can no longer itemize? So that’s somebody that
had their miscellaneous itemized deductions go to the wayside. They don’t have kids, so
they don’t qualify for, earned income, what is it? Child credit?
– Right. – Earned income tax
credit, some other things. And so, they’re like, “Hey what do I do?” So we’ll get into that. Can you get lender financing
for a property deposit from a self-directed IRA? So there’s a couple ways to read that one, I read it like three or four
times trying to figure out what exactly to say, but I think I got it. Are horses and their
expenses tax deductible? Can a Revocable Living
Trust be the managing member of an LLC flowing through
to a couple’s tax return when there are two trustees? What do you need to do to
use the medical 105 plan, and reimburse your medical expenses? What is the meaning of DBA,
and what are implications of setting up a business
structure using DBA? Go over that. I recently sold a home
and purchased another in the same year, I did not fill out any special tax paperwork. Will this qualify as a 1031 exchange? So this one came in a
few different pieces, and I actually kind of put it together, reading the tea leaves
of what they were asking. They said they didn’t do
any special paperwork, and what would this be treated
as, and everything else. So we’ll go over that, what that means when you don’t go through a intermediary. Is it better to form an LLC or corporation on rental properties? That’s interesting, and some of you guys are already laughing,
’cause you know where I’m gonna go with this immediately. (Jeff chuckles) If I plan to purchase one or
more vehicles with the intent of renting them out, should I
title the vehicles in an LLC? So somebody’s gonna go out there and probably lease to the Uber drivers. Should I turn my residence
into a rental property, sell it after two years, and 1031 it to delay paying property gain? One million tax. We will definitely go over
that, that’s interesting too. Can I offset gains from rents with depreciation? We will answer that. These last ones I kinda
like, they were short. There’s a large number,
but they’re not as big as some of the questions we sometimes get. Can I expense travel to a
remote real estate investment owned by my qualified plan in
order to supervise renovation? And can a small, newly
set up LLC buy a property? So we’ll go through all those. And even when you think
you guys know the answer, it’s sometimes fun. Because the answers, it’s so interesting. There’s different ways to read these. And depending on how you read it, it could have a pretty different result, so we’re gonna go through these. Jeff, this it’s gonna be fun. – [Jeff] And scary. ‘Cause it’s Halloween. – [Toby] Scary. All right, we already have a few questions that are coming in. Somebody says the audio is distorted. So let’s make sure it’s not, if anybody’s having trouble
with the audio, let me know. Otherwise, I have a feeling that somebody’s, yes, it’s probably somebody’s
internet connection. So try the phone, and
the phone might help you. Yeah, so anyway, cool. We are purchasing our
first buy and hold property through an LLC, congratulation. All the loan documents
request our personal name, info, and signatures. Thought an LLC was to help with protection via anonymity of personal information. How does one sign for an LLC purchase? Jeff, this really isn’t a tax question, but it’s a very interesting question. – [Jeff] When you go to the bank, somebody has to sign for the LLC. – [Toby] Mm-hm. – [Jeff] One of the members, preferably the manager can do it if you have a separate manager. One thing I was a little
concerned with though was, make sure that they’re not
getting personal guarantees. – [Toby] Well they probably are. Anytime you have a
business, there’s three Cs. You can actually write this down, this will be helpful
to anybody doing this. ‘Cause you can explain this to your kids. You have cash, collateral, or credibility. You’re gonna need one of those three Cs, cash, collateral, or credibility. So the reason people don’t
like to give young people loans is because they usually don’t
have any of those three. They don’t have a history yet, they certainly don’t have enough cash. And I’ve done this with
businesses, by the way, where I’ll actually go get a CD, and you pledge it as security on a line of credit on a business. So that the business
starts to get credibility, so it’s not just me. Otherwise, they’re always
just gonna look at the owner. So the collateral is the real estate. So that LLC has no credibility, so it’s gonna have to
borrow somebody else’s, and that’s where the owner comes in. So almost always, when
you’re financing property, your first bunch, probably
your first 10 at a minimum, they’re doing the direct
financing with you. Once you have enough
credibility and collateral, there has to be equity
in those properties, then you’ll start getting loans that do not have personal guarantees. And frankly, you don’t
really care whether you have a personal guarantee
or not on the property, that in and of itself is not
an asset protection issue. Like, maybe there’s something that happens on that piece of property, and they go pull the loan
to see who’s signed on it. That loan document and that mortgage, or the security against that property is gonna say that you’ve guaranteed it. That doesn’t put you in the firing line, being a guarantor on a loan
does not make you liable to tenants on that property,
that would still be the LLC. – [Jeff] And something we see a lot, like in refinancing of
these rental properties, the banks want you to pull
the property out of the LLC. – [Toby] Get it into the individual. – [Jeff] Get it into the
individual, refinance it, and then you end up dumping
it right back into the LLC. – [Toby] Yep, yep, yep, yep. And somebody just said this, I bought my first property
under my personal name, how can I change the title now from mortgage company to LLC name? Well, you don’t change it
from the mortgage company. You’re still on the hook. So you’re just transferring
it into the LLC. Or more likely than
not, if you have a loan and you’re worried about that loan, you’re gonna use a land trust. There’s somebody else who
asked the exact same question, if you convert a rental home
from a personal ownership to owned by your solo member
LLC, what they say, solo. Yeah, single member LLC, where or how do you make
this change on the tax forms? You don’t. This is the thing, an LLC
is a creature of state law, so we always have to look at things and step back and unpack them. So from a tax standpoint,
this is more than likely, 99.9% of the time, completely neutral. And that’s because you own the LLC. And it’s gonna go on your Schedule E. The only question is whether
or not you own that LLC straight up, or it’s a disregarded LLC, meaning it exists for state
law, gives you asset protection. But for the federal
government and the state, they look it and say, ignore that LLC and
we’ll look at the owner. So that’s option number one. Option number two is if
you and a spouse own it, or you and another third
party, you might say, hey you know what, make it a partnership. In which case, all you’re doing is saying you file an informational return
called a 1065 with the IRS that says, here’s how much money
it made, here’s the owners. You get a K-1 and it goes
on your same Schedule E, just goes on page two instead of page one. The properties are not
all listed on your 1040. There’s a summary line, it’s
just the summary from that LLC. At the end of the day,
it’ll make zero difference. The only difference
between those two things, is I’ll have a somewhat cleaner 1040 if I do that partnership return. If it’s no partnership return, then it’s the same as
me owning it personally. Now somebody’s gonna say, wait a second, I want an anonymous ownership. Well, the anonymous ownership
is gonna be completed either using a land trust,
where you use somebody else, or a company better yet, as the trustee. And then from a personal title standpoint, if somebody goes and searches
who owns that property, they will not see your name. If they pull up that LLC, you can have anonymous ownership in LLC, they don’t see your name. If you have it in the
land trust, and they say, who’s the beneficiary? Other than in Arizona, and there’s a slight
work around even there, other than Arizona you do not list beneficiaries of land trusts. So, you’re just saying,
hey, the bank knows that I am on the hook. And I am on the hook for
that loan to that bank, but not to any other third parties. In other words, somebody trips and falls, they do not get to sue you simply ’cause you guaranteed a loan, or that you helped that
company get a loan. Hope that makes sense. – [Jeff] So in this particular case, if there was a land trust involved. – [Toby] Mm-hm. – [Jeff] Would the trustee of a land trust actually be the person
signing for the purchase? – [Toby] Yeah, the
trustee would be signing. So the way you look at a land trust– – [Jeff] The buyer would
be the land trust itself? – [Toby] If you’re buying
directly through the land trust. Most people buy, and they close in the land trust or the LLC. Or they buy and they have financing. It’s like this case,
there’s no way the lender is gonna let you close
in the name of the LLC. It’s not gonna happen. First time you do it, they’re gonna say you need to close on this individually. And the reason being, is
they want to make sure that they have you on the hook. They want to make sure that
you’re gonna be responsible. So they’re gonna make
you close in your name, and then if you transfer it afterwards, they really don’t care, ’cause
you’re still on the hook. Do all states recognize land trusts? Yes, there’s about 15 states where there are actual statutes, the rest of them are common law. How do you become an anonymous owner of an LLC in California? So I’ll give you, kind of, a way to do it. It’s two-step. Number one, LLCs in
California incur a $800 a year franchise tax, so I probably
would use a land trust and have it held, have
the beneficial interests held outside the state. But if I wanted to have
an anonymous ownership directly in the state. I would create a Wyoming or
Nevada entity that’s anonymous, and I would have it be
a member-managed LLC in the state of California. Which means the member is who’s listed, and that member is the out-of-state LLC. That’s how you create
anonymous ownership there. Somebody says, and here I should probably put my new screen up. Oo, a chance to do my new screen! My wife and I are starting
a new single member LLC taxes disregarded entity. In the formation documents, is it necessary to list her as a member? If we do, have we moved away
from a single member LLC and are now a partnership? So Kevin, the answer to that question is, are you in a community property state? ‘Cause if you’re in a
community property state, then you both can be listed. If you’re not, then technically
you’re a partnership when you’re both listed. And you would then file a partnership. If you want to avoid
filing as a partnership and you’re in a separate property state, then you set up a living trust, with the two of you guys as trustees, and you guys are both beneficiaries. But then you have only
one trustee own the LLC. That’s a little tricky way to do it, and the courts are already, I mean, the IRS is already cool with that. There’s usually a way to do it. Somebody says, “What’s a
work-around on an AZ trust?” The AZ trust, the
beneficiary’s gonna be listed, so it’s gonna have to be an LLC. You’re already there, that’s
anonymous, there you go Chad. So there’s always a way to get around it, always a way to get around it. For a brokerage account
with a single member LLC, is the beneficiary, is the grantor who can
best be the trustee? I see what you’re saying Bria. So, this is a question,
it’s a little bit different, it’s not right on real estate. But quite often when you are
