Are you a real estate professional? Then, how do you avoid an IRS audit? Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- Do you pay tax on discrimination judgment? If so, how much percentage? What qualifies as non-taxable income? Usually, pain and suffering are non-taxable and then compensatory judgments where they’re paying you for lost wages is always taxable because your wages would have been taxable.
- Are solar credits available for the installation of solar panels and equipment on an RV or travel trailer? What if the RV or travel trailer is used to live in for a substantial part of the year? You can put solar panels on your main home and second home. Your RV could qualify to be your second home as long as it has a bathroom, kitchen, and sleeping area.
- We plan to claim qualified real estate professional status for my unemployed wife this year. We have been maintaining records, and she has been using a separate phone and email to track all her real estate efforts. We live in New Jersey, and if we get audited for this, what will the IRS likely ask for, and how many years back? Forget about the phone and its deductibility and the email. Instead, keep good logs of her time spent to meet the various tests for real estate professional status. You may be asked about any contemporaneous records and numbers. If you are a real estate professional and you’re accelerating depreciation, you’ll need your cost seg report and records of your purchase and improvements. It is unlikely that you will be audited.
For all questions/answers discussed, sign up to be a Platinum member to view the replay!
Go to iTunes to leave a review of the Tax Tuesday podcast.
Resources:
Homeowner’s Guide to the Federal Tax Credit for Solar
26 U.S. Code § 45L – New energy efficient home credit
Inflation Reduction Act of 2022
Real Estate Professional Status
Anderson Business Advisors on YouTube
Anderson Business Advisors on Facebook
Anderson Business Advisors Podcast
Full Episode Transcript:
Toby: All right, we’re on.
Jeff: You missed some good stuff.
Toby: I was just making fun of Jeff’s shirt because it looks like, on my screen, doing all sorts of crazy stuff which is exciting. But that’s not why you guys are here. You are here for Tax Tuesdays. Come for the Tax Tuesday, and stay for the hilarious commentary.
All right. Bringing tax knowledge to the masses. We are going to answer your tax questions live today. Hopefully, there are a bunch out there, and hopefully, we’re able to answer all of your questions. Speaking of answering questions, here we go. I just made my screen show the right thing.
You can ask questions via chat. You can ask questions via email. Somebody also says it’s Taco Tuesday in their neck of the woods. Hopefully, we get Taco Tuesday here tonight.
All right, so we have a chat feature where we have a bunch of wonderful accountants and tax attorneys that will be answering your questions. I can see Eliot, Troy, and Dana. Is there a bunch of others hiding? Because usually there are a bunch of others hiding on here. Let me see if I can make the screen go up. You guys have to bear with me as I play with technology.
Let’s see, Dutch, Paio, Troy is on, Ian’s on, Eliot’s on. It’s not showing all their images to me, but I can certainly see them now, and Cristos. You guys have a whole bunch of accountants that are helping you and you can ask your questions via the Q&A. Somebody just went right on and started asking questions in the chat. You can absolutely ask any question you want in the Q&A, and they will answer it.
If you have comments, put them in the chat. Right now I’m going to ask you guys, where are you at in the world? You say what city and what state. We have Houston, Texas. We have hi from Wasilla, Round Rock, Texas; Palo Alto, California; El Paso, Texas; Albuquerque, New Mexico; Bronx, New York; Carmel, California; Newton, Georgia.
Now they’re flying too fast. Kauai in Hawaii, which is awesome. Beautiful. It’s where I got married, actually. Austin, Texas; West Virginia; Greensboro, North Carolina; Dallas; Atlanta; St. Croix; US Virgin Islands—nice, the Woodlands, Texas; just a little north of Houston; Fort Myers, and then more stuff.
We have, “Aloha. I’m looking for syndication with cost seg. I want to find out if it makes sense to use this to offset my payroll to fund my Solo 401(k).” Great question, Kathleen. Throw it in the question and answer and we can certainly help you.
There’s Long Beach, California. I was just there this weekend. I spoke at a conference on one of those days, maybe Friday, maybe it was Friday. It was basically a residence for the elderly folks there, so it was very cool.
O’ahu, Orange, New Jersey, Michigan, Sacramento, Washington, DC. We’ll leave it there. Washington, DC is infamous because we just passed the Inflation Reduction Act which is a set of laws that I don’t know if they have anything to do with inflation. I was worried that inflation was going to go down and now they’re fixing that. Actually, in the Inflation Act, they mistakenly put in the reduction. No, maybe it’ll do something. Who knows? It’s politicians.
All right, let’s dive in. I’m going to read out the questions we’re going to answer today plus you could ask a whole bunch more. These are the questions we’re going to answer live. By the way, this is Jeff Webb, tax director, and CPA, and he has to endure my shenanigans all day.
He’s mad at me because I said his shirt looks like a science experiment. On my screen, it’s doing all sorts of crazy colors. On that screen, it looks really nice, but on that one, it looks like acid, like somebody’s doing acid in your shirt.
Jeff: At least on that one they can’t tell if I got anything on my shirt from lunch.
Toby: We weren’t going to say anything. Apparently, Jeff has an eating disorder where he dumps things on his shirt. All right, but we won’t say anything because you can’t see it. You can’t see it.
All right. “Do you pay tax on discrimination judgment? If so, how much percentage? What qualifies as nontaxable income? Good question.
“Are solar credits available for the installation of solar panels and equipment on an RV or travel trailer? What if the RV or travel trailer is used to live in for a substantial part of the year?”
“Is it better for a trust to sell stock and pay tax on any capital gains before making distributions to beneficiaries, or should its assets be distributed as stock and let the beneficiaries decide whether to sell the stock?”
These are all good questions that we got. Hopefully, you know the answers to these questions, Jeff. I’m going to be rolling zeros today.
“We have an active Nevada S-Corp since 2007. We’ve always used a portion of our home as offices to write off about 25% of the utilities. We are thinking of paying off our home and transferring the title to our S-Corp to use thiS-Corporate housing. Is this doable?” Interesting.
“Could you please explain in section 45L of the tax code. Do home buyers qualify for the credit for the tax code? It shows that we need to be involved in the construction. Just being a home buyer does not qualify for the credit?” We’ll go through that. That actually got affected by the new tax laws, so that actually got pushed out a little bit. They extended it and increased it so you can actually get more credit if you know what you’re doing.
“I own syndication investments A, B, and C. Investment A is sold as a profit. Can the suspended passive losses from prior years from all three investments be used to offset the capital gain profit for the sale? Or only the suspended passive losses of investment A can be used to offset the capital gain on the sale of investment A?” I know this is going to be confusing. We’re going to break it down. “If possible, may I please have an IRS reference to show my CPA?”
