Tax Tuesdays w Toby Mathis – Sept 4, 2019 EP 99

Tax Tuesdays w Toby Mathis – Sept 4, 2019 EP 99


(expanding music) – [Toby] Hey, guys, this is Tax Tuesdays with Toby Mathis and…
– Jeff Webb. – [Toby] Hey, welcome back
for another fun-filled day of playing with the tax code,
and trying to figure out what the heck all these rules are, and trying to maximize your, your tax savings, so you
can actually keep more of what you earn, so, this’ll
be an interesting day. Just as an aside, as we record right now, we still have that hurricane
off the coast of Florida, and just devastating the Bahamas. So our prayers and thoughts
go out to all the folks that are impacted by it. I’m sure that a lot of our
clientele are impacted by this, so hopefully, hopefully, you get by with the least amount of damage possible. But on a tax side, I hope they declare it a federal disaster area,
then you can at least get some tax relief. – [Jeff] Yeah, we can get relief and forms of any losses you might have. – So long as–
– Also delays in filing tax returns, if you’re affected. – Yeah, and this isn’t tongue
and cheek, either, this is, you have to have a federal
designation, otherwise, they don’t let you write those things off. – [Jeff] And it usually
doesn’t happen right away. But that’s the way that
it almost always happens. – [Toby] Yeah, but those poor folks in the Bahamas, oy-yoy-yoy. All right, let’s jump into Tax Tuesday. Stuff, freebies, always
remember to go in and visit our YouTube channel,
our Facebook channel, if you like filling your brain with, with lots of asset protection tax, and estate planning knowledge,
anything that we can do to help you preserve,
protect, and prosper, that’s what we try to do. So we’re always coming
up with new content, feel free to join us. Obviously, you can always jump
and do the podcasts on this, we’re on Google Play, and
iTunes, so you can always come in and listen to our, the Tax
Tuesdays after the fact, if you don’t want to look our mugs. Actually, you never, you can just look at the slides, I guess. – [Jeff] Yeah. – [Toby] You’ll be able to
do it just on the audio. All right, Tax Tuesday rules. Ask live, and we’ll answer
before the end of the session. Let me just pull up the Q&A, I was not even thinking about doing that. Let’s see, we’ve got a
bunch of folks on already asking some questions. Wow, look at this, lots of questions. So you guys can’t see
’em, but I look at ’em all the whole time. Jeff and I are routing these
out, we try to answer ’em before we’re done. Let’s see if I can actually
drag this, and make it bigger. There we go. And that way, we can be
answering your questions. Yes, you should sell Tax Tuesday mugs. Maybe we will, we could
make a dollar, all right. So anyway, so you ask
live, we’ll answer before the end of the webinar. Send your questions to
[email protected] We get a lot of ’em, we go through ’em, and we pull out of those,
depending on when you send ’em. I try to get ’em a few
days before we advertise the question, so usually by, you know, if you really
want to see it get answered, make sure that you’re,
that you’re doing it a week ahead of time. But, we’re still pulling ’em
out as of yesterday afternoon. If you need a detailed, specific response that’s on your situation, you need to be a tax client,
or a platinum client, so that we can answer that. We can’t just go through your stuff, your personal stuff on the air. It’s confidential, and I’m
sure you wouldn’t want me to start getting into all that. This is fast, fun, and educational; we want to give back and help educate. So the whole idea is that you guys learn as much as possible,
and that we go through all this fun stuff, so that
you start picking up on it. I see people all the time at events that have been to the Tax Tuesdays and the constant refrain that I get is, I’m starting to understand the questions before they’re even asked. Like I already know what’s gonna be asked, I already know a lot of the responses. And that’s exactly what… That’s perfect, that’s what we want. We love that, so, let’s jump on in. Opening questions. Can a married couple file
a joint federal return even though they live in different states? We are paying our son’s rent
while he’s in dental school. Is there a deduction we
can take for that expense? We’ll answer those. I purchased an investment
property in another state and formed an LLC. Can the LLC reimburse me
for the flights, hotels, and meals incurred prior to formation? We’ll go over that. I’m going to deed my rental
property into a California LLC. How do I pay the mortgage if
it’s still in my personal name? I am new real estate investor. Welcome. And I’m purchasing two properties
with cash through my LLC. What kind of financial
records should I keep? We’ll go through that. I have co-wholesaled properties
50/50 with another investor. The deals were made in my company’s name. Do I claim/disclose the entire amount, or only what I received as profit? Can I submit the mileage driven
from my main work location to a branch office to my
employer for reimbursement? What is the best entity
for flipping raw land on an installment sale? Interesting. Can I form an LLC to purchase a vehicle, then lease it to myself, and
then use an accountable plan from the C-corp to reimburse
me for the lease payments? That’s interesting. How can I rent my home to a corporation in which I am a shareholder? We’ll go through all of those. We’ll just jump right on in. You guys know we’re always
trying to be done in an hour. Though, I think in the
last 90 plus sessions we haven’t hit it.
– Okay. Yeah, I agree with that.
– But we’re gonna shoot for it today, Jeff. – [Jeff] And it’s a holiday weekend. – [Toby] So maybe we’ll do
an hour, maybe we won’t. (person laughing) We’ll see, (chuckles)
right, now let’s see. Then there’s already a bunch
of questions that have come in, so we’ll, we’ll go through a
bunch of those, too, right? Can a married couple file
a joint federal return, even though we live in different states? And when this question
came in, it was actually one spouse living in California. It was a really a long question,
so I took some editing, to make it so that we
could fit on one screen. But, what it really boils down to, is they’re married filing jointly, federally.
– Right. – [Toby] But one lives in California, and the other one doesn’t. California has a very high state income tax, and the question is, can the other one avoid
it on their income? – [Jeff] So starting with their question, on your federal return
you have two choices, married filing joint, or
married filing separate. And married filing separate
usually ends up much worse than married filing joint. The government, federal government demands that you file together in some fashion. Where the difference comes from, is if you’re actually residents
of two different states. That you may file separately
in each of those states, as a resident of one, California, and wherever the other state was. We saw a lot of this when… Well, actually, it was the
opposite of this, when there, California had the
registered domestic partners, where we were having to file
separate federal returns. But we were filing joint
California returns. So, yeah, you, if all the spouses are, say, in Texas, or Tennessee, they can claim to be a
non-residence of California. – [Toby] You’re gonna get
audited on it, by California. – [Jeff] California is
one of those states that they want you to be a resident forever. – [Toby] The answer is, yes, you can. You can actually do this, because, there’s your tax home,
there’s your physical home. But your tax home,
quite often, is gonna be your physical home, and
they’re gonna try to prove that you really reside in the jurisdiction where they actually can tax,
you know, hit you hardest. The big case that, actually,
was just decided in the Supreme Court not that long ago was, you guys have probably
heard me rail on this, was Hyatt v. Commissioner. It’s a case out of
California that’s gone up to the Supreme Court, US
Supreme Court twice now. It has been appealed on
three different issues. The Supreme Court ruled one way, and then when it came up again, and
it ruled another. (laughs) It’s like, you gotta be kidding me. Where they actually dispatched
franchise tax board agents to his home in Nevada. The issue was, a lot of tax
on the sale of a business. And they wanted to show that
he was actually residing more in California than
he was anywhere else, and then they could assess their tax. Just know that you’re gonna
have to deal with that. Which means, go in with the understanding that you’re going to have to prove it. Which means, you’re
gonna want to show, like, how many hours you’re
spending in that location, how many utilities you’re using. And I’m not, like I’m not
kidding, you’re gonna have to show where your cars are actually registered, where your drivers license is. All these things to show that one spouse is really residing in another state. And then the question is, is it worth it? You’re gonna have to look at it, and say, hey, basically, this is the amount. – [Jeff] Yeah, California,
in particular, really looks for what relationships do you still have. Do you have property in the
state, the drivers license, like you mentioned? Unfortunately, I think that the
spouse living in California, especially, if you were
formally a California resident, could be a deal breaker. I think the FTB is gonna go after the, you know, you’re still
technically a resident of the state.
– They like to audit it, but there have been people that have won. I remember looking at it… I remember looking at it once, if they want to say a couple years ago. They tend to scrutinize ’em,
and there was an attorney who actually had, it
was like a blog article, so you could probably Google this stuff, and maybe find it out there. He said, here’s the cases,
they tend to dispute ’em all, and then here’s when you’re successful, here’s what they show. And they give a little
bit of a laundry list. Anyway, so there’s, so there’s that. Man, we’ve got a lot of
questions that have come in since the beginning, now. I’m gonna see if any of
these are really relevant. Can I do an installment sale on federal, but a conventional sale in California? So that’s interesting. I believe California’s
gonna have to follow, but, do you know, so it sounds
like he’s selling a property, and would he be better just
to recognize everything? I think you have to make it–
– I want to say that you might be able to do
that, treat them differently. – [Toby] You’re making a
installment sale election on the federal, for sure. And the question is: I
think California follows the federal, but I’m sure
you might be able to say, hey, but I don’t want
to be treated that way for California purposes. But I’m not sure why you would do that. The whole idea is to spread
it out over the receipt of it. – [Jeff] The only thing I can think of is, for example, California doesn’t recognize real estate professionals. So you might have a gain
on your federal side, but you could end up having a
loss on the state transaction. – Okay.
– Because you haven’t taken all those deductions, but. – Maybe.
– Just throwing it out there. I’m not sure that I– – [Toby] So you can’t do
a real estate professional in California?
– No they do not recognize it. – [Toby] So you can’t take
the deductions, non-passive? That’s brutal. On your state taxes, not on your federal.