having a brokerage account in an LLC, the brokerage
companies started wanting to charge LLCs as professional traders. They started trying to charge them a couple hundred bucks a month. Do you see more than that, or you still have some of those, right? – [Jeff] Yes, we’ve run into
some with that exact thing. – [Toby] So what you do, is you set up a personal property trust,
we do this as a courtesy for our clients by the way. Personal property trust
where the beneficiary’s the LLC, it’s the same as
holding the account in the LLC. And you as the individual are the trustee. Then they’re happy as a clam. And in that particular case,
you should be the trustee, ’cause you want to be in
control of the account. Let’s see, can I change
the name of my Florida LLC? Of course. You can always amend the name, you can amend your own personal name, too. Somebody says, “With an LLC isn’t it “different state to state?” Yeah, all states have different statutes. A lot of them have the Uniform Limited Liability Company Act, but there’s differences. For example, there’s differences
in Nevada and Wyoming, you cannot foreclose on an
interest in real estate. And that’s gonna be very different than say a state like
Washington or California. Somebody says, what else was another one? I want to make sure that
I’m getting through this. Is this true of tax lien purchases? You buy a tax lien. If you’re not financing, you
don’t have to worry about it, you can buy it directly, it’s
only when you have financing. Somebody says, I am
transferring a rental property from my name to my new LLC,
can I record all incoming and expenses, so all income and expenses, for the year to the LLC? Or do I need to have a partial
year on a personal return, and a partial year on a 1065? You would do the latter, if that LLC is actually a partnership. You would record the partnership income, here’s the funny part, Jason, it’s all gonna end up on your 1040 anyway. – [Jeff] It’s gonna make
no difference in the end. – [Toby] Somebody says,
as a real estate agent, and then I’m gonna advance
this, ’cause we have a lot of other questions
that were relevant. Now we’re getting into
some that are different. As a real estate agent, is
there a benefit to getting paid through my entity as opposed
to myself personally? And if yes, which would one
use, an LLC or my C corp? So Chris, as a real estate your state is gonna have restrictions, – [Jeff] Yes. – [Toby] On what kind of entity you can be as a professional
and having a license. Your real estate board and your state are gonna have little restrictions. Usually it’s an S corp, or an LLC taxed as an S corp, or disregarded. So remember that LLCs are creatures of state law, they’re not a tax type. So we can have an LLC
that’s taxed as a C corp, we can have an LLC that
is taxed as an S corp, we can have an LLC taxed as a partnership, we could tell the IRS to ignore the LLC. Somebody says, I cannot see
the writing on the questions. We already went over that. We are answering questions right now that are submitted via the chat. You guys can’t see that,
’cause names are associated with these, and I don’t want
you guys seeing your names with the question, in
case you say something that could get you in trouble. – [Jeff] And the other thing we see with the real estate agents, is even if the state law allows them to put the income on a certain thing, the broker won’t always allow it. – [Toby] You got it. And what Jeff is saying is critical. So, if you have, for example, I have my company, I set up an S corp, and I am the real estate agent. And you’re in a state, let’s say Texas. Texas has some inconsistent rules. Some say you can do
it, some say you can’t. So brokers are gonna take
the more conservative route, and say, “I can’t pay your S corp.” What you have to do in order to comply, there’s actually a tax ruling on this, I think it was Freidman case, where it says you need to
have an employment agreement between you, the agent, and the S corp, showing that it has dominion
and control over you. And then you have to
make your broker aware, and then it doesn’t matter
whether it pays it to you or not, you’re gonna list it on that S corp. And you will win under
those circumstances. So, some people just put it on
a Schedule C and zero it out. They say, I made a hundred
thousand, and then you have a hundred thousand dollar
expense going to an S corp. You could try that too. But I prefer to follow what the IRS. So, let’s go to the next question. We managed to spend a lot of
time on question number one, (chuckles) let’s go to
question number two. And I do see that you guys are asking a lot of questions, and we will get them. We will go through a bunch of those. How can I minimize taxes
for someone with no kids, who under the new tax law
can no longer itemize? Jeff, what do you feel about this? – [Jeff] This has a big,
it depends, answer to it, because it depends on where
your income is coming from, whether you’re just a W-2 employee, or whether you have rental incomes, or some kind of, outside company that you may own, a corporation, or a partnership. So, there’s various things you can do, whether it’s retirement contributions will lower your income. If it’s money coming from other entities, there are other ways to
minimize some of that income. What say you? – [Toby] Me, I’m kind of
like this process person, I always trust the process. So if I have somebody, and
I don’t care who you are, this happens to be if
you’re single, no kids. Maybe you’re married with no kids. But you don’t have miscellaneous
itemized deductions, so you have your standard deduction. That standard deduction is
step number three in my world. So step number one is calculate all your different income types. And how do you minimize your taxes, is you keep that income
from hitting your return. So if I have income
coming from a business, I am probably, I’m gonna try to keep that from
just jumping onto my return. If I have income coming from rental properties then there’s a way to start pushing that up
into a management entity to keep it from hitting my return. If I have income from a business, and it’s all going on my Schedule C, then there’s a way to keep that, I could put that in a C corp,
I could put that in an S corp. And there’s things I could do to keep that from hitting my return. Step number two is, what are
the, when you were looking at adjust your gross income, what are the areas of adjustment? So you’re gonna be looking,
like Jeff’s saying, you’re gonna be looking at IRAs, you’re gonna be looking at HSAs, you’re gonna be looking at anything that’s gonna adjust your income. And then last but not least,
we’re gonna get to where we have deductions, and you guys
all have a standard deduction. And the problem is that
those standard deductions are really big now. So we have these huge standard deductions. Now a lot of you guys
aren’t getting the benefit of your charitable giving,
you’re not getting the benefit of your mortgage interest,
you’re not getting the benefit of your state and local taxes,
you have a $10,000 limit. We saw a lot of people just get hammered on that.
(Jeff drowned out) I mean like really bad. We’re talking about people
with 60, 70, $80,000 of state and local taxes that
they couldn’t write off. And you’re gonna say, all
right, how can I minimize taxes? Well I’m gonna get the
money out some other way. So for example. And I’m sorry to give
you guys the long answer, but let’s say that somebody has a home. I want the home office deduction. And I don’t want a home office deduction as a sole proprietor, I want
an administrative office in the home, that their
employer is reimbursing them. So the employer gets a deduction, and they don’t have to report the income. And I’m gonna write off
somewhere around 15% to 25% of all of my expenses
associated with my home, including my utilities
and everything else. And I’m not gonna have to report it, but I had to make sure that that never hit my return as income. So I need to have a business, I have to have an
accountable plan to do that. That’s why you hear me sometimes going off on accountable plans. You have to have an S or C
corp from a tax standpoint, so yes, it’s gonna be
an LLC taxed as an S, LLC taxed as a C corp. You gotta have one,
otherwise you can’t do that. Last but not least, there
are things that when we look at the deduction side,
now I’m looking at things and I’m like, all right, maybe I can’t deduct this, maybe I can. Maybe I can get some real
estate professional status and make a big deduction
of the depreciation. Maybe I can give, maybe I’m
gonna really work my Schedule A and I’m gonna give a bunch
of money to a charity. Maybe it’s my own charity. Maybe I set up my own operating nonprofit that I can toss a bunch of money into, that’ll reduce my taxes for sure. Maybe I’m looking at
credits, maybe I’m looking at solar credit, hey I
get a 30% solar credit, maybe I buy an electric
car so I can get a credit. I’m looking at all these things, and I’m going through
like a mental checklist to figure out what is available to me. And whether any of it
falls into a category that I may want to take advantage. If I do that, then I don’t
care if you have kids, I don’t care if you’re married,
(chuckles) I don’t care. We’re gonna get your taxes lower, period. It’s just how much of
an appetite you have, and how much of benefit. So for a doctor in
California, which you know, I got to meet a whole
bunch, they’re pretty funny. They have a tax appetite. Some of those guys are paying 53% tax. Before you say that’s
impossible, no, it’s not. You add up the payroll taxes, you add up the net investment income tax, the state income tax, and the federal tax, and they get up over here. And it stinks. And it’s just not right. So they have a tax appetite. So if I can get a $20,000 deduction that they wouldn’t otherwise get, that’s a $10,000 savings to them. It’s really strong. Now, if it’s a 24 year old
who’s making $40,000 a year, they don’t have much of a tax appetite. They’re not gonna wanna do
that, they’re gonna say, “Wait a second, why would I spend $2,000 “to save myself a thousand?” It’s always gonna be a value proposition. Somebody says, “How can I
minimize taxes for someone “with a family gross income
on a W-2 around $300,000?” So V.J., you reduce that tax
by again, credits, deductions. There’s an old adage that if you pay, if you pay taxes, it’s voluntary. But you pay taxes because you
don’t own enough real estate. That’s the old joke. And the reason being, it’s
’cause I can take real estate and I can overcome the
implication that’s it’s passive, by either myself or a spouse
being involved in real estate. It was called real estate
professional status, It doesn’t actually exist
under that name under the code. It’s actually just an exception
for real estate investments in which you materially participate. So if you like code provision,
it’s 26 USC 469 C 7. So if you’re nerdy, go there, read it, it gives you the exact rules. Now all of your real
estate deductions including depreciation, you can offset
your $300,000 in income. So V.J., we can eliminate
your tax if we want to. Just buy enough real estate
and make sure you qualify, or your spouse qualifies as
a real estate professional. If that’s not your flavor, set up a charity and do
your real estate investing through a charity, you’re
allowed to do that. Actually low to mid-income
housing, or Section 8, qualifies as a nonprofit activity. Then if I give my charity
$100,000 to buy a property, I get a $100,000 deduction, right now. Yep, it’s gonna lower
my $300,000 to $200,000. I’m gonna save, depening
on your tax bracket, probably between $22,000
and $37,000 for doing that. And I still own the property
and everything else. How did we get there? I’m going off now, I need
to draw myself back in and breathe a little bit. Minimizing taxes.