Yes, we will dissect that for you. I know it gets complicated, but the good news is we have an expert sitting right next to me who’s really good at this stuff.
“If earnings in any quarter are under $600, do you have to pay the taxes in that quarter, or could you pay them when you file your income tax return? I have only had a small amount of income that I would be responsible for paying the taxes. I’ve been a W-2 employee for most of the year.”
We’ll get over that. We’re getting into quarterly taxes. Exactly what everybody wanted to do today. […], woke up and said, gosh, I hope I get to talk about quarterly taxes. We’re your answer.
“I have a likely sale of an REO,” real estate owned. Usually, it’s bank owned, which is weird that they’re saying that. Maybe they have debt on it or something. Is that what you’re thinking?
Jeff: Yeah. I didn’t quite follow how it would be real estate owned unless they bought it from a bank.
Toby: That’s what I was wondering, but we’ll find out. If you’re out there, whoever wrote this question, maybe stick around so we could ask you questions via chat.
“I have a likely sale of an REO for $640,000 that will create about $500,000 capital gain and $40,000 of depreciation recapture.” They got it really cheap, selling it for a lot. “I would like your input on my options: pay taxes now, opportunity zone fund, 1031, DST, then a REIT, or any other ideas. I’m 65 and looking into more passive investments.” Great questions. We’ll get there.
“We plan on claiming qualified real estate professional status for my unemployed wife this year. We have been maintaining records and she has been using a separate phone and an email to track all of her real estate efforts. We live in New Jersey and if we get audited for this, what will they likely ask for? How many years back?” Good questions.
“If the funds from a self-directed IRA are invested in the multi-family program and the program has,” it sounds like syndication, so you say program, “a loan of 70%, is there a tax liability for the gain? What is the tax rate?” Really good questions and we’re going to have some fun with it.
But before we go there, as always, this is just mind food. We’ve been doing this for years. We have tons and tons of videos on our YouTube. If you go to our YouTube channel, which is the aba.link/youtube, you can absolutely just click the little signup button, subscribe, and then every time videos comes out, which is usually twice or three times a week, especially now because the tax act. We’re going to be dissecting it over the next few weeks. There you go. You can see my smiling face. Get out there and you could always go to the Tax Tuesdays on YouTube. There are also just tons and tons of videos. All of our Tax Tuesdays we make it to videos.
All right, let’s go in. “Do you pay tax on a discrimination judgment? If so, how much percentage? What qualifies as nontaxable income?”
Jeff: Usually for settlements and lawsuits, what qualifies as nontaxable fall into two categories First one is medically related, including personal injury and so forth. The other one is emotional duress. Neither is subject to nontaxable income.
Discrimination judgments will almost always fall into a taxable category because it either has to do with employment, or housing, or something like that where the IRS has determined you are receiving money outside of any injuries you may have had.
Toby: I would say that I’m just going to second what you’re saying. Pain and suffering are usually nontaxable. Then compensatory judgments, where they’re paying you for lost wages, that’s always taxable because your wages would have been taxable.
The only place you really get a break is when you’re doing personal injury cases and you have pain and suffering. You’re not going to be paying tax on that, but if you have lost wages, if you’re being compensated because there’s discrimination, you are released, those would more likely be taxable.
You could always try. The IRS is not bound, but you can always try in your settlements to put in there that this was for the emotional distress that you suffered.
Jeff: Let me ask you this. I sue whoever for personal injury, pain, and suffering, and I’m also awarded a punitive.
Toby: Punitive are almost always taxed.
Jeff: That’s what I thought.
Toby: Punitive, they want to be compensated. Let’s see. We usually have a good lawyer, too, out there. Do we have any PI lawyers in the audience right now? Then how do you guys usually spell it out? What do you guys usually tell your clients?
There’s almost always one or two floating around out there. Even though we harass them, we love them. What do you guys do? Do you guys do anything as a matter of course in your settlement? Let’s see if anybody responds if you are a personal injury attorney, which we may not make them feel very welcome here, Jeff. This is all a tax. We’re not doing the tax and asset protection stuff, but it doesn’t appear anybody is doing that.
Jeff: The other thing I see, Toby, is when you do have a taxable settlement and of course, some part of that is going to go to your attorney. It seems to depend on what circuit you’re in on how that gets treated. Some circuits say that, oh, that’s not income to you if the attorney received it. Another says, no, it is income to you.
Toby: When the attorney receives it, it’s always going to be income that you paid to the attorney. Almost always. They’re going to try to play games with it. It’s not a circuit issue, it’s the IRS. It goes down to miscellaneous itemized deductions. We don’t have them anymore so when you pay the lawyer, it’s not going to be.
Jeff: If I get a $100,000 settlement, $30,000 of that goes to my attorney. I’m going to be taxed on the whole $100,000?
Toby: Yes, and that’s the problem, especially with a personal injury right now where the percentage that you’re paying the lawyer can be as high as 50%. You do get some money to cover some of your medical expenses and things like that and you’re paying the lawyer and you’re going to have a little bit of money left over, then you realize you’re paying a big tax bill on top of it. That’s happened to a few people.
I know that there are attorneys trying to get around it, but again, the IRS is not bound by the agreements that you enter into with clients. What they’re going to say is this compensation for services rendered? If so, they’re going to say, then you paid it to the client and that’s one of my problems with contingency fees, is that it’s turning into unjust results because the client rarely gets made whole. When all that’s said and done, they just get this huge burden.
The lawyers are only paying tax on what they receive, so they’re okay. It’s just that you can’t write off any portion that you paid them. Not since 2017, which is for us 2018. All right, we beat that one.
This is an interesting one. I don’t know the answer at the top of my head, so hopefully, you do. “Are solar credits available for the installation of solar panels and equipment on an RV or travel trailer?”
Jeff: When I read this one, I thought this was the stupidest question. Then I started looking into it and here’s what happened. For solar panels, you can put them on your main home and put them on your second home. What in turn happens is your RV could qualify to be your second home. If you don’t have another second home, you could call your RV your second home. We already know that.
Toby: As long as?
Jeff: As long as it has a bathroom, a kitchen, and a sleeping area.
Toby: Even your boat can qualify.
Jeff: Even your boat can qualify. We already knew this because that rule applied for deducting mortgage interest on your RV. I just didn’t think that far ahead that it could apply to solar also.
