In this episode of Tax Tuesday, tax experts Toby Mathis, Esq., and returning guest Jeff Webb, CPA, CFO of Anderson Business Advisors discuss various tax strategies for real estate, stocks, and nonprofits. Online we have Ander, Dutch, Sergei, Ross, Jared, Elliot, Troy and all kinds of staff to help answer all your Tax Tuesday questions.
Toby and Jeff cover topics such as 1031 and 721 exchanges, the Section 121 Exclusion, employee stock options, and the tax implications of short-term rentals and Health Savings Accounts (HSAs). They also discuss best practices for reimbursing personal contributions to a business. Submit your tax question to taxtuesday@andersonadvisors.
Highlights/Topics:
- “Section 721 and 1031 differences” – It has the same effect as 1031 but you don’t pay tax on the sale, But you’re not exchanging one property for another…it’s a tax-free exchange, but it’s a one and done.
- “Tax benefits of a foundation versus a nonprofit organization?” – The easiest way is – a nonprofit (public charity) DOES stuff, a foundation funds stuff…
- “I have two houses I’m selling this year and or at the same time, both were residences for two years at the last five years consecutive. I have just lived in the latest house for the last two years and I’ve been preparing both to sell. Will I have a problem claiming both of them as residences two of the last five years and I’m selling them at the same time.” – So of the last 60 months, 24 of them you had to have lived in it as your primary residence. That met, then you can exclude, if you’re single, $250,000 of capital gain. If you’re married, you could exclude up to $500,000 of capital gain. DO NOT SELL AT THE SAME TIME.
- “How are stock options taxed?” – Tax treatment varies depending on the type of stock option (ISO, NSO, RSU), time held, and exercise/sale timing.
- “LLC taxed as S-Corp with brokerage account….anything similar to trader status?” – I have not seen anything that says any entity can make a mark to market section 475 election. If you’re making a mark to market election because you’re losing so much money in the market, get out of the market and go do something else.
- “Does California’s 571L form business property tax apply to short-term rentals? – Yes, as short-term rentals are considered active trader businesses and subject to the tax.
- “Who can qualify for an HSA?” – Eligible individuals must have a high deductible health plan (HDHP) and not be covered by another non-HDHP plan. Can I open an additional HSA with my LLC business? – No, you can only have one HSA per individual, but your LLC can contribute to your existing HSA.
- “Anderson made me a C-Corp, I put money in from my personal account to pay expenses. I have to take out the initial $7K … How do I legally and ‘tax-friendly’ take the $7,000 back that I need for my personal reimbursement? – If the initial $7,000 was a loan, you can withdraw it tax-free as repayment; if a capital contribution, the process is different.
- Send us your questions, and we do about 50 events a year – check out the event schedule listed in the notes.
Resources:
Tax and Asset Protection Events
Full Episode Transcript:
Toby: All right, welcome to Tax Tuesday. My name is Toby Mathis. I got Jeff Webb here.
Jeff: Jeff Webb here.
Toby: It’s been a minute. So glad to have Jeff back. If you are looking for Tax Tuesday, you’re in the right place. We’re going to let everybody fall in here for a second because we stream. We’re on multiple platforms, but we’re also on YouTube. I can see people dumping in, and it just keeps going up and up and up and up and up. When it stops, then I quit pontificating.
Anyway, we are bringing tax knowledge to the masses. If you’ve not been to a Tax Tuesday, I’ll give you guys some ground rules. It’s really simple. You ask your questions via the Q&A feature.
When I say a question, if I ask you something like, hey, where are you from, then you could put that in chat. But if you say, hey, I’m thinking of selling my house, and I’ve owned it for three years, what’s the capital gain exclusion if I’m single, then you put that in the Q&A. You could ask whatever you want of our folks.
If it gets too crazy and too detailed, we’re going to say, hey, become a platinum. It’s $35 a month, come on, and we can answer it, and then it will live forever in your portal. We could do that. There we go.
We got people all over the place. There’s Sherry. We got a whole bunch of friends here, like every time. I see Faith is in the house. There are names that I see over and over again, and love to see it. Let me know where you guys are from. If you’re in a particular state, and I don’t mean like, hey, I’m blasted, I’ve been drinking all afternoon type of state, tell me where you’re at.
There’s Philly, there’s Miami. You guys are doing great. O’ahu, jealous. New Jersey. I grew up in Philly, so I hate anybody from New York and New Jersey. I don’t know what it is. We just give you guys the stink eye.
Jeff: It wasn’t Trenton, was it?
Toby: No. I grew up just outside of Philly, DC, there we go. Virginia suburbs, Aloha from Ewa beach. That’s on Oahu. I got a whole bunch of clients over on Oahu. I love that area. I actually crashed a big old canoe, one of those big outriggers, and […] literally just drilled into it.
There’s Tyro from Savannah. I was just in Savannah, Tyro. Love it. I was down on the riverfront at the JW, which means we’ll be a museum. It’s the most amazing hotel. If you guys ever get a chance to go to Savannah, I would definitely recommend it.
If you get a chance to go to Savannah and stay down by the river, stay at the JW. It’s amazing. It’s like this billionaire took it up, and there’s a dinosaur in there, and there are tons and tons. It may as well be a museum. It just looks absolutely gorgeous. There’s my Savannah pitch.
I used to own properties in Savannah, but I sold it all, but I’m looking again. Here is Jeff. Jeff, if you want to share what you’ve been to because there are some folks saying you look a little skinnier.
Jeff: I’ve had some health issues and been going through some treatment, not shock treatment. About six months ago or so, my health declined dramatically. It turns out I had colon cancer. It’s fine. Treatment comes with this really cool fanny pack.
Toby: We’re just glad to have Jeff back. We’re going to give him something to do. You did chemo today, didn’t you?
Jeff: Yup, and I got more in here.
Toby: There we go. Jeff’s a trooper. We’re going to stand by him this whole time. Anytime he wants to come back to Tax Tuesday, he’s invited. If you guys would do your little prayers. Lucky, you already had people that had colon cancer a year ago. Not fun, but you’re getting through it.
David’s another person I recognize. Gosh, bless it. I didn’t know you’re going through that, sir, because we would have certainly sent some prayers out to you guys. I believe in that stuff. You guys may not.
Jeff: Can I do a quick soapbox?
Toby: Yup.
Jeff: If you are scheduled or should be scheduled for your prostate exam, your colonoscopy, your mammogram, your pap smear, on and on your bloodwork, please get it done. The sooner they catch some of the stuff, the better off you are.