– On your state taxes, yeah. – [Toby] You’re federal you can. That’s no fun, none of that’s fun. That’s maybe due–
– That’s California. – [Toby] That’s California. Well, anyway, if you’re
doing an installment sale, that’s when you escrow threw me into this situation and explained it a little bit more. So they said, hey, we want you to do a, a tax election on the federal side. But, we want to treat it
as a conventional sale. Because you have the
election, you get to choose whether you want it to
be an installment sale, period, right?
– I don’t know why escrow would have a say in that.
– Yeah, I’m thinking that you’re getting some
weird advice on that one. And maybe push back on ’em a little bit. Because buyer has to withhold payments. Since when? If they are foreign, or… I don’t know why they’re
withholding payments on it. That’s weird. I’d have to see a little bit more. If you can, maybe email it in,
so we can take a look at it, and dig into it. – [Jeff] Well, maybe he’s,
are you a non-resident of the state, might be
the reason they’re having to withhold tax. But I… – [Toby] I don’t even know if
the state would be the issue. I guess, maybe it would be
the issue for California. But if it’s… Otherwise, the withholding is
only for non, non-US citizens. – [Jeff] Well, the state’s is
like if he was non-resident, if we was a resident. – Right, and–
– Arizona. – [Toby] Right. That’s what I’m thinking,
like, the only one I know where you definitely
have the withholding is on the federal side, on
the state side, I imagine. But, again… Yeah, a little more facts. California buyer has
to withhold at escrow, also had to withhold state
tax, so it’s the state tax. But he lives in California. – That is weird.
– Yeah. I don’t know about that, you may want to query, query, and see
what’s going on there. Unless they’re being
forced to withhold if, withhold if they do it as a
installment sale in California. Which, again, I’ve not seen that. Let’s see, somebody else,
there’s a whole bunch of questions, but, does
the calendar of days in the state affect the
state residence decision. It’s a factor that they use. But it’s not the, it’s
not the deciding factor. So if you live outside of another state, and you spend a lot of
days outside the state. What California cares
about, is well how many days did you spend here versus
those other places. And then what, you know,
where’s your true tax home. – [Jeff] Right. – [Toby] Then it says, it
says, if you have a C-corp for various business activities, and I want to do wholesaling,
is it best to do it under a charter LLC to separate
the brands and liabilities? If so, how should the
charter LLC be taxed? Yeah, if you’re doing
various business activities, you want to separate ’em out What Juan is talking about
there, is having a C-corp, and having it owned, owned separate LLCs, they
would be disregarded LLCs for tax purposes, that flow up. And then, there’s, let’s
see, is there a sales tax on the sale of rental
property in California, in addition to K-1 flowing through? Not aware–
– I don’t know of any state that has sales tax on
the sale of real estate. – [Toby] Yup, I don’t
think you’re gonna get hit. Ah, du-du-du-du-du, let’s
jump into the next one. We got a lot of questions,
but, not necessarily related to that question, all right. We are paying our son’s rent
while he’s in dental school. That’s very nice of you. Is there a deduction we
can take for that expense? – [Jeff] No, I’m sorry, that’s a gift. There’s no deduction at
all for paying the rent of a relative. – [Toby] But this is where we gotta put on our thinking caps. We need to have business, first off. And so, here’s the big
question, is your tax bracket higher than your son’s? If the answer is yes, then you want to pay
him out of a business, and have him actively
participate for that business, actually do something for that business. And then if it pays him, then he can receive that money
in a much lower tax bracket, quite often zero. He could pay for his own. – Right.
– His own rent. So you’re just paying him. He is paying tax on that
money at a lower bracket, and the rent is still being paid. You’re still coming out of pocket, but instead of you doing it personally, if you run it through a business, then he can work for the business. But he actually has to do
something for the business, so you’d actually have
to get him on your board, or have him do things. A lot of you guys know
that I had a daughter go through college, and I
had her do social media, and things like that. Stuff that was pretty
high value, and there’s, you know, there’s a wide swath
of what you could pay for it. If it’s sweeping floors, you’re gonna have a tough time going above, you
know, 25/30 bucks an hour. But when you’re doing technical stuff, really, a reasonable amount
can pretty a high amount. If they’re acting, or doing, what was it, Screen Actors Guild rates for photography and things like that, when you’re using for modeling. That’s actually a tax court case, in case some of you guys think I’m being goonish. There’s actually a case where
it was a young individual, I think they were 11, it was a pretty low
age, and they were given a reasonable amount was whatever
the Screen Actors Guild. I just think that stuff’s a
lot of times misunderstood. You gotta actually do something,
and then you’re paying it. As long as we’re talking
about school, I just did a little section on this. A lot of people go to the
529 plans, which are great, you put money into ’em,
and you don’t pay tax on any of the growth, so long
as it’s used for education. And it could be private
school, for elementary school, and high school, and all these things now. It doesn’t just have
to be higher education. But, man, your returns rally stink. Like I get the calculator out and, because you have to
stick it in mutual funds, and they charge so many
fees, there’s just not, you’re really not getting much. So I tend to shy away from those. There’s… Sometimes, we get into
Uniform Gift to Minors Act, and some of these accounts. But, the problem there, is
when I see parents doing that, is the money goes to that
minor when they hit 18, and you have no choice if
they’re gonna use it for college, or they’re gonna, you know,
spend it on a Lamborghini. You don’t get to choose on that. The other one is using an Index Universal
Life or Whole Life Policy, where you put extra money into
it when your kids are young. And under Section 7702, it’s 26 U.S. C 7702, the cash value grows tax free. And when I say tax free,
I’m being deliberate with that word, I’m not
talking it’s deferred. It’s literally tax free,
as long as you borrow it from yourself, if you’re
gonna use it for school. And then, you know, the good thing is, the good thing is, you may not have to, you know, pay it back if
you keep that policy in active, then when you die,
the policy gets paid back. And if you don’t, if the kid doesn’t need, you know, say that your child
has lots of scholarships and doesn’t need the money,
or just says, hey, I’m okay, then you don’t have to
spend it on education like a 529 plan. You could just keep the money in there, you can use it for your retirement. Somebody says, the dental
student might also qualify for tuition credit to
reduce his income tax. Yup, there is that. Again, what I did with my
daughter, I’ll tell anybody, if they have kids and they’re
underneath a certain threshold as far as income, let’s
say they’re making less than $40,000 a year, I
forget the actual amount, it’s over 100 grand, but, you can do a Roth IRA, and
that’s a great savings plan. People look at me and
go, you’re a goon, Toby. Why are you putting it into a Roth, when there’s so many
penalties to take it out. And I’m like, no, there’s no
penalty to take the amount that you put in out, there’s
only penalty if you take the amount that has grown out. So if you put $5,000 in
it, and it grows to $6,000, you can take that $5,000
back out at any time. And if they never have to
touch it, and they get it there for 20, 30, 40 years, there’s a, you just took care of their retirement. All right, if you’re
saying there’s no sound, you’re the only individual
that’s doing it. You may want to try
calling in, sometimes the, the computer, your
computer’s not gonna do it, so maybe somebody can help
that individual, or repeatedly putting it in the chat. If you can’t hear, you can’t hear. What else, escrow threw
me, du-du-du-du-du. There’s withhold. I’m just trying to see if
there’s anything else here that’s relevant to this. Can an individual sole
proprietor sponsor a 401(k) plan? The answer is actually yes, you can. Although, all of your income
is considered wages, so you, if you’re making over 30
or $40,000, it could be a, a negative situation for you. It also depends on your 1099-A deduction, and how much you’re making, so it’s… Yes, it can do it. If no, why not? No, you can do it. But we just recommend that,
usually, you’re gonna use a corporation, an S, or
an LLC taxed as an S, and take a salary out and control how much you’re actually putting in there. Let’s see, dental student,
we already did that one. On the tax organizer, page titled expenses, there’s
a line called equipment rent. Could this include a
monthly cost for a lease car used to drive to various
education seminars for stock. Just a crazy thought,
yeah, don’t, don’t do that, we’ll get to the car stuff
here in a little bit. We always get a car question. I’m just always gonna tell you guys, unless you have a really
good reason to have a car in your company, you
reimburse mileage instead. It’s 58 cents a mile right now, you know, you just have to track your mileage use. MileIQ, it’s a simple
app, I think it’s free. So you can… It’s really simple, like,
you can make sure that you’re just tracking
it, it literally GPS’s, so it just says was that a business trip? And it doesn’t matter what car
you’re in, you just keep it, and submit it, and 58
cents a mile, it adds up, and you don’t have to
worry about 50% or more, or bonus deprecation,
or anything like that. Do you have a opinion? You’re sitting over
there kind of mute today. – [Jeff] No, I was just listening. I don’t like that idea of putting these vehicles into businesses. Especially, if they’re not
those 100% use vehicles, which the majority of ’em are not. There’s gonna be some personal on it. – [Toby] You just said,
that’s really important. There’s gonna be a personal tax. – [Jeff] There’s a
personal issue with that. – [Toby] People do not realize this. – [Jeff] That personal
use, it is taxable to you. – [Toby] There you go. Whenever I, as an employer,
give a benefit to a employee, it’s considered taxable, unless
there’s a specific exclusion that says it’s not.