– Next question. – [Toby] You guys are asking a lot of questions too,
by the way. (laughs) There’s some good ones. (laughs) – [Jeff] A lot of how
you’re gonna minimize taxes is gonna depend on what
type income you have, and what type income you
can commit to in the future. Capital gains, we have
the opportunity zones. – [Toby] Opportunity
zones are great, yeah. – [Jeff] Contributing appreciated assets to charities.
– Mm-hm. – [Jeff] We have selling off your losers to minimize your gains on capital gains. Every item seems to have a
number of ways to do those. – [Toby] There are so many
cool questions right now. And so we’re gonna go on. So based off what you just
said there, really quick. How do you keep your rental income going onto your income on your tax return? So now you’re thinking,
Mina, you get a star because you’re thinking right, hey, this income’s gonna
hit me, how do I keep it? Well we offset it, there’s a
deduction called depreciation. Now if you follow the IRS
guidance and you just, let’s say I have a rental property that’s, I’m gonna assume it’s residential. That’s 27 1/2 years, that’s the MACRS, Modified Accelerated Cost Recovery System, that’s the default. That default isn’t what
you’re required to do. You can change that, and you can say, hey, wait a second, parts of this house aren’t gonna last 27 1/2 years,
it’s gonna last five years. The carpet’s gonna last five
years, paint’s gonna go away. The doors aren’t gonna last 27 1/2 years, the appliances aren’t gonna last. The electrical system’s
gonna last 15 years. Well, if it’s less than
a 20 year time period, you can write it all off in year one. That’s how you keep that
income from hitting you, is you accelerate the depreciation
that negates the income. You still have the money, but you don’t have to pay tax on it. That’s how you do it. It keeps it from ever
hitting your tax return. Another one, Rory says, how
does this accountable plan work? Well, same situation. Let’s say that I have rental properties and I have rentals income being made. What I would do is pay a corporation to be the manager, my own corporation. And then it would set
up an accountable plan. And it would reimburse me
for things that benefit it, as the management company, it’s my family management company. Now I’m gonna get myself, all
my equipment, my computer, a chunk of my house, I’m
gonna get all these things, miles, and medical, dental, and vision, and all these things, and
I’m gonna write them off. But I’m not gonna have
to report it as income, it doesn’t go on my 1040. So we just eliminated a big chunk of tax. Does deduction apply
to both free and clear as well as properties with leverage? Yes it does, Kevin. How do you keep your, oh
somebody says that already. I have W-2 rental
properties, is it recommended to open a property
management firm under my wife and contribute to retirement for her? Usama, you get a star too, so
Mina and Usama both get stars, because they’re starting
to think tax wise. If I can get the money into a corporation, then I’m either gonna get
it out to myself tax free, or I’m gonna let the corporation pay tax, or I’m gonna pay it to
somebody for services rendered, and I’m gonna defer
into a retirement plan. And I’m not gonna pay any taxes. How about them apples? I’ll take that action all day long. Absolutely, you guys are nailing this. Somebody says, “I lost my job midyear, “I went into rental real
estate,” great idea. ‘Cause rental real estate pays you whether you want to work or not. What is the best approach to
prep for taxes at three units? What I wanna do, Kevin, on that, is you’re gonna want to calculate how much improvement,
how much the improvements are on that property, how much income is coming in, and we’re gonna determine
how much tax we wanna pay. And you have a choice. By the way, I could
choose to just write off five year property, seven year property, just 15 year property,
take bonus depreciation, not take bonus depreciation. I have so much control. And the accountants, for whatever reason, they always say 27 1/2
years, and that is just, I mean, that’s kind of lazy. That’s all it is. What if I’m already enrolled
in a 401k from a job, can I do beyond that amount? Well, your 401k, your
deferral is for you only, but you can contribute to multiple 401k’s. And you can go up to, what
is it 56,000 this year? – [Jeff] Yeah, so you can contribute, assuming you’re under age 50. – [Toby] $19,500? – [Jeff] $19,500 total. But that $56,000 limit is per employer. – [Toby] Per employer per 401k, right. – [Jeff] Per 401k. – [Toby] And that’s based
off of 25% of your salary. – [Jeff] Correct. – [Toby] So yeah, you
can actually contribute 100 plus thousand into 401k’s, your employers can do it for you, or you can do your own. That’s so cool. When you need to create
a resolution for an LLC, in what types of situations? Okay, that’s kind of a funky one. Any major decision, you
wanna back up with writing. The way I tell people, is if you fell off the face of the Earth, and somebody tried to figure out what you were doing, they would need to have a paper trail. You should be able to
tell what that company was doing based on that paper trail. So if you weren’t there to explain it, you just wanna have a written
explanation, that’s all. And the way I would look at it is, the amount of respect
you show your business is the amount of respect banks, judges, and other third parties
will show your business. So just keeping a paper trail
keeps you out of trouble. All right, there’s a whole bunch. I do cost seg, then sell
a lender two year items, we don’t have to recapture, so
there’s very little benefit. All right, here’s how it works. When I accelerate depreciation, and I sell even one or two years later, I’ve actually had cases,
it was in the webinar we did about two months
ago with Eric Oliver. There was a great example, where we did a cost segregation right before selling a multi-unit. And it saved the taxpayer $70,000. And the reason being is this, when you depreciate under straight line, you have to recapture that at your ordinary income
tax bracket, capped at 25%. So if you’re in the highest tax bracket, the most you’re gonna pay is 25%. When you do accelerated depreciation, then you are either paying ordinary income on the fair market value
of that piece of property when you sell, or it’s
long-term capital gains. Long-term capital gains
being capped at 20%, also being taxed commiserate, it could be either zero, 15, or 20%. So when somebody is doing this, and you’re just gonna
hold it for two years, it really depends on how
old that property is. So If I have five year property, I’ve had the unit for three years, I do a cost segregation
on five year property, it has no value. That’s gonna be taxes,
long-term capital gains, and I’m gonna get an
accelerated depreciation for that extra year right now. That’s like a tax, well,
that’s a interest-free loan. It’s really hard for those
things to not pencil out to be beneficial, unless
it’s under $250,000. But everything else, I’ve
yet to see situations where it wasn’t a tax benefit,
and then it just becomes, is the tax benefit worth the cost of doing the cost segregation? So if the cost segregation is 2,000 bucks and it saves me six, some of you guys are gonna say it’s not worth it. If it’s $2,000 and it saves me 60, then you’re crazy not to do it. Can you get lender financing
for a property deposit from a self-directed IRA? – [Jeff] I read this as they were wanting to get the down payment from the lender. – [Toby] Me too. – [Jeff] And if you’re
talking about from a bank, I would find that highly doubtful. They’re gonna want to see money from you, or the entity, or something. – [Toby] I can’t see how you’d ever get your deposit out of an IRA. I don’t think you can. I think you can get a distribution
for a new first homes, and things like that,
like for a set amount. But otherwise, the lender can’t
use your IRA as collateral. – [Jeff] You can’t secure
into your loan with your IRA. – [Toby] So here’s the trick,
you can’t borrow from an IRA, but you can borrow from a 401k. And you can borrow up to
$50,000 over five years from a 401k, and you can
do that per participant. So, husband and wife can
borrow up to $100,000 from a self-directed 401k. So if I see a self-directed IRA, I’m probably rolling that
into a self-directed 401k. Or, better yet, Anderson, we do one where you’re the trustee. You don’t need to have a custodian, you’re in complete control. You just wanna make sure that
you’re doing proper loan docs in case you were ever audited, but don’t see that often either. But then you could borrow. – [Jeff] Otherwise, if
it’s a rental property, I could see the IRA contributing
to that, for a share. – [Toby] Someone just said
something really good. What about using a
self-directed IRA or a solo 401k to contribute to a syndication
as a limited partner? You can absolutely do that. But here’s the difference. If I have a self-directed IRA, you guys are gonna learn
way too much tonight, this is gonna be freakish. A self-directed IRA, if it uses leverage, you have to pay tax, it’s called unrelated
debt financed income. You have to pay tax on the income derived into the IRA from the leverage. If I buy into a syndication, chances are, they’re gonna lever my money. They’re gonna take a 2
million dollar investment and turn it into $10 million by borrowing. Which means, if that’s the
ratio, then for every dollar I put in, 80% of it’s gonna be taxable, ’cause I’m levering 80%. But that is not true of a 401k. A 401k does not have that same thing. So if somebody else asked, “Hey, if I want to invest in real estate, “I believe possible can I use my IRA?” I don’t think I’d be using an IRA, I think I’d be investing