Toby: They’re not fun. I just had my colonoscopy the week before last. It was so exciting, I slept through it.
Jeff: Almost the worst part is preparing for it.
Toby: You have two days. I wish I had the pills. I didn’t have the stuff you had to drink. If everybody’s grossed out by this, don’t be. If you catch it early, you’re good. That’s our public service announcement.
Personally, it’s just not the same not having Jeff here, so it’s really cool. Everything’s clear for David. He got through it, so you will, too. We’re going to get going.
All right, since we’re talking taxes, we have to do it. We got to go into the taxes. All right, “I think most people have heard of 1031 exchanges in the associated tax deferral benefits, but I recently became aware of section 721 exchanges. Can you discuss the similarities and differences between those two options?” We will answer that.
Again, if this is your first time, we’re going to read through a bunch of questions, and then we are going to answer them live. You guys can put stuff into chat. But if you have questions on your stuff, put it into the Q&A.
I have a ton of staff on right now. I got Ander, Jennifer, Matthew, Dana, Dutch. I have to scroll. Tanya, Sergey, Ross, Jared. Eliot, Troy. I got CPAs. I got attorneys. We got all sorts of people there to answer your questions. Guess what? This is the only time you get to ask a question of an attorney or a CPA where they don’t send you a bill. We just answer it and make sure that we’re doing our very best to give you.
Please be patient with us because there are always hundreds of people on, if not over a thousand. We bring a big old staff here to answer your questions. We’ll get through it and make sure that we’re taking care of you so that you can demystify the tax world. It shouldn’t be something that causes you stress.
All right, “What is the tax benefit of a foundation versus a nonprofit organization?” Interesting question, we’ll answer that.
“I have two houses I’m selling this year and/or at the same time. Both were residents for two years out of the last five consecutively! I’ve just lived in the latest house for the last two years as I’ve been preparing both to sell. Will I have a problem claiming both of them as residents two of the last five years since I’m selling them at the same time?” We will answer that, but the answer is yes, don’t do it, but we’ll explain. All right, if you’re listening out there, keep your ears open for that one.
“I am planning to follow your renting out stock advice and selling covered call options. We’d like to be a stock market landlord in our world. The earnings of that deal be used to buy more stock from the same company. What is the tax situation here? How much tax has to be paid, and when?
Another one, “How are stock options taxed?” Talking about an open-ended question. We’ll answer that one, too.
“I have an LLC taxed as an S-corp with a brokerage account. Can the profit or loss from the active stock trading business be reported as business income loss or capital gains loss? Is there anything similar to a trader status mark-to-market for an S-corp?” Good question, and we’ll get there. We’ll answer that one too.
“I have a second home property that we are renting as a STR,” short-term rental, that means like an Airbnb. “It is titled under Wyoming statutory trust, and we are already paying property taxes. Does a 571-L form business property tax still apply to us?” That’s a very specific question to California, by the way, guys. We’ll answer that as well.
“Who can qualify for an HSA? I’m an active duty military member, and I have been told I don’t qualify. However, my wife still has co-pays based on her plan, and I’ll have to pay co-pays once I retire. I have an HSA with my W-2 job that I’m maxing out. Can I open an additional HSA with my LLC business?” Good questions, we’re going to answer them all.
Here’s the last one. “Anderson made me an entity as a C-corp. I always put monthly money in from my personal account to pay monthly business expenses. Initially, in order to open my business account, I put a lump sum of $7000 in as startup money, funded initially by a loan from me to the business promissory note or stock. I really don’t know what it would be categorized as. I don’t understand that part anyway.” That’s why you have bookkeepers. “Anyway, I made $4000 and had to take out the initial $7000 startup money from the C-corp account for personal needs. Having the $4000 I made still in the account, how do I legally and tax friendly take the $7000 back that I need for my personal reimbursement?”
Okay, we’ll get into all that. We’ll break down the good, the bad, and the ugly on all those. But before you do that, if you’re already on YouTube, you’re probably already seen it. You could just subscribe to my page, and you can continue to get all the recordings of the Tax Tuesdays. This is episode, I believe it’s 195, so we’re getting close to the big 200.
We do these every other week. We’ve been doing them for a long time. I don’t know how many years that is, but it’s a lot. We’re just going to keep doing them because we enjoy it, and we always get positive feedback. People tend to be appreciative of folks that don’t mess around and just answer their questions.
If you like this type of information, I would encourage you to subscribe to the YouTube channel, and then you’ll be notified whenever new things come out. There’s a fancy link there, aba.link/youtube. I like the YouTube stuff. I don’t know about you guys. It’s fun. I like going out and seeing what everybody else says, too. I’m not just a content creator, I like to see what everybody else out there thinks.
Okay, “I think that most people have heard of 1031 exchanges and the associated tax deferral benefits, but I recently became aware of section 721 exchanges. Can you discuss the similarities and differences between these two options?”
Jeff: Let’s start with a brief explanation of 1031. 1031 Exchange means I can sell a property through a Qualified Intermediary, and replace it with another profit as long as they meet certain requirements. I won’t go into all those requirements unless you want to.
Toby: I can’t help myself, usually. You know that. You just set me up.
Jeff: A 721 has the same effect as if you don’t pay tax on the sale. But you’re not exchanging one property for another property, you’re exchanging one property for an interest in a partnership or some other type of entity, a real estate interest, where you don’t actually own the property directly.
Toby: Yeah. The biggest difference here is the 721, I’m contributing something that I’m leaving for a business interest, and then I’m done, like I can’t do it anymore. There’s no such thing as, hey, I’m going to 721 again. You’re going from, hey, I sold some real estate, and I have some capital gains, I want to defer it. I believe you still have to use an intermediary, but I’m placing it into a business vehicle like a master partnership that may own pieces of a real estate investment trust.
Usually, that’s what you’re doing. You’re saying, I’m done with my private real estate, and I’m going to get into a REIT. Or Delaware statutory trust, I’m going into a vehicle, but you’re done once you get into that vehicle. Whereas the 1031, I could 1031, I could sell one property by 10, sell those 10, buy 1 as long as it’s real estate, do it again.
By land, I could buy an apartment complex. I could buy a bunch of single families. I can do whatever I want as long as it’s real estate of equal or greater value, and I could just keep doing that over and over and over again. 721 is a tax free exchange, but it’s a one and done. That’s my understanding.
Anybody out there ever do a 721 exchange? Anybody do that? Put it in chat. If you’ve ever done a 721 exchange, you’ll oftentimes hear them referred to as an UPREIT because you’re going into a partnership that goes into a REIT. Generally, at least that’s my neophyte understanding.