Toby: If you could make it into a second home and use it as a residence, which means you don’t have to spend a substantial time in it except to use it as something where you stay, that’s pretty funny. Right now I think I just went up to 30% now. It’s 26%, but I believe this Inflation Reduction Act change that back to 30%.
Jeff: I know I shouldn’t have claimed that credit last year.
Toby: Yes, you have to take a little peeky–peek. Somebody says, “Can you make an RV a first home if you are a renter?” If I’m renting from somebody else, unless you’re renting the RV and that’s where you live, they’ll look and say where do you reside?
It’s always facts and circumstances on these things. A lot of people think, hey, I can just say this is my primary residence or this is my principal residence, it’s not that easy. They’re always going to say, what do you spend the most of your time on?
Somebody says—just real quick because it’s in the Q and A and I apologize, guys, I’m reading three different screens, but if I see something that’s relevant, sometimes I just respond—“How does the solar deduction work? A tax grant or discount?”
In the market, actually, it’s a tax credit. If I spend $20,000 on installing solar, paying for panels and the installation, I literally get a tax credit, not a deduction, a tax credit of $6000. It was just $5200, but I believe as of today, as in like a couple of hours ago, the president signed the Inflation Reduction Act that went back up to 30%, I believe—don’t quote me on it, but I’m pretty sure, as in 90% because they kept saying they were going to increase it, go back to where it was—which means that’s just offset your tax bill.
Now it’s not a refundable credit so I don’t think you get, hey, if I only owe $5000 taxes, the government is not going to send you a check for $1000, but I think you’re not going to lose it.
Jeff: The solar credit, we talk about being mostly for I put solar panels on my house, so I get a credit for it. It also applies to getting a storage battery for my solar. It’s in a separate year, but the credit still applies to that.
Toby: Now, you guys want to know something really twisted? If you’re a landlord and you put it on, if you fall under a different section, not only do you get the tax credit, but then you get to write off. You take half of the tax credit and subtract it from your basis and then you get to write that off. You can get bonus depreciation.
Jeff: You pay $20,000 for the solar. You took a $6000 credit, you’re telling me you can depreciate how much?
Toby: $17,000.
Jeff: That’s crazy.
Toby: Yeah, it is crazy. You can do it. So what you do is you get a $6000 tax credit. You get 50% of that amount subtracted from your basis. Your basis is what you paid to put it up there. It’s $20,000, subtract the half of the tax credit you took so $17,000. Because it has a useful life of less than 20 years, you can accelerate the depreciation into this year, write off the rest of it, even if you’re financing it.
They’re trying to give you many incentives to put alternative energy sources on and it’s whether you do it as a landlord. I haven’t done it myself because I always think of one more thing that can get destroyed on my property or disappear. No offense, but it’s just sometimes you don’t know what’s going to stay in your home when you have little houses.
If you haven’t had that joy of having your house stripped, well, it’s just a matter of time. You want to make sure that you have made good decisions and really what you’re doing is you’re doing something for the tenant because the house now is energy neutral.
“Has bonus depreciation been extended this year with the new inflation act?” No, but still it’s 100% this year, it’s 80% next year, and 60% the year after. I don’t think they did. I should just say that. “Shame, he should have solar. They’re very terrible.”
All right, let’s keep going. “Is it better for a trust to sell stock and pay tax on any capital gains before making distributions to beneficiaries, or should the assets be distributed as stock and let the beneficiaries decide whether to sell the stock?”
Jeff: I have to think about this for a little bit. We’re talking about irrevocable trust, which includes the estates, and I have a different answer for that. If it’s estate, once you distribute that asset, it’s going to get the basis of the trust, which has already been stepped up.
Toby: If you’re assuming that somebody died.
Jeff: Somebody died, when we’re talking estates.
Toby: Let’s back up just for one second. Jeff is saying this is an irrevocable trust that pays its own tax.
Jeff; It’s not your grantor trust or living trust.
Toby: So living trust, land trust, personal property trust, that’s not what we’re talking about here. Those ones, they’re ignored, it’s just you. It doesn’t make any difference.
Let’s just say grandma passed away. She had a bunch of stocks and she left them in trust for the benefit of some grandkids. This is basically saying hey, would we be better off just selling the stock and distributing the gain, probably the principle to the beneficiaries, or will we be better off just giving them the stocks?
Jeff: Here’s my thought in general for this question. I think you’re better off distributing the assets because they’re going to go from the trust to the beneficiaries at the exact same value. The reason I like distributing the assets rather than selling them is trusts have very slim brackets. You hit the higher brackets really quickly in a trust.
I would rather distribute them to, say I had set up a trust for one of my kids, distribute that money to hit them, and let them sell that in their tax bracket rather than possibly being at the highest tax brackets in the trust.
Toby: Whenever you have a trust, you’re looking at the distribution of income. If you have a simple trust, it requires distribution. It’s always taxable to the beneficiary unless you apply it. If it’s like a dividend, you can sometimes apply that and apply it to the corpus and not have a tax just on that.
On a complex trust where you can distribute principal and interest, which is almost all of the living trusts out there, you can do health, education, maintenance, and support. You can raise the principal, then you’re absolutely right. If you’re not going to distribute that income, if you’re not going to distribute the principal, then if there’s a taxable event, it’s going to be taxed at the insanely high trust percentage, which means over $13,000 would be taxed at 37%.
Jeff: Exactly.
Toby: It’s horrible.
Jeff: They do have a lower capital gain.
Toby: Lower capital, but you would be in the highest capital gains rate, so it gets pretty stinky. What you do is you just distribute the net income, and if that’s the case, then the trust pays no tax on it. If you want to give them the full-on, hey, I want to give you the principal and the income, then I don’t think it really makes a difference whether the trust sells it, or redistributes it, or you just distribute it ahead of time. Either way, that individual is going to be paying tax on those capital gains. All right. Did I miss any?
Jeff: No.
Toby: Somebody, by the way, was asking a question about hey, I just did a settlement and they’re realizing right now that out of $100,000 settlement, they got about $25,000 of it. Now they’re realizing, yeah, you’re probably going to have a taxable event. Sorry. Some of it is going to the medical provider. I don’t know how that works. I forget whether you’re having to deduct the medical expense. I don’t think so in that particular situation, but it depends on your settlement.
I think that you do have a taxable event, even on the lawyer getting paid. Again, I did a video on this once before. I may dig back into it just because there are people trying to find workarounds and it’s not good.
“We have had an active S-Corp since 2007. We’ve always used a portion of our home offices and write off about 25% of the utilities.” That sounds like it’s an administrative office in the home. This is different from a home office that you do if you were a sole proprietor, so do not confuse these two things.
