In this Tax Tuesday episode, Eliot Thomas, Esq., and CPA Barley Bowler address listener questions on diverse tax topics, including property management, S corporations, and QBI deductions. They explain how to structure management companies for rental properties, the relationship between W-2 wages and K-1 distributions, and the power of the 199A qualified business income deduction. Eliot and Barley dive deep into 100% bonus depreciation, cost segregation studies, and depreciation recapture rules—clarifying when to use Section 179 expensing versus bonus depreciation. They also cover maximizing education expense deductions through C corporations, leveraging oil and gas working interest investments for immediate ordinary deductions of 60-85%, structuring private operating foundations with proper payroll procedures, and optimal tax strategies for business sales, including the powerful Section 1202 exclusion. Tune in for expert guidance on these advanced tax planning strategies!

Submit your tax question to taxtuesday@andersonadvisors.com

Highlights/Topics:

• 00:00 – Intro
• 05:34 – “I have a property management S corporation for my rental properties. All rents and expenses are paid to/from the S-corporation. I take a W2 from the corporation. At the end of the year I receive a K1 for the net rental income. Can I take a QBI deduction for this K1?” – The K-1 reflects only the management fee, not rental income. QBI applies to that fee.
• 14:07 – “I am curious how I can get the maximum benefit from a tax perspective for education class fees paid.” – C corporations can deduct new business education via loans from shareholders arrangement.
• 19:04 – “Please explain 100% Bonus Depreciation recapture and eligible assets with a less than 20 year life being fully depreciated in Year 1.” – Cost segregation identifies 5, 7, 15-year assets eligible for immediate bonus depreciation.
• 24:08 – “What happens if you sell a rental property with depreciation recapture after a cost segregation with bonus depreciation?” – Five-year and fifteen-year property recaptures at ordinary rates; building capped at 25%.
• 29:46 – “Please explain Section 179 expensing.” – Section 179 allows immediate equipment expensing but cannot create a loss situation.
• 36:20 – “Is oil and gas a good tax deduction?” – Working interest investments provide immediate 60-85% ordinary deductions through intangible drilling costs.
• 40:36 – “My family has a private operating foundation. One family member works full-time for the foundation and we agreed to pay a wage to that individual. Would that family member have a w-2? Or does the owner withdraw? Also payroll?” – Pay reasonable W-2 wages through payroll; no owner withdrawals in nonprofit foundations.
• 44:40 – “What is the best tax strategy for selling a business?” – Stock sales create capital gains; consider Section 1202 for qualified small businesses.

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Full Episode Transcript:

[00:00.00] This is the Anderson Business Advisors podcast, the show for real estate investors, stock traders and business owners. We help you keep more of what you earn and protect what you’ve built. Let’s get started. 

[00:12.30] Barley: All right, we’re back. Welcome back everyone to Tax Tuesday live from Las Vegas here at Anderson Business Advisors studios. Every other Tuesday, what are we doing bringing tax knowledge to the masses? Fast-fund and educational welcome back everyone for anyone here for their first time.  This is Tax Tuesday every other Tuesday going over your tax questions. My name is Barley Bowler, I’m one of the CPAs here and tax advisors here at Anderson joined by Mr. Eliot Thomas. 

[00:35.94] Eliot: Hello, Eliot Thomas manager the tax advisors.

[00:37.76] Barley: Tell them what we’re doing here today.

[00:39.76] Eliot: We’re going over questions that you have provided. I have gone through every one of them and we picked out some and we’re going to hit up some answers here and hopefully give you some information that you weren’t aware of.

[00:50.52] Barley: That’s right. These are your questions, we ask you to submit. We got the email right here, email your questions to tax Tuesday. Like Eliot said he really does go through all your questions every other week. We try to compile them in a way that it will be usable and hopefully valuable to you and your enterprise. Every other week, so we’re very happy you’re here. Thanks for joining us again, fast, fun and educational. We would love it if you became a tax client. We obviously can’t do calculations are too much in detail tax planning here from the front of the room.

[01:18.76] But we’d love to have you become a client. We’ll have information on that as we go.  What else Q&A could post your questions as we go. Please post anything in the chat if you got any questions about our service or about the program today, post any questions in the Q&A. We got people in the background, a whole team. We got a Patty, we got Amanda. Well, Amanda who’s usually here doing or here are every other Tuesday doing Tax Tuesdays.

[01:41.44] Eliot: Yep, and today she’s doing the YouTube and then we got Dutch, Marie, and Troy.

[01:45.56] Barley:  Nice touch, one of our CPAs in the background. All right,  we got a team in the back answering your questions take advantage of that. Of course, if you’re a client you can submit questions to the Platinum portal. You can go into the Platinum knowledge room five days a week staffed by our attorneys five hours a day five days a week. But with that, let’s hop right into it. 

[02:01.84] Eliot: Let’s do it.

[02:02.84] Barley: We’re going to read through the questions and again if you got any questions.  Please let us know and keep the questions coming. We love getting these great questions from you guys, usually all across the board. Mostly real estate stuff today all tax focused, of course, but keep the great questions coming. 

[02:17.60] This first question really, could encompasses a lot of stuff we do here at Anderson. We could probably easily spend an hour just on this. But I have a property management S- corporation for my rental property. We set up a corporation for management purposes, ransom expenses are paid to and from the S- corporation. I take a W-2 from the corporation at the end of the year. I receive a K-1 for net rental income. Can I take a QBI deduction for this K-1, great question.

[02:46.08] Eliot: A lot of depth there.

[02:47.08] Barley: Yeah.

[02:48.00] Eliot: I am curious on, how I can get the maximum benefit from a tax perspective for education classes and fees that I have paid for.

[02:56.92] Barley: Education is one of those categories the IRS likes to pay attention to. Please explain 100% bonus depreciation recapture and eligible assets with less than 20 year. We’ve got these five,10, 15 year assets being fully depreciated in year one. What does that look like with a cost segregation study bonus depreciation?

[03:17.08] Eliot: Please explain section 179 expensing.

[03:20.08] Barley: Our pleasure. What happens if you sell a rental property with depreciation recapture after a cost segregation with bonus depreciation? We’re going to pair that up with that other cost segregation question there and really go into the weeds a little bit on that one.

[03:32.56]Eliot: Is oil and gas a good tax deduction?

[03:37.36]Barley: Sure can be, I’m finally switching gears just a little bit here. My family has a private operating foundation. One family member works full-time for the foundation. And we agreed to pay a wage. Would that family member have a W-2 or would they take owner withdrawals or payroll? What would that look like? 