Has anybody ever done one? I don’t see anybody yet. Sometimes it takes a second on the chat, but we’ll see. We’ll watch that. Nope, so they’re rare just like my steak.
All right. Let’s see if anybody else pops on there, and we’ll go back to that. A bunch of noses now. I always think about it like you’re creating a very specialized vehicle for folks that want to 1031 out. Most of our clients, we’re private investors. If we want to 1031, we will, or we’ll do a lazy man’s 1031. Sounds sexist, lazy person’s.
Somebody says qualified opportunity funds are one and done, too. I always thought those were red herrings. I know a lot of people pitched as qualified opportunity funds that were neat if you’re going to do a regular business.
On the real estate side, I was always like, I don’t want to get stuck in something for 10 years much longer. Depending on what your deferral period is, you could be eating those things for 15 years. I preferred not to be. Anyway, I’m not going to keep pontificating. Let’s jump back into tax benefits of a foundation versus a nonprofit organization.
Jeff: I’m going to approach this a different way. It’s not so much the benefits of a foundation versus a nonprofit. A foundation is a nonprofit. What it is not is a public charity.
Actually, if you don’t qualify to be a public charity, you’re automatically going to be a foundation. We see that sometimes, where people aren’t getting public support for their public charity, then they default back to the foundation status. You still get the same deduction for your contributions. There is the possibility of attacks if you’re not distributing enough of your money. Foundation distributes to other charities.
Toby: There’s one other thing you could stick there, a private operating foundation, which is now they don’t have to give anything. The easiest way to think about a foundation and a 501(c)(3) charitable organization that’s a public charity, is that the public charity does stuff. A private foundation funds stuff. It doesn’t do anything, it just gives money out. They got to give 5% a year, right?
Jeff: Yeah, I’m glad you brought up operating foundations because a good example is you’re running an animal shelter. It’s an operating foundation. You have operating expenses, but you’re contributing all your money to that. That works very similar to a nonprofit public charity.
Toby: Public charity does stuff for the public and gets its support from the public. You can get away with not doing that for about six years, and then it switches where you really got to pay attention to it, although I’ve never seen anybody reclassify it. I know Kareem did once, but he worked for the IRS. I’ve always kind of looked at it and said, hey, if you’re going to do something for the public, and you’re going to do nice things, you’re not going to have to give away money.
You’re either going to be a private operating foundation or you’re going to be a public charity. What’s the big difference? I can give 60% of my AGI and cash to a public charity, whereas I’m limited to deduct 30% to a private foundation. I can give up to 30% of my adjusted gross income and appreciated assets like real estate or stock, versus I could give up to 20% of my adjusted gross income if it’s a private foundation.
Somebody says, did I see that ABA recommends a 501(c)(3) own property? Not really, Jim. What you see is that a lot of property qualifies as charitable activities, so residential assisted living, transitional housing, shared housing. I do housing for elderly folks, where we’re below market. It’s like sometimes we just give people houses. That would be imputed income to me if I did it in the for profit realm, so I give them away. But that’s me.
If it’s somebody who’s running a residential assisted living, the activity qualifies as a charitable activity. But we usually have the houses and the real estate owned in a for-profit, and then it leases to the nonprofit. You’ll see it sometimes. It depends on what you’re doing.
I like not having to pay property taxes if I’m not making money on the property. You know what I mean? If you guys don’t know who I am or anything like that, I’ve been doing this for 26 years, but I have 400-some properties. I like to give some of them. I’ve already depreciated. I get a tax deduction when I give those away, and I usually give them away to charity.
If you’re doing that for other people, you don’t need a punch in the gut when the IRS comes in and says, you need to pay tax on that, and you have to pay the property taxes. If you 501(c)(3), you can move for an exemption of the county property taxes, the real estate taxes, and then you don’t have to worry about it. But it’s not my property anymore, either. It’s owned by a charity, and the charity is not owned by me. It’s just controlled by me, and it’s there for the public benefit.
There are a lot of situations. When we do recovery housing, that’s a beautiful situation where you can have a charity involved in. At least certify the house. There’s something called the National Alliance of Recovery Residences that gives a certification for homes. You could do something like that, and you could still own the home in a for-profit realm, but go get money from municipalities, go get grants, go get money like that.
Toby, I’m looking for my first recovery house. We’re happy to take what off your hands, Tracy. You got to go out there and get that done. We’ll show you how to do it. Actually, on YouTube, I just had Frank and Sherri Candelario, two of my favorite people who do recovery houses. We just did a really cool video on that.
If you guys want to learn that stuff, I will show you all day long. Somebody says, I’ve been working with them, too. Yup, they’re really great people. Michelle Wheeler, another great gal. She’s going out there. I think she’s got 10 and was getting a grant, $75,000 per home and about $1000 per bed, 10 beds per home. If I’m not mistaking that, I think she gets about $10,000 a month to run a recovery home.
There are public monies available, but you have to have the charity in those situations. You can’t do that simply private, but you can collect the money through the charity and then pay for profit. You can actually just use it as a vehicle to allow. You can absolutely jump in there. The video that I did with Frank and Sherri was in the last couple of weeks, so check out YouTube. You’ll see it in there.
All right. “I have two houses I’m selling this year and/or at the same time. Both were residents for two years over the last five years consecutively.” They’re talking about a section 121 exclusion. That’s when you sell a house, you don’t have to pay capital gains. “I have just lived in the latest house for the last two years, and I’ve been preparing both to sell. Will I have a problem claiming both of them as residences two of the last five years since I’m selling them at the same time?” What do you think?
Jeff: We’re going to start off assuming that each of these houses were your primary residence consecutively. One stop being the primary residence, even though you didn’t sell it. It has its own issues, and then the second one becomes your primary residence. Yes, you have to live in this house, primary residence, for two of the last five years, but it’s only good for one house. Now, this whole thing resets in another two years.
Toby: Let me just make sure I’m distilling the wisdom that you’re spewing. Two out of the last five years as a primary residence. A lot of people just say, oh, I lived in it two of the last five years. No. It’s your primary residence two of the last five years, that’s the qualifier.
Of the last 60 months, 24 of them, you had to have lived in it as your primary residence. That met, then you can exclude, if you’re single, $250,000 of capital gain. If you’re married, you could exclude up to $500,000 of capital gain. The rub is you can do this every two years. There are two out of five and every two years. If you 1031, and then move into it, it’s every five years.