– Right. – [Toby] So, for example,
if I give you a soda pop, it’s taxable, unless there’s
a de minimis fringe benefit rule that says it’s not. If I give you a car,
and it’s my company car, the company owns it. And by the way, I’m gonna
scare the pants off you here in a second, because there’s actually a really good court case that
I just read on a company car. That company car is a taxable benefit to you. You have to track your business miles, and the personal mileage is considered personal compensation. It’s subject to self-employment. Or not self-employment, old
age, death, and survivors, and Medicare, Social Security
taxes, and withholding. It’s like if I paid
you with a Lamborghini, I gave you a 200, 300 thousand dollar car. You have pay tax on it. And people might–
– I’m okay with that. – [Toby] Yeah. (chuckles) But, a lot of people don’t realize that. A lot of accountants don’t realize that. And so, they’ll have this automobile, and they’ll just write 100% business use. The IRS knows that’s not the case. Your low-lying fruit, and they zap you, and they say, “All right,
where’s your mileage log?” And you say, “What are you talking about? “Were you trying to concoct something?” And they didn’t deny it, and they say, “Great, the entire value of that vehicle, “based on it’s fair market
value, the lease value “is gonna be added to your wages every year.” And then, the other thing is, that really hurts, is when
you are zipping around in your company car, and
you get into a car accident, or somebody does on your behalf. A, it’s commercial insurance,
it’s gonna have to be the higher insurance. And B, you just put the
liability in the company. And there was a case here,
that got a little bit of attention, where it was
$100,000 personal liability, and the individual’s caused
a traumatic head injury on a, they hit a bicyclist in a, on the road, they just hit him on the side of the road. And it was a truck. And then they sued the
business, trying to get to the business’ million dollar policy. They dug their heels in and fought it, and it ended up being a
3.6 million dollar verdict. Well, there’s only a
million one of coverage for the business, what you do think the business is doing now? They’re yelling at the
insurance, and it ends up just being a nightmare
situation for the business. And the guy’s saying,
I wasn’t on business. But the lawyers on the other
side, they’re gonna sue anybody that they can get their hands on. And unfortunately–
– And the other side of that that I’ve seen, is those people who decide that the commercial
insurance is too expensive, so I’ll just use my personal insurance. To drive it on company
business, get into an accident. Now, not only do they
have the accident problem, their insurance company
may say, no, sorry. – [Toby] You gotta make sure that it’s, that you’re letting ’em
know it’s commercial use. Two other questions that relate to that, and how we got into these cars. Aloha, Zach, and it says
it’s regarding a company car. What if we already bought the car? How do we take advantage of the Tax Cut and Jobs Act tax deduction? So what he’s referring to,
is depending on the vehicle, we used to do what’s
called a 179 deduction, and then depreciation. 179 is the first million
dollars of equipment purchase you can write-off in a year. But, there’s limitations,
depending on whether it’s a luxury automobile, or whether it’s not considered equipment,
just a passenger car. So they usually limit it, I
think it was like $16,000 a year was the maximum amount.
– Yeah, it’s actually $13,000. – 13?
– A couple years ago. – [Toby] Yeah, so, is it, what is it now? Is it still the same?
– I want to say it’s 20, right around 20.
– And then you have bonus depreciation,
which under the Tax Cut and Jobs Act says, hey, if something is a, is written-off over five years,
seven years, or 15 years, you just write it off in
year one, if you elect. – Right.
– So in that one there’s still a limitation,
but it’s not equipment. So it depends on the type of car. So if it’s over a 6000 pound vehicle weight, yeah, so if
it was an SUV, or something, you probably are able to write it off. But here’s the problem. Ready for the problem, Zach, this is, I don’t want to freak you out. You gotta make sure you’re
using it 50% or more for your business. If you’re not, and you
touched a 179 deduction, then it’s ordinary income,
you have to recapture it. If it’s bonus depreciation,
you just have to recognize the personal use of it. Right, it’s not gonna affect
your bonus depreciation on recapture, is it?
– No, I think it is. And I think it’s also
gonna affect any type of accelerated depreciation.
– Yeah, you gotta be careful. That’s right.
– So if you’re gonna– – [Toby] That’s gonna be ordinary income. – [Jeff] If you’re just
using straight line, you’re deducting a fifth
of the value every year. – [Toby] If you wrote
it all off in year one. – [Jeff] If you write,
yeah, if you write if off. We had, speaking of luxury
vehicles, I had a client who bought a Bentley within his company. (person chuckles) – [Toby] Wrote it all off? – [Jeff] No, he didn’t
write any of it off. We had to explain to
him that his deduction was limited to like
$11,000 the first year, and later on it was $1,775 a month. Because it fell under
the luxury vehicle rules. – [Toby] Yeah. Ouch! And so, the answer to
you, Zach, is to make sure that you’re using it 50%
or more for business. You know, again, just use MileIQ. Somebody said it, you have
to pay something for it. Yeah, I think you get it
free for like 40 or 50 trips. I think it’s a couple bucks a month, or something, just get it. Shoot!
– Like you figure, at 58 cents a mile, if you
drive a standard $1,000, a thousand miles a month,
that’s paying you $580. – [Toby] Hey, guys, look at this. Hey, guys, love your advice last time about cost segregation,
you just saved me a heap, $118,000 off my taxes. You may want to teach this again. Caroline, you’re reading my mind. We are probably gonna, I
am gonna introduce you guys to that concept again, and
we’re gonna keep going. Yeah, usually, you make
big huge chunks of money. All right, somebody says,
if I own six large vans for passengering school-aged
kids, would you recommend a separate corp for
each of these vehicles, then lease it back to myself,
to keep liability away? I own six large vans. Wow! My company has six vans,
and then you’re using ’em. I see, it’s a daycare, so
you have a bunch of vans that you’re using. What I’m gonna say is, it’s
not the vehicle that causes the liability, because cars
don’t drive themselves. It’s the individuals in the daycare. So what I would say is, keep the daycare, don’t have a ton of
assets in that daycare. Yup, and any young drivers. Make sure you have good
insurance, and then, here’s the big one for
ya, is make sure you have a umbrella policy on yourself. I call that lawyers insurance, and you can get a huge umbrella. And I’m talking, they’re pretty cheap. But you can get three
and four million dollars worth of coverage, for 1000 bucks a year, or something like that, or less. – [Jeff] What about, I
mean, I like the idea of having the vehicles all in one place. There’s fleet discounts on
the insurance, there’s other– – [Toby] There is. – [Jeff] They’re treated
differently for tax purposes. – [Toby] But you have them
in these, so there’s always the where does the liability come from? The liability comes from the
employees of that daycare. So what I’m gonna want
’em to do, is get them, get the money out of the daycare, get the assets out of the daycare. The vehicles themselves,
you’re gonna write those off, and they’re, I used to do liquidation. You know, you buy vans for
$500, they’re just not worth a lot when you liquidate ’em. Because when you auction ’em, realistically, nobody
even gets to inspect it. They’re just, they’re popping out there, and they’re just bidding on… They have some pretty interesting rules on how to liquidate things out. And they have wheels, and can roll away, and have somebody pull things out of ’em, so that they don’t
operate, you know, anymore. It’s like most people don’t
go after you for your vans. What they’re gonna go after you for, is if they can get to you
individually, so make sure you have an entity for that daycare. They really just want to,
you know, lawyers go after the low-lying fruit of
the insurance policy, unless you give ’em a really good reason to go outside of it. So just make sure you have
lots of insurance on it. Make sure that business is separated. And then, make sure your other
assets are not in your name. So if you have rental properties, don’t have ’em in your name. You’re just asking for
someone to come after you and try to break the veil of the business. And that’s the easiest thing. What you’ll find, is
that things settle out, or don’t get filed, they’re
usually in investigation phase, and they say, how much
insurance do you have? You tender it, and you’re good. When you have three rental
properties and they can see ’em, and they think you have something, then they just go right after ya. – [Jeff] And if would say if
you owned the daycare property, I would probably separate that, also. – [Toby] Yeah, if it’s the real estate. You’d actually lease that to your… So you’d setup… The active business is usually
gonna be an S or C-corp. And for those of you guys
who have listened before, you can have an S or a C-corp that is an LLC that is taxed as an S or a C-corp. You would have your real
estate in a separate LLC. Generally speaking, it’s
gonna be either a partnership or a disregarded LLC that
flows down under your return on your Schedule E. And you’re gonna lease it
to the active business. We do this with residential
assisted living. We do this with daycares. You do this with any business. You’re gonna have real estate
in an LLC, doctors, lawyers, exactly what I do in my
business, our buildings are held in LLCs, they
lease back to the law firm. And the whole idea is you’re just, you’re just keeping the
activities separate. That’s really, really important. Is that if you have something
go wrong on your property, on your real estate, you know, in the case of a daycare, let’s say that, I don’t know, somebody
trips down the stairs, they’re gonna sue the daycare,
they’re gonna go after that property, no matter what.
– Yeah. – [Toby] What you want to be able to do, is isolate out the liability
to the extent possible, so that if they come
after you as the landlord, there’s that liability. If the landlord gave
it over to the daycare, now you’re trying to, to
say, it’s the daycare. I’ve created a line. When you’re walking up here,
the daycare is responsible. I have very little culpability, if any. What you’re trying to
do, is get, you know, keep that equity out of
the, out the firing line. And somebody else is doing something else, the audio is still
doing some weird things. I hope everybody’s able to hear out there. I’ve had two people now, have some issues. It’s just there’s a lot of
you guys on here right now. Let’s see, I am a realtor sales associate, and my company requires
me to place my broker as additional insured. Can I write-off the
portion of my premiums? Absolutely, they’re just
as an additional insured. You’re probably not paying too much. They’re just saying, hey, you
want to be, you want to cover. A lot of you guys are
saying you can hear fine, so everything’s good. It’s probably a little bit
a somebody’s home internet. Sometimes, it’s not the greatest. All right, here we go. I don’t know why, we were
on the dental school. Did we get through all that? – [Jeff] We got through the dental school. – [Toby] All right. I purchased an investment
property in another state and formed an LLC. Can the LLC reimburse
me for flights, hotels, and meals incurred prior to formation? – [Jeff] Well, you know,
we don’t talk about, we talk about start-up
costs a lot in corporations. But, actually, any entity
can have startup costs, including an LLC. I mean, these are costs that you incurred trying to establish
your business, and all. So this is something we would capture. Or you would capture it, and amortize. So, yeah, that’s perfectly acceptable. – [Toby] So this gets fun. So I’m kind of a… I think these things are fascinating. If you already have investment property that’s offered for rent. Then, it can just, it can
write-off all these things as a startup expense, whenever you start bringing in the money. But if you don’t, now it’s gonna be a startup expense, and it’s gonna have a little cap on it. A, it’s gonna be limited to $5,000. Anything above that,
you’re gonna amortize over, what is it, 15 years?