[03:53.50] Eliot:  What is the best tax strategy for selling a business?

[03:56.56] Barley: Mm-hmm. You worked hard get the exit strategy. Guys, make sure you subscribe as usual, go to these YouTube channels tons of free educational content. I mean what more can we say we’d love to have you become a tax client asset protection client. But there is a lot of content on Toby’s channel, Clint’s channel a lot of great interviews captains of industry. A lot of great tax strategies. So dig in there. Make sure you’re subscribed. We got events coming up. 

[04:22.24] Eliot: Well, we do Las Vegas, come see us, $99 cheap.

[04:31.24] Barley: That’s right. It will be right during the great time to be here too right in the spring just starting to get nice. In addition to the live events coming up, a couple virtual events. Just want to make sure you guys got these in your tool belt if you want to attend any of these events. Of course, let us know any questions there. Tax and asset protection workshops coming up and a live event here in Vegas and you can scan this QR code. What does this take you to it? Just an advisor strategy session basically. 

[04:53.32] Eliot: It will help you get connected with one of our business advisors get a free consult, basically on different strategy and things of that nature that we can help you out with.

[05:02.48] Barley: Yep, take a look at what you got, kind of get a high-level view of where we think you should go next. That said, let’s hop right in guys. Anything we need to pay attention to there. 

[05:12.08] Eliot: Not yet, I think they’re taking care of it.

[05:13.84] Barley: All right, got a great team in the back shout out to Zion in the back and our yes tech team. I’m very lucky to have them.  Let’s hop right in. Let’s talk tax. Got a property management S corp,  like I said this first question really incorporates a bunch of tax terminology tax concepts strategies that we talked about here at Anderson a lot. Let’s hop right in. I have a property management S corp from my rental properties. We’ve set up a corporation to manage our rental properties, right a property management company.

[05:44.28] All rents and expenses are paid to and from the S- corporation just like a property manager. I take a W-2 from the corporation at the end of the year, I receive a K-1 because it’s an S corp. It’s a pass-through entity, so we get a K-1. Can I take QBI deductions for this K-1? Yes, really this really goes all over doesn’t it?

[06:02.64] Eliot: It really does.

[06:03.64] Barley: We’re going to break this down one one step at a time here. First, let’s go over the structure part. How about that?

[06:08.96]Eliot: Let’s do it.

[06:10.64] Barley: Okay, so we’re talking about using a corporation for management. When we talk about that we’re usually talking about this term a Wyoming holding company. That’s going to hold a couple of rental properties. Alright, this is going to be an LLC. The Wyoming holding companies an LLC, each of these rentals held in an LLC. Typically can be other legal structure, but that’s usually what we see there.

[06:33.72] Now what we’re talking about here is we set up a corporation over here for management purposes. So, LLC is going to pay rent to the management company and then what does that look like? Let’s go back to our question there. 

[06:48.64] Eliot: Yeah, so really what’s going to happen here having the management entity it’s usually going to be a corporation. We see a lot of C corporations for this. We don’t see too many S’s but there’s nothing wrong with having an S management corporation. Usually we use a C corporation for a couple different reasons. It just depends on the client and what we have going on. Nothing wrong there, but we certainly want to examine that but here we did have specifically an S- corporation.

[07:12.96] And with that, again, the renter, the tenant will typically that rent from that building from that rental is going to be paid by the tenant to our management corporation and then the management corporation pays out the various expenses. But the critical thing we have to be aware of here is that the income those expenses don’t belong to the management corporation.

[07:43.64] It’s basically just holding on to those in trust if you will, it’s being paid to do a job, receive those incomes, pay those expenses, but it’s not, it doesn’t belong to this C or S- corporation, the management corporation. That management corporation will earn a management fee

[08:02.52] We got to make sure that’s what’s going on here because in the question we won’t flip back because we want to keep the picture up here. They mentioned that there’s net rental income on a K-1. Well, there will be no rental income on thiS- corporation S- corporation doesn’t own any rentals. It doesn’t have any rental income. Again, it only receives the rental income on behalf of those rental buildings. 

[08:24.36] It only receives the expenses on behalf of those rental buildings. It’s going to pay those out receive the income.  It’s just going to keep a management fee and that is its income. That is what we’re going to see as far as possible paying of expenses for the S- corporation. Maybe a wage whatever the leftover coming on a K-1. It’s going to be ordinary operating income because that’s what a management fee is to a management corporation, S- corporation in this case.

[08:49.88] Again, I would distinguish, Barley brought this out that this is a pass-through entity as an S corp. We have that K-1. We don’t have that going on in a C corporation. We want to make that distinction here. But again in our case here money comes in and we’ll keep maybe a certain percentage, 10% of gross rents. If we had a thousand dollars of rent coming in after expenses. Let’s say expenses got paid out as well. We’d keep 10% of that or actually of the grocer. 

[09:16.28] On a thousand dollars, you’d have a hundred dollars earned as a management fee by that S- corporation in this case or C corporation. That’s going to be ordinary income and if there is going to be a W-2 being paid out, it’s going to be out of that hundred dollars. Maybe we pay $40 of W2 then the other  $60 would come out on the K-1. Now we get brought into the 199A, the QBI, the qualified business income deduction. What’s that all about?

[09:45.60] That’s a special deduction that came all the way back in the 2017, 2018 tax cut and jobs act. It says for certain businesses, like a sole proprietorship,  like an S- corporation, like a partnership. Anything but a C-corp, you could maybe get an extra deduction based on the qualified business income that just means the operating income.  We’ll just say it’s that, it’s the operating income. There’s a lot more to the definition of it.

[10:11.96] But it’s what it isn’t, its interest income. It’s not capital gains things of that nature and we would take out that amount of that W-2 on our S- corporation as well. The QBI in our case is that K-1, It’s $60 in and what Barley had written up there and yes, if you pay yourself a W-2 of that S- corporation now, yes, it could be eligible for a QBI deduction, maximum of 20%.

[10:37.64] Barley: Right, your S corp only. Let’s go over one of those details.  You’re asking a cash flow question. All rents and expenses are paid to from the S-corp at the end of the year I savor K-1 for the net rental income.  I just want to clarify, you’re just going to get a K-1 for the management fee. We want to make sure the rental income is actually reported on the profit and loss statement of the rental property. 