If you 1031 it into a property, and then it becomes your residence, use it as a primary residence, you can still 121 it, you just have to live in it for five years. But in this particular case, do not sell these houses at the same time. What you want to do, what would you say?
Jeff: You want to sell, right now, the house that was your primary residence longest ago, so the one that you moved into (say) four years ago, because the clock’s ticking on that house.
Toby: When you move out of a house, you basically have three years to sell it without there being any penalty. In other words, I lived in it two of the last five. In year one, I lived in it as my primary residence. In year two, I lived it in my primary residence. I moved into another house. In year three, I lived in the second house as a primary residence. In year four, I lived in the second house.
I have three years from the date that I moved out of that first house to sell it in order to meet the two out of the five year test. What Jeff’s saying is the one that you’ve lived in, that was your primary residence a couple of years ago, you need to sell that one because you have one year to sell it. Then what would we do with the house that I’m living in now? I don’t want to live there anymore.
Jeff: My suggestion is to turn it into some type of rental. I prefer long-term in this case.
Toby: Because you have three years, you can rent it before you lose the 121 exclusion.
Jeff: I prefer to rent it for at least two years because you need the clock to tick for that long anyway. You don’t want to rent it so long, though, that you can’t sell it timely. You will have some depreciation recapture that you may get tax on. We’re not talking about a lot of money, it’s money you just deducted in the previous two years.
Toby: Here’s the thing. We also should look at how much tax liability. If you’re looking at selling two houses, one of them has $250,000 of gain, and the other one has $10,000, then we’re going to go right to the $250,000. Let’s make sure we sell that one first because that’s going to be your biggest bang for your buck. If you have $10,000 of gain, you’re not crying.
Worst case scenario, if it’s long-term gain, you’re talking about net investment income tax. You still get hit on your house. You’re looking at 23.8% Federal Tax tops if you’re in the top bracket, so you’re a rich guy, and you’re making over $600,000, married. You sell it, nobody’s crying for you if you have to pay $2400 in tax on that one. But if it’s big like half a million dollars of gain, and you can avoid it, then we want to make sure that we’re capturing that one. There is that factor.
Jeff: I want to throw one more in. If your adjusted gross income is below (say) $85,000 and you’re married filing jointly, then I dumped both houses now.
Toby: Yup. It’s a little bit of a math equation. If you have two houses, and you’re thinking of selling them, and they both have gain, peace them out. Do what Jeff just said, sell the one that you have the least amount of time to sell, that one that could be done in a year. Then the second one, hang on, rent it out for a few years tops. You could rent it out for up to three years, then sell it, and you could use your 121 exclusion. And you can 121 and 1031 Exchange. You could do those together.
You could actually use up your 121. If I moved out of the house, let’s say that it appreciates, let’s say you’re one of those guys that’s in Miami or something, you’re like, oh my God, but my house is going to go up another million dollars. If you make it into a rental, then we can actually use your 121 exclusion, 1031 that property into another, and it steps your basis up for depreciation and everything else. You’ll get a big benefit out of it. If that sounds like Greek, it’s all right. You stick with us. We’re going to teach you that language.
All right, what else do we have? Somebody says, late to the party, what is a 121 exclusion? 121 is when you can avoid $250,000 of capital gains when you sell a home if you’re single, $500,000 if you’re married, and you just had to live in it two of the last five years as your primary residence. You’re selling a house, there we go, perfect.
All right. “I am planning to follow you’re renting out stock advice and selling covered call options. The earnings of that deal be used to buy more stock from the same company. How was the tax situation here? How much tax has to be paid, and when?”
Jeff: This is one of those ‘it depends’ answers. I write a covered call, it never gets exercised. That is short-term capital gains however much I’ve received. It’s taxed when it expires, not when you write it.
Toby: If you sell a leap, you could actually end up in a long-term capital gain. It’s a capital asset, so when you sell it, and this is going to go to the next question because I think the next one is about how they’re taxed, but let’s say that I sell options on a stock and defer a month out. I’m going to have a taxable event within the next month. They’re either going to expire worthless, and I get to keep the money. That’s the taxable event when it expires. Somebody is going to call me out, in which case is going to get added to basis, right?
Jeff: Yup.
Toby: Or I just sell it, and I’m like, oh, it’s become worthless and I’m going to sell it, in which case I’m taxed the day that I sell it only on the gain that I get the money I got to keep. In any of those cases, we’re talking about capital gain. That’s what it is.
Whenever you have options, you get the money now, and you’re going to have a taxable event at some point in the future. If you’re doing them a year out like you’re selling leaps, then it’s whenever it’s exercised or expires. Let’s say that it expires a year-and-a-half from now, you’re going to have long-term. I believe it’s going to be long-term capital gains. I say that like I think it is. Is it? You think it’s long-term?
Jeff: Yeah. If you’re exchanging your stock because you’re exercising the option, whoever bought your option, then your gain or loss is going to depend on the stock, like you said.
Toby: I’m sorry, a leap is a long-term option. Jim, if I have Coca-Cola, and it’s at $60, and I sell a $70 leap, that’s exercisable not this June, but next June. It’s a year and some days, and Coca-Cola never gets to that point. Coca-Cola stays at $60. In a sideways market, these are our friends.
You’ve had that money the whole year, you weren’t taxed on it, and then it expires worthless over a year ago. Then I would have the tax hit at that point. At least somebody pointed it out correctly. If it gets exercised, then it would be early.
Let’s say I sell that, and then in two months from now, it gets exercised, and they buy my stock, it’s at $65, then I would have a taxable event at that point, the date that it gets exercised. It works great. Did I say that a lien was like an option? No, I don’t think I did. Do I say lien was like an option?
Jeff: No, you said a leap is an option.
Toby: Yeah, a leap is an option. There we go, sorry. That’s a long-term option. Whenever you hear somebody say, I invest in leaps or I sell leaps, what they’re saying is, hey, I’m really, really lazy about buying stuff in the short-term. I’m not selling an option that expires in two weeks or a week. Some of you guys do it within days because you guys are really smart, and you love looking at this stuff.
I am the laziest trader on the planet. I buy stuff, and then I immediately sell an option on it. I should roll out of these most of the time. I’m just a horrible person, but I have a bunch of money managers. They actually pay attention to it, but I always find out that, oh, I made some money on some stock. Taxable event, it’s like, okay, it’s all right to have some tax. There are some ways to offset it. You just got to have a little plan.
Jeff: Where would be a good place for people to learn about leaps, options, and maybe infinity investing?
Toby: Infinity investing, you should come visit us in infinityinvesting.com. We have a free membership that you can go in there. You can learn all about this stuff. It’s infinityinvesting.com. I wrote a book on it. I don’t have an original idea in my head.