directly through a 401k. And as I needed money I would take it out and I wouldd pay the
penalty and the tax on it. I’ll be in a lower tax
bracket if I don’t have a job. And that’s this case,
so I’m just paying 10%. I’m doing that, I’m taking that action, and I’m gonna leave it in my plan, ’cause you could really
get those things cooking. I’d rather not have the
penalty and everything else and then invest, I’d rather invest, and then have the money I actually need pay the little bit of penalty. Isn’t that fun? You can’t borrow from your
own self-directed IRA, but you can borrow from someone else’s, and then you can loan their IRA
from your self-directed IRA? Susan. No. That is a, that is– – [Jeff] Step transaction? – [Toby] Yeah, that’s like textbook, you’re learning quid pro
quo in the news, right? You can’t do that. You’re benefiting from your plan document, the IRS is gonna tax
you, so don’t do that. That’s really bad. – [Jeff] And what IRS looks at when they look at these step transactions and quid pro quos, is they disregard all the different steps and
say, what actually happens. – [Toby] Yeah, you both took
money out of your accounts, so that’s really, really bad. This is why we do not show your names when we read the questions,
in case you do it. What about a 401k that
is rolled over to an IRA upon leaving an employer? You can still roll that into another 401k. But that 401k you roll it into an IRA, and if it’s self-directed,
you could do it. What if a self-directed IRA holds a trust that holds a property? Can you get lender financing
that way through the trust? Will it still be subject to the special self-directed IRA tax? The answer is yes,
’cause it’s all gonna go onto that self-directed IRA, and it would have the
unrelated debt finance income. So, hey, it’s Amanda. So, Amanda, you would
roll that into a 401k, and you would do the financing. Instead of doing a self-directed IRA, you’re just doing a solo 401k. You don’t even have to
contribute to the 401k. That’s what a lot of people think, it’s like you just roll
you’re IRA directly into it. And now you don’t have to worry. You can get all the financing you want. And there are companies
that specialize in finance. Boy, we have really been bad. I can be the trustee
of a self-directed 401k and can set one up
myself, is this correct? Katrina, you can set one up, but you have to use a prototype plan. I know that, Steve (laughs). I can see your name, and that’s why I don’t
post it to everybody else. Somebody said, I heard it’s
not possible, yes it is. We have people doing it all the time. We have thousands of
folks that have set up, I think last check, I think we had 5,500 exempt organizations, a lot
of them doing real estate. So don’t let somebody tell you you can’t. In fact, it was this weekend, and again, same, it was
a fun group of doctors, and one of them was up on a panel. And he was talking about when
he first got into real estate, he got one of those books
off of late night TV that said how to but real
estate with no money down. And he said, “I did this thing where I did “the no money down.” And about a month later, he bought a book that said it’s impossible
to do no money down. Well he had bought a apartment
complex in the meantime for no money down, and he goes, “It’s a good thing I didn’t
order the second book. (laughs) “Told me I
couldn’t do it, I just did.” Yeah, so, don’t do that. Can you roll a 403b from a former employer to a self-directed 401k? Yes, and again, you could
do a self-directed IRA, it just so much, me personally,
401ks are the way to go. You have so much more control, you can actually invest
in many different things, you don’t have unrelated
debt finance income. It’s just way better. Let’s see the next one, we
got some more questions, but they’re not necessarily related, so we’re gonna keep jumping through. Bad Toby. Here we go. Are horses and their
expenses tax deductible? – [Jeff] Yes, they are. As matter of fact, some
horses are even depreciable. You can depreciate breeding horses, you can depreciate race horses. For race horses it’s once
they’ve reached two years in age. – [Toby] There are some really cool cases on horses, by the way. – [Jeff] Yeah, we see a
lot of those in Kentucky. – [Toby] Yeah, that’s where Jeff is from. But there’s some great tax court cases. There was one gal, a
dentist, who was making on average about $100,000 a year, and her expenses on her
horses about $50,000. There was three audits, and
she won audit number one as to whether it was active or passive, because she materially participated. Then they audited her
again saying it was a hobby about five years later. And by this time she was just
racking up massive losses, she lost money every year. So that’s Section 183, and they applied this nine part test, which number one is, do you have a true and real profit motive? And they went through this big analysis. The gal’s daughter was a CPA, and they tried to run through this. Well, she did everything herself. She had a one page business plan that was a form that
was halfway written out. And they looked at all
the expenses and realized that about 1% of it total
was for generating revenue. The rest of it was just
caring for the horses. And then there’s other
cases where, of course, they write off everything. What was the funny one? The guy from Herbs and Rye. No, Peaches and Herbs. Reunited and it feels so good, what’s that guy’s name, Barker? Cecil Barker. Yeah, Cecil Barker. Beverly will love this. Beverly where’s my thing, it’s over there? Because she loves that stuff. And they also did Georgia,
there was something Georgia. Gladys Knight and the Pips won a Grammy with Cecil Barker’s, this is so completely out there. But anyway, he lost $38
million over a period of 11 years trying to get
his son into entertainment. He tried to start a label. And he won. He won because he showed
he had a profit motive. – [Jeff] And that’s the
most important thing. We say yes, you can deduct these expenses. And that’s why we talk about, race horses and breeding horses, because
that is the profit motive. – [Toby] You just gotta show
you’re trying to make money. You gotta always show that
you’re trying to make money. – [Jeff] And we’re also seeing
them in some other fields like physical therapy,
where they’re buying horses and all, that actually help with some of their patients
muscle-ology needs. – [Toby] They’re doing
it with people that have, when you’re, Alcoholics Anonymous. – [Jeff] Oh, really? – [Toby] Yeah, and drugs,
and all this stuff, when you have an addiction. They use equine, but there’s
all sorts of good stuff. So I just thought that
this is so interesting, ’cause there’s so many funky cases. The poor gal that got audited three times, she was going to tax court
when they did the third audit. So, it was like, Jiminy Christmas. Sherry, I’m sorry to hear
somebody said that there was a horrible tragedy in
Atlanta with some horses, 19 show horses, gosh, that is horrible. Prayers go to those folks
and those poor animals. Jumping through, I’m not gonna answer a bunch more questions. Can a Revocable Living
Trust be the managing member of an LLC flowing through
to a couple’s tax return when there are two trustees? This seems like I’m having deja vu, did we already answer this? – [Jeff] No, kind of, sort of. But the answer to this one is yes, that you can always do this. I think every state would allow this. – [Toby] Every state allows this. But even more importantly, when it flows to the couple’s tax return
when there’s two trustees, if you’re in a community property state, you don’t even have to do a separate tax return for that LLC. – [Jeff] Now here’s my question for you. If a Revocable Living Trust
is the managing member of an LLC, and that living trust has a lot of other assets in it, is there an asset protection issue? – [Toby] Repeat the question, Jeff. – [Jeff] Okay, so it’s the
managing partner of this LLC. – [Toby] So, there’s a managing member, usually we don’t like
to see managing members, by the way, 90% of them or so are gonna be manager
managed, but go ahead. – [Jeff] So if it’s a managing member and the LLC is sued for
something particular. And this Revocable Living Trust has a lot of assets on it. – [Toby] Yep, you’re
gonna say, should you have a holding company in between it? – [Jeff] Okay. – [Toby] Yeah, and the
answer is, there’s always good, better, best. Good is, at least have an LLC. Better is to have a holding entity that holds the LLC, so it’s
keeping you twice removed. And best is have that
holding LLC in a state that you can’t take away and
it has anonymous ownership. So if you’re gonna do
this with a living trust, and it’s just holding
cash and non-risk assets, I mean, that’s not gonna get you sued, then go ahead and have
that LLC right there, we don’t really care. Personally, I would rather
have that LLC in a state where nobody can see it,
nobody can take it as cash. But that’s not gonna be a huge liability. If it’s a property, the last
thing I’d want is to have to defend myself for outside liability and defend the LLC for inside liability in the same state in
front of the same court. I actually wanna make that
extraordinarily complicated and involve two jurisdictions to make it cost prohibitive for anybody
to really try to do it. The old adage is, for $250,000 you could break through most plans. For the most part, I could
make your life miserable if I decided to spend $250,000
and sue you to pieces. The trick is never putting yourself to where that’s ever worthwhile. And making it so where