[10:59.76] The expenses as well. The S corp can collect income and pay expenses but it’s not going to report rental income or depreciation or fence repairs or property taxes or anything like that, right? That’s all going to be on the P&L of the rental and where would we see that on a return? Typically on your just on your schedule E or maybe you have a partnership will be on the partnership return But use it just right on schedule E.

[11:22.00] Eliot: Even if you did have the partnership Barley’s mentioning it would still show like that K-1 number coming on to your schedule E just on page two or part two as they call it.

[11:30.56] Barley: Bottom line here the corporation just pulls the management fee. It’s going to withhold the management fee at the end of the day. It’s going to be its only taxable income member before you pay tax on that want to reimburse yourself for all those expenses be an accountable plan. Go to Toby’s YouTube page after this and check out the videos there. 

[11:46.58] Eliot: Good stuff we could do to knock that down. 

[11:50.64]Barley: Right? Yeah, easy to implement the unaccountable plans. Cell phone to ADA meetings home office right there. A good chunk of cash we can pull out without too much trouble.

[11:59.20] Eliot: Maybe we could even wipe out all that cash, but that’s why you want tax planning or tax consultations because maybe that’s not your best move. Perhaps you also have a goal with this W-2 of maybe contributing to a solo 401k and getting some retirement income and there are something like that retirement going all things that. Through consultations, through tax planning we can look at and look what see what best fits you.

[12:24.16] Barley: Mm-hmm. And of course S- corporation has the reasonable wage requirement. You have a net profit and you’re paying out distributions. You’re required to pay a wage. Then you will get a K-1 if it’s an S- corporation get a K-1 at the end of the year opposite C Corporation will not provide that similar concept though. We can use this purely as a tax tool, right? Take out our tax-free reimbursements, get it down to zero wash rinse repeat do it again next year, right?

[12:48.40] Save ourselves $20,000- $30,000 dollars a year just by incorporating.  Lot of directions we could go on this one. But hopefully that covers the basics, the rental cash flow parts the most important there, right? Just at the end of the day we have to have each rental individual activity report its share of rental income, its share of expenses.  That corporation managing it will just have management related expenses, mostly your tax-free reimbursements. 

[13:12.32] Eliot: And just a little real quick history again on the 199A that is where we get the QBI the qualified business income.  Again, that was something that popped up in our tax cut and jobs act a few years back. The reason we got that for these businesses and the C-corp was excluded because a C-corp came in with a flat 21%. Congress knew we’re giving a real benefit to C corporations. We got to do something for the other business forms. Most people don’t really respect that they do try very hard to keep an equivalence in the code. C corporations got the flat 21%.

[13:45.20] We got an even potentially better deduction with the QBI of up to 20%.  But we have other deductions and things like that that we can take advantage of. 

[13:54.20] Barley: Should move it along. We got Jerry in the chat too,  good. Let us know if any questions on that kind of a number of things there guys. But let us don’t think I got any questions on that one. All right, what do we got?

[14:06.68] Eliot:  I am curious how I can get the maximum benefit from a tax perspective for education class fees paid

[14:13.56] Barley: Why me too, education is expensive, can be.  I guess this thing you just traditional university but a lot of these real estate classes stuff like. You guys take learning how to be trading for example, those can definitely be expensive, no gotta make sure we get a deduction for that but kind of a hangout. Hard to get a deduction on a new line of business. Can we deduct that anywhere?

[14:35.52] Eliot: No, a taxi code doesn’t allow us to duct a new line of business unless we have a C corporation there we can deduct it. What’s our best avenue? Well, at least we get a deduction there but better than that we can call it a loan from shareholders. Maybe we want to draw this up and we’re going to show money going in so we have an individual. Who’s maybe paying for something on behalf of the C corporation? Let’s say it’s $50,000 or something of that nature.

[15:01.04] We can just basically even though we paid for it. We can call it a loan to the C corporation. The individual pays for the $50,000 they’re doing it on behalf of the C corporation and so extensively it’s just a loan. We call it loans from shareholders on the C corporation return.  It’s a commonplace that the IRS even has an area on their tax return for C corporation.  Where we place on the balance sheet loans from shareholders, so it’s highly recognized. It’s nothing new to the IRS or anything shady or anything like that, but we have $50,000 of loan. 

[15:37.96] We’ve been asked a lot recently. Well, why can’t we just call that a reimbursement? If you were going to get paid back from the C corporation within 30 days 60 days, that would be fine.  You could actually do that, say, hey it’s just a reimbursement to get my money right back.  But the C corporation can’t pay you and it’s going to be over time, maybe several years before it pays you back that amount. It’s going to have to be a loan and it’s going to have to be alone with some interest imputed onto it as well.

[16:03.08] Barley: This isn’t usually the question there. Can it reimburse me once it’s profitable?

[16:06.80] Eliot: Yes. 

[16:07.50]Barley: That usually means we’re waiting until next year or something like that or even a couple years’ current period reimbursement. 

[16:13.28] Eliot: We have to be real careful with our terminology in that sense. Well, aren’t we really getting reimbursed when we get paid back? Even if it is three to five years or more I got my money back. Well, no not under the code, that’s not a reimbursement. We really can’t use that definition. It’s a loan and the loan has interest, a reimbursement doesn’t. Reimbursement is something different. That’s where we’re talking about an accountable plan reimbursement or something of that nature.

[16:37.12] Here it is a loans from a shareholder again. It has to have imputed interest on it. That’s the way you would go about it. It’s not a reimbursement, but in the sense that you’re getting your money back. I can understand why people would use that term, but it really is a loan.

[16:51.16] Barley: Right and that makes sure it’s a deduction to the corporation obviously. The educational expense then we just pay it back as soon as it’s profitable, right charge interest, payback period, stated rate. 

[17:05.00] Eliot: That deduction typically is going to be if we incurred that expense prior to the C corporation being set up. It’s going to be what we call a startup cost. If we enjoyed that education or paid for it after the date of incorporation, it’s just going to be an ordinary expense at that point. If it’s a startup cost we typically will take initially $5,000 the rest would be amortized over 15 years. But that’s not a limit on how fast the C Corp can pay back that loan if we have a great first year or two. We can pay back that loan right away. The C corporation can pay back that loan immediately without any penalty or anything like that. 

[17:47.56] Barley: You can have continuing education, as it gets pretty strict with those same line of business. Continuing education like for me as a CPA that’s going to be real obviously related to my current skill set.  Same thing with most trades skills. If you’re doing continuing education to increase your current skill set, improve your current skill, maintain I think is another one right your job position there. Those  will be deductible at other entity levels. In most cases the C Corp is going to be your best friend for that new line of business education. 