Let’s be real straight up with you, I did steal everything from the clients that do well. If they’re smart, I just steal their stuff. I’m looking over their shoulders like, hey, that was really smart, what did you do? That’s a really good idea, let me regurgitate it to somebody else, and then you did good. Yay, that’s good.
If I see it repeated 100 times like we do over 10,000 tax returns here, we can see who’s doing well. We can actually say, hey, guess what? These people over here are always killing it. Markets going up, they’re killing it. Markets going down, they’re killing it. They make money when there’s a recession, great. They all have the same earmarks, it’s all the same stuff.
I look over your shoulders just because you’re the opposite of everything. I’m just kidding. That’s Michael. I do the opposite of Michael’s like, this was a great stock. I’m selling puts on. I’m going to short it.
All right, “How are stock options taxed?”
Jeff: We pretty much taught regular stock options, the debts, maybe from the point of view of employee stock options.
Toby: Okay. Regular stock options, expiration, they’re sold, you’re exercised. That’s it. That’s when they’re taxed. I can make a bunch of money, and then there’s stuff that happens in the future. Employee stock options, a whole other ballgame.
Jeff: Employee stock options. There are a couple of different kinds. There’s the ISOs (incentive stock options) which have a very special treatment to them. There are non-qualified stock options, which you see a lot more often. There’s RSUs (restricted stock units), and they’re all treated slightly differently. There’s a code section called 83B that lets you predetermine how much tax you’re going to pay ahead of time.
Toby: You have to recognize a little bit then.
Jeff: You have to recognize a little bit of it at the time of granting, so then we can start talking about vesting, when was it granted? When have you vested? And so forth. Typically, if you’re receiving stock options from your employer, they’re going to deal with all the taxes, the non-qualified stock options they’re going to have withholding.
There are a couple of different ways to exercise these options. You can either pay for him upfront. There’s still something to pay for, or you could sell some of the options that you just got or maybe already holding to pay for the new stock. Yes, this is a bit complicated, a bit convoluted.
Toby: You can get really reamed in a bad way. If you have a vesting and you have stock options that you get taxed on, then the stock takes a dive. That’s how employees sometimes get scared because they might have a tax bill on something that’s not worth the tax payment. That’s one of the reasons why I don’t like mark-to-market for all you traders out there, you crazy traders who want to do mark-to-market.
I remember in 1999 and the big correction on Qualcomm, and all these people were millionaires one year, and then the stock just took a dive. All these people that made mark-to-market elections are having to pay massive tax bills with the stock that’s not worth anything anymore. It was just so messed up. I didn’t like that.
All right, who’s Rickards? Somebody says, what do you guys think of Rickards? Is it Jim Rickards? I don’t know. Do you know Jim Rickards? Anybody out there know Jim Rickards? Jim must be somebody who’s an investment guy. Rickards is a fear monger, there we go. Thank you for following the mainstream, sorry. I can’t help myself.
Jeff: I thought his name was Jim, what’s the mad money guy?
Toby: Cramer.
Jeff: Jim Cramer.
Toby: Cramer, you do the opposite of whatever he does, you’re going to kill it. Somebody says Rickard’s a little doomsday attorney that worked with the […]. Jim is a lawyer who writes books. What do you guys think of him? You guys can’t see the feed. Oh, he worked for the CIA.
Jeff: They tend to be a little pessimistic.
Toby: I don’t know how you can trust anybody that works with the CIA because they literally will tell you that they learned how to deceive everybody. Oh, I’ve heard of Stansberry. They’re actually pretty good, gold bugs, it’s all a game, I think, to want to hype us up. There you go, it is all a bit of a game.
If you play it like a game, you won’t get stressed out. You’ll just say, hey, you know what, there are certain rules. There are certain things I can do that’s going to make it better for me. Somebody says Rickards is an opportunist who is constantly issuing warnings that never take place. It sounds like the guy that does The Big Short too.
Troy he’s not helping. I’m sorry. You could always bring this stuff to us. I actually love our group because everybody is so straight up. They said, Chicken Little. All right. I didn’t know.
Jeff: Is this one of those guys that still says the world’s ending in April, even though that was a month ago?
Toby: Yes. You know what, there will be some short-term pain. Where you’re going to see it, there were all these indicators that were doing apartments, and they’re going to get smooshed because all their loans are resetting. They did this whole thing, where they’re like, ah, we’re going to make all this money, and it’s really low. It’s 3.5% interest.
I remember all these guys because I hate that. I’m one of those guys that doesn’t like to buy any of my real estate with that. Oh, you’re crazy not to lever. I always say, well, I don’t remember too many foreclosures in 2008 that didn’t have a loan attached to them. Just call me crazy, but I’m still not a big boom, you see all these folks that’s just getting smooshed. There is going to be pain. There’s going to be a lot of pain. It’s just making sure it doesn’t happen to you guys. What we care about is it that we’re safe in our group.
Jeff: Speaking of market market.
Toby: “I’ve got an LLC taxed as an S-corp with a brokerage account. Can the profit or loss from the active trading business be reported as business income loss? I don’t know what all this means, but I imagine that they’re saying, can it be reported as business income loss or capital gains? Is there anything similar to a trader status mark-to-market for an S-corp?”
Jeff: I have not seen anything that says any entity can make a mark-to-market, section 475 election. I think it’s still going to fall back on the individual. What I just told somebody in tax who was asking about this is the problem with this is you have to meet all the requirements. We haven’t found two courts that agree on what those requirements are.
Toby: We know that for trader status. Here’s the thing with trader status, it doesn’t exist in the code, so there are no rules. They had to go to court. The courts have said, consistently, if you have a holding period beyond 30 days, you’re not a trader. Number two, you need to trade the majority of the trading days about 70% as you’re cut offline. If the market is open for 220 days, 70% of those you got to be trading constantly.
It’s about 750 trades a year, and it’s facts and circumstances. They can try to find a way, but there are folks that traded $15 million and were denied trader status. I just don’t go with that at all. I avoid trader status. You may as well put a big old bullseye on your forehead if you’re going to do that.
I know there are some of you guys that are probably just ticked off because you’re like, I’m filing as a trader. I use a real simple structure to avoid it. I use a partnership and LLC taxed as a partnership with the corporation as a general partner or as one of the partners, and then I let the corporation earn its money and write off expenses.