nobody ever really sees that you have anything
to justify the $250,000. Doesn’t mean you’re
gonna lose, by the way, just means that somebody can
make your life pretty miserable if they decide that they’re
just gonna target you. – [Jeff] Right, you don’t
have to lose a lawsuit for it to be expensive. – [Toby] No, you could win. We just had a client, the
client had a tenant destroy the downstairs of what was
gonna be his dream house. They flooded it out. And in exchange for flooding it out, they sued him for mold
and tore up his house. And he sued them, ’cause it was them that
caused the problem, they flooded the downstairs,
their kids did or somebody did. We don’t know to this day. And he won at trial, two year trial, 200 and some thousand dollars. And they went bankrupt the following month to not pay the judgment. So what he got out of it was he spent about 200 and some odd thousand dollars, plus all the time and
everything else, to get nothing. So it’s not worth it,
and it was just somebody just trying to shake him down. So, kudos for fighting it. No kudos for the fact
that you can’t get it. You’re better off just having an LLC, where you’re like, is the
max that I’m ever gonna lose. All right, thinking about liquidating. I’m gonna answer a couple questions. Thinking about liquidating
a previous rollover traditional IRA to fund a
short-term rental in Orlando. I’m under 59 1/2, is there a strategy to avoid recognizing the amount as income? I already know I am out 10%. You’re gonna have income
if you take that out, unless you fall under a
category of a hardship. Even with the hardship I
think that’s just gonna get rid of the penalty. You can avoid the penalty
if you do a 72t election, which is taking out equal distributions. I think you have to be 55. – [Jeff] And even the
hardships are very specific as to what is allowable. Although I hear that’s changing in 2020. They’re changing some
of the hardship rules. – [Toby] Yeah, there are
some other ways to do it. But your better thing is
just to roll it into a 401k and then invest through the 401k. And then if you need money, borrow it. And if you need money and you
can’t afford to pay it back, then pay the tax only on
that portion of the money. Which you can do that through a 401k, you cannot do that through an IRA. An IRA, it’s either good or bad. When you take a
distribution out of the 401k the portions that, if you
choose not to pay it back, there’s portions that
you could have as tax. – [Jeff] And here’s one of my issues, I’ve seen this often with
people in financial straights, owe money to lenders,
creditors, and so forth. Most times retirement money is
protected from those lenders. They can’t touch it. – [Toby] Yeah, we call it O.J. money. O.J. has over, I think it’s
over 60 million right now that he owes the Goldmans, and they still can’t touch his pension, or the distributions therefrom. – [Jeff] As soon as you pull
it out, that’s free money. – [Toby] No, only the IRA, you pull it out, then it’s free money. But even in a pension the
distributions are protected. That’s why O.J., he has
to stay in Clark County right now, he lives in Summerland, because he’s on parole. So he has to live out here. He still has his unlimited
homestead in Florida, he’s still getting his
distributions out of the NFL player. So even with that huge judgment,
they can’t do anything. There’s just nothing they can get. Somebody says, hey a
husband and his two sisters, they’re doing an investment in an LLC. Husband has a Wyoming LLC,
but the sisters don’t. How do we complete the anonymity? You don’t have to worry about it, Lisa, because the anonymity
is through the Wyoming. The one with the sister, that LLC, chances are the sisters
are gonna be listed, there’s no anonymity. If you wanted anonymity
for the whole thing, you would have to put it in a
state where there’s anonymity, which is really gonna
be Nevada and Wyoming. Keep in mind that, right
now, we have the House that passed a resolution for transparency. They’re trying to get to all the owners of all the companies. They don’t like not knowing who owns what. And I think the Senate will knock it down. But just know, every year
we go through the same thing where they’re always trying to figure out who are the owners of things. And they’re always gonna come
up with some cockamamie idea that it’s a bunch of
terrorists laundering money. Which is absolutely not the case. If you guys knew how money
laundering goes, (laughs) I hate to even say that I know
how some of this stuff works. They’re not using that. There’s lots of other
ways to launder money without doing it. (laughs) Somebody says, how to. Yeah, we won’t go there. Hey, if you do a 401k,
or if you need a 401k, Anderson does it, and if
you need help on taxes, you can certainly contact us as well. That’s not the reason I
do these webinars though, just know that we’re trying
to get the information that a bunch of people keep asking. I think tonight’s been a
little more active than normal. Usually I don’t get to
go off this much, sorry. I think we’re like three
questions in, right? Do the horse questions pertain to livestock, dogs, et cetera? Yes, the horses are special
under the hobby loss rules, they have to make money
five out of seven years. In fact, they look at horses
’cause they’re so expensive. And they think you’re
gonna try to make horses, your hobby into a deductible event. But it’s much easier with other livestock. Somebody says, “Jeff, you are “so smart, how could you do my taxes?” You can always reach out. If a friend contributed
to your investments with a percentage, how can I set this up properly for the tax? Kevin, that’s a good question. But what you wanna do is
figure out what type of entity it’s gonna be, and usually
it’s gonna be a partnership. And then the question is, who wants the short-term losses
and things like that. And guys, I’m sorry, if
you asked a question, we were getting hit really
fast with a whole bunch, and I didn’t answer it, I apologize. You may have to resubmit it, just ’cause I’m about,
and don’t even know, we’re hundreds of questions
in off of the chat. We just got slammed tonight. And so, if it was an hour ago, there’s a good chance
that it’s so far back there I’m not gonna see it. What do you need to do to
use the medical 105 plan and reimburse your medical expenses? You can hit this one. – [Jeff] Well, first off,
you need a corporation. That’s the only place a
105 plan actually works. You need a plan document, that’s usually, what, a one page document? And say I’m establishing
a 105 medical reimburse, or health reimbursement account. And then you have to show
your receipts to the 105 plan, the sponsor of that plan,
and they reimburse you. – [Toby] Yep, and the
105 plan’s really just a fancy way of saying
medical reimbursement plan. If you’re a 2% or greater
shareholder of an S corp, or a partner in a partnership, we’ll start with the 2% or
greater shareholder in S corp, you have to recognize anything it gives you as taxable income. – [Jeff] Right. – [Toby] And then you would
write off the insurance premium only, on your 1040. There’s a self-employed
reimbursement form. You’re not gonna get a
benefit under a 105 plan if you are a sole-proprietorship, or a partnership as the
proprietor or as the partner. If your spouse is an
employee of the organization, then they could be covered under it. – [Jeff] Right. – [Toby] It’s so much
easier, the last entity which we didn’t talk
about, was the C corp, so much easier to use a C corp for these. Then you don’t have to
recognize any of it. If it’s a C corp and it’s just you, husband and wife, small company. Then it’s so much easier. – [Jeff] And keep in mind,
that if you have full-time employees that they are
also part of this 105 plan. – [Toby] Somebody says,
“Can you do a 105 plan with an LLC taxed as a corp?” Absolutely, it’s treated as
a corporation for the IRS, so the 105 plan is no
different than having the 105 through a regular C corp. Can I reimburse medical
expenses from my LLC taxed as a C corp which
go above the income earned for the year? Yeah, absolutely. There’s nothing that even
says that you have to take a salary or anything. That’s actually part of the compensation. In fact, if you ever go and you look at forms of compensation,
you can look at 26 USC 61, and you’re gonna see all the
different types of income. They have everything listed there. If you get a fringe
benefit, it’s compensation. Like if I hire you, and
I pay you in Ferraris, I have to do withholding on the value of the Ferrari if I give
you fringe benefits. So all I give you is, let’s
say it’s vouchers for, what’s a good one? Give vouchers for eating,
and maybe plane vouchers, whatever, that’s compensation. Or if I give you a car
allowance, that’s compensation. If I reimburse your car, not compensation, if it’s business use. If I reimburse you for
medical, dental, and vision, not compensation if it’s C
corp and you follow the rules. – [Jeff] Allowance is
kind of a dirty word. It’s gonna cost somebody money. – [Toby] Somebody says, “Is a 105 plan “vouchers for Krispy Kremes?” You are right on! You must have been doing event. Love them Krispy Kremes. 105 plan is only for C corp, S corp is not allowed, correct? No, you can have a 105 plan in an S corp, but when it pays you as a
greater than 2% shareholder, or your spouse who is imputed, because they’re married to
you as a 2%, that is wages. I don’t think it’s subject to, it’s not subject to