– 15 years. – [Toby] Yeah, ouch. But you can only write-off the flights, and hotels, and meals where the property is purchased. So I remember this, going
back, there was a guy and he looked at three different states, and he was was trying
to look for properties. And so, he went, and
he looked in New York. He went to D.C., and I
think he went to Georgia. And then he bought the property in D.C. And he wanted to write
all the expenses off. But he couldn’t, because it
wasn’t in the geographical area that he did the investment property. Which is why we tend to
use management companies, where we’re just, we don’t care. We’re just, A, if it has to
do with you doing something on behalf of an LLC,
we’re gonna write it off. And it’s an active trade or business, which something that
we didn’t hit on here. You can only write-off,
really, the travel. You can’t write-off other expenses. I’m trying to think of a whole
bunch off the top of my head, but there’s expenses that
you cannot write-off, ordinary, necessary business expenses, because it’s not an
active trade or business. These are investment expenses, and they’re much more limited. So, you know, there’s things
that here, I think the hotels and flights, and meals would be fine. But if you had other expenses, interest… If you had ordinary office
expenses and things like that, you wouldn’t be able to
write it off, period. You’d actually have to have the
rental property an activity. And then even then, there’s certain things you can’t write-off.
– Right. Some of those expenses you would probably have to end up capitalizing
into the cost of the property. – [Toby] There’s some, and
then there’s some expenses you just flat out can’t write-off when you’re dealing with
an investment property versus an active trade or business. The biggest one is, if
you guys do seminars and things like that, you
just can’t write ’em off as in an investment. You can only write them off as
an active trade or business, which means we use a corporation. This is interesting, so
you could, in your case, I don’t know who asked the question, but, in this case that’s on the screen, they would be able to reimburse themselves as soon as that investment
property is available for rent. So it has to be available. So it’s not that I have it rented. Like, let’s say I’m
rehabbing it, and I rent it, and then they move in. Let’s say I have it rented on August 15th, and they
move in on September 1st, and it’s available on September 1st. The date you can write-off those expenses and capture ’em is September 1st. Because that’s the date it was
actually available for rent. Same thing is, if I make it available for rent on September 1st, but I don’t get a tenant until October 1st, I still can start writing it off as of September 1st.
– Why? – [Toby] Because it was
ready and available for rent, that’s always the big trick. It’s not when I acquired it, it’s not when there’s a tenant in
it, it’s when it’s available for the tenant. Even if they rent it ahead of time and it’s still not available
to the tenant until it’s done. Did I misstate anything?
– No. And I think the best way, the easiest proof for
available for rent is an ad or something that says it
was available for rent. – [Toby] Two other questions. So I had, what it is, my buddy is, he sent something in here, here we go. Or where did he just go, I managed, all right, Zed, I join now. I’m partnering in a flip
with somebody 50/50. So anytime I see these, I just kinda go, hmmm, two months long. That’s what they all say. It’s gonna be a two month flip, and it’s gonna be a two year flip. Okay, what is the best form
to create this partnership? Do I create LLC as individuals,
and both our companies create a new company as a tax benefit? When you’re flipping, you’re
gonna want a corporation between you and the activity,
from a tax standpoint. And when you’re working
with somebody else, you’re gonna do this in one of two ways. You’re either gonna do a joint
venture, where you’re both, you both have control, and you’re gonna do a joint venture LLC
between the two of you. Or, if, for example, you
are in control of this, I am going to advocate for you
to not have a partner in it. I’m gonna say, if they
want to participate, they loan you the money, and
you do a contingent interest, where you pay them 50%
of the gain as interest. And that way you write it off. You don’t have a fiduciary duty to them, and it’s much, much, much cleaner. – [Jeff] We actually
had a question on this. – [Toby] We do, where? – It’s coming up.
– Oh, good. I saw when he asked it here. Another question. I know! (sighs) I know there’s a, but I don’t
know it’s the exact same one. All right, so, they said, hey, what about, what’s the difference
between donating product to a 501(c)(3) non-profit,
or categorizing it as a market expense? So this is a case of an S-corp. The important difference here,
when you have a corporation that’s giving something to
a 501(c)(3), or a charity, is a C-corp can only
write-off up to 5%, or 10% now of it’s net income. So if makes $100,000, it can
donate and deduct $10,000. If it’s an individual, you
can write-off up to 60% of your adjusted gross income. When you’re donating products, I think you have a little
bit a different issue. And I’m thinking about donating products. If it’s foodstuffs, you
can write-off the product, and write-off the charitable gift. If I am donating a product,
it gets whatever my basis is. – [Jeff] It has to go towards the feeding of women and children. – That’s the food–
– Impoverished women and children, for their products. – [Toby] But if you’re donating product. In this particular case, let’s just say it’s inventory in a business. Then it’s just gonna be, you’re
just gonna not have it there when you do your inventory,
so that’s cost of goods sold. – [Jeff] So it won’t actually
be a charitable deduction. It’ll be a write-off of inventory. – [Toby] Right, it’ll be, right. In that way, you’re not actually even, you know, messing around
with a, with charitable. The other thing you do, and I think I’ve talked about this before, is sponsorships out of
C-corp, or an S-corp, you don’t have to worry
about the charitable amounts. And for those of you guys who are taking the standard deduction, which is $24,400 this
year for a married couple, for a single it’s $12,200. If you’re not necessarily
gonna exceed that, and you’re like, oh,
man, what’s another way I can get money to my,
my church, or to my, the organizations I care about? Sponsor them through your corporation. It becomes a business
expense to the company, you don’t have to worry
about a charitable donation, it just comes off the
top against the income. – [Jeff] The other one I see
occasionally is I donated my cabins to a church group,
that I usually rent out. What deduction can I get? – [Toby] You treat it like it’s rent. – [Jeff] You treat it as
if that was your expense, and that is your write-off. – [Toby] Yup, with, somebody says, with the 50% contingent
interest on a flip, are we violating any SCC laws? No. It’s not the SCC laws,
I’m not even certain what laws that would be. Karen, you’re gonna have to elaborate. There’s usary laws, but
that’s not for commercial. So whenever your commercial,
I can these contingent. And I can say, hey, pay me 4% interest, or 25% of net
profit to find it’s following. Usually, what you do, is
you have your basic note, and then you have a, a contingent interest agreement. It’s a second agreement that says, hey, if we make money on it, then here’s what I can do. Boy, we have a lot of questions
coming in, what the heck! I had the New Jersey sales tax. I have to look at the
New Jersey sales tax, I don’t know what that is, Mr., Mr. Ron, somebody asked. Maybe you could ask the question again. I don’t see it in my, in
my queue of questions. Can an LLC previously
established be (garbles word) reconfigured to be taxed as an S-corp? Yes, you can, you just have
to follow the same rules as making an S selection on anything. Can you separate land and
property under separate LLCs? Land and property? The property is sitting
on the same piece of land, I guess I see what you’re saying. In other words, can you
take the improvement and toss it in an LLC, and
have the land on a LLC? I don’t see why you would,
I imagine you could. – [Jeff] I think it would be very difficult to do.
– You’d have to lease it. – [Jeff] You’d have to talk your county into letting you do that. – [Toby] It would be weird. And I’m not certain of the
reason you would do it. – [Jeff] Well, for one thing, you’d end up having to parcel ’em out separately. – [Toby] Yeah, and then somebody says, yeah, I’m not certain about that, Bruce. Somebody says, do you just
let the food deduction washout the cost of goods? No, actually, John, on the,
when you’re donating food, I think you actually get
to write it off, too. – Yeah.
– I think you get to do both. And I think that’s the
big, you get to do both. – [Jeff] So, yeah, if you
deduct $1,000 worth of food that you donate to a soup
kitchen, or something, you’re gonna end up deducting $2,000. So it’s your cost of
goods sold, plus whatever, again, whatever that cost of goods sold as a charitable deduction.