That’s part of the partnership agreements. Corporation gets to cover those. It makes its money. If I need to give the corporation more money, I have something called a guaranteed payment to partner because there’s no such thing as miscellaneous itemized deductions anymore. They went away with the Tax Cuts and Jobs Act, so I don’t even mess around with it.
At the end of the day, you get the net on your trading account, and we don’t worry about the losses. We’re not trying to do a mark-to-market so you can take ordinary losses in the market. If you’re making a mark-to-market election because you’re losing so much money in the market, get out of the market and go do something else.
Jeff: My general opinion is the only people that benefit from mark-to-market are people who were bad investors. That might be a little strong bet.
Toby: That’s me. Yeah, you’re writing ordinary loss. Otherwise, you’re going to carry forward capital losses. I’m sorry, but I actually went back and forth with another accountant about 26 years ago. We were writing articles. He took aim at one of ours, and I took aim at one of his, and I just kept saying, if your planning involves the idea that your business activity is going to lose money, you should be looking at a different business activity. You should never enter a business activity where you lose money, period.
Jeff: I’ll give an example. We had one guy who thought he was a genius because he made a mark-to-market election, wrote off about a quarter of a million in losses. The following year, the market turned around, and he had to pay tax on a half a million dollars of unrealized profit.
Toby: Here’s how it works, guys. If you hear Jeff and I get a little wacky on this, I’ll give you a prime example. I believe this was in 1999 or 2000. I won’t say what stock it was, but stock went up almost $600 in about a month. People were trading on this by selling leaps.
I was part of a group where there were about a thousand people who had actually done this. They were all or buying leaps, which is gambling. They all made, in some cases, seven figures. You were making $100,000 a day as this thing was just going up. It’s going $30, $40, $50 every day, and you just ran up right after the end of the year. What they do is they mark it to the market, and you’re taxed as though you’ve sold it.
Here, you have a million dollars of gain, short-term gain, which is taxed as ordinary income. At this time, I think it was 39.6%. You get hit with about a $400,000 tax bill. Then the following year, the next three months, it just went straight down. It gave back all that gain. Here’s all these people, and I remember this, who were sitting there with a $400,000 tax bill, and they have stock that is worth less than the tax bill.
Jeff: I don’t know if you heard what Toby said. When they reported the gain, they were in the highest tax bracket. But when you take a loss, you’re no longer in that highest tax bracket.
Toby: And you can’t use it. If you make money, make $100,000 in the market in 2022, you get hit at whatever the capital gains rate is. If it’s short-term, it’s your highest bracket or your bracket, whatever the highest amount you’re in, and then the next year, you lose it all, they don’t let you write off the $100,000. They’re going to let you write off $3000 of it and carry it forward, unless you have other capital gains.
That’s how stinky it is. It’s not a fair game, so I don’t like mark-to-market. I don’t like imposing those types of things on myself. I know a lot of you guys are traders out there. Just bear with me, I’ve seen thousands of returns that are doing these activities. I can just tell you, nothing really ever comes good of doing that mark-to-market.
All these guys are out there like, you should make it mark-to-market, you should be a trader. They’re all accountants that specialize in that so that they can handle the audits. There are a lot of audits, so it sucks. So don’t do it.
Hey, here’s some you should do, though. You should come and visit us at the tax and asset protection event that Clint and I do about every other week. If you want to learn about land trust, LLCs, corporations, how they work together, a whole bunch of tax deductions for real estate investors, including how to accelerate depreciation, doing cost segs and how to take bonus depreciation, how to do 280A, how to do administrative offices for the home, and things like that, this is the right place. Come on in, it’s free. You can join us.
Somebody says, are C-corps limited by passive investment losses?
Jeff: Yes.
Toby: All right. While you’re here, answer your questions. All right. “We have a second home property that we are renting as a short-term rental. It is titled under a Wyoming statutory trust, and we’re already paying property taxes. Does a 571-L form business property tax still apply to us?”
Jeff: Yes, 571 does apply to short-term rentals. The reason is because it’s a trade or business.
Toby: It’s business property. This is a California tax. I think it’s 1% or something that they impose on business properties like your computer and stuff like that. But if you are doing a short-term rental in your home, it’s an active trade or business, so you would more than likely have a chunk of that home be considered business property, if not the whole amount. I just know that it’s hotly contested, and that most people won’t pay it unless they actually have a city or municipality give them that form and say, hey, you owe it.
Jeff: I believe this form is actually called, per Eliot, the 571-STR. Apartment complexes, I should say, can also fall into this.
Toby: Apartment complex is probably hotels and things like that. Somebody says, do you have any YouTube? Yes. Can you guys send out the YouTube link to Vivian so she can see where all the old YouTube or all of our old Tax Tuesdays are? You’ll find it in there. Just say Tax Tuesday on the thumbnail. It always gives a couple of the things that we answered, and then we’ll put it over there. All right.
Jeff: Let us know if we’re getting any smarter as time goes by. Some days, I’m not sure.
Toby: I feel like I’m backtracking at this point, like I’m forgetting so much stuff. All right, “Who can qualify for an HSA? I’m an active duty military member, and I’ve been told I don’t qualify. However, my wife still has co-pays based on her plan, and I’ll have to pay co-pays once I retire.” What do you think, Jeff?
Jeff: Forgive me. I’m going to partially answer from my experience when I was in. To qualify for an HSA, you have to have an HDHP (High Deductible Health Plan). I think it’s $2500 minimum deductible.
Toby: Something like that. There’s a family deductible, too. I looked this up. Eliot, if you’re rolling around out there, what are the limits? Or any of our accountants, what are the limits on the high deductible plan?
Jeff: When I was in the military, me, my spouse, my children, were all covered by military health benefits. I could go to any hospital, any VA hospital. That includes my spouse and my children. I’m not sure that they were qualified, just none of that aspect. I know we have TRICARE and some other stuff.
Toby: TRICARE, automatically, you can’t do an HSA. Somebody says $1400, $2800 for family. It’s $1400 per individual. $2800, that’s a high deductible plan. That just means that’s the minimum amount of your deductible to qualify. TRICARE, you’re done, TRICARE, you’re eligible to be covered, you’re done. Your spouse is covered, you’re eligible to be covered, you’re done.
Jeff: And the plan has to be deemed an HDHP because my deductible is higher than that, but it’s not a high deductible health plan. It’s not considered one.
Toby: You could ask your administrator if you’re a member of a plan. A lot of times, companies will also have an HSA that they contribute to for their employees. I know there’s another question here I think that pertains to that. But if you have a high deductible health plan, your spouse is a member of something else, but you’re not eligible to be covered, then you can still do an HSA for yourself.