[18:18.88] Eliot: One time one thing that we run into a lot about that consideration what it really is, a new line. We’ve even seen where we have flipping a property.  That’s where you buy a house and fix it up, sell it right away.  Well, we’ve seen instances where the IRS, let’s just say you’re doing flipping like that.  Barley’s got a flip business and he decides hey, I’ve made a lot of money. I want to start getting long-term hold rentals or maybe even a short-term or whatever it be. 

[18:44.22] I’m going to take some classes learn up on that make sure I know what I’m doing.  That’s actually considered a new line of business as well. He would not be able to call education about a rental. Wouldn’t be able to call that a immediate deduction on his S- corporation. That’s a new line of business. We probably have to set something else up a C Corp for that. 

[19:04.72]Barley:  Yep C Corp only for that one. Great question, okay, please explain a 100% bonus depreciation recapture and eligible are we pairing this with another question? 

[19:14.00] Eliot: Yeah the number five. 

[19:15.00] Barley: Oh, yeah, we’re going to skip around just a little bit guys. Covering two topics at once here. Well kind of similar related, a 100% bonus depreciation. You guys have heard that term before right? Recapture and then the related depreciation recapture and eligible assets with less than 20 year life. Those are the assets subject to a cost segregation study. Eligible to be included in a cost segregation study, five, seven, and 15 year assets.

[19:40.28] Assets with less than a 20 year life being fully depreciated in year one. I’ll read that again, please explain a 100% bonus depreciation recapture and eligible assets with less than 20 year life being fully depreciated in year one.  So, how does that work? What does that look like? 

[19:54.40] Eliot: So let’s back all the way up. What is depreciation? Let’s start simple, grow up. Your depreciation is simply we’re allowed to finally expense. Capitalized assets think houses maybe heavy machinery that’s going to be around for a long time. We take a little bit of a deduction each year. We don’t take it all at once. Okay, that’s kind of a common element of depreciation.

[20:18.44] We will talk, real estate. Although again, it could be machinery or something like that, but if it’s in real estate, generally, if it’s a let’s say a single-family rental, you’re going to appreciate that over 27 ½ years. We call it straight line depreciation. We’re taking the same amount every year, boring but efficient it gets us there. Okay? But that deduction maybe we can improve on it. Let’s say we have a  $10,000 building take away the land but the building you divide it over 27 ½ years,  $10,000 a year for 27 years.

[20:53.12] However in the code we can do something called cost segregation. What is that? That’s where we have a group come in they look at that house and they start tearing it apart. Not physically figure just figuratively and they look at the five-year property carpet whites things like that. That on their own would have a different wife spanned a depreciation life then 27 ½. Again carpets five-year, electric lights and wiring that might be 15 fixtures or 15 things of that nature. Then again, you have the rest of the shell of the building which might be 27 ½.

[21:30.36] In this case, we have five-year property, maybe some 15 year property and then again still some 27 ½. But that’s what cost segregation does. It breaks it into these pieces.  Now with that in mind you’ve already had some tax savings right there. Probably because that five-year property we’ve sped it up instead of being over 27 ½ years. We shorten it to five. That’s just going to increase our depreciation deduction give us a tax benefit potentially.

[21:56.80] Barley: Taxed if we’re just correcting the depreciation, ironically. 

[21:59.80] Eliot: That’s exactly right because we’re not actually supposed to, we’re supposed to actually do it in five and 15. We’re just fixing the problem. Is really what we’re doing here.  Now, we have this other concept bonus depreciation that we can latch on to our cost segregation and it says anything under 20 years of life or five-year property or 15 year.  You can deduct immediately as bonus depreciation a certain percentage depending on what year we’re in. July 4th of 2025 is determined permanent now that we have bonus depreciation. For that five and 15 year asset we conduct a 100% of it immediately. 

[22:39.94] That’s not only do we have the savings from speeding up to five years versus 27 ½. But now we can just deduct the whole amount. You’re looking at a very massive deduction immediately now the tax impact will just very much depend on what you have going on your return. We have you know, maybe active or passive loss and things like that. A lot of things that you might want to have a consultation on this. View how this might help you could be some big savings or something like that. We mentioned here, depreciation recapture. What do we got going on there? 

[23:12.60] Barley: We got another slide on that but we’re both basically when we talk about accelerated depreciation, which is just the result of the cos seg study, right? We do a cos seg study, accelerated depreciation is the result of that we reclassify these assets. We speed up the depreciation.  Dollar today is worth more than a dollar tomorrow, right time value of money.

[23:30.48] Then like Eliot said we can couple bonus depreciation onto that but then what if we just went and sold it the next year then we’re going to have to recapture that depreciation according to the IRS if it’s if it hasn’t been fully depreciated. We have this word and you guys are familiar with this if you’re in real estate recapture depreciation recapture.  So how do we plan around this or what’s our approach to this?

[23:52.08] Eliot: Well, so going back to that cost segregation effect.  Let’s step back before that before we did the cost segregation again, we’re talking real estate. The code says it’s what we call section 1250 property, that’s just basically your real estate for the most part for our purposes here today.

[24:07.76] Barley: Yeah, you’re roof and walls foundation the building.

[24:11.00] Eliot:  Exactly and it says if you have 1250 property and you took some depreciation.  In fact, maybe let’s forward if we can real quick to that one question where we see it. What happens if you sell a rental property with depreciation recapture after a cost segregation bonus depreciation? Which is what we set up so far now, the appreciation recapture just says if we sold.  If it’s 1250 probably and that’s real estate. We did the cost segregation that five and fifteen is what we call 1245 property. 

[24:43.32] And when we sell it then we have to recognize gain on our 1245 property.  That’s your five and 15 year property furniture, carpet lights. Then we also have to recognize some gain we have a portion out gain for the 1250 property. Which is the shell of the building still 27 ½ and the code says at that point your depreciation recapture on the shell the 1250 property is going to be taxed at up to a maximum 25% 

[25:15.00] Barley:  The recapture portion

[25:16.00] Eliot: Exactly whatever amount of gain you got. How much depreciation you took on that 27 1/2 property. It’s going to be taxed at 20 up to 25%.  What’s going to make the difference whatever your tax bracket is if you’re a 22% tax bracket.  It’s going to be limited there if you’re in the 37. It’s going to get limited still at 25%. We won’t go above 25%, not the case with the 1245.  

