1 00:00:00,720 --> 00:00:06,080 Speaker 1: Because four hours simply enough. This is armstrong and getty 2 00:00:06,160 --> 00:00:13,760 Speaker 1: extra large. I was just thinking, is we're about to 3 00:00:13,760 --> 00:00:17,759 Speaker 1: talk to a tax expert. How upsetting it must be 4 00:00:17,840 --> 00:00:23,119 Speaker 1: to him these stories about tax payers all across America 5 00:00:23,160 --> 00:00:26,280 Speaker 1: feeling like their taxes went up because their refund is smaller, 6 00:00:26,920 --> 00:00:29,840 Speaker 1: even though their taxes actually went down. Yeah. We've known 7 00:00:30,080 --> 00:00:33,400 Speaker 1: Stephen Moskowitz for years in a variety of capacities, uh, 8 00:00:33,640 --> 00:00:35,599 Speaker 1: personal and professional and the rest of it. And I'll 9 00:00:35,640 --> 00:00:38,919 Speaker 1: tell you something about Stephen is he feels about taxes 10 00:00:38,960 --> 00:00:41,920 Speaker 1: like shirtless guy in the stands feels about football. He 11 00:00:42,080 --> 00:00:44,839 Speaker 1: is so into it. Uh, that makes it fun to 12 00:00:44,880 --> 00:00:47,239 Speaker 1: talk about the changes in tax going a lot more. 13 00:00:47,240 --> 00:00:51,080 Speaker 1: Steve Moskowitz joins the Steve, how are you, sir? I'm great, 14 00:00:51,200 --> 00:00:53,000 Speaker 1: really happy to be a guest on your show. And 15 00:00:53,000 --> 00:00:56,200 Speaker 1: you know how excited I get when we talk about taxes. Absolutely, 16 00:00:56,800 --> 00:01:00,800 Speaker 1: I really do. We could start there people who feel 17 00:01:00,840 --> 00:01:03,000 Speaker 1: like their taxes have gone up because the refunds have 18 00:01:03,080 --> 00:01:06,480 Speaker 1: gone down under the new law. Are you frustrated reading 19 00:01:06,520 --> 00:01:09,360 Speaker 1: those news stories? Yeah, you have to take a look 20 00:01:09,360 --> 00:01:12,280 Speaker 1: at the totality. Now, some people's taxes really did go 21 00:01:12,440 --> 00:01:14,960 Speaker 1: up because with this new tax law. There really were 22 00:01:15,040 --> 00:01:17,640 Speaker 1: winners and losers, but an awful lot of people don't 23 00:01:17,680 --> 00:01:21,560 Speaker 1: realize when they get something in every paycheck that at 24 00:01:21,640 --> 00:01:25,440 Speaker 1: some point you pay for it. And theoretically, with the 25 00:01:25,560 --> 00:01:28,400 Speaker 1: time value of money, you're better to get the money 26 00:01:28,440 --> 00:01:31,640 Speaker 1: as soon as you can invest it. But what happens 27 00:01:31,640 --> 00:01:33,520 Speaker 1: in real life. A lot of people just spend it 28 00:01:33,840 --> 00:01:36,120 Speaker 1: and when they got the refund, it's like the old 29 00:01:36,200 --> 00:01:38,280 Speaker 1: Christmas clubs that had a chunk of money and they 30 00:01:38,280 --> 00:01:40,560 Speaker 1: could do something with, you know, buy something or go 31 00:01:40,600 --> 00:01:43,720 Speaker 1: on a trip. That's that's what they're missing right right. 32 00:01:43,840 --> 00:01:47,280 Speaker 1: So let's talk about the changes in the tax code recently. Well, 33 00:01:47,280 --> 00:01:49,560 Speaker 1: what's the headline, do you what has had the most 34 00:01:49,640 --> 00:01:59,920 Speaker 1: effect positive and negative on people? Oh? By far they 35 00:02:00,120 --> 00:02:03,920 Speaker 1: through where if you qualify, you only pay tax on 36 00:02:04,920 --> 00:02:07,880 Speaker 1: of your business profit. That's the biggest one out of 37 00:02:07,920 --> 00:02:11,600 Speaker 1: all this. This really really helped business people. Doesn't do 38 00:02:11,639 --> 00:02:14,080 Speaker 1: a thing for employees. But if you're in business and 39 00:02:14,240 --> 00:02:18,560 Speaker 1: you qualify, who wouldn't want to pay tax on of 40 00:02:18,639 --> 00:02:23,280 Speaker 1: the profit instead of and qualifying real estate? What do 41 00:02:23,280 --> 00:02:28,080 Speaker 1: you mean qualifying? Can you pay tax and only of 42 00:02:28,120 --> 00:02:31,760 Speaker 1: your real estate profit? Yes, if the real estate is 43 00:02:31,800 --> 00:02:35,360 Speaker 1: a business, know if it's an investment. So what's the 44 00:02:35,400 --> 00:02:38,480 Speaker 1: difference between a real estate business and investment is a 45 00:02:38,560 --> 00:02:42,280 Speaker 1: laundry list of rules and essentially how much time you 46 00:02:42,320 --> 00:02:44,720 Speaker 1: spend with it, what you're doing with it, how many 47 00:02:44,760 --> 00:02:47,360 Speaker 1: properties you're managing. And then the government came along with 48 00:02:47,400 --> 00:02:50,600 Speaker 1: something called the aggregation of rules, and without going into 49 00:02:50,639 --> 00:02:53,200 Speaker 1: all the technicalities, you know these things have limitations on it. 50 00:02:53,720 --> 00:02:56,320 Speaker 1: One of the ways to get around the limitations is 51 00:02:56,360 --> 00:03:00,680 Speaker 1: you have the choice of putting property together. Where properties, 52 00:03:00,680 --> 00:03:03,880 Speaker 1: say would qualify with businesses some belt but if you 53 00:03:03,880 --> 00:03:06,919 Speaker 1: put them together and you qualify for that, you get 54 00:03:06,919 --> 00:03:10,440 Speaker 1: the benefit of on the profit for all of them. 55 00:03:10,440 --> 00:03:13,480 Speaker 1: So there's so much here, Oh my god, And it's 56 00:03:13,520 --> 00:03:16,480 Speaker 1: mind bogglingly complex and honestly, and I don't mean to 57 00:03:16,520 --> 00:03:19,160 Speaker 1: put you out of work, but the fact that it's 58 00:03:19,320 --> 00:03:23,880 Speaker 1: this confusing and complicated, it's just it's a sin to me. 59 00:03:23,919 --> 00:03:26,680 Speaker 1: It's un American, it really is. And I mean, you know, 60 00:03:26,720 --> 00:03:30,160 Speaker 1: there's there's the big joke. Every time there's a tax 61 00:03:30,200 --> 00:03:33,600 Speaker 1: simplification acts, and they've been tax simplification acts since I've 62 00:03:33,639 --> 00:03:35,839 Speaker 1: been in practice for over thirty years. The big joke 63 00:03:36,000 --> 00:03:40,120 Speaker 1: is it's the tax People's Full Employment Act, where it 64 00:03:40,200 --> 00:03:43,560 Speaker 1: just gets more and more complicated and mis exception and that, 65 00:03:44,120 --> 00:03:46,680 Speaker 1: and most people really do need to rely on somebody 66 00:03:46,720 --> 00:03:49,960 Speaker 1: because if not, you can leave so much on the table. 67 00:03:50,040 --> 00:03:53,600 Speaker 1: And there's all kinds of changes, like the college plans. 68 00:03:54,200 --> 00:03:59,920 Speaker 1: Now you can use them for kindergarten through high school. 69 00:04:00,320 --> 00:04:02,640 Speaker 1: You just be able to do that, so you can 70 00:04:02,640 --> 00:04:04,720 Speaker 1: put an extra ten grand in that. And you know 71 00:04:04,720 --> 00:04:06,800 Speaker 1: a lot of people were putting money away for their 72 00:04:06,880 --> 00:04:10,480 Speaker 1: kids for college and under the old rules of plans, 73 00:04:10,760 --> 00:04:12,400 Speaker 1: you have to use them for that. Now, I mean, 74 00:04:12,440 --> 00:04:14,440 Speaker 1: you know you have an extra ten grand from kindergarten 75 00:04:15,120 --> 00:04:18,159 Speaker 1: through high school. That's nice. There's all kinds of things. 76 00:04:18,200 --> 00:04:21,039 Speaker 1: They're interesting. I asked you this every time we have 77 00:04:21,080 --> 00:04:23,080 Speaker 1: you on, just to make a point. When you started 78 00:04:23,120 --> 00:04:25,520 Speaker 1: doing taxes, how many pages were there in the tax 79 00:04:25,560 --> 00:04:27,600 Speaker 1: code with all the regulations and what is it now? 80 00:04:28,880 --> 00:04:33,719 Speaker 1: It was so much simpler. And it's it's funny that 81 00:04:34,160 --> 00:04:38,320 Speaker 1: very question was posed to us. When I was a student, 82 00:04:38,360 --> 00:04:40,200 Speaker 1: we had the professor came in and he said, when 83 00:04:40,240 --> 00:04:43,560 Speaker 1: he started in taccess, he put his hands up in 84 00:04:43,560 --> 00:04:45,520 Speaker 1: the air and said this was the rules. He said, 85 00:04:45,520 --> 00:04:49,080 Speaker 1: now I can't spread my hands wide enough, and it's 86 00:04:49,120 --> 00:04:51,560 Speaker 1: becomes infinite, because not only do you have the converse 87 00:04:51,600 --> 00:04:55,680 Speaker 1: people in their infinite wisdom making rules, you also have 88 00:04:55,920 --> 00:04:59,239 Speaker 1: the courts interpreting them. So you have a really good 89 00:04:59,240 --> 00:05:04,599 Speaker 1: one where you know that the mortgage interest dropped from 90 00:05:04,800 --> 00:05:07,160 Speaker 1: interest on a million dollars to three cores a million 91 00:05:07,400 --> 00:05:12,640 Speaker 1: for any houses that were purchased after the law became effective. 