The problem with the military is that they allow the spouse to be covered. I think that knocks them out. But here’s another up, get a C-corp. An HSA is cool because I get a deduction for the contribution, it grows tax-free, and if I use it for health, anything for health related co-pays, deductibles, things that aren’t covered, anything from my health, non-taxable. I get over 65, I have a huge war chest, and I’m just never getting sick. Then you could take the money out and pay tax on it when you take it out. There’s not even a penalty if you get over 65.
If you’re under 65, you pay tax and a 10% penalty. Still, it’s a great, great thing. But if you’re not qualified for HSA, you might want to look at a C-corp because C-corps can reimburse you 100% of your medical, dental, and vision expenses. If you have a little C-corp floating around out there that maybe it’s a partner in a trading account, or maybe it’s managing some rental real estate or whatever, you put that in there, then it can reimburse you 100% of your medical dental vision.
Somebody says I can’t find prior Tax Tuesdays on the YouTube channel. You’ll see them, Gail. If you look at the videos, you have to look at the thumbnail., and you’ll see in the little bottom, it’ll say Tax Tuesday. It’s usually the questions that are asked that are put as the title of the video.
You’ll see them, they’re almost every week. Once you can tell, you’re like, oh, there’s the thumbnail, oh, there it is. On the bottom there, you’ll see. You can always go find them. If you want to, you just reach out to our staff. We’ll point you right to them.
Jeff: I’m one of those who say, I can’t find it, and then somebody goes, it’s right there.
Toby: It says Tax Tuesday. We don’t put it in the title, it’s on the thumbnail. You have to look at the little thumbnail, which is way fun. They’re the dumbest of thumbnails that make us do goofy faces and stuff. Like, oh, the market is going to end. For whatever reason, people click on those. If you just look normal, they won’t click on there.
Jeff: That way, you call it clickbait. The title has nothing to do with what you’re talking about.
Toby: There are some people. Right now, it’s all doom and gloom, the debt ceiling. We’re going to default. Wait a second, it’s going to print more money. They’re all a bunch of knuckleheads. We cut back our budget. You did not. That’s like the kid’s saying, I’m not eating as much chocolate and candy. It describes myself.
All right, next one. “I have an HSA with my W-2 job that I’m maxing out.” It sounds like you have a high deductible plan with an employer that also has an HSA component. “Can I open an additional HSA with my LLC business?”
Jeff: HSAs share quite a bit in common with IRAs. They have the same deadline April 15th to make their contribution by. They also have a limitation that is for all IRAs or all HSAs. What we say, the HSA limitation is best $7300 for a family?
Toby: Yes. This year, it’s around $7300.
Jeff: Like an IRA, I can open up 20 IRAs, but I’m still limited to that $7000 contributions. HSAs work the same way, I’m limited to how much I can contribute to all HSAs. If you’re already maxing out, I wouldn’t bother. You’re going to have an administrative fee with your new HSA. Save the money, just keep contributing to your employer. It sounds like it’s also pretty […].
Toby: You don’t need an LLC business. Let me just put it this way. The HSA is something I could set up. I have one, but I set it up. I think I’m eligible to do another HSA through the employer, but I have my firm. It’s like, oh, just put this over here.
That’s all you do. It’s an individual account. You get a little deduction, and all is great. You just keep accumulating, and then you could invest in it. I did some risky investments in mine and it popped. I was laughing because I was like, I would never have invested in that. I entered it like a normal time horizon, but I’m thinking 20 years.
See what this does. Roll some dice. Sometimes it goes, great, and then you’re sitting here, oh, there’s a bunch of money sitting in this account. So if I get sick, there’s money there. It’s not a bad feeling, it’s a great feeling.
Jeff: Yeah, it doesn’t matter how big that pop is as long as you’re using it for medical expenses.
Toby: Yup. It can be $2 million, it can be $2 trillion. It doesn’t really matter. At the end of the day, if you don’t use it for the medical, then there’s going to be a tax, and it’s going to be if I take it out. I don’t really know what happens if you pass. I imagine it would be taxed to the individual when they pass. I haven’t really looked at that.
Jeff: I’m not sure.
Toby: Yeah, but there will be a, hey, if you don’t use it for the medical, there’s going to be a tax consequence at some point. But it’s nice to know that you have the money there if needed. It’s the triple threat. There’s nothing else out there that I get a deduction for. It grows tax-free, and I get to use it tax-free.
There are a lot of things where I could put money aside tax-deferred like an IRA, but I’m going to pay tax on it in the future, or I put money into a Roth. I don’t get a tax deduction, but I’ll never pay tax again. What they do with the HSA is said, we’re going to combine those two things, you’re just never going to pay tax, and you get a deduction. I don’t know anything else out there that’s quite like it. It’s one of the best things you can have.
If you have health needs, this is what you do. Especially if you’re one of those people that tries to write off your medical expenses, but your 7.5% of your adjusted gross income prevents you from really getting any deduction, the HSA is what you should be doing. I should be putting money in, taking a deduction, and using it for those health expenses. Voila, we just got a tax deduction. It’s just like that.
Jeff: Some people will use the argument that I never have any medical bills, why would I want to do this? You will.
Toby: Somebody just said, the HSA goes to a spouse. It could be assumed like an inherited IRA. Great, no tax. If it goes to anyone else, it’s taxed immediately. Bottom line, don’t die, or get really, really sick and spend it on whatever it is. There was a guy I read today that was spending $2 million a year on anti-aging, $2 million. That’s a great reason to have an HSA.
Jeff: If I got that kind of money, I’m not sure I care about how I look.
Toby: That’s probably how he feels. Maybe he’s trying to be mortal. We all get a little crazy. To clarify for us, it’s more beneficial to have an HSA or to use my C-corp accountability plan. It gets you to the same place because in a C-corp, I get to pay you, deduct it, and I don’t have to pay tax on it. It’s zero. I got a write off, and I got to use it for health, and I didn’t pay any tax.
The HSA, I get a deduction, but it can grow in the meantime and grow bigger, and not pay tax. You can’t do that with a C-corp. C-corp, you just park the money in there, and it makes $10 million. It’s going to pay 21% on the $10 million. It’s not going to really be paying out hopefully that much, but we do have clients that have reimbursements. What’s the biggest one you’ve seen for the medical reimbursement in our group per year?
Jeff: I want to say $30,000.
Toby: Yeah, $25,000-$30,000. I was just going to say that we have some clients that have kids, dependents, or they’re caring for an elderly parent. They have sizable expenses, and it allows them to write that off out of their company tax rate. I think that’s a good thing.