The company is reimbursing you for the use of your home. You do not have to recognize that as income and it does pay everything from utilities to cleaners to property taxes and everything. It sounds like they’re using a portion of their house, a significant portion of their house, at least a quarter of it, and they’re reimbursing themselves for that. “We are thinking of paying off our home and transferring the title to our S-Corp to use it as corporate housing. Is this doable?” Jeff?
Jeff: I would not just transfer the title to start with. I would probably sell it to my S-Corporation for one reason, to use my 121 exclusion if I’ve lived there two out of the last five years. The other thing that I keep thinking about is we’re calling it corporate housing and I’m not sure what that means in this situation, because normally, once you transfer title to another entity, you can’t live there anymore.
Toby: Or if you do, you’re being taxed on the fair market value of the lease back to you. I don’t think I’d be doing that. I’m not a big fan of having corporations own property anyway, because you can be in a situation where you have to get stuck in there and you distribute it out to yourself. It can end up being treated as wages to you.
Jeff: I think the only reason I would do this is if I wanted it to become investment housing, whereas I’m renting out to people from unrelated parties.
Toby: What you can do is you do that. The only time I’m ever going to really transfer a house to an S-Corp is if I sell it to the S-Corp. To take advantage of Jeff talking about 121 exclusion, that’s called the capital gain exclusion on the sale of a principal residence that you lived in for two of the last five years.
If you know you’re going to keep it as a rental property and you have all this gain and you’re going to lose that step up, what you do is you sell it to an S-Corp on an installment note and elect out of the installment category. It makes all of that income taxable in the year you sell it. You use up your half a million dollars if you’re married with capital gain exclusion so you pay no tax. Now you have a nice high basis. S-Corp owns it, you rent it, and you just did yourself a huge favor.
If you’re not doing that, then I would say do not transfer this puppy into an S-Corp. You’re living there. There’s always going to be a taxable event for your living there and don’t use it as corporate housing. There’s no such thing. That’s a term used when somebody’s providing you with the benefit and the corporation owns it.
They should call it corporate-owned housing, in which case, you are now a tenant. If the corporation says, hey, Jeff, you can live in my house. There’s a taxable event for that. It’s the same way as if they said hey, Jeff, here’s a really nice car.
Jeff: That’s what they call taxable fringe benefit.
Toby: Absolutely. There you go, 100%. Is it doable? Yes. Is it something I would do? No. You’re writing off 25% anyway that you’re getting tax-free. Why would you care? You’re getting a huge benefit right now. Stop doing that. There, we made it clear.
All right. “Could you please explain the 45L tax code? Do home buyers qualify for this credit? For the tax code, it shows that we need to be involved in the construction. Just being a home buyer does not qualify for the credit.”
Jeff: Okay, I think they answered it. 45L is part of the code that was designed to get builders to build super-efficient homes and it is focused on two groups: home builders and multifamily developers. I don’t even think it applies to commercial property. Correct?
Toby: No. I believe it’s going to be residential property. I think there are three different levels that you can meet and I know that under the new tax act, under the Inflation Reduction Act, that there are new categories.
Jeff: The credit used to be $2000 per dwelling unit. If I build a four-family home that meets 45L, then I could get an $8000 credit.
Toby: Correct, but you can do it even if you don’t build it if you substantially improve it. You could actually gut it. We were just dealing with this yesterday in a 300-unit apartment building. They gutted the place, had no idea that the credits were floating around out there, and they did put in the most energy efficient, everything from appliances to the windows to you name it. They were looking at it going, what do we get? It looks like they’re going to get about $2000 per unit tax credit, so 300 units at $600,000 is pretty good. I’ll take that action.
Jeff: And again, it’s a tax credit, not a deduction.
Toby: You got it. It’s a tax credit, dollar for dollar. It’s not a deduction. It’s an overlooked area because they kept letting it expire. When I say they, it’s Congress. They even let it expire last year, and then they just reawakened it.
It’s now a $2500 tax credit at a minimum, going up to $5000 if I’m not mistaken. Again, that law was just signed a few hours ago. We haven’t really had a chance to dissect it, but I know it’s in there because I looked at it earlier today and I was like, oh, there’s the final bill and I just typed in 45L. There, it’s sitting.
We’ll see what else they did. I know that they did cars, the $7500, and they did the tax credit, and there are lots of other energy efficiency stuff that they’re throwing in there. Let’s keep going. This is a fun one and I know you enjoy this.
“Would new construction count?” Yes, Tommy. Construction, absolutely, and then remodel where you’re doing substantial improvement to the property. Substantial, I believe is the term they use that you could qualify for.
You have to have an engineer look at the property and qualify you for the credit. You do pay an engineer to come out and say, hey, you made all these things energy efficient. I believe there’s A, B, and C or one, two, and three. There are different levels and you have to hit it. It’s not hard to hit the first level to qualify, so it could be pretty beneficial.
“I own syndication investments A, B, and C,” so they own three syndications, “Investment A is sold at a profit.” They sell their first syndication and they make money. “Can the suspended passive losses from prior years of all three investments be used to offset the gain of this sale?”
I’m just going to say time out right there. Let’s set the table on this. They own three investments. It sounds like real estate. In real estate, we like to accelerate depreciation, especially if you’re in charge of the project.
If you’re one of the general partners, or your real estate professional, or you just want lots and lots of passive loss, you can accelerate and then end up with this big passive loss. If you’re an investor, chances are you can’t use that passive loss on anything because you don’t have a bunch of other passive income.
You’re sitting there going crap and you’re not a real estate professional, so you can’t write it off against your other income. You end up carrying forward passive losses. That’s what they’re talking about when they say we have suspended passive losses from prior years on all three investments.
It’s probably something like apartment complexes, medical facilities, surgical centers, you name it, warehousing, whatever, and they have these losses that are floating and now they just sold one at a gain. What does it do to that passive loss that they’ve been carrying forward on A, B, and C? There are three units, they just sold one. What happens to that passive loss?
Jeff: Like Toby said, we have passive losses in A we have passive losses in b, and passive losses in C. We sell investment A. We know they’re not real estate professionals because they have passive losses.
First thing that happens is as soon as they sell an investment A, all the passive losses under A become nonpassive. They’re freed up, they can be used. What the reg says is any gain from the sale of investment A takes on the same character as it was when it was an investment, meaning the gain is passive.