employment taxes though right? It’s not subject to the old age, death, and survivors in Medicare. – [Jeff] Right, the only time I’ve seen the 105 plans in the S corporations, is if they did have employees,
unrelated employees. And those 105 plans
usually have limits set up on how much they were
willing to reimburse. – [Toby] Oh, somebody just
asked a really good question. Oh, this is freakish,
I forgot to ask this. Can I do partial in-kind
distribution of a rental property that’s held in an IRA LLC, without getting into a
prohibited transaction? Because now the IRA and
I now own the property, assuming that I’m over 60 years old. – [Jeff] I want to say no. – [Toby] Actually you can. – [Jeff] Can you? – [Toby] Yeah, you just
can’t enter into repeated transactions with it, it’s weird. But you can do it, I believe. I’ve never seen anybody
actually want to do it. Usually they’re gonna try to find a taxable amount and they’re gonna try to come up with the cash. So it gets kinda funky. What about reimbursements from medical problems
from the Krispy Kremes? You can write those off too. – [Jeff] And it’s
usually the same expenses that can be deducted for
medical on your Schedule A. Like over-the-counter drugs are not. – [Toby] Such a good question, by the way. Is there an advantage
to having a corporation as opposed to an LLC taxed as a C corp? Mina, there’s one advantage, there’s only one difference
that I’m aware of. I could tell you that
the LLC usually gives you better protection than
the corporation shares. The only state that has
statuary protections for shareholders is Nevada. There’s no other state that does it. Normally what you’re gonna do is have an LLC taxed as a C corp. The biggest difference
between an LLC taxed as a C corp and a vanilla C corp is what’s called a 1244 Stock Loss. When it says stock loss, they don’t say that means
membership interest in LLC. And all that is, is if I
have losses in a C corp, up to, let’s say I lose $30,000, I have lots of expenses
and I don’t make any money. And I get tired of running that C corp, I can dissolve it, and
I take that $30,000 loss in the C corp and write
it off against my active ordinary income, my W-2 income. I can do that up to
$50,000 per shareholder. So husband and wife could
write off a hundred grand. I can’t do that with an
LLC taxed as a C corp. If you did this LLC taxed as a C corp, and you did that same transaction, you’d have a capital loss of $30,000. – [Jeff] Right. – [Toby] Which could or could
not be offset capital gains, but you’ll be able to
write off $3,000 per year against your W-2, you
just carry it forward. So that’s the difference. (Toby laughs) It is possible, or you
just sell the property inside the LLC. So, Jorge, when you’re asking about the in-kind
distribution, it is possible. In fact, you can actually partner and buy with your IRA and buy a property. That’s not a prohibited transaction. It’s the continued transactions between you and that property
that become the issue. – [Jeff] So, what if I
already own the property? – [Toby] Then how I don’t see how it’s a prohibited transaction. – [Jeff] Can I sell part
of my interest to my IRA? – [Toby] I’ve seen people do that. Sitting here today, I don’t know if I could
answer that question. – [Jeff] I’m just trying
to put you on the spot. – [Toby] No, I’m sitting
here thinking about it. ‘Cause I know that you can, if I am buying that interest from my IRA, I don’t believe that I could just enter into a transaction where I buy it. I think that I am gonna have to use it. I mean some third party’s
gonna have to acquire it. – [Jeff] Okay. – [Toby] But I think I
can turn it into cash. Or, I think I could possibly swap it out for something of equal value. But I just know just being
an owner, you’re an owner, usually what you’re gonna
do is set up an LLC, and you’re gonna distribute, and you’re gonna pay
tax on a portion of it, on those distributions. Being a partner with your own IRA or 401K is not a prohibited transaction. In fact, there’s a whole thing
called a Rob’s transaction that you do where you
can actually partner, and use the money from your 401K or IRA, to buy a business. A lot of people use it for franchises. Buying and holding a 10-plex
with a non-spouse partner in Ohio, both residents of California, best way to structure,
where to form the entities? Kush, what I’d probably do
is have a Wyoming entity, just to keep you from having
California seeing you. You’re still gonna see your K-1, you’re still gonna pay tax. And then any of the
properties that it owns, I would have an in state entity. So, I would have an Ohio
entity own the 10-plex. And, the owner of that Ohio entity will be the Wyoming entity owned
between you and your partner. And then you could do
that over and over again. Somebody says, “You can
pay your accountants “with Krispy Kremes,” heck yeah. They’re just like cash here. Let’s keep going on. What is the meaning of DBA,
and what are the implications of setting up a business
structure using a DBA? – [Jeff] DBA means doing business as. Some places, I know Los Angeles County they call it fictitious name. – [Toby] Yup. – [Jeff] I like the idea of
DBAs, they’re not full proof, but I kind of feel like they add a little more anonymity to. – [Toby] Yeah. – [Jeff] So if I go to Chuck E Cheese’s that’s not who actually owns that place. – [Toby] Right, Chuck E
Cheese’s would be, yeah. – [Jeff] Jeff Webb
Franchise, or Jeff Webb, LLC. – [Toby] How about
Anderson Business Advisors? I don’t know if anybody every noticed, there’s nothing behind that name. – [Jeff] Yeah. – [Toby] Anderson
Business Advisor is a DBA of Anderson Law Group, PLLC. – [Jeff] Correct. – [Toby] So, all a DBA
is, it’s a registration, usually in the county, or city or state, everybody’s different, like
Wyoming it’s the state. And it’s called a fictitious name. You have a fictitious
name statement in Texas. You could do the Clark County,
for example, in Nevada, we don’t have a state registration
you have it per county. Or Washington State is a statewide. But you just say, “I’m doing
business as Jeff’s Donuts.” – [Jeff] Right. – [Toby] And it’s ABC, Inc doing business as Jeff Webb’s Donuts. The DBA is just a database
saying here’s a business name. You cannot put LLC after it,
you can not put Inc after it, you cannot put anything else. Now you’re just saying,
“Hey I need to look “to see who the actual owner is.” So it’s not uncommon for a corporation to have multiple DBAs. And be doing business as
different organizations. – [Jeff] Absolutely. – [Toby] And the implications,
it’s nothing more than a name, it’s just
pointing to some other entity. It has no tax ramifications. A lot of people will use a
DBA for a sole proprietorship. It’s like Jeff Webb doing
business as Jeff Webb’s Donuts. There’s no asset protection under that, there’s no tax, like you’re
gonna be a sole proprietor, you’re gonna be a Schedule C. – [Jeff] And for example,
I have a company that is a really boring name, and
it doesn’t explain what I do. But I could DBA Taxes Are Us. – [Toby] Yeah, so you
could have a really boring, anonymous named company, hint, hint. Wherever, if you’re gonna
go do business in a state, you say, “I’m doing business
as Jeff Webb’s Taxorama.” And hey if I’m gonna go
into Texas I’m gonna be, you know Redneck Texas, or Taxes. This is because I go to
the Redneck Country Club. – [Jeff] I like that, I like that. – [Toby] That sounds horrible. (chuckles) Doing business
as Anonymous, somebody says. No, I used to go to the
Redneck Country Club, so I’m not calling
people in Texas rednecks, before I get hate mail. You know, something cool, Longhorn Taxes. Then if you’re in, from Philly you know, Flying High Taxes, fly Eagles, fly. All right, so keep going on. Bunch of fun stuff, how far are we in? I recently sold a home
and purchased another in the same year. I did not fill out any
special tax paperwork. Will this qualify as a 1031 exchange? – [Jeff] I’m thinking this one’s gonna be a fail from the start. You probably sold the
home, received the cash, and then purchased another home. And the problem with that
is, you can’t touch the cash. The qualified intermediary
has to touch it. – [Toby] Yes, it’s gonna be a fail. – [Jeff] The other problem
is that you have to within 45 days of selling the first home, you have to identify
what you may be buying. – [Toby] Mm-hm. – [Jeff] Yeah, this is not gonna work. You can’t do a 1031 as an after thought. – [Toby] Yeah, but here’s the thing is if you sold a home and it
was your personal residence, we could still 121 it. If you sold the home, and, there’s another way and
it’s gonna be fun, too. I love it when they do the 121 and the 1031 exchange together. This house, so I purchase
another in the same year, sold it, purchased another. You may be able to qualify
to opportunity zone that if you did it this year. – [Jeff] Oh yeah. – [Toby] So you may
still be able to do it. But the 1031 exchange,
you can’t touch the money, you have to have an intermediary
in the there from the day. 121 is the, somebody’s asking that. 121 is the home exclusion
for capital gains on the property that you lived in two of the last five years. Redneck Country Club in Houston, yeah. Do you know what it’s called now? They changed the name,
I think it’s Republic. Shoot, I thing it’s something Republic. But anyway, the Redneck
Country Club’s really cool. Who is it, Jet Lending, they do free beer and food every month. Good group, by the way, I love those guys. Eddie Gant over there at
Jet Lendings, good dude. All right, let’s see, keep going. Is it better to form
an LLC or a corporation on rental properties? Now you know what I’m gonna do, right? – [Jeff] Yeah, go ahead and say it. – [Toby] An LLC can be