– Yeah, that’s why you want to go around. The food banks want to hit up all the, the bread companies, and
all these guys that have the day-old bread, you say, give it to me. You can write it off, you know. You’re basically writing off the cost. Not the retail cost, but
whatever it costs you, you’re getting to do that twice. Somebody says, do I need
to file a 1120 form, even if I don’t have any taxable income? Yes, you want to grab all
your expenses, for sure. Even if you didn’t have any,
you would just say no activity, but you still have to file that expense. Somebody says, what
about donating a service? Is there a 10,000, let’s say that you have a design expense of 10,000,
and you give the design away, can you write-off the $10,000? The answer is, no, because you
never recognized the income. So you’d have to, you’d treat
it as though you sold it, and add 10,000, and donated 10,000, which is gonna be a wash. I have seen people give intellectual property to
charities, where you get a, you get a, an appraisal on the value of it. You could do that, perhaps. Where you say, hey, we’re giving this, and this is what it would be worth. I just don’t know whether
it’s gonna be worth it for you to do that, since
the appraisal would be probably almost as much as the deduction. – [Jeff] And you’re gonna
have a specialized appraiser to do that valuation. – [Toby] Veronica’s
asking about wholesaling. Veronica, I have a
feeling that the question is gonna come up. Let’s see, two-member
LLC, husband and wife. They did not file a 1065 for
2017, do they need to amend the 1040 return? The rental activity was
reported on Schedule E. So, Patricia, it depends
on which state they’re in. Because in a community property state, they are considered one person,
they wouldn’t have to do it. Florida, so that’s separate properties. So technically they were
supposed to file a partnership if they both own it. That’s interesting. And then B.J., we’re going over questions that are being asked, so
I’ll get to the other slides. (sighs heavily) They always,
there’s always someone who says what the hell are you guys
answering questions for, go over the slides. We’re answering ’em as they come in, too. Here we go. I’m going to deed my rental property into a California LLC. How do I pay the mortgage if
it’s still in my personal name? Guess what, mortgage companies will take a payment from anybody. – [Jeff] I was thinking that very thing. – [Toby] So, we’ll make
it really simple for you. Like, I wish it was a
little more elaborate. I actually saw a thread on this question. Like all these people were
throwing in their two cents. And it was like, yeah,
we’ve been doing this for 20 something years,
nobody really cares. But you want to make sure that
if you have other properties in that LLC, or if it’s
related to other LLCs, or you’re trying to offset
other income with it, that’s it’s paying, and otherwise, the mortgage company’s
gonna be sending it to you. It’s gonna end up on your
Schedule E, no matter what. And this is the big thing, a lot of people when they’re doing a mortgage,
and they start freaking out over the Tax Cut and Jobs
Act, and the limitations on the mortgage interest
deduction on a personal property, it has no affect on your Schedule E. You can still write off your, the mortgage interest against your, against your rents. But, I wouldn’t try to
move that mortgage into the name of an LLC, I’ll
just caution you against it. Just go ahead and have
that LLC pay the mortgage, or the LLC can receive it’s
rents, distribute it to you, and you can pay that mortgage,
if it makes you feel better. At the end of the day, you’ll
have zero impact on your taxes. And almost no impact with regards to asset protection. It’s highly unlikely that
that would ever be a factor, because, as long as the
California LLC is someone who’s actually receiving the money. And it’s receiving it either through a property manager, or directly. Let’s see, let’s keep going here. You guys are asking a lot
of questions online today. I’ll get onto those here in a second. But, I gotta bust through some of these. I am a new real estate investor and am purchasing two properties
with cash through my LLC. What kind of financial
records should I keep? So, I’m gonna hit on a couple things. First off, Jeff, I’ve been Hobarting this
whole dang thing, haven’t I? – [Jeff] You’re doing a great job. You keep everything that has anything to do with that, those properties. You spend a nickel on it,
you keep that receipt. If you’re able to keep
your own records, then keep a spreadsheet or something. – [Toby] Such a CPA,
such a CPA. (chuckles) If it’s a nickel, you want
me to keep a receipt on it. – [Jeff] All right, we’ll make it a dime. But, still, you need to… (person laughing) Because dimes add up.
– Yeah, I think. – [Jeff] But, yeah,
anything that has anything to do with a property, you want to keep receipts on. You want to keep your
mileage for when you’re going to visit these properties, and so forth. It’s usually not as much
as it sounds like, but, you gotta be diligent.
– Mm-hmm. Realistically… – [Jeff] Oops. – [Toby] Realistically, the, the IRS requires that you
keep books and records on all financial activity. So books and records just
means a record of your income, a record of your expenses, and a record of your assets. And if, you know, and
when it’s real estate, you’re allowed to take depreciation. Here’s the thing, you’re
not required to take it, but you are required to recapture
it, as though you took it. If you don’t take it, you’re nuts. So you’re gonna want to still keep track. What would I keep? I would just keep, like Jeff
said, I’d keep a spreadsheet of what comes in and out. And then, you could always
work with an accountant at the end of year, to fix it. The more concerning thing, is
you’re buying two properties for cash in an LLC. Which means, something that
happens on property one, they’re gonna take property
two, and vice versa. So depending on how value
those properties are, I’d probably recommend that, at a minimum, you use land trusts, and
hold them separately. Since you’re buying ’em for
cash, that seems like a, like probably, that
maybe it isn’t something that’s 100% necessary. I’d probably just use two LLCs. But I don’t want to
have an activity on one cost me property number two. And it really comes down
to, some people would say, well, if they’re not very valuable? But what if they’re $75,000 properties? Or $100,000 properties? And I’m like, well, I don’t
really care about that, I care about the rents that
are gonna come in forever off those properties. And if it’s making 1500 bucks a month, and you end up costing
yourself it, because there’s a fire on a property,
or something happens on one property, and
they end up taking both, you’re gonna be kicking
yourself, saying, shoot, I coulda just tossed an LLC around it. If you’re doing two
properties, I’d caution you, I’d say, probably put ’em in
a separate LLC, if you can. Or use some financing,
so there’s not as much there. Boy, we have a lot of
questions that have come in. Let’s see. Please elaborate on the wholesaling
with a business partner. We have an LLC. We are not renovating and
flipping the property, we are truly wholesaling. How can we share the tax burden? That’s actually a
question that’s coming up, and I’ll show you how to do that. So I won’t answer that just yet. I’ll answer it when it comes up. I have an Inc., but how many
LLCs can I have under it? I’d like as many as you
want, there’s no limitation. I’d like to add a foundation
along with my two houses and a publishing company. That’s four LLCs, is that okay? Yes, you can always do that. Your personal property, I wouldn’t do it. If you have other rentals, absolutely, and it’s just management. And I love to do that, I love to have a management entity
that’s a family entity, that we’re running all of our
expenses, for the, you know, for our active activities,
it’s just a management company. With eight vacation rentals
and two commercial rentals, and a regular rental, do
you recommend 11 LLCs? Yeah, actually, probably, it
depends on what they’re worth. There’s not a
one-size-fits-all for anybody, you just have to know what
the actual exposure is. Before you go, oh, my God, 11 LLCs! Some states allow series LLCs. You know, states, quite
often, 11 LLCs are not nearly as expensive as what you’re thinking, In California, it’s ungodly expensive, so I wouldn’t do that. But if you’re in Ohio, or,
you know, Florida, or some, you know, where it’s not really expensive, it’s just really cheap insurance. Yeah, Oregon’s not that
expensive, like 100 bucks a year. And it can save you considerably. If you ever found yourself on
the wrong side of a lawsuit, you’d realize that
you’re thinking in terms of hundreds of thousands, not even tens of thousands anymore, it’s just really, really expensive to defend. And you want to just
be able to cut it off, and say, here’s the total exposure I have. And again, you make sure
you have good insurance for each one, and you make sure you have a good umbrella policy, so
that they’re not interested in coming after your other properties. They just put their ears
back at the insurance abd go, we want some of that. Follow-up on the flip Q,
can your deed go 50/50 in two separate LLCs owned
by the individual partners, to avoid partnering
with someone in one LLC? You can, it’s called tenants
in common, or you’re… Realistically, I wouldn’t do that. I would have an LLC that’s
a joint venture LLC, that’s owned by your two companies. Or again, try to keep
them from being an owner. Somebody says, yup, being
sued to the walls right now. Sorry, that just sucks! I hate being on the
wrong side of lawsuits. Even on the right side of
lawsuits it still sucks. But it’s absolutely… No offense to plaintiffs’ lawyers, but, a lot of ’em are on contingency, and their partners against ya, and they’re just using the client to, to see how much money they
can claw into, just, you know. If it’s me, I’m just,
I’m digging my heels in and fighting to the last breath, if I can. – [Jeff] And you gotta remember that a lawsuit can be expensive
even if you win the lawsuit. – [Toby] Mm-hmm. Oh, the… We had one of those. Very recently, and it was
200,000 plus to go win the lawsuit, get a
judgment against the tenant that they bankrupted. And, the worst part about a lawsuit, guys, isn’t the, like, the money is annoying. And some you guys are very well off. It’s waking up at three o’clock
in the middle of the night and not being able to go back to bed. That’s the part that really is.. And you’re just angry. I just, I, yeah, it’s like
I’ve been down that path with so many clients. I had a friend that had died
of a heart attack at 52. Part of it’s because he was
just like always getting into, he had a neighbor that was just suing him every time he turned around. And I said, “Just move.” “Get out of there, you
just want to be able “to wash your hands of it.” All right, I just sold a
rental property last week, and another we sold this week. I think the basis on
both may be incorrect. If I find basis on previous
bookkeeping records that this is the case, is
there a way to correct it? Would it trigger a change
in the depreciation? Is there a way to correct the change? – [Jeff] This you can
change without doing the, you’ve heard of (mumbles words)
change in accounting method. – [Toby] Yup. – [Jeff] Because this
is a change of estimate, not a change of accounting method. So they’d just go in
and change the numbers, and depreciate the new
number going forward. It’s pretty simple. – [Toby] Yeah, so, what Jeff’s just said. – [Jeff] Yeah, what I said. (person laughing) – [Toby] You CPAs. No, Jeff’s actually, how
many years, 27 years? – A long time.
– A long time he’s been the CPA, and I’ve been a lawyer for not quite as long, I’m a lot younger. – Yeah.
(person laughing) – [Toby] All right. Somebody says, would
all the LLCs be Wyoming, so they are hidden? Not necessarily. So a lot of times, what
I do is I’ll have one LLC in Wyoming that owns the
LLCs in the various states. If a lot of you guys know me, we have over 150 rental
properties ourselves. It’s like I always say,
good luck finding ’em all. It’s never what anybody thinks. And all you’re trying
to do, is making sure that they’re not coming through
the back door against you. They’re not trying to take your LLCs. So in a lot of states, they’re like, oh, well, if I can’t get the, the liability in the property, I’ll go after the owner individually, and see if can’t take the LLC from him. It’s just really frustrating. But then, can’t a lawyer find them easily? So this is where it gets beautiful. So if I use Wyoming, where
you’re not disclosed, and setup a bunch of Oregon LLCs, they won’t be able to see your name. And so, I can keep the
Oregon LLCs from having your individual
information on ’em, anyway. But again, what we’re really
worried about, is making sure that we don’t have them all
simply sitting in one big, one big LLC that is very easy to see, and they can try to take it all. There’s always a way to do it. We’re gonna keep moving on. Let’s see. This is what you were talking
about earlier, a co-wholesale. So this is wholesale, this isn’t flipping. So there is a difference, in my own– – [Jeff] I think we’ve got another flipping question later, too. – More flipping questions?