[25:39.44]Again, that’s your five-year property, your carpet, your lights, what have you, your 15 year property? That’s 1245 and it says if we have any recapture gain on that it’s good or it’s going to be whatever your tax bracket is it could be 37%. 

[25:54.16] Barley: Now we hire of right 25% or higher.

[25:59.40] Eliot:  Yeah, whatever your ordinary bracket is and that could be really painful on that. Now we get in a situation, what if it was five-year property we sold in year three?  We’re going to have that depreciation recapture for  those years. You’re potentially going to have a lot of that recapture at that high rate. However, if we do it after five years, let’s say six years.

[26:24.32] Well, at least we can technically write off the five-year property and say well, it’s only carpet. It’s only worth life is five years. We’re beyond five years, let’s just zero that out or at least have a very low level that will attribute to that of any gain and the rest of the game will get pushed off to the other 15 and 1250 properties. What that does for us is that means at least a portion of that. 

[26:47.72] What would have been gained on that carpet is now going to your 1250 which is limited up to 25%. There’s a tax play there are potential world savings. Now, it may not sound a lot with the numbers we’re talking.  But if you have a billion that’s worth several hundred thousand millions the higher you go these percentages these differences, can be quite impactful and that’s going to be our cost segregation again with most appreciation. 

[27:12.08] What happens when we sell the rental property you going to pay taxes. Depending on whether it’s after the cost segregation 1245 property your five or 15 year property or your 1255. The 1245 tax up to whatever your tax bracket rate is. The 1250 max at 25%.

[27:31.00] Barley: Eliot from your experience is most of the deduction within the five, seven, or 15 or is it just spread across or do is there any analysis on that?

[27:40.36] Eliot: Yeah, we do we hear a lot from the folks that do these kind of cost segregations. You want to have a specialist. We work a lot with CSA partners cost segregation authority partners, they’re very good at what they do. They generally say as a rule of thumb. You’ll see maybe anywhere from 30 possibly, you know 25 to 30% of the building, not the land, the building of that value will be eligible for a cost segregation to be turned into 1245 property, your five-year property or 15. 

[28:10.00] In other words, let’s say we have a house, we bought a house for half a million dollars. The land worth $100,000 we throw the land away, we can’t appreciate that. The building is 400,000, well, maybe 25% for a $100,000, would be eligible for being sped up under a cost segregation study turned into 5 or 15 percentage. Excuse me, 5 or 15 year property, you take that bonus depreciation and we’re going to get what on that with the bonus depreciation these years.

[28:41.26] Barley:  Hundred percent. 

[28:44.34] Eliot: A hundred percent, exactly, right. That’s kind of what we see and you can start to imagine when you see these numbers. They’re quite great and just depending on having good tax guidance on how this will impact your return. Could really pay some dividends. 

[28:57.24] Barley: Yeah a lot there. If you wait at least five years you’re going to avoid part of that recapture on the five-year assets, wait a full seven years. You’re most of the way there. Obviously if you hold it for a long-term investment, that’s going to be the most benefit to you.

[29:10.68] Eliot: Yes, sir.

[29:12.00] Barley: Let’s just hop back to that last question. Make sure bonus appreciates recapture elbow assets fully depreciated in year one. Yeah, you got it, right? So the cost segregation study results in accelerated depreciation. We can then apply bonus depreciation that will bonus it out and take care of all that in year one.  You’re absolutely right about that. Let’s see eligible assets less than 20 your life, you got it. Let us know if any questions on follow-up on that one.

[29:36.72] Eliot: That was my fault for not getting these questions in order my bad.

[29:41.00] Barley:  You always do such a great job, Eliot. Section 179 expensing,  very similar bonus section 168 K is the tax code there for bonus depreciation very closely related, section 179 expense deduction a little change in terminology here. But very similarly treated, we’re looking at small businesses many of you are small business owners purchasing equipment, a vehicle, a bulldozer, a frozen yogurt machine maker.  Whatever the copy machine for your property management business, whatever the case may be talking about equipment purchases.

[30:17.88] Section 179 basically says you can write the whole thing off if you have the income. If it’s a purchase less than a few million dollars and you have positive income the government says just write it off. Just write it off a hundred percent in the first year. That’s a great option.  Now there are some limitations to that though, like I mentioned income you want to talk about that? 

[30:36.60] Eliot: No, Barley is exactly right. We can only take advantage of 179 if we have our profitable. We can never use 179 to create a loss. Yeah big distinction from what we were just talking about with bonus depreciation and cost segregation things like that. We can use that to create a loss, not this case with 179. The 179 is exactly as Barley laid out. It’s going to be with your equipment machinery that you purchased to be used in the business not inventory mind you.

[31:05.12] But it’s stuffy that we’re using as in the trader business.  It’s qualified property is the term that they use and that’s going to be your new and used tangible personal property. Again machinery things like that.

[31:018.12] Barley: Personal just means not real estate. 

[31:19.00] Eliot: Exactly, and it was made permanent. By the July 4th. 

[31:24.32] Barley: We joke around about it because it is permanent until the administration changes. As permanent as we can get, permanent in our world. 

[31:32.44] Eliot:  Exactly and it was wise that they made it permanent because the idea is it helps with tax plan. We know that. 

[31:39.40] Barley: Reduce uncertainty. 

[31:41.40] Eliot: Exactly, right. We know 179 will be around. We talked a little bit before and Barley had brought up a really good point. You can use both 179 and bonus. How’s that? What’s that look like?

[31:52.52] Barley:  Ironically, we don’t even see 179 a lot anymore because of the 100% bonus depreciation.  It can be applied to most all the same kind of things.  But section 179 is again as long as you have positive income you make an equipment purchase or asset purchase for your business has to be a business use asset. 

[32:12.28] Used in the business more than 50%, use there’s some qualifications here.  But you know generally if it’s a business asset that’s going to qualify. It just can’t create a loss, it can take you down to zero and then you could even add bonus depreciation on top of that. Honestly, when would we use section 179? We have to use that over bonus depreciate. Would there be a situation? What’s what’s when I can’t think of up the top of my head. 

[32:37.28]Eliot:  First of all, you have to use the 179 first and then we can go into the bonus depreciation. Why would we want to use maybe, 179 maybe you don’t want to create a loss. Maybe you want to have a heavy deduction amount, but you’re not looking for a loss. Clint and Toby talked a lot about that when they started Anderson, they were so good at reducing their taxes.

