Anderson Business Advisors Podcast AndersonAdvisors.com

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

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

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

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

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

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