If you’re having a hard time wrapping your head around that, I understand. It’s the one time we talk about a passive gain. Why that’s important is that passive gain can be used to offset other passive losses. I freed up my passive losses in A. I’ve got this capital gain, but I can use that capital gain to apply against my losses in B and C. It unlocks them up to the amount of my capital gain from the sale of A.
Toby: Because it’s passive capital gain. You have passive gain and then you can use your passive loss carry forward against it. Whether or not that gain is passive at all on the first one is immaterial for that particular one. But there’s one exception here, guys, where we can mess this whole thing up. If you’re aggregating all your properties together as one property, then there is no A, B, or C.
The only reason you’d be aggregating your property is if you’re trying to be a real estate professional and you don’t qualify. If you elect, to treat all of your investments as one activity, then there is no A, B, and C. There’s one economic unit. In order to unlock the passive loss, at that point, you would have to substantially liquidate all three assets.
Jeff: This is something that we talk about occasionally, that I’ve had these rental properties, or in this case, I’ve had these syndications for a couple of years and I want to get into some other properties and I declare myself a real estate professional. When you do that, what ends up happening is you lock up all those other passive losses from the past end with your new properties, because when you do this aggregation (as we call it)—you’re basically putting all your properties together—you have to aggregate all of your real estate, even your syndicated properties.
You have to be real careful when you’re doing that real estate, professionally. You need to go in and look to see if you have any suspended losses that may affect what you’re doing.
Toby: I have to respond to one thing. I’m looking up in the chat. Personal injury case, settled. There’s money that has gone out to a lawyer and they’re saying, oh, shoot, remember what we said earlier? That pain and suffering is not taxable, whatever you have a lawsuit, unless it’s all pain and suffering. Hey, I suffered from some injury.
I guess there’s a possibility that the IRS would allow you to allocate it all towards pain and suffering. I doubt it. I think a lot of it would say, how much work did you lose? Hey, I wasn’t able to work for three weeks or whatever it really caused me.
That’s going to be taxable to you, I’m sorry. Even if you call it pain and suffering, the IRS is not bound by your agreements. They do this in lawsuits. They do this in the sale of companies when somebody is trying to allocate it all to a particular class of asset and they go through and they look at it.
I don’t mean to freak you out, but that’s why you get an accountant to take a look at it before you sign whatever it is you’re signing. When you’re settling things, you should actually have an idea. I know it just became a little bit. It’s bad enough that you got that, Anthony.
Happy to take a look at it, by the way. I’d be happy to take a look at it for you just to see if there’s anything that you need to be aware of. Usually, you could tell depending on what type of damages you had and what type you claimed. I’d probably be able to tell just off of a demand letter is what you’re guys looking for.
Jeff: We’re not trying to create more pain and suffering.
Toby: No. Gosh, they get kicked in the shin. Out here, these people go for large amounts and most of it ends up actually being in a taxable category, from my experience, and the IRS is certainly going to argue that. Hopefully, you’ll never get audited. Hopefully, you’re able to get made whole and you’re able to get a good settlement. But boy, the attorneys take a big chunk.
Let’s jump into something else here. The first time we were doing a live event for a long time, and when I say live in-person for Anderson, we’re doing a live event in December. It’s actually going to have an extra day.
If you’re interested in the investing side, if you want to learn about real estate investments, we bring in and we work on the Infinity on the 1st and then the Tax and Asset protection, and is going to be on the 2nd through the 4th. That’s going to be a live event here in Las Vegas. We’ll see where we’re going to put it.
We already had a whole bunch of people register on the first day, which was yesterday, so we made people aware of it. They’ll probably send you a link. If you want to come out, it’s really inexpensive. I’ll let you figure that out. I don’t even know how much. It’s maybe $100 or something. It’s pretty low. I’ll let you guys look.
There are three different levels. If you’re Titanium, I know that there’s no cost. If you’re Platinum, there’s a small cost. If you’re not a client, there’s a small cost. You just reach on out and we’ll make sure that we take care of you.
If you can’t wait till December and you’re willing to do the online stuff—apparently you are because you’re on a Tax Tuesday—we do a Tax and Asset Protection event about every other weekend. Clint does a fantastic job on the asset protection and I do the tax.
Patty, you have to tell me what the costs are. Tell everybody what the costs are. I don’t know what the costs are. I know that it’s something. Somebody says the Platinum cost was $199. It might be. It’s pretty low. You get to come to Vegas, you get to hang out, we’ll all get together, and start doing these wonderful live events again, which we used to do all the time, and then COVID came along. We’ll get back out there and keep doing them.
Jeff: First thing I thought was hang out in Vegas in December where it might be cold where you live.
Toby: Yeah. Coming out to Vegas, we do get a little chilly here. But it’s sunny and the casinos will keep you warm. It really get hot.
“If you’ve done cost segregation analysis on new construction without analysis qualify for the 45L.”
A little bit different. “Pre-registration is $199 just gone down from $599.” All right. Is that for the regular pricing, Patty? What if somebody is Platinum? Is that it? That’s the regular? They get a special if they’re Titanium? You got to walk me through this, I’m dense. I know that they’ll give you a really good one.
Maybe a group discount on the hotel. I imagine we will once we figure out where we’re going to put it. I know they have a few venues right now, just depends on how many people pre-register. If it’s 400 people, we’re one facility. If it’s 200 or less, then it’s some place else.
Cool. Platinum is $99. If you’re Platinum, it’s $99 until September 5th. What are we in today? You get two or three weeks. Fantastic. All right, enough with this nonsense.
Jeff: In regards to the cost seg and the 45L, a lot of these companies who do the cost seg will also do the 45L. So talk to them about it and they will do the 45L study for you in a lot of cases. I believe Cost Seg Authority does, I know KBKG does and some of the other places.
Toby: Mostly if you’re a specialist in cost seg, you’re a specialist on the tax credits too because they’re the same engineers. I imagine that if they did a cost seg analysis on your property that it’s not going to be remarkably different. They’ve already visited the property, they know it’s in there. Now we’re just looking to see what the energy efficiency is. It’s a different analysis but they’ve already been in the property.
Then somebody says, “Does the December 1st, is that included in the $199?” Yes. You get to come. Basically it could be a four-day event for $199. If you’re Titanium, I think it’s free. Don’t want to speak out of turn.
Anyway, the Tax and Asset Protection workshops that we do virtually are always free. Again, there’s one on August 27th and September 17th. My partner Clint does really good job of breaking down the asset protection. I do an okay job doing the tax. That’s why I have to have Tax Tuesdays so we could fix it.