– Maybe. – All right.
– Let’s do this one first. – [Toby] I have co-wholesaled
properties 50/50 with another investor. The deals were made in my company’s name. Do I claim/disclose the entire amount, or only what I received as profit? So the question is, what do
you mean by claim and disclose? (laughs) – [Jeff] Well, I think
about, they’re saying if I wholesale these properties for a total of a million dollars. Whoever’s name those sales were in is gonna have to report that whole amount. – [Toby] I’m reporting the million. – [Jeff] And then you’re gonna
deduct from that million. – [Toby] The amount that I give to my partner.
– Exactly! – [Toby] Right, so, what you’re doing is, you’re gonna recognize 100% of it. Using Jeff’s example of a million dollars, and you’re gonna give them 500,000. That’s gonna be a 1099-MISC, right? It’s miscellaneous itemized? Or not itemized, miscellaneous income? – Right.
– To your, the other party. Which, he’s gonna kick you in the shins if you give it to him individually. You’re gonna want to make sure
that they’re using a company to at least keep the
self-employment tax off, depending on how much it is. But, yeah, then you would just deduct it. And so, all you’re showing is your profit. So you would just, you
know, so what’s the amount that you’re actually
showing the IRS would be whatever amount you ended up keeping minus your other expenses. And so, you could, you could expense. Oh, my gosh, here’s one I have to answer. I did not claim depreciation
on my rental property for the first 15 years. I started taking
depreciation two years ago. Is there any way to claim
15 years of depreciation I did not take previously? – [Jeff] This goes back
to what I was saying about that change of accounting method. What the change is, is you’re
saying, oh, I originally said I wasn’t gonna take deprecation. Now, I’m changing my method to
I’m gonna take depreciation. And they’re filling out the Form 3115 for the change of accounting method. – [Toby] Yeah, then you
can could take it all? – [Jeff] We can go back and
recoup all of those expenses, in the current year. – [Toby] So, Paul, the
answer is, you should email Tax Tuesday, and say, send me to Jeff. And let Jeff do, yeah,
take care of you on that. You know what? There’s a lot folks that
say no, that you can’t, that if you didn’t do it, that
you could go back two years, and you can amend. But, what Jeff is saying
is arguably correct, which is a change of accounting
method, and to go back. Because you’re gonna have to recapture it, no matter what, which is silly. They make you pretend like
if you sold that property, you’d have to pay 25% on the amount that you should’ve depreciated. Even though you didn’t. That is crazy. Somebody says, is there a difference between
Nevada and Wyoming LLCs? Yeah, Nevada is more expensive. (chuckles) – That’s right.
– That’s about it. Wyoming doesn’t, doesn’t
disclose anything, Nevada will disclose
officers and directors, or the manager of an LLC,
but you can use a nominee. – [Jeff] But the charging order
protection’s about the same, isn’t it?
– They’re identical statutes. So that people can’t take ’em from you. The good part, so somebody
says, hey, I have a whole bunch of LLCs in my home state, and it shows my personal name as manager. Is there a way to do something? Yeah, absolutely, Chris,
we just, I’m a nominee. I’ll just hop on, and sign
your doc, and now you have a lawyer saying it says
nominee, I don’t pretend like I’m actually the person, I
always put nominee next to name. Then if they, if there’s
ever an issue, they like to, to go after me, and I just say, hey, I’m not gonna tell you
anything, and It works. 20 something years,
never gotten through it. It works like a charm. Let’s see, somebody
says, do you give a 1099 to an individual that
helped you find a deal as a referral fee? If you pay somebody, Regina, you’re gonna want to 1099 ’em, it’s it more than 600 bucks.
– Right. – [Toby] Yeah, we gotta
keep going through this. Somehow we got, it’s over an hour. Dang it, Jeff. – [Jeff] Well. Time flies when you’re having fun. – [Toby] Here’s what
somebody was talking about, the cost segregation. Susan, if you could send ’em the link. This is a invitation to join
us next Tuesday at 4:00 p.m. It’s free. I am going to be joined… I’m cheating on Jeff, I’m
bringing in Eric Oliver. He’s an accountant. A good guy.
– Yeah. – [Toby] And his firm, all they do is cost segregation studies. I’m gonna go over three, three deals. Let’s see. That’s okay, would you,
(mumbles) for five hours. Oh, somebody says, so that’s
so nice of you, Regina. I thought that they were gonna say, you’d be good for five minutes. (garbles words) So this is, we’re gonna go
for about an hour on this one. I always say that, right? Now, this one I–
– Does that meant that you’re not talking? – [Toby] Nah, we’re gonna go over it, we’re gonna go over three case studies. So here’s how it works. See, he’s mean. I’m gonna go over,
well, here’s what we do, because this is the
actual, we’re gonna go over the actual tests on actual cases, so you actually see how it works. Not how it might work, or anything else. And just so you know, Jeff and I, we do not do cost segregation studies. This is what you hire
professional outside people to do. But we use them, and so Jeff
files the 3115 on your return with that study, because you have to have the study to take it. And, yeah, you’d want to
side, you’re gonna want to sign-up for this one, Alyssa. You’re gonna want to go to aba.link. CSW, and just register for it, because this is not Tax Tuesday. I don’t want to sign-up
people for something that they didn’t mean to. This is just for this one
issue, we’re gonna go over how a real estate investor
that owned a property for over five years, and
they were able to harness the tax benefit, even though
the new law was passed in 2017. We’re gonna show you how they
were able to get about 30% of the value of the rental
in one year, as a deduction. Before you go, “Wait a
second, you can’t do that.” Yeah, you can, the law
allows you to do it, and actually encourages you to do it. But, if you’re gonna take
the full benefit of it, you better have some passive
income, or you better qualify as a real estate professional,
so you can write it off as an active expense. In other words, you don’t want
to have a whole bunch of loss that you can’t do anything
with, expect carry forward. Yes, it’ll be recorded,
but you’re still gonna want to register for it. We’re gonna go over, these
are, this one’s actually a really cool case study. They bought a duplex with tenants in it, and then
rehabbed it shortly thereafter. And we were able to get a 50%
deduction in the first year, without even having to come
out of pocket on the rehab. In other words, they
financed it, so it’s huge. And then, the way the seller
of a commercial building, and this is gonna blow this you guys away. Mr. Ron, I still don’t
know what your question is. (chuckles) You keep saying
are you gonna answer this. Oh, here we go, I see it. I’ll take a look at it, and I’ll see if I can answer it real quick. But, I went over it,
another one we went over was a sale of a commercial building right before the sale sold. And people say, hey,
you’re never gonna do this, a cost segregation if
you’re selling a property. And that is not true. You gotta understand
how these things work, and we’re gonna go
through that case study. So this is for you guys. And the reason we’re doing
it, is just because on a, to Tax Tuesday last
time, and the one before, we had a lot of people asking
about cost segregation, how it works. And you gotta understand
where it gets applicable. On the commercial building, it was about, it was a 2.2 million dollar
sale, and it was $80,000 just because right before,
they hadn’t even done a, a cost segregation, it changes
how the gain is allocated. This is really, really important. It will, like, and I don’t
care whether it’s a million, or a million five, or
500,000, like these things pay for themselves. And I always look for
about a 10X response. I want to see, if I’m gonna
spend 1,000, I better see, I better save about 10,000. You’re gonna be able to, before you ever would even pull a trigger
on something like this, you would know exactly what
you’re gonna get out of it. That’s what’s so cool. Somebody says, is Tax Tuesday recorded, and where do you go to find
the recording of this session? We’ll send it out to you, it is recorded, and you don’t have to do anything, and it will be sent out to you. If you’re a platinum, you can see ’em all. And if you go to our podcast, you’ll get
recordings of the audio. Man, this is so much fun. Anyway, we’ll get into more stuff. Now, Mr. Ron. He said, I have a sales tax judgment. Oh, gosh, we have so
many questions coming in, they just moved ’em into another page. Nuts, let me see if I can do this. Did you see me just do that?
– I did. – [Toby] Mm-hmm. All right, I have sales
tax judgment, $11,000. I’m on social security. I have a traditional IRA with cash. Life as a realtor, I made
very little this year, under the 3,000. What is prospected from collection. One day I would like to do an LLC. I guess your question, really,
this is the type of thing that I would prefer that you email in under [email protected],
because I don’t want to give you anything that would
be perceived as legal advice in front of a whole bunch of
people, where we’re waiving it. But whenever you have a tax judgments, depending on whether it’s
personal, or a business, they’re gonna have to
renew those every so often. But they’re just, there’s certain assets that are gonna be exempt. And so, on your particular case, it’s gonna depend on your state. We’d be able to tell you. We’d also be able to
tell you whether or not it’s something you could
even bankrupt away, if you think it’s an issue. Somebody says, is it true that
if you do a cost segregation, you have to pay everything back, if you do a 1031 exchange in the future? No, you’re just rolling forward the, the basis, and your,
and your basis forward. – [Jeff] Your basis and
your property, right? – [Toby] Yeah, yeah, so, when you sell, the idea in a 1031 exchange, or excuse me, the idea
in a cost segregation, is people always say,
well, it’s ordinary income. Well, no, it’s based on the
value of the asset that is, as it is on the date of sale. And it could actually be
long-term capital gains, or personal income,
depending on the value of it. So, yeah, so, Mr. Ron, I want to email me at [email protected],
so we could have somebody help you with that. Because it’s very specific to your state. Somebody says, I’m a
platinum member, can I access the cost segregation
webinar from the portal? Yeah, you just register it,
you don’t even have to go into the portal, I’m gonna give it to you. Just because you guys are on here. Somebody says, I’m
licensed with Primerica, should I create an LLC for my business? It depends on how much you’re making. But, the answer is almost
always gonna be yes. Because, otherwise, your
personally responsible for any of the liabilities
that are incurred. So you never want to be doing stuff in your personal (mumbles). Here we go, we gotta jump on. Was the $80,000 saving
on the sale of property because of reducing and recapture? Yes, so, John, you’re hitting it. Without getting into too
much detail, it’s the idea that if I depreciate my carpet,
and then sell the house, I shouldn’t be paying taxes on recapture on something that has no value. – Right.