taxed as a corporation, an LLC is not actually a tax designation. An LLC can be a partnership,
a disregarded entity, S corp, C corp, trust,
whatever you want it to be. So, is it better to form
an LCC or a corporation? Well, you don’t really
want to have a corporation for rental properties, period. – [Jeff] Yeah, I was gonna say that would be my last choice. – [Toby] Yup, so I’m
gonna make it real simple. You want rental properties to flow under your personal return. You do not want them
going into corporation. And the reason being,
corporations just have income. But they have a little problem. And that is if they give a shareholder an appreciated asset,
like a rental property, and you take it out to
refinance it or do anything else that is taxed. All the appreciation,
whether you sell it or not, is taxed as wages. – [Jeff] Yeah. – [Toby] The day that it
gives you that property. Yeah, Republic Country Club
and Barbecue, there you go. You guys rock, Texans
are pretty darn cool. All right, we got to keep rolling on, ’cause I’m way late. We’ll we’re not so horrible. – [Jeff] We’re not terrible. – [Toby] If I plan to
purchase one or more vehicles, with the intent of renting them out, should I title the vehicles in an LLC? So you’re possibly renting
them to a like Uber drivers or things like that. – [Jeff] So two things on those is yeah, I think they definitely
should be put in an LLC, because there’s a lot of liability with renting out vehicles. The other thing is, they need to be titled to the entity or person who
is actually doing the renting. – [Toby] Mm, so like– – [Jeff] Any different to do this? – [Toby] Are you saying
that, let’s say I put them in ABC, LLC and I rent them to drivers. It needs to be titled in ABC, LLC. – [Jeff] Yes. – [Toby] The driver,
it’s not gonna be titled in the driver’s name. – [Jeff] No, correct. – [Toby] Right, I 100% agree with you. The way that they do these,
I’ve had clients do this, they buy a bunch of Priuses or Corollas, there’s a few different vehicles. There’s a few vehicles that are
in the 13, 14, $15,000 range that don’t cost much to operate, that they like to rent to the Uber drivers on a weekly basis, Lyft
drivers and things like that. You’d put them in an LLC to keep them from flowing over to you. ‘Cause as Jeff said,
when you are the lessor, usually you’re not gonna get too drawn up into drama, you’re just exposed to the loss of the vehicle. The driver is who’s gonna be responsible. But they could try to say
that you were negligent in leasing the vehicle to a driver. The other thing you do is you make sure that you have commercial insurance. A lot of folks just go get
regular insurance on a car, then they use it in commerce. They’ll put it in a
company name, or something, and they don’t realize that
that’s a different type of insurance policy,
that’s a commercial policy. – [Jeff] And one other
thing I would suggest is immaculate maintenance
records on your vehicles. – [Toby] Yup, yeah, absolutely. This is lucrative though, this is something I did in college. I used to work for Alamo Rent-a-Car when they first got going,
and boy they took off. They made a ton of money,
’cause they weren’t tied to any car places. Some people would just give them cars. Say, hey we’ll pay you to put
$10,000 miles on this one, so that the new market
wasn’t as saturated. It’s pretty interesting. Management company is
protected better as a C, or as a corporation in LLC? Protection wise you almost
gonna be better as an LLC, but it can be taxed as a corporation. Let’s keep going on, we’re getting close. I know we’re over guys,
but we’re having fun. Should I turn my residence
into a rental property, sell after two years and 1031 it to delay paying property
gain, one million in tax? They have a million dollars. The answer’s yes, and
that is a great strategy. – [Jeff] That’s what I thought. – [Toby] Jeff do you want
to lay it out for them? – [Jeff] To get that Section 121 exclusion the $250,000 or $500,000, you have to have lived
in to for at least two of the last five years. – [Toby] Right. – [Jeff] That doesn’t mean
you couldn’t have rented out for the last 35 months, and move somewhere else. So then after that time
passes, it looks like two years they lived in it, or maybe
three years they lived in it, and rented it out for two years, and then they decide to sell it. They’re first gonna
take that 121 exclusion, say $500,000 of gain. – [Toby] Yeah, it’s a
capital gains exclusion. So guys, this is not
depreciation recapture exclusion, this is just capital gains on the sale of a personal residence. A property that was used
as your personal residence two of the last five years. – [Jeff] Right, it’s got
to be your main home, if you have a second
home it does not qualify. – [Toby] You could
actually have two homes, and then you qualify two,
and then one for two years, and the other for two years. You got to specify which
one’s your primary. – [Jeff] But, with the
remainder of the gain, that remained gain, say it’s another half a
million dollars in gain, can be deferred by selling this house through a 1031 exchange. – [Toby] Yup, and the IRS
is the one who actually spells this out. It jumps your basis in the property. ‘Cause if you guys know 1031 exchanges, you know I’m just swapping my property A for property, or properties, BCDEF. Like you could just have
a ton of properties. But, the new properties
inherit your basis. So everything about
property one is transplanted under property two. When you do this, and you have a, and you have both a 121 and a 1031, your 121 jumps up the basis to whatever, you know if it’s a married
couple it’s $500,000. And then you 1031 the remaining portion. When you do the rental
property you just have to be very careful, ’cause
you want to make sure that you’re just specifying that the depreciation recapture’s
all going to the 1031. So, if you have a million
in tax, of gain, excuse me, one million in gain, then we look at it and say all right. Whatever that property, let’s say it was a half a million dollars, and
you’re gonna sell it for 1.5, the way it would look was
you’d have a sale, 1.5 million. You’d have the basis step up
for the half million dollars, the $500,000 121, so your
new basis in the new property would actually be a million. And you’re deferring half
a million dollars of gain. – [Jeff] Yup. And I’d forgotten about that, the 121 does step up your basis. – [Toby] Yeah, I mean again,
when we do these things you’re spelling, you’re following, here’s the IRS guidance,
it’s pretty straight forward. It’s just knowing it exists,
most accountants don’t, most people don’t. It’s not a slight on
them, they just don’t. It’s like you don’t know
what you don’t know. You never heard of this, you’re
never gonna know it’s there. – [Jeff] Yeah I knew it,
I just didn’t remember it. – [Toby] Yeah, yeah that’s it. There’s always a little specific. Does the house require
two steps to the sale? No John, you could actually do this, this is what’s funny, guess what? You could make that 131
into an investment property, rent it for a few months,
and then go move into it. – [Jeff] I wasn’t even
thinking about that. – [Toby] And I think that the rule is that you can’t do another
121 on that property for five years if it was
part of a 1031 exchange. You can actually go read 26 USC 121, and you’re gonna see it has
specific language saying, once the property uses
part of a 1031 exchange in the last five years. They’re letting you know right there, hey, it’s okay, we know
that you’re gonna do this. If you live in Manhattan, San Francisco, certain really expensive places, Hawaii. Yeah, it gets really annoying,
(chuckles) so it’s like hey. So it’s kind of fun. – [Jeff] And you know while
we call it like kind exchange it doesn’t mean you have to sell a rental property for
another rental property. You could buy land, you could
buy a commercial property. It’s almost any kind of real estate, that’s so widely fun.
– A lot of people are doing, what’s funny is, they’re selling
all their single families and putting them into storage units. ‘Cause (chuckles) they
can’t stand the tenants. That’s why these property managers exist. But yeah, that’s actually
not too bad either. Some people are just getting annoyed. ‘Cause the millennials all, the millennials, sometimes they’re, it can be frustrating
when they’re your tenants. (laughs) This is pretty funny. Are all the consultants at
Anderson as smart as you guys? Way smarter. (laughs) We’re the idiots doing the
free work on a webinar. – [Jeff] We’re actually wearing earphones and they’re telling us
what we should answer. – [Toby] Here’s the answer,
that’d be pretty cool. Can I offset gains from
rents with depreciation? The answer is, you go for it. – [Jeff] Yeah, you can. Your income, I’m not gonna
call it gains, but your income, your rental income’s gonna be offset by all of your expenses from your rental property,
including depreciation. – [Toby] Yeah, so a lot
of people don’t realize depreciation is a deduction. So it’s a tax deduction. So if you start looking at everything, you always look and you say, all right, income, adjustments, deductions, credits. – [Jeff] Yup. – [Toby] And you start looking and you say income, there can be
exclusions from income. So like if I get reimbursed by an employer I exclude that, I don’t have to report it. Now I have income, are there adjustments that I can take against that income? And then are there
deductions that I can take? And then are there
credits that I can apply towards my taxes? (laughs) Way funnier than Clint. They like you way better than Clint, by the way.