Here we go. “If earnings in any quarter under $600, do you have to pay the taxes in that quarter or can you pay them when you file your income tax return? I only have had a small amount of income that I would be responsible for paying the taxes. I’ve been a W-2 employee for most of the year.” Jeffrey?
Jeff: I’ll try not to make this too long. We’re talking about quarterly estimated tax payments. What it basically says is if you have more than $1000 of tax than you did in the previous year, you should be paying these estimated taxes. If we’re talking simply about $600, you can pay it with the turn. Your tax is going to be very low, less than $300, $200 and so forth. Many people decide not to pay the estimates. They’re just going to pay on April 15th, and they’re willing to pay that estimated tax penalty. It’s not really substantial.
Toby: You’re not doing any quarterly taxes, unless you really expect to have a tax bill of more than $1000, right?
Jeff: Correct.
Toby: You’d have to have $15,000–$20,000 worth of income because you have $12,000 right after standard deduction.
Jeff: Here’s what I do in that case. If I’m working my same W-2 job but now I have $20,000, I’m making estimated payments just so I can get the money paid in and I don’t forget about it. I get to the end of the year and I don’t have that much.
Toby: Because you’re an accountant. Let’s talk about real people. Because I’m one of those annoying real people that doesn’t like to pay in. Do I have to pay in? If I know I’m on my business, I’m probably not going to owe anything.
Jeff: Let’s talk about Safe Harbor first. If I pay an enough tax, say through W-2 withholding, it’s I owed him the previous year.
Toby: You don’t have to worry about it.
Jeff: You don’t have to worry about it.
Toby: Time out, time out, time out.
Jeff: I know what you’re […].
Toby: If you are here, this person is, and they’re worried about quarterlies, I would say stop worrying because it has nothing to do with $600. That’s whether or not somebody has their 1099 you. What we care about is, are you going to owe money of at least $1000 if you pay the same amount that you paid last year, you don’t expect to owe anything else. The answer is no, you don’t have to do quarterlies.
But if you’re Jeff and you have a side gig and you’re going to make an extra $20,000, and you know that you’re in the 24% tax bracket, you’re going to owe about $5000. As long as you paid at least 100% of what you paid last year, you still don’t have a penalty on it, right?
Jeff: Right.
Toby: You have interest or no?
Jeff: No, you won’t even have an interest.
Toby: You just owe the tax and you would pay it in the first quarter.
Jeff: Right. Then we get to April 15th, and then you have to pay them everything you owe.
Toby: Yeah. The answer is, probably talk to somebody. Just an email, give us the facts and let somebody who’s looking at your scenario give you a response. If you’re Platinum, it’s free. Otherwise you’d have to be a tax client. But you could always reach out. We’ll answer this type of stuff all day long.
I wouldn’t be worrying about it if I’m you because I’m looking at it saying, you’d have to have a lot of earnings in order to make it taxable. As long as you’re paying what you did last year, who cares? You’re not going to get hit with any penalty. You might have to owe something.
Somebody said, “Hey Toby,” I think they were yelling at Patty, the Live 22 is for everybody if you’re a Platinum. I think they have a special link for the Platinum. If you’re Platinum, just ask Patty in the chat for the link. I think it’s Live 22 Platinum. Knowing my crew, that’s probably what they’ll do.
Here’s an interesting question. “Does paying quarterly taxes reduce your chance of audit?”
Jeff: No, it has nothing to do with that.
Toby: Yup. All right. “I have a likely sale of a REO,” real estate owned, usually that means by a bank, but it sounds like it’s them. Maybe they bought the mortgage, maybe they bought a foreclosure, whatever, “for $640,000 that will create about $500,000,” and they have $40,000 of depreciation recapture. “I would like your input on my options. Pay taxes now, opportunity zone fund, 1031, deferred sales trust, then a REIT, or any other ideas? I’m 65. I’m looking for more passive investments.”
Jeff: I’m going to base my answer on your very last sentence that you’re looking for more passive investments. Frankly, I’m not a huge fan of the qualified opportunity zones, especially as I get older.
Toby: It’s going to defer until 2026.
Jeff: And I got to throw more money at it. I do like the 1031, but actually at this point if I want more passive investments and want to have to do less work on them, I’m doing that DST to a REIT. Whatever we call it.
Toby: A REIT, real estate investment trust.
Jeff: I feel like that’s my go-to and for a couple of reasons.
Toby: Are you doing a deferred sales trust?
Jeff: No, Delaware statutory trust.
Toby: Can you do a publicly traded REIT with those?
Jeff: Yeah. I could actually sell my property to the REIT and exchange, get a share of that REIT’s entire portfolio. That’s one of the things I like about it. Now, I’m not just investing in one property like I would if I have 1031. I’m investing in a portfolio of real estate.
Toby: I’ve never done a Delaware statutory trust with the dock. They always treat you as though you won’t own the underlying real estate. That sounds like that would be good for somebody who’s just wanting to chillax and not do much.
Jeff: Exactly, and that’s kind of my thing.
Toby: Otherwise, you’re reallocating your property, you have a lot of gain and depreciation, and you’re old enough to where you might be thinking, hey, what do I want to do? I just want to come out of it. You might 1031 income-producing properties. You don’t have to buy just one property, you can buy four or five properties with that much.
Depending on which area of the country, but you might be going into where we invest in North Carolina and Kansas City, Ohio, Indianapolis, and some of these other pockets where you can go in and buy houses that are still pretty inexpensive and have nice cap rates. You could do that. You could do a 1031, or like Jeff said, a Delaware statutory trust. I don’t know anybody that I would recommend that do DSTs.
Jeff: I don’t either.
Toby: You just have to talk to your 1031 exchange facilitator and see if they’re tied in with DST. Some of those make me a little bit nervous because I’m losing control. C’est la vie. You might not particularly care.
Jeff: You can accomplish the same thing with the 1031 in multiple properties and just find a really good property manager.
Toby: Yeah. Somebody just said, “I just wanted to chillax and collect passive income, be it short-term rental and MTR.” I don’t know what MTR is. I’d have to Google it. But I’m sure it’s something that I should know. Midterm. What’s a midterm? Anyway, but yeah, you’re just sitting back letting stuff comes in.
Short-term rentals, a little more work than I like. I’ve had both. Boy, people are killing it in Airbnb, but to me there’s a lot of work.
Jeff: Can I throw up a word of caution about the short-term rentals? When you’re considering buying a property for short-term rental, please make sure that you can actually do the short-term rental. We have somebody who did one lot of property and the HOA said no.