– That carpet is worthless. It should be gain. And if you don’t break that out, you’re gonna be paying recapture on it. And that seems silly. And so, you end up paying
a higher tax rate on it. So I hope that makes sense. So it’s the fair market value of assets after you’ve depreciated ’em. If it’s personal property. See, John’s smart, he’s already got it. 1031 exchange, I was
not aware of the plan, is it too late after 60 days? Yeah, but… So then what you can
do, is you can still do, you can still do qualified
opportunity zones, if you want to defer the gain. You could still do that. And recapture, it’s not gonna, oh, yeah, you can actually do that
qualified opportunity zone on recapture, too.
– Mm-hmm. – [Toby] That’s the proposed,
or the temporary regs address those, right?
– Right. – [Toby] Can I submit mileage driven from my main work location
to a branch office to my employer for reimbursement? The answer is, you can submit it. But it doesn’t mean they’re gonna pay it. – [Jeff] My answer, exactly. Yes, you can do this, if
your employer is willing to reimburse you for that. – [Toby] Now, here’s the problem. If they don’t reimburse
you, you used to be able to do this on a miscellaneous
itemized deduction, they’re gone now. – Yeah.
– Tax Cut and Jobs Act got rid of ’em, so you
can’t write it off, at all. – [Jeff] And here’s the other issue. We don’t see this very often, but a lot of people don’t understand. We talked about the mileage reimbursement being 58 cents a mile. That’s the maximum allowable. That doesn’t mean an employer has to give you 58 cents a mile. – [Toby] They can give
you 10 cents a mile. As long as they’re, well… We don’t want to yell at employers. They usually don’t give you
anything, let’s just be real. – [Jeff] Yeah. – [Toby] Or if they do,
you gotta pull it out of ’em with a, you know.. – [Jeff] But, like Toby said,
this would really be up to the employer’s policy.
– Mm-hmm. All right, somebody else
asked, individual, yes. (mumbles words) I bought a triplex, I lived
in one unit, used one as a, it must be their residence,
and the other as a… Oh, my goodness! Short-term rental, then
there’s a long-term one. Would it be worth setting up an LLC to let the money roll through,
what are the pros and cons? DeShaun, that is an interesting question. That’s called, I call it house-hacking, when you live in one unit,
and you have the others. I know, (chuckles) that’s actually a term, by the way.
– House-hacking? – [Toby] It’s called house-hacking. And so, it’s when you live in
one part of a place, and… What I would end up
doing, is more than likely just sticking the whole thing in an LLC. And then you would depreciate two thirds. You’d cut your expenses,
you’d be writing off some of them as personal
expense, and part of ’em, you know, two thirds, or
whatever the portion is. If you’re doing short-term
rentals, then the question is whether it’s less than seven days, or seven days or less,
not less than seven days, seven days or less, because
you’d be considered a hotel, and it’d be an active
business versus passive. – [Jeff] How does that
affect the 121 exclusion, for the sale of principal residence? – [Toby] There’s gonna be a
period of qualified, or non-use. So you’d be able to write
off a portion of it. But there’d be a big section
of it that would be non, non-permissible use. So your 121 exclusion would be available to the gain that’s
attribute to the portion that you used as your personal residence. – [Jeff] Even though it’s still in an LLC? – [Toby] Even though it’s
still in an LLC, right. So the 121 exclusion
is not affected by the, a disregarded LLC, I guess,
if you have a partner in it, then that would be another matter. But I don’t know a way to break it out. And nor would I want to have somebody who’s in a rental
being able to follow me around the rest of my life garnishing me. – [Jeff] Right. – [Toby] I tend to always
stick things around it. You know, that’s what they never tell ya. They’re always like, oh,
you don’t need these LLCs. Well, until you’ve bought
into, I’ve had that discussion with somebody that had gray
hair, and was really ticked-off. They will not stop garnishing you. They can renew that judgment about every 10 years
in most jurisdictions, and they can just keep
garnishing you until you’re dead. Let’s see, somebody
says, full depreciation, a fun deprecation question. I bought a $200 ladder to
prepare the hurricane shutters for my rental property. Does this need to be depreciated,
or just straight expense? If it’s a ladder, you just write it off. You got onus depreciation, 100% this year. So you don’t have to
give it a useful life. And would it be equipment, anyway, 179? – [Jeff] Yeah, it’s under the $2500 limit. – [Toby] Yes, you can write it off. Good luck, in the hurricane. So anyway, so mileage reimbursement, ask your employer, and hope
that they pay you back. And if not, then just
say, hey, I took it on the chin on that on, but I am going to, I’m gonna find other ways
to get money out tax free on some other ways, so, you know. Oops, here we go. What is the best entity
for flipping raw land on an installment sale? What say you, Jeff? – [Jeff] I’m still not sure
that I have a real good answer for the entity type. Because if it comes under
the rules that allows you to do installment sales
on, for parceling land, I would think it would
work on almost any entity. – [Toby] Yeah, so here’s the deal. When you have raw land,
you just gotta be careful that you’re not preparing
it and developing it. Because if you do, there’s no such thing
as an installment sale. Now, it’s dealer property. If you’re subdividing
it, I think six or more, it’s dealer property. Even if you don’t actually develop it, there’s a great case where the individual had it for 11 years, 11 years, and he was doing
the engineering study, but he never pulled the
trigger to subdivide it. And they said, you’re
intent when you bought it was to flip it. Was to develop it, not even flip it. But, it qualifies as dealer activity. And it just ruins it, because
you have ordinary income, and you get no installment sale. The best entity, if I’ve
just flipping raw land and it’s just, like when you say flipping, I’m doing it through a corporation. It means you bought it to
sell it, it’s inventory. In an installment sale,
you’re not actually supposed to have. I hate to say this, but,
the installment sale rules specifically exclude dealer
activity, and inventory. It gets kinda stinky, you’re
supposed to pay the tax down. But if I was doing that, I would probably be running this through a
corporation, probably an S-corp. Unless I am just buying
land as an investment. Here’s another one,
someone says, what is the, what are the best ways to
save on a double-close, or a silent win wholesaler. Also, is the best tax
efficient way in a trust? Because, I’m closing on a
deal, but signed in under a land trust for anonymity,
looking at double-close. Yeah, if you can avoid the double-close, you just sell the beneficial
interest in the land trust. Let’s see, when I sell it,
then he asks another one on personal residence. (stutters) Delay payment,
considering they’re a total of $500,000, what would… (mumbles) So, Bob, what you asked… Or maybe this was a different one. I can’t tell if this is two questions. When I sell a personal residence… So the first one, let me go
back to the double-close. Brandon, you use the… You use the… Someone just says, I knew you’d be here if I left for an hour. And there you are.
(person laughing) That’s not very nice, right? What’s the best way to
save on a double-close, and to avoid the double-close
tax, is to use the land trust and sell your beneficial interest. That’s all you’re doing. Is you’re literally assigning your beneficial interest to somebody else. And they’re paying you money, so you don’t actually have to close. That’s gonna be your best deal,
because when you’re closing and you’re having to do two closings, there’s just gonna be costs. Next person says, when I
sell my person residence for $800,000 with a cost-basis
of 200, profit of 600, how much do I have to reinvest via 1031 to delay payment of taxable gain? Well, you actually have to… So you’re doing a 121 plus a 1031 exchange at the same time. The 121 is gonna exclude the 500,000, which is gonna move your
basis in your property from 200,000 to 700,000. When you 1031 exchange,
it has to be converted to investment property, which means you have to make it into a rental. And then you’re going to
1031 a $800,000 property into at least $800,000
worth of real estate. So I’m not certain whether
this is gonna get you where you want. – [Jeff] I don’t think the
121 reduces his commitment to invest–
– No, no, it’s the investment
property, the value of it, it’s not your, it’s not your gain. It has nothing to do
with basis, it has to do with the fair market value. And then, if you’re, so
you have to buy more. I would tend to say, hey… I don’t know if I would do
it under those circumstances. You might be able to
save yourself 10 grand. Maybe if you did it cheap enough, and you were gonna buy real estate anyway. That would work. Otherwise, I would be looking
at adjusting my basis, and seeing how much of that
$100,000 is actually taxable. Because you’re gonna have all anything that you put into that
property, you may be able to make that gain disappear
almost into nothing, anyway. Let’s see, how could they
sell them my interest? You just sell ’em your interest. We do wholesale trusts all the time. Brandon, this is something
you email in Tax Tuesday, we do these, and we actually
have a kit that we can sign, I think it’s like 200 bucks. And you can actually use it. And you get, you’d save that
much in the 10, 20 times that much, if you did this
thing, if you used it. We like saving big tranches of money. So anybody thinks this is free. This Tax Tuesday is
actually a negative amount, because you’re saving so much money. (person chuckles) Yeah, it’s not just free, it’s minus thousand of dollars. All right, can I form an
LLC to purchase a vehicle, and then lease it to myself, and then use an accountable plan from
my C-crop to reimburse me for the lease payments? Don’t do that, stop that.