(Jeff laughs) We’d have him in here, but the ceilings aren’t high enough to fit his head. That’s horrible, (chuckles) who says that? – [Jeff] I never heard that. – [Toby] No, no Clint’s awesome. He’s been my partner for 27 years. He’s a great guy. He’s really funny when you
watch him on stage, too. – [Jeff] Yeah the only issue with this is, if you’re not a real estate professional, how much you can actually
deduct on your return may be limited. – [Toby] So here’s an easy rule. So if you make active income, and you have, there’s active
income, there’s capital, there’s portfolio, there’s
all this fun stuff. What we look at is, what
type of losses do we have? Do we have ordinary losses, active losses? Do we have capital losses from
the sale of capital assets? Do we have passive losses
from things you don’t materially participate in? And, real estate is
considered passive, per se. So if it’s investment property. So if you have depreciation,
it can’t offset your other types of income, unless you fall underneath
one of the exclusions. And we were talking about one
of the exclusions earlier, which is again, 469 C 7, 26 USC 469 C 7, you go there and you look
it and it’s gonna say here’s the exclusion. You’ve got to jump through the hoops. It’s 750 hours for one spouse, with it being more than 50%
of your personal services. And you have to materially participate. You hit those, you get to
take, if you have depreciation that creates a $100,000 loss, you get to offset your W2 income with it. So it becomes pretty. Somebody just says, “Can
depreciation offset W2 income “for an Airbnb business on a Schedule C? So that’s a great, great question. And the answer would be
pretty much kind of a yes. ‘Cause you get your depreciation, and you’re an active participant. But I believe your real estate is gonna be sitting on your Schedule E
under those circumstances. You’re gonna grab the depreciation and you’re gonna use it on Schedule C. And I could see somebody
putting it on there. I’m just not sure whether
you get to put it on your Schedule C, or whether
it’s sitting on your Schedule E. – [Jeff] I mean even
with the short rentals, I’m not sure that you’re
providing substantial services. – [Toby] Our in house belief is that, oh yeah that’s right, you have to do the substantial services,
then you get ordinary loss. Which means you got to do a lot more than just be an Airbnb. – [Jeff] You got to start
looking more like a hotel. – [Toby] Yup, otherwise
you’re not getting it. So the Airbnb, they way
we suggest people do it, is they have a corporation
that is the host. And you rent your
property through the host. So that you’re getting rental
income, passive income, with the depreciation. You’re trying to to
get that thing as close to zero as possible. And then you’re trying
to offset and write off everything else on your corporation. I would not put it on a Schedule C, simply because your audit rate as of 2018, $100,000 a year business, the
audit rate was 1,200% higher for Schedule C versus an S corp. And about 800% higher for the
Schedule C versus a C corp. So, let us see what else
we got, are getting close? I can’t believe, jeez we’ve
still got a bunch of questions. Can I expense travel to a
remote real estate investment owned by my qualified plan in
order to supervise renovation? The answer’s kind of weird. Realistically, if you’re the trustee, so your company is the
sponsor of the 401K, and it has an investment, then technically that could
possibly fall underneath an administrative expense. But man, you’ve got to be
careful that you’re not getting any personal benefit out of that thing. So, I believe there’s an
argument that you could. But, I ran this by a few
other people that were in that industry, and nobody
knew the rule by the way. It was kind of funny. But they kind of said hey this is when you have soft costs in a mutual fund. You have expenses that
you’re personally benefiting. It’s like, you want to make sure that, that you’re not possibly
walking into that gray area. That being said, exempt organizations have about 800 agents nationwide. And there are quite literally billions of exempt organizations. So, the chances of you
getting a really thorough review are slim. I would just say, hey
what you can always do, is expense something through your company, if there’s a profit motive. And I would just say, “Hey as the trustee “I’m gonna kill two birds with one stone. “I’m also look at an area, “but I’m also looking at the plan.” I don’t think I would use plan assets to reimburse that company. And frankly, I wouldn’t want to, I want to get more money into
my plan than anything else. I think I would just expense
it through my company and I wouldn’t tie it to the plan. – [Jeff] And the whole
problem with this is there’s really two different issues here. One is, as Toby said, you
cannot benefit from plan assets, you cannot personally benefit. – [Toby] Mm-hm. – [Jeff] The other issue is that the plan can not
benefit from your work if you’re a participant with it. – [Toby] Mm-hm. – [Jeff] Within that
401K or IRA, or so forth. Again, I was not sure which
way to go with this one. – [Toby] I’d just be careful. I would just run it through the company. And I wouldn’t specify
it as having anything to do with the plan, make it easy. – [Jeff] I would make
sure that if I did this that all of my travel was only for– – [Toby] Yeah, if you’re
going out to a property, and the plan is paying for
it, that’s the big thing, the answer is can I expense travel? Yes, but do I want my qualified
plan to reimburse me for it? Probably not, so. Can you have one corporation flip active income back into passive
from multiple properties? I’m not quite following that, yes. – [Jeff] What’s that one again? – [Toby] There’s one that says, can you have one corporation
to flip active income back into a passive for
multiple properties? I’m not really following that one. You’re flipping, you’re active. – [Jeff] And generally, the
character of that income doesn’t change just because
you change entity types. – [Toby] Can I create an
S corp late in the year and run all my income expenses
from an Airbnb business through it for the year? – No.
– No, yeah you’d start once it’s incorporated, once
you get that business going. You can grab some of
the expenses sometimes, start up expenses. Like if you were doing this,
and you were out some money, you could lump it under
the corp if you wanted to. Can a small, newly set
up LLC buy a property? Yes.
– Absolutely. – [Toby] Yeah, absolutely,
just ’cause it’s new, there’s no seasoning requirement. – [Jeff] You know when I
first looked at this question I was gonna say, well
you have to have money. But no, actually you don’t. – [Toby] Yeah, you don’t
even have to have money. Patty and Susan, whoever’s out there, there’s a question that
we’re gonna have to get on a, somebody’s putting in a
customer service request here, or a status request, if
you can see it second down. I’m not gonna call them out. Can a small, newly set
up LLC buy a property? That’s really cool. We’ll make sure it gets done. Hey, next week I think it is. Is it next week, or the week after? Maybe the week after that we’re doing the Tax-Wise Workshop, starting to blend. It’s getting towards the end of the year where it’s getting really, really active! So it’s not too late, we
got a full house in house. And we’re still bringing
people in on the live stream, but I think we’re sold out internally. But you’d still get to do the live stream, ’cause we can do that per infinity. You get a two for Tuesday, it’s $197, you get the Tax-Wise Workshop, plus access to all three we did. The one I’m doing in two
weeks is gonna be a year end. We’re gonna be, really focusing in on doing year end planning. And then also it includes
The Bulletproof Investor, which is two tickets to a three day tax and asset protection
workshop here in Vegas, or anywhere in the country
where we hold them. We’re doing early next
year, I know we’re doing San Diego, San Francisco,
Los Angeles, Houston, Dallas. I think we did Chicago
recently, Boston recently. We’re gonna continue to do them throughout the United States. You get Clint’s book on
“Tax and Asset Protection “for Real Estate,” you get immediately a three part video series, and
you get a strategy session. Can somebody contact me about the two-fer? Let’s see we’ll have to have
Patty or somebody reach out. We’ll get it. How about Minnesota? Yeah, it would be fun to go out to Minneapolis, beautiful city. Or someplace there. My mom’s actually from
St. Cloud and we used to fish on Melex Lake and eat bugs. Which didn’t mean to do that. I still remember vividly
as a kid running out in the backyard after one of
my brothers yelling at him, and getting a mouthful
of whatever just hatched. And it was pretty cool. Florida, we’ll probably
do something down there. Florida where they have
mosquitoes as large as bats. Happy Holidays, or
(laughing) Happy Halloween. – [Jeff] We did do Florida the winter, – We should.
– And Minnesota in the summer. – [Toby] Actually I love Orlando. We’ll probably do something there. I know we’re doing, actually
with all seriousness, we’re doing, I know that we are working with a big real estate group in Miami, that we’re gonna be going down. I think it’s in December that
we’re doing an event there. And I’m not hating. If you attend the live
stream, can you ask questions? Yes, and we have, an accountant, attorney handling the chat. You could also, by the way somebody asked if these things are
recorded, they’re recorded. If you’re a platinum you
have access to all of them. If you’re not platinum, I
think we saved a month’s worth, or at least a few of them. Where you can go back
in and listen to them. And, what else do we have? So you can go through and
listen to our podcasts. There’s a lot of cool stuff. My partners are really awesome on this, Carl’s really awesome on this. Clint has fantastic
interviews, Michael does. You just listen to our
podcasts, Coffee with Carl, who’s one of our attorneys,
he’s pretty funny. Look at that big waves, lots of big waves. I’m gonna be back in Hawaii
in December, working with a buddy of mine’s on the board
of the real estate board over there in Alaska. We’re doing continuing
education for a whole bunch of the Realtors, all the
Alaskans coming to Maui. There’s probably 150 of them. That’ll be at the Sheridan
Black Rock in early December to watch the beautiful
whales and do all that. If you ever feel like doing that, and get some continuing education, you should reach out and just
Google it, you’ll find it. Jerry Royce is the guy’s
name, he’s a fantastic dude. Anyway, and then replays
in your platinum portal, and follow us on social media. And everybody here you can send in. If anybody wants to get
ahold of me by the way, you can always shoot it at Tax Tuesdays they’re all gonna come to me. You guys rock, and visit
us at AndersonAdvisors, do the free stuff. And do not eat too much candy. Somebody says, “Come to
the north shore of Oahu.” I would love the north shore of Oahu. It’s one of the few places
where they don’t have so much build out, and that’s
our buddy Lane is out there, (speaks foreign name) he’s awesome. Oh, you’re in Turtle Bay, you rock. I bet you guys have
some big waves out there right now, oh my god. I imagine you guys have
some pretty big surf. So Happy Halloween everybody. Love you guys, hope you
guys are doing great. And we’ll see you in a couple weeks. Actually, we’re gonna be
doing the Tax-Wise Workshop. We’re gonna bring you
guys in live to do this. You’re gonna have to come
down to the Tax-Wise Workshop. And we’ll do this live,
probably as a livestream it’ll be a little different. It’ll be a lot of fun though, thanks guys. (upbeat synthesizer piano music)

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