All right, “Anderson made me an entity as a C-corp. I always put monthly money in from my personal account to pay monthly business expenses. In other words, it’s not making enough money, so they’re putting money in every month. They put $7000 of startup money. That’s how they funded this thing. They put an initial lump sum of $7000 by a loan or a stock. They said, I don’t know.
Anyway, they finally made $4000, and they want to take out the initial $7000. They want to leave the $4000 I made.” Really, what they’re saying is, I just want to take $7000 out, and I put $7000, and I’ve also put in other money. “How do I legally and tax friendly take the $7000 back that I need for my personal reimbursement?”
Jeff: When you put that initial $7000 in, it was most likely alone, especially if it was an LLC taxed as a C-corp. That’s a true C-corp. You need to put a little fraction of that $7000 to stock. We’re talking like $100. The rest is a loan that that corporation owes back to you, which is no tax. You can pull that money back out any time you want and tax-free. There are no tax implications at all.
Toby: But I’m going to throw a curveball at you. If you made $4000, you’re going to owe tax on that $4000. If you are owed money because you’ve been funding this thing, it needs to reimburse you for things like computers, your cell phone, medical, dental, vision, whatever. It needs to reimburse you for an administrative office in your home, 280A. It owes you money to reimburse you because you’ve been flipping the bill. That is a deduction that goes against the $4000 of income.
You can always give back the money that you contributed to a company tax-free. You can just have a return of capital. Hey, I put $100,000 in a company. A few years later, it’s making money, and I want my $100,000 back tax-neutral. I do not pay tax on the $100,000 that it gives me back because my basis is 100.
Once it starts giving me more money than I put in, now I’m going to have taxable events, period. Unless I’m at risk, and I share some loss, then we will get into all that. That’s another topic. But in this particular case, you can get your $7000 back without incurring any tax event.
Somebody asked previously, can you open an HSA if you have an employer sponsored plan? Yes, but your limitation is the annual amount. Anything else on this?
Jeff: It’s really important. There’s a big difference between C-corps and S-corps when I give my company money. On an S-corp, I want it to be a capital contribution because again, I can distribute that money back out to myself left and right. I do not want to do that in the C-corp because if I make it a capital contribution, the only way to get that money back is through a dividend, which may or may not be taxable to you or by taking it out through salary. It is important how you designate that initial contribution.
Toby: One other thing is, if you’re losing money in a C-corp, here’s the big one. If you have a loan, you’re not going to get any tax benefit out of it, but you need to contribute all that in exchange for stock before you dissolve the C-corp because you can write off up to $50,000 as an ordinary loss if, for whatever reason, you lose money.
If you’re plugging along, and the C Corp never makes it, and then it goes out of business, make sure that you don’t have a bunch of loans to the company. Make sure you contribute that in exchange for stock so you can take a small business stock loss. That’s at 1244 stock. There we go.
Jeff: Let’s say you screw up and don’t make that switch over to stock. You now have capital loss. You can still deduct it, but it could take a long time to recover.
Toby: $3000 a year. Let’s see what else we got. Somebody says, can we promote this on our blog? Yes, of course you can. We do not care. Just share the good news.
All right, speaking of good news, somebody was just asking about YouTube. Here’s another one. Feel free, subscribe. I love people being on YouTube. For whatever reason, it brings me an immense amount of joy to stand in front of chalkboards, dry erase boards, computer monitors, and pontificate.
Anyway, that was it. There are no more questions? What the heck happened, Jeff? It’s 4:01. That’s almost on time. When we started doing these, some of you guys were there. We would just answer 20–30 questions. They were a little bit long.
Jeff: We were still going at 5:30.
Toby: Yeah. We may have been going for a long time, which is weird that people would hang out and listen to stuff. It was not uncommon to have a thousand people listening to those things. I was like, how are you doing that? I like listening to taxes. Maybe you’re in the gym or something.
Anyway, somebody had a question. This is a really long question, but I think he’ll probably need to put that in the Q&A. Speaking of the Q&A, Eliot, Jared, Ross, Sergey, Tania, Troy, I know there was Ander, I know there was Jen, there’s Dana. There are a bunch of others answering questions. They’ve answered over 130 questions that are detailed questions, not little ones.
Thank you to my team for doing that. You guys rock, but I know that there are some open questions, and they’re answering those. Even though we are at the end, I want to say that we will stay on until we’ve answered all your questions.
If you have a question and you go, dang it, I wish I’d asked that, do not worry. Send it into taxtuesday@andersonadvisors.com. We will answer that. Somebody says, when are you going to the UK and Spain? On Saturday. Yes, I love traveling. It’s a lot of fun.
Some of you guys don’t know, but I went to school in Madrid when I was in law school for a little while, which I don’t remember much of it, to be honest with you because they have really good wine in Spain. I went all over the place. I learned a little bit about the European economic community at the time before it became the EU and just how insane that whole process was. It was a lot of fun.
Anyway, hopefully you guys get to travel around too. I think it’s a lot of fun. If you can mix a little bit of business in there, then sometimes your travel can net you some nice deductions, which we will go over another day. That’s something you guys should be asking. If I’m going to go to Spain, how do I write off some of that trip? And I can do that.
Somebody says, appreciate the outreach, data goes to Newcastle University in the UK studying shipping law. Way to go, Brian. I have a brother-in-law that’s in Bristol. They go to London a lot and have a lot of friends there. You should be really proud of your kid if they’re going international. That’s pretty extraordinary. She has to be away from home.
It’s also really cool to go over there and get a different perspective. It’s fun to travel, and then it makes me glad every time I come home. I like American side stuff too. Europe is great, but you like her space in the US. Let’s be real.
They don’t have a lot of ice. The UK is like, where’s the ice? I’ve never been to Spain, but I like the music. You’d love Barcelona, you’d love Mallorca. Go out into the Mediterranean, but the whole country is beautiful. Everybody’s so nice there too.
All right, we got off somehow. Guys, thanks for joining us on Tax Tuesday. If you have an open question, just hang tight. We will get an answer to you. If you have questions, in the meantime, send them in at taxtuesday@andersonadvisors.com.
Thanks, Jeff, who was an absolute beast for being here today. If you guys weren’t listening earlier, go back and watch the video. You’ll understand what I’m talking about. Jeff, thank you for being back. We missed you.
Jeff: You’re welcome.
Toby: We’re glad to have Jeff Rowe back in the house. We call him Jeff Rowe. You can call him Jeff Rowe too, and we will see you in two weeks.