Toby: A lot of HOA’s, states, and cities, like here we had a restriction, now they’re doing a lottery to let you be in the short-term rental game. But yeah, you do want to make sure that you could actually use it for your reason. But most HOAs, you can’t do 30 days or less. It doesn’t mean people don’t do it and then they get fined and they get into a battle with an HOA. You’re going to lose that battle. Sorry. You walked in and you signed an agreement. You bought a property subject to the HOA, even if you didn’t read it, courts are not really forgiving on that.
Jeff: A lot of HOAs are willing to throw a lot of money at minute matters.
Toby: But here’s one thing, I’m just going to say this of all the strategies that you could use for a high income person. If I am a doctor, dentist, lawyer, accountant, consultant, you’re a sales manager, somebody who’s making good money and it’s active money, one of the few ways where you could take an immediate deduction against it is if you buy a short-term rental and accelerate the depreciation into that year. You got to self manage it.
If we bought it now and we closed in September, you’re managing it yourself to the end of the year, but you could accelerate that depreciation, take a huge deduction that will offset your W-2 income. You don’t have to be a real estate professional if you’re doing short-term rental.
It’s one of those one areas where I always look at it going, man, buy something that’s an Airbnb, use it that way for the first year, and then make it into a long-term rental afterwards. Somebody did say Four Springs Capital for DST to REIT. Somebody who’s there is already throwing something up. We make no recommendations, but if somebody is willing to share that merrily, we will share that with everybody else. I don’t know Four Springs Capital, but you could actually look at them. At least one person is saying they’re good.
All right. “We plan on claiming qualified real estate professional status for my unemployed wife this year.” She’s not unemployed, she’s a real estate professional. The first thing we’re going to do is tweak your nose a little bit, right? “We have been maintaining records and she’s been using a separate phone and an email to track her real estate efforts. We live in New Jersey, and if we get audited for this, what will they likely ask for and how many years back?”
Jeff: Forget about the phone and its deductibility, and the email. What you really need to keep is good logs of her time spent to meet the various tests for real estate professional. We’re talking about two tests. The first one, she’s unemployed, so she’s going to be able to meet more than half her services, but she also has to have 750 hours in real estate activities.
Toby: Real estate trade or business.
Jeff: Real estate trade or business.
Toby: Not even investment activities. You got to be doing something. Wholesaling, managing the properties, getting your hands dirty on the rehab, at least be present and at least be supervising it. You can’t just be driving around looking for properties. That time does not count towards this first prong.
Jeff: Those hours all have to be hers. Now, in the second test, it’s are you materially participating in the real estate professional activities?
Toby: Your rental activities.
Jeff: Your rental activities. Those can be both her time and your time that you spend on those rental activities.
Toby: There are seven tests on that one. But the easiest one is if you’re there, if you’re self managing your stuff. If you have your own properties, all they’re looking for is logs of time.
Technically, there have been cases where they didn’t have logs. They weren’t kept contemporaneously. They came in but they found the person credible. There are also cases where they did not find the individual’s record keeping credible because they would say like I worked 8 hours this day and then after discovery, they found that they were out of the country during that time and they call a little bit of BS on you.
Just keep track of it. Use one of these little phone things that has a nice little calendar. Put the time that you worked and what you did and just make sure that it’s active trade or business versus investor activity. Investor activity does not count towards the first premise, 750 hours. But managing your Airbnb, managing your rental, doing rehabs, driving out, taking care of the property, supervising all that stuff does count.
I’ll tell you this. The only time that you will get education included in that is if it’s part of your profession. If you’re a realtor and you’re doing continuing education, or your construction and you’re learning things about part of your trade, then you can add that time in. But it is real estate trade or business.
We didn’t give a code provision for that. It’s actually the same as I’m about to give you now. It’s 469. The people that were doing the syndications, I’ll go all the way back to the syndication. There it is. That code provision is also 469. But you’re going to tell them to go look at the regs because the suspended passive losses and the release thereof is in the regs not in the code provision itself. But it’s 469, if you want to give that to your accountant. Same thing on this one. And what are they going to ask for? Any contemporaneous records and the numbers.
If you are taking your real estate professional and you’re accelerating your appreciation, you’re going to just have to have your cost seg report which is engineering study, the records of your purchase, and your records of your improvements to that property. It’s not horrific and the chances of you being audited are still fairly limited. And it’s not going to be New Jersey that’s asking for it. More than likely it’s going to be the feds.
All right. This is one of our friends like IRA Club Equity Trust, one of these companies that does self-directed IRAs. This is not your Schwab or anything like that, but let’s just say you have a self-directed IRA and you invest in a syndication that’s doing multifamily. That syndication levers up, which they all do, probably about 70%. Is there any tax liability for the gain? And it’s not just the gain. We’ll say on the income or any profit and on the gain. What say you, Jeff?
Jeff: This IRA could be subject to UDFI. I always forget what it is.
Toby: Unrelated Debt Financed Income.
Jeff: Okay. If you’re using debt financing to make money, they’re going to say part of that gain or income is disqualified from being tax exempt. It comes down simply you’re not allowed to leverage your IRAs. What happens? Please correct me if I’m wrong. If I make $1000 an income in a year and 70% of it is from loan money, 70% of my income is going to be taxed and it’s typically taxed at the highest trust rate. We’re talking about 37%.
Toby: It’s taxed as trust income. Very small, again, you’re at 37% when you’re over $13,000. It’s fast and nasty. But what Jeff just said is absolutely 100% correct. The proportion of that revenue that is attributable to the loan is taxable as unrelated debt financed income and taxable at the trust rates which is—let’s just be real—you’re going to be at 37%. Because your income is to be, you’re going to have income, too.
The other issue is it’s so easy to avoid. Just be a 401(k)—self-directed 401(k), Solo 401(k)—roll your IRA into your 401(k) and invest with that because 401(k)s are not subject to UDFI.
Let’s just say here’s IRA and here’s 401(k). Let’s say Jeff is the 401(k). We go and it’s both exempt, we both have $100,000 in our in our account, we both go up to buy some properties right next to each other, same builder, we put $100,000 down and we financed $200,000, rent it for $300,000, and let’s just say we make $30,000 a year.
In my case, as an IRA, I am going to pay tax on ⅔ of that $30,000. I’m going to have a taxable benefit of that $20,000, it’s going to be taxed at 37%. Even though it’s in an IRA. In Jeff’s case he’s going to pay zero tax. He’s going to have zero UDFI. That’s the difference. As an IRA, I’m also going to have to have somebody that signs off on all those documents. The custodian who signs off and signs all this stuff. Jeff gets to do all that on behalf of a Solo 401(k).