[32:59.24] Well, there wasn’t enough income for any lending purposes and things of that nature. Maybe we don’t want to lower our income too much from something like a bonus depreciation situation because that’s an all-or-nothing. Once we’ve engaged in cost segregation. We took most depreciation.  We can’t just parcel out how much we want to take, we take the whole thing if that’s going to create a large loss.

[33:19.44] Maybe that’s not beneficial to us. Where’s 179 we have a little more control. We know what we’re purchasing and at least in that business on our return. It’s not going to create a loss, so that would be one reason why you might use one over the other. If you are going to use them both 179 first and then bonus depreciation second.

[33:38.60] Barley: This is honestly a kind of attack software thing, apply the maximum tax deductions. It’ll kind of pick and choose a little bit of that.

[33:47.48] Eliot: Unless you’re Jeff Stolkin, one of our tax advisors who just does it off the top of his head. 

[33:52.92] Barley: If we ever have any changes in bonus depreciation, we’ll just be talking about this again. If this didn’t change what bonus depreciation did. We’re just looking at two two ways to two paths to the same goal. 

[34:04.72] Eliot: Just thought of something else. We talked about the depreciation recapture earlier in our past two questions about the bonus depreciation situation. We have something very similar here with 179 expensing. In other words, if you’ve got a five-year property and you took 179 and you sold the property within two to three years. You’re going to have a recapture there as well. Exactly right. We got a claw back on that. Same holds there in that regards.

[34:31.32] Barley: Well, maybe that wasn’t that bad having that right in the middle then. It is all kind of related. I think we mentioned this guys make sure you subscribe to the YouTube channels. Again, Just tons of tons of great content fast, fun,  and educational that’s been the business model for these guys from the beginning. Give away as much as we can for free.  Trying to have you guys we’d again love to have you become clients tax clients asset protection clients. But tons of good info on these websites. 

[34:57.66] We are subscribed to Clint’s page regardless. The little thing isn’t checked there, but we are. And so should you and of course schedule a strategy session if you got a QR code scanner scan,  this code right now. It will take you to a strategy session with one of our advisors, give them your basic information. They can help you get started. We went over this one any other questions that we want to follow up on?

[35:21.20] Eliot:  No, I think they’re coming at all. 

[35:23.20] Barley: We’re good on bonus depreciation. That’s always such a hard one to explain. Is that the asset classes, the timing? Because it does all play out kind of the same at the end at the end of 27 ½,  39 years. You get the same amount of deduction. But again, if somebody offered you a dollar today or in 39 years it’s a long time. 

[35:43.48] I know what’s going to happen. We’d much rather have time value of money calculation takes over and that’s what the whole point of this. Is accelerated depreciation the bonus depreciation current period deduction.

[35:56.04] Eliot: there’s a lot through it. It’s difficult to explain with a lot of fun to try and calculate because that’s where we can make some really great tax moves. 

[36:00.76] Barley: Once we talk about real estate professional status material participation a lot of you guys, your ears perk up like what? Well, that’s all I have to do, I mean, it’s easier said than done. Of course, those few moves with real estate are very very powerful. Changing gears a little bit here. 

[36:18.00] Eliot: I mean houses all together. 

[36:20.48] Barley: Leaving houses, leaving rental real estate, leaving real estate in general. I’m not totally leaving real estate.  We’re going to talk about oil and gas deductions here, question just very generally. Is it a good tax deduction? Well kind of depends we got to look at it kind of our first fork in the road comes. Are we getting royalties or are we actually invested right? Isn’t it? 

[36:40.60] Eliot: We got two types of investments typically other than of course, you can go out and buy shares and Chevron or something like that, publicly trade company.  But we’re not talking about that you can invest in it where you get a royalties interest where you’re just getting.  Basically the product coming out the sales of the product with a depletion amount 15% is automatically deducted. 

[37:01.48] Barley: That’s right on schedule E with your rentals their royalty income at the top depletion at the bottom there.

[37:06.16] Eliot: If we had a $100 of that coming in we will have if it’s showing up as a $100 in we will have already 15% knocked off of it as an automatic depletion amount. The real deduction comes when you have what’s called that working interest and that’s a different thing altogether.  That’s where you as an individual are basically taking it on as your own without any limited liability company or anything like that.

[37:29.24] It’s in your name, but what the code allows you is a substantial deduction on the amount that you invest so maybe we put $100,000 into oil and gas. We often see anywhere from 60% to 85% that’s deducted immediately based on what we call, intangible drilling costs. 

[37:49.48] Barley: Ironically for the same reasons we just talked about using the same code sections to apply the deductions. 

[37:54.68] Eliot: Yeah, exactly when there’s a deduct. The provision that allows us to duck up to 60 again to 85 percent will just depend on your investment. You got to check with them, but that’s an immediate deduction.  Huge loss typically that you’re going to have on your return, and it’s an ordinary loss mean it can go against any income on your return. That’s the big deal.

[38:15.48] Barley: It’s not passive and not a passive loss right. 

[38:17.84] Eliot: Exactly right, we’re not going to be limited by any passive activity loss limitations or anything like that. Now we have it on that but what about the rest of it. Well the other 15% or what have you 40 just depends on whatever the other percentage is that’s typically going to be seven-year property or something of that nature which gets depreciated. It itself might be eligible for bonus depreciation.

[38:39.60] Likewise, you can get a substantial deduction there too and then in time.  You will have the flow hopefully of the oil and again same thing you’ll be able to take 15% off the depletion on that as well but I’ll ordinary up to that point immediate ordinary deduction. You’re trading your investment for a deduction now. It’s going to take a little more time typically to see your money come back, maybe a period of years. But you got the deduction today.

[39:05.68] Barley: This could be good, just general energy in general. There seems to be a lot of activity in the country, in this hemisphere. But that could be a good deduction. I like to just I tell you guys this a lot. If this is your first time hearing in it don’t go write a check for a hundred grand to somebody. But if you  have your network and people working on this and you’re familiar with a business that does this maybe that’s for you. We’re certainly here not to give financial planning advice more just to let you know the tax repercussions. 

[39:36.60] Using the same strategies bonus depreciation.  Maybe even section 179 most likely more like just bonus depreciation to depreciate the equipment that can create a loss large current period tax deduction, absolutely.

