In this episode of Tax Tuesday, tax attorney Toby Mathis, Esq. and CPA & Tax Director at Anderson Business Advisors, Jeff Webb, bring tax knowledge to the masses and answer your tax questions LIVE!
18:42 – Can a corporation managing real estate qualify for Section 1202? What is Section 1202?
22:17 – The investment property held title as an LLC and was kept in the deceased father’s living trust. The heir is a minor child. If I transfer it out to the child’s name, will it affect the property taxes?
29:54 – The recently-passed California Proposition 19 will allow California to re-access any non-primary residence properties transferred to heirs at market rate starting Feb 21, 2021?
35:01 – I am trying to meet my goal of $50K for Infinity Investing. Let’s say I have $30K that I could use to buy stocks/ETFs, etc. Could I use all $30K to purchase stocks without violating the annual $6,000 IRA contributions or am I bound to the $6,000 contribution limit?
47:19 – My elderly mother has her house in a trust/living will with the fair market value today at approximately $700K and a cost basis for property taxes of $289K. The current tax assessment is $341K (protected under CA Proposition 13). Is there a federal tax liability if the property is deeded/transferred as a gift to a child (to avoid California Proposition 19 implications for property taxes, assuming the mother is living after February 16, 2021)?
51:21 – I have a single-member LLC that owns an SFH with a tenant and also is used to book my real estate bookkeeping side hustle. How do I segregate the reporting in the tax return (between Schedule C and E)? Also, I am assuming, only the service revenue is subject to self-employment tax. Can you please confirm?
56:06 – I have two self-directed IRAs for real estate. One property is a single-family residence that produces IRA income and incurs IRA expenses. The other property is some land where apartments will be built with a partner. Hence only expenses incurred in 2020. Question: What kind of tax reporting needs to be done on these properties?
59:05 – Outside of retirement contributions and charitable donations, are there any other vehicles to reduce a six-figure tax liability?
1:12:15 – What words of wisdom do you have? (I own the properties personally — they are not yet in land trusts — and my management company runs the AirBNBs).
1:18:30 – Can you explain how passive activity losses from depreciation are used against the tax liability on the sale of the same passive income asset?
1:23:29 – I did a 1031 exchange to buy a condo, which I rented out for two years. This March, I moved into it due to COVID (easier to rent the SFH we were in than the condo). It’s now my primary residence and I want to put it in a revocable living trust. What are the tax implications of doing this? When I go to sell, will it still be treated as a rental and I’ll pay cap gains, or will my years of living there impact the ratio (2 out of the last 5 yrs for primary residence)?
1:27:01 – My employer sent back a portion of the previous year’s 401(k) contributions to comply with IRS rules for highly-compensated employees. Can the returned balance be applied to a separate QRP against last year’s tax-deferred contribution limits?
1:31:36 – Home sells for a profit of 500K after 2 yrs. I’m splitting the profits 50/50. How do I avoid paying taxes on the entire profit?
Toby MathisToby Mathis, is a founding partner of Anderson Law Group and current manager of Anderson's Las Vegas office. He has helped Anderson grow its practice from one of business and estate planning to a thriving tax practice and national registered agent service with more than 18,000 clients. In his work as an attorney, he has focused exclusively in areas of small business, taxation, and trusts. In addition, Toby was the past director and host of the longest-running local business radio program on KNUU in Las Vegas "The BOSS Business Brief". He sits on the board of directors for several companies and was recently appointed to the local board of Entrepreneurs’ Organization, a worldwide association of owners of successful businesses. He has authored more than 100 articles on small business topics and has written several books on good business practices, including first and second editions of Tax-Wise Business Ownership and 12 Steps to Running a Successful Business.