Just to put this real simple, if you are investing through your IRAs into syndications, you might want to reconsider repositioning that into a 401(k).
Somebody says, “What does a QRP figure into that?” It’s Qualified Retirement Plan. That’s a 401(k). QRP is a 401(k) and a 401(k) is a QRP. The only difference is whether or not you have multi employees or whether you’re doing with the Solo. We want to make sure that you’re doing a Solo 401(k).
Patty is kindly putting out the different links. Sorry if we confused you. For the live event that is going to be held in December, there are three links. One for just the general public, there’s one for Platinum, and one for Titanium. If you want the discounts, if you’re Platinum, you just type in the aba.link/live22. Just put in Platinum or you put in Titanium if you’re Titanium. We do check those. If you’re not one of those and you’re trying to get a discount, it’s not like you’re just going to get the discount. We’ll reach out to you.
Somebody says, “What if I inherit an IRA?” Still, it’s an IRA. I understand. You’re still going to have the UDFI. That might not be the appropriate vehicle for doing multifamily where they’re levering it up. Just two things that aren’t levered.
Frankly, I’m not the hugest fan of doing all these syndications inside your retirement plans because there are usually big huge deductions that are available from those. As we talked about with the person who’s doing three syndications, you release those losses and you can use them. The losses are not used at all instead of a retirement plan.
Jeff: I also want to say that for an IRA to invest in a syndication, I believe it has to have at least $1 million on its account.
Toby: Oh, if it’s going to qualify as […] investor. They can use the individual, too. If the individual qualifies, then I believe the IRA would, too.
The live event in December, we’re not going to be live streaming it. If you can get the extra day, that’s also included. It’s funny, we’re getting so many comments on it. I just threw that in like literally five minutes before we’re going on saying, hey, since I know we’re going to do this, let’s put this out there. I’m sorry if there’s a little bit of confusion there because I probably surprised my staff.
“Can you post the tax code that was mentioned tonight?” Melba, it’s 469. It’s 26 USC 469 and then you were looking at 45L. And we’re talking about 1031s. You’re talking about 121 exclusion. I’m not going to post it, but they’re in there. You could always come back and listen. We put this as a video and as a podcast. You can always come through and listen to it.
What else do we got? Go to YouTube because speaking of which, you will get access to this. You could go back and listen to it.
“Are you saying I can roll over my IRA into a 401(k) without going through an employer?” Yes. Sole proprietors can sponsor 401(k)s. The only issue is, let’s say hey, I’m going to do a 401(k) and I’m going to have employees, and everybody tells you not to. You just can’t contribute to it.
If you want to control it and say you’re husband and wife and you have two IRAs, you want to get control of them and have them one single unit where you can invest in things that you want to invest in, and you don’t want to have to worry about unrelated debt financed income, then yes, you could just do a single 401(k) and roll those in there. You can have 2 IRAs, 3, 4, 10 in a single 401(k).
Anyway, I think that’s about as much as I want to read out of the chat. There’s my YouTube channel. Go in there. There are lots of videos. Putting out probably 2–3 a week. All sorts of fun, different topics. I know I’m going to end up doing one on the Inflation Reduction Act, if not this week, probably next week. As soon as I get a chance to really read it and digest it. Nobody really knows what’s in there yet.
Jeff: The people who voted for have no idea what’s in it. Which is typical.
Toby: Our politicians, God love them, right? It would be helpful if they didn’t try to just ram things through and they actually took a measured approach. There are bits and pieces of this that have been around since last year. That’s where you have the CBO and some of these others coming up with analysis. Like how did they do that so fast? Nobody’s read it. That’s the same stuff from the Build Back Better, and they already ran the analysis.
“What is the maximum contribution for a Solo 401(k) this year?” I think it’s $68,000. If you’re over 50, there’s a makeup provision. What is it, $62,000 or maybe $68,500?
Jeff: The makeup is $65,000, I believe.
Toby: $65,000 is the makeup provision, but I can’t remember. I thought it was $60,000. Is it $61,000? Maybe $61,000. I don’t know. We’ll look it up. I think the max if you’re over 50 is $68,000.
Jeff: That’s a lot of money.
Toby: A lot of money. And by the way, you could actually get that all into a Roth 401(k) if you want to. If you’re making good money and you want to, it doesn’t matter what you make. There’s a way to do that, and the IRS actually tells us how to do it.
It’s not something that’s even hidden, but you do have to follow rules and you have to have a Solo 401(k) like Andersons where you can do in-service distributions. You got to overfund your employee into the Roth 401(k) side.
You have basically three buckets whenever you have a Solo. You have your employee contribution, the employer contribution, you have the Roth component. You’re overfunding over here and you’re not taking a deduction because you’re rolling it into the Roth component during the year so you never took a deduction for it.
Voila, it’s in the Roth 401(k) and we love that. You can jam a ton of money in there if you’re doing activities where you know you’re going to make a ton of money. It’s great. Something cool.
All right, that’s it. If you have any questions in the next two weeks you want us to answer, we always grab usually 10–15 of the questions that come in. We get about 500. That’s coming off this email, so you’ll get responses. But we always grab a few of them, not in any particular order.
I’ll be honest, I try not to read them before I pick them. I literally just start grabbing them, saying that looks like a good one that’s not 10 pages long. You guys would really like to write. But then we just answer them live and we usually get a good roll questions. You guys are actually always really good about bringing in and asking good stuff.
Thank you to Patty, Eliot, Troy, Dana, Ian. He’s probably on there. I already said Eliot. Christos is on there, Dutch is on there. Piao is probably out there. Dana. All the folks that are answering the questions. You don’t get to see their faces, but they’re answering questions in the Q&A the whole time.
By the way, we don’t charge for this. People say, why do you do that? Because I wish somebody would have done it for me when I was starting. It’s such an annoyance to have to book a time with the accountant and they used to hit me $300 a meeting. I hated that. We like to do this and it’s a lot of fun. You guys always seem to have really cool businesses and investments just by the feedback that we get. Cool. That’s it. Anything you want to add?
Jeff: No, sir.
Toby: All right, we will see you in two weeks. In the meantime, you’ll get a copy of this. It will be posted on YouTube and on our podcast. You want to go back and listen to anything. If you ever need a clarification, just reach out to us. taxtuesdays@andersonadvisors.com will get you to us and we’ll make sure that we always give you some clarity if there is any fog on an answer. Fair enough? Thanks guys.