[39:49.28] ELiot: Really it can be a really powerful strategy.  You do want to make sure do your due diligence, watch out who you’re investing with. Could be a lot of takers out there. So get something that has a reputation of being around. 

[40:01.36] Barley: Don’t invest in Southern crude adventure mining.

[40:05.14]Eliot:  That’s the one I use for my company.

[40:12.88] Barley: Yeah, I’m sure there’s a lot going on. Of course again just to give you guys the tax play. What would this look like if you made that move for tax purposes? Obviously, this is much easier said than done requires a lot of due diligence. Changing gears, kind of totally in here.

[40:29.56] Eliot: Outside the private world,  We’re private now going into helping people out.

[40:34.40] Barley: All right. What do we got? 

[40:37.40] Eliot: My family has a private operating foundation, one family member works full-time for the foundation and we agreed to pay a wage to that individual. Would that family have a W-2 or owner withdraws? Also payroll? We want to really break out what’s going on with operating. We’re talking about donations, charity, and we have two kind of primary areas.

[41:01.76] We have public charity and then we have found private foundations. Public chair, it’s just about where you got your money if the majority of the income coming into your nonprofit if it’s from the public. It’s a public charity and it has a little bit different set of rules, still it’s a donation when you donate to it. It’s a deduction. Excuse me when you donate to the charity the public charity.

[41:21.32] But it handles differently on your return if you’re the one operating that potential public charity and making the donation, private foundation.  Again, it’s a little bit different in that most of the money typically is coming from you or your family. We have a different set of rules for that now often when we set one of these up. We’ll start down the public charity rule because they’re more generous for what you can donate and get deducted on your return. 

[41:46.96] You get a higher amount, 60% of your AGI for cash donation as a deduction as opposed to a little bit less for private foundation. We can start down that public charity and in time if we still don’t have enough support coming from the general public. If it’s just you putting money in your family putting into it. Well, then fine. It turns over to a private foundation. 

[42:08.00] And that’s okay. You didn’t do anything wrong, it’s just now you will operate under a different set of rules and requirements of how much money you have to give out to other charities or use up in the charity. But the real difference with the private foundation is very much hands-on. Being operated by that family who’s running it and then you can imagine if it gets really busy. You might want to have an individual, one primary individual running the show so to speak and that’s perfectly fine to do that. 

[42:34.00] And you can pay them a wage, but it’s got to be reasonable for the services being provided and that could be W-2. When we have W-2 that is payroll. So as to the question about payroll. That’s exactly what’s going on when you have the payroll.  That’s what’s going to give the w2 and vice versa when you have the W-2 you’ll do it through payroll. That’s perfectly fine again, but the amount has to be reasonable. 

[42:55.92] Let’s say you donate a hundred thousand and this would go for a public charity as well.  You put $100,000 in you can’t pay yourself as an employee, %90,000 and get it right back. You wouldn’t want to do that. You can even use primarily most of those funds towards the operation of that charity be a public or private foundation.  The owner withdraws, we just don’t see that because we don’t have an owner of anything like this. These are not owners anymore. They may be ones that you run or something that nature, but you don’t really own it. We don’t have owner withdrawals.

[43:28.04] Barley: Public I think we have five years or maybe to prove this out. We have an incredible nonprofit team here Kareem, Savannah. You guys likely know them just super smart, super passionate. It helped so many of our clients have a great success rate, tons of knowledge. I think Kareem was with the IRS for over two decades working on this stuff. We have the resources you need to get these questions answered and get this set up. 

[43:52.76] This is going to be a great option for a lot of you guys that are doing legacy planning. Maybe you want to put kids on the payroll in the future. You got community causes you want to help out plus you get a tax deduction. Obviously, or we wouldn’t be talking about that today. Great option there.

[44:07.24] But we have an open office hour on that too if you’re a platinum client come into the platinum knowledge room every week. We have a full hour. We just spend talking about nonprofits, usually as they relate to real estate and relates to the real estate assets. Hop in there, a lot of good information there. Setup payroll, that’s certainly one of the benefits kind of a legacy planning plus you get to contribute to your community  a lot of good work you can do there.

[44:32.68] Eliot  Keep moving. I think so.We might end a little bit early here today.  I apologize, but we have one more question. 

[44:40.44] Barley:  Best tax strategy for selling business, great question. We would ask you first. How is the business taxed or the tax guys? That’s where we default to in our minds right when we’re analyzing things. If this were a sole proprietorship LLC or a publicly traded C-corp, they see very different things, right? Assuming you’re just talking about, maybe a S-corp just kind of a I don’t want to say run-of-the-mill business.

[45:06.26] Like a froyo shop or we use Toby’s pizzerio is the example we used a lot,  dry cleaners.  We have lots of franchise owners right that have lots of dry cleaners, health spas, gym’s fitness centers. A lot of that’s going to depend on the structure and kind of what we generally refer to as the exit strategy when you’re talking about selling your business. 

[45:28.12] Now when it comes down to the brass tacks we look at this asset sale versus stock sale. A lot of difference, directions we could go there but primarily we’re looking at a capital gain from selling a business and the resulting capital gain but kind of a general question. Where do you want to go from there?

[45:46.88] Eliot: First of all, let’s start if it is a corporation S or C. You’re going to have shares their corporations now. Even if it’s an LLC tax with an S or C for our purposes here on this item. It’s going to be considered shares and when you sell those if you just have a sell of the shares. That’s going to be capital activity. And if you held it over a year, which more than likely you did, you’re going to get a tax at a lower rate. 

[46:11.32] Now if it happens to be what we call a true C corporation with actual shares and you thought ahead and you’ve held it for over five years and expanded this business. Well, then you typically can use what’s called section 1202 and you brought that up. What do we have with 1202?

[46:28.12] Barley:  I thought when I brought that up, was like that’s not going to play a lot of service management related. Just kind of a work for what we’re talking about here is, typically a product. This became very popular with app developers software people you’re developing a product for sale. 

[46:45.68] You plan again having an exit strategy at the end of five years or so. It’s actually very very generous.  I don’t know how business hours get away with it.  

[46:54.62] Eliot: Qualified small business stock 1202 if it’s a true C corporation and you held it long time, take advantage this you don’t have to pay any tax. 

[47:02.28] Barley: What? nothing that did this down in Dallas with a software app. They did 1202 and he was surprised. I knew about, it’s kind of a narrow specific thing, but it eliminates the tax on the game, essentially.