– I’m just gonna say, I’m not a fan of this, at all. – [Toby] Right, you don’t
need to do the lease. And you don’t have to do this crazy stuff. Just reimburse yourself. A C-corp reimburses you, it’s so much cheaper, you guys. I do this stuff day in and
day out, and these accountants are always trying to
write-off stuff in big chunks. Unless it’s 50% or more for business, don’t even go down that path. If you do have a car, and
you have multiple cars, it’s so much easier just
to do the reimbursement. And then you don’t have to worry about the commercial insurance,
and all this other craziness. Plus, with a lease you have
sales tax, so don’t do that. Let’s see, somebody says,
how about the best entity for buying and selling raw
land by buying tax deeds. Probably do it in an S-corp again, unless you know you’re
gonna keep that property. But if you’re intent is to sell, you’re never gonna do that
through your individual. So you have an LLC taxed as a C-corp, located in California, to
manage a property in Florida. Located in California, to
manage a property in Florida. Wow, I don’t think I would do that. I would not have a California manager, he’s gonna bring
that revenue into California, and they’re gonna tax it. Let’s keep going on, so they
ask these questions sometimes, it makes my brain hurt. How can I rent my home to a corporation in which I am a shareholder? – [Jeff] I kind of feel like
this question is similar to the last one. Unless we’re talking about
that 14 days or less of rental. – [Toby] Yup. – [Jeff] This is just, for me, a bad idea. – [Toby] So what Jeff is pointing out, is that there’s a difference between me renting something to somebody, to the corporation,
like on a monthly basis. Now, that corporation gets
an expense, but I have income.
– It’s going to have to, so let’s just say I’m renting
it out $1,000 a month. – Yeah.
– The corporation gets to deal out $12,000, but I’m picking up another $12,000 of income.
– But, also, now, I have a house that’s a
residence, that is also a rental. And I’m gonna have to,
I have depreciation, I have depreciation recapture,
and all this other stuff. It’s much better if I just rent it to my corporation for the meetings that it has once a month. Now, that is just tax-free
income, it’s under 280A G2. So it’s 26 USC, 280A,
Subsection G, Subsection 2. And it says, that anybody
can rent their residence for less than 15 days,
which means 14 days. And they don’t have to report the income. You don’t have to put
it on your tax return, so it’s great, you don’t
have to do depreciation, you don’t have to do any of that, and the corporation just expenses it. It’s probably one of the best
tax deductions out there. Yes, how can I rent my house,
you enter into an agreement. I would not do it under a long-term. I would not do it on a
month-to-month, or a yearly lease, it just doesn’t make it any sense. So I would not rent your
house to a corporation, unless you’re doing it for
like a monthly meeting, and then it has to be 14 days, or less. – [Jeff] And going back
to what we talked about, about the depreciation recapture and 121. If you have to start
depreciating your home, and you have a gain
when you sell the house, that depreciation captured is not eligible for that $500,000 exclusion.
– Yup. – [Jeff] You have to pay tax on it. – [Toby] That 121 exclusion
is only on capital gains. It’s not your cap, it’s not your… Yeah, so you still have the 125, excuse me, the 25%, what
is the section for that? It’s–
– 1250. – [Toby] 1250, all right. Too many numbers rolling through my head. All right, guys. A lotta really good questions. Feel free to ask, or ask more. This is the 2FER Tuesday,
I’ve thrown this at you guys a few weeks, I’m just gonna
go over it real briefly. You can do all the Tax-Wise
Workshops this year. You get two tickets to a Tax
& Asset Protection Workshop, that we have here in Vegas,
and other parts of the country, you’re gonna gonna get
two tickets to that. You’re gonna get an Tax
& Asset Protection Book for real estate investors,
a three-part video series, and a strategy session. Plus, you’re gonna get all
the live-stream recordings of all of our Tax-Wise Workshops, including the one coming
up in November, for $197. Feel free to, to just email,
and I think there might be a link to it somewhere. But you just say, hey, I want
the Tax-Wise and Bulletproof, the 2FER Tuesday offer. There’s some sort of link somewhere, we’ll shoot it out to ya. Podcast, feel free to
jump on, and it’s free to listen to the last Tax Tuesdays, plus we put a lot of other stuff out. I do podcasts with people, just
did one really cool with a, with a trader who does a
lot of futures trading. And I just love talking to these guys, to see what, you know,
what makes ’em tick. I did one today. Somebody says, I got a couple
more questions come in, which we’ll answer here before we’re done. You can go to Google Play, it’s free. And then, the replays are
in your platinum portal. And, of course, feel free to
follow us on social media, AndersonAdvisors.com/facebook,
AndersonAdvisors.com/youtube. You can jump on in there. And then, you ask your
questions, go to, yeah, just submit it, it’s
[email protected] All right, a couple more questions. What is the best way to reduce taxes on a large gain after a house flip? So, Cassandra, if you did it in your name, all of that is ordinary income, subject to your ordinary tax brackets
plus social security, which is old-age, death,
and survivors, and Medicare. That’s 15.3%, plus your
federal tax, plus your state. So hopefully, you did
this through a corporation of some sort, so we can
try to minimize your tax. If you did it through a corporation, then we’re going to try to expense the living night out of it. I don’t even know how to say it, living night, that sounds weird. – Daylights?
– Daylights, there we go. Daylights, we’re gonna the opposite. Somebody says, I listen to your podcast when I’m on the treadmill. See, that’s what I like to think about, people out there listening to this stuff while they’re sweating. Jeff, they’re listening to
you while they’re sweating. – [Jeff] Well, I’m not
sweating, that’s for sure. – [Toby] Sweating out beer. This is our Minnesota
Chris, I just know it. Or vodka, they’re sweating out the vodka. I had a buddy come over and he met with a bunch of businesses. And they sell marijuana
here, it’s all legal. So he was in this room with these guys. He comes back, and he is, he
goes over to his doctor buddy who yells at him and says,
“You’re sweating out weed.” Like, he goes, “I didn’t smoke any.” He was like, “You’re around
it, like, these guys.” – [Jeff] Ohhh. – [Toby] Yeah, I was just laughing at him. I go, “Sure, whatever.” You’re like Clinton, never inhale, right? (person laughing) So the best way to reduce
tax after a house flip, is to make sure it’s not you, and to, there’s a lot of deductions,
280A, accountable plan, equipment, all sorts of
things, setup your family. Medical reimbursement,
there’s so many different ways to write things off that we
will use on your house flip, if we can just get it into an entity. Can I do partial in-kind
distribution from an IRA LLC, (garbles words), and I’d like to… Oh, yeah, so he’s doing… Yes, you can. So if you have an IRA
LLC, and you’re doing, and that’s all it is, there’s no cash, and you have to do required
minimum distributions. Or you’re just trying
to use up some losses, and then you’re gonna
take partial ownership. And it’s not illegal to
co-own property in a, in an IRA, but you cannot (garbles word), you cannot contribute
to it, nor can you use your personal labor to
increase the value of it. So no working on that. But you would talk to your IRA
custodian, they’ll make sure you don’t step on any
land mines there, Jorge. But, yes, you can. Because sometimes you
don’t have cash in it. – [Jeff] Right. – [Toby] That being said, we went, we’re right at an hour and a half. Exactly what we anticipated.
– Absolutely. – We said–
– Right on schedule. – [Toby] Yeah, right on schedule. Sorry, we always go a little over. We’re gonna do an hour one of these days. Before I forget, I’m gonna
go back to that screen. Let me see if I can actually do it. Ahh, I want to go to
the screen that had the, the webinar, there we go, Aba.link.CSW. Next week, come on in. And do you need an LLC
to close in a land trust? You probably would, but you could use the social security number of the individual instead, Brandon. Yeah, somebody says, no you’re
not, could you please explain the pros and cons of New
Mexico versus Wyoming entities? Yeah, Wyoming’s pretty good,
but, New Mexico is okay. Wyoming is a absolute sole
remedy state, much like Nevada, where they cannot
foreclose on your interest. So New Mexico is not
bad, it’s right up there, but Wyoming is just a little bit better. In New Mexico, I think
you only have to pay once, so it’s cheaper. It’s always a weighing test,
I tend to go to Wyoming, just because it’s 50 bucks a year. And then somebody says,
what’s your email again. [email protected] And we’ll send you a
follow-up email, I’m sure, where you can, you can ask your questions. Go to the aba.link/CSW, and
register, and join us next week. We’ll record it, so you can,
we’ll still send it to you, but it should be lots and lots of fun. I love doing cast studies,
and I love doing case studies with really smart people. And accountants qualify
as really smart people. Even Jeff. (person chuckles) Come on, Jeff, you’re wicked smart. And then, so this is fun,
going over this stuff where people are crunching numbers. I just love digging into it.
– Yeah, if you’re interested in cost savings, you
really need to attend this. I was really impressed with Eric. – [Toby] Yeah, Eric’s come in
and he trains our staff, too. So he comes in and, there’s nothing better than sitting in room
with 20 or 30 accountants and people live-stream,
and then ask you questions. – [Jeff] Well, it’s a lively party. – [Toby] It’s, yeah, I
didn’t hear anything. (person laughing) It’s like a pin would
drop, you guys are all, there was numbers on the board,
so they were all entranced. Look at those numbers, those
are really cool numbers! – [Jeff] Oh, my gosh, he color-coded ’em! (people laughing) – [Toby] All right, guys,
so join us for next week. If nothing else, I’ll see you on the next Tax Tuesday in two weeks. But this special event’s next week, and it’ll be a lot of fun,
so join us and support us, and let Eric know that you
care, right? (chuckles) – Right.
– Lay a little guilt on it. Let Eric know that you actually
care about accountants, and you love cost seg. Until next time, though,
this is Toby and… – [Jeff] Jeff Webb, and see you next time. – [Toby] All right, guys, thanks. (upbeat music)

Leave a Reply

Your email address will not be published. Required fields are marked *