[47:13.36] Eliot: Now they’ve even simple well made it easier where if you hold for at least three years you may get 60 years. It’s not an all or nothing. You can get certain amounts slowly graduating up after five years to a%100. A lot of benefits if we have that going on as you mentioned as an exit strategy because that’s really what we’re talking about here. How can we save on an exit? So if you’re setting a business up today, we can think about these things now there are businesses even if they are a C corp. They’re not allowed to take advantage of this if it’s a personal service.

[47:44.48] Think your doctor, your lawyer, things like that accountant type things, those corporations, those services. We don’t get it include, consultant so on so forth medical field things of that nature. However, maybe you’re just doing medical software.  Yes, you can so that is a little bit more involved but the point being that if it’s a corporation you’re going to sell the shares typically or you’re going to want to as the seller doesn’t mean the buyer is going to agree. You have to both agree on it, but then it would be a capital activity. 

[48:14.88] Maybe taking advantage of the 1202 qualified small business stock provision. Maybe not but nonetheless at the worst it’s going to be a capital gain long-term capital gain.  We held over a year and that means lower tax is what’s going on. You mentioned some other types of businesses if it’s a disregarded or a partnership. We have something else going on there and typically on those they’re going to treat it as an asset sale and if that happens. 

[48:41.12] That’s usually somewhat of a disadvantage to the seller. It means that mostly you’re going to have to look at the property, the assets if you took depreciation on them. Guess what? We talked about it almost half the show today. You’re going to have some depreciation recapture on that. You got to calculate that all up, but then you will have some assets to get capital gains. Maybe your good will, something like that, but if it’s there’s inventory accounts receivable. 

[49:06.04] Those are going to be taxed at ordinary rates as well. A lot of things we call those hot assets, so there’s going to be a lot of different factors in here. But the best strategy is if it’s a corporation try and make it a sell the shares. You get capital gains activity, you don’t have to worry about ordinary gains in this case or any depreciation recapture because you’re just selling the shares that control  the corporation itself as opposed to the assets they just all go with the corporation but in an asset sale. 

[49:36.48] Think disregarded partnership and you could have an asset sell for an S Corp or C Corp as well, there you’re going to have depreciation recapture questions. You’re going to have to asset questions which are taxed at ordinary rates and things like that. That’s the best you’re looking for. The strategy is of course what’s going to limit our taxes and that just depends on what kind of entity you have. Working with the buyer, now most often you’re going to get the asset sale whether you like it or not. 

[50:02.00] When that happens you’re going to have to work with the buyer,  you’re going to have to apportion out the amount of the sales price to each of the assets and maybe the iInventory and things like that. Both are going to have to agree and both have to show the same numbers on their respective tax returns for the next years. It’s something that you have to really work with the seller and the buyer have to work together to get those numbers coinciding.

[50:27.92] Barley: Finally just a little well, I won’t say bonus thing. But not totally my wheelhouse, but I just want to throw out you know, you’re probably doing a valuation on your business. So cash flow is going to be king here, right? EBITDA that earnings before interest taxes depreciation, right? You want to get that number high because it’s going to be that times whatever for your for your multiple what you’re going to be valuing your business as so structuring those last couple years before you sell is going to be real big.

[50:55.88] I’m not your finance guy at all. I just used to work in that field a little bit. But there are a couple moves you can do in the last couple years before you sell the just structure your business to make it more attractive to increase cash flow. Make the balance sheet more attractive, make your cash flow more attractive. That’s something to keep in mind as well. Just kind of on a finance tip to that. 

[51:14.36] Eliot: Just to latch on to that, Barley’s talking about numbers that show up on your financials. That gets us back to the very basics of all this you want to have good excellent bookkeeping. If you don’t have good bookkeeping all of our numbers are basically just a shot in the dark. You don’t know really what you have or what the value is. Everything we’ve even talked about today. All these numbers are on that bedrock of good bookkeeping.

[51:41.40] Make sure you’re working with a good bookkeeping team. We have a lot of good bookkeeping staff here and packages and things like that if you’re interested.  We just want to make sure that you have sound bookkeeping going behind all your numbers.  

[51:55.00] Barley: I don’t think people most people think about is that bookkeeping is one of the most fundamental things to asset protection. 

[52:00.76] Eliot: It really is.  

[52:03.60] Barley: But that’s fundamental to protecting your assets, good books who knew right? That’s absolutely crucial.  All right guys. Well, we got done a couple minutes early any questions. We want to go over there. 

[52:13.84] Eliot: No, they’re great over a hundred questions again. Big big high five to our team. Of course, we’ve got Z in the back. We’ve got Patty out there, Amanda again on the YouTube, Dana jumped in, thank You Dana and Dutch. Jeffrey Marie and Troy as always dependable and we appreciate all your help. Can’t do it without them and we appreciate you joining.

[52:35.12]] That’s right. Hey look, there’s Toby and Amanda again. There she is hanging out on the screen there. I think we mentioned check out the YouTube channels, right? Come to the live events. We’d love to see you guys. Hey, this is just a couple months away here in Vegas.

[52:47.20] Barley: It’s going to be beautiful. Do you know where this is?

[52:49.00] Eliot: March 19th to 21st? 

[52:51.20] Barley: You know where?

[52:52.00] Eliot: I  think we’re going to try and get back to the place.

[52:55.88] Barley: It’s the newly remodeled, very very nice gorgeous, gorgeous amenity whatever facility there. 

[53:01.56] Eliot: I just can’t remember the name of it Durango Durango. Is it the new Durango? That’s what it’s brand new. We just built it within the last two years or so.

[53:11.32] Barley: Come visit, we’d love to see you here and of course structure, set up a strategy session right now, or you can talk to somebody if you want about your structure, about your business, about your next tax moves.  We’d love to have you become a client. We work with real estate, small business, very close second very often hand-in-hand a lot of our clients are business owners that operate and own their own real estate as well. 

[53:32.88] A lot of crossover there and email your questions. We’re going to be back in two weeks guys, back doing it again fast fun educational.

[53:40.08] Eliot: We’ll get every question. We appreciate them. Keep them coming.

[53:44.00] Barley: Email your questions visit us at Anderson advisors. Any other questions you have please let us know and definitely look forward to seeing you guys again in two weeks. Thanks so much for tuning in guys. See you next time.

[53:53.40] Thank you for listening to today’s podcast show notes for links to everything mentioned in this episode can be found on our website andersonadvisors.com/podcast. Be sure you subscribe to our podcast and if you are already a subscriber, please provide us a review of what you thought of this episode.