92 00:05:13,000 --> 00:05:14,919 Speaker 1: So you have to watch out. There's a lot of people. 93 00:05:15,080 --> 00:05:17,160 Speaker 1: If you already had the house, you can still go 94 00:05:17,200 --> 00:05:19,599 Speaker 1: ahead and the duck the mortgage on the million the 95 00:05:19,640 --> 00:05:21,880 Speaker 1: new ones three cors of a million. But then a 96 00:05:21,960 --> 00:05:24,960 Speaker 1: case came out, and this applies to a lot of people. 97 00:05:25,000 --> 00:05:30,839 Speaker 1: The vast case where boyfriend and girlfriend bought a house together, 98 00:05:31,440 --> 00:05:35,039 Speaker 1: they each took the deduction. Here says no, no, no, 99 00:05:35,360 --> 00:05:38,680 Speaker 1: the limitation is per house. The task would said, no, 100 00:05:38,920 --> 00:05:42,560 Speaker 1: it's per person. And that's a very common situation, especially 101 00:05:42,600 --> 00:05:45,039 Speaker 1: here in the Bay Area, where say a gentleman and 102 00:05:45,080 --> 00:05:47,360 Speaker 1: his girlfriend or or any people buy the house together, 103 00:05:47,800 --> 00:05:51,240 Speaker 1: they each get the mortgage of seven fifties. So that 104 00:05:51,240 --> 00:05:53,719 Speaker 1: would mean that if a boyfriend and girlfriend bought the house, 105 00:05:53,720 --> 00:05:55,840 Speaker 1: they could duck the interest on a million and a 106 00:05:55,880 --> 00:06:00,440 Speaker 1: half mortgage instead of just better off not being married 107 00:06:00,480 --> 00:06:03,920 Speaker 1: and just living together in that situation. Absolutely, And also 108 00:06:03,960 --> 00:06:06,640 Speaker 1: there's other areas tax law where that's the check case 109 00:06:06,680 --> 00:06:08,920 Speaker 1: as well. Wow, you shouldn't need a tax expert to 110 00:06:08,960 --> 00:06:10,760 Speaker 1: buy a house. Stephen moscow Witz is with us, and 111 00:06:10,800 --> 00:06:14,120 Speaker 1: we shouldn't discourage people getting married. No, I wouldn't think so. 112 00:06:14,120 --> 00:06:16,280 Speaker 1: So Stephen, what's going to get me audited? These days? 113 00:06:18,640 --> 00:06:22,800 Speaker 1: You know, anything can get you audited, But you should 114 00:06:22,839 --> 00:06:25,599 Speaker 1: take everything to which you're legally entitled, no more, no 115 00:06:25,720 --> 00:06:27,520 Speaker 1: lesson if you get audited. So what it's like if 116 00:06:27,520 --> 00:06:29,640 Speaker 1: a police officer stopped you when you're driving, if you 117 00:06:29,640 --> 00:06:33,320 Speaker 1: wouldn't stop driving. But there's a lot of things. For example, 118 00:06:33,400 --> 00:06:37,000 Speaker 1: as your income goes up, if you make more than 119 00:06:37,000 --> 00:06:41,160 Speaker 1: a million dollars, you're chances of being audited are one 120 00:06:41,320 --> 00:06:43,440 Speaker 1: in eleven. If you go to the other end of 121 00:06:43,440 --> 00:06:46,320 Speaker 1: the scale, your chances of being audited or one in 122 00:06:46,360 --> 00:06:50,360 Speaker 1: two seventy six. Yeah, we're making here in our job, 123 00:06:51,120 --> 00:06:55,159 Speaker 1: so let's see that's eleven years. Calculate that pretty much. Volunteer, 124 00:06:55,200 --> 00:06:59,360 Speaker 1: congratulations on the raises, Thank you? Is that just because 125 00:06:59,400 --> 00:07:02,640 Speaker 1: they think are people making more money, are more likely 126 00:07:02,680 --> 00:07:05,040 Speaker 1: to cheat, or just because the taxes get more complicated 127 00:07:05,080 --> 00:07:07,640 Speaker 1: and there's there's more likelihood that you may stay cheating. 128 00:07:07,680 --> 00:07:10,000 Speaker 1: But it gets more complicated, and then you have the 129 00:07:10,040 --> 00:07:13,600 Speaker 1: opportunities to do all types of things. You know, for example, 130 00:07:14,120 --> 00:07:16,840 Speaker 1: there's all kinds of fancy things you can do. Suppose, 131 00:07:16,880 --> 00:07:20,360 Speaker 1: for example, you say, you know somebody say living alone, 132 00:07:20,440 --> 00:07:23,480 Speaker 1: and they say, when I go to my reward, I 133 00:07:23,480 --> 00:07:26,320 Speaker 1: would like the charity of my choice to have my house. Well, 134 00:07:26,320 --> 00:07:29,720 Speaker 1: that's nice, but there's no tax benefit to that. But 135 00:07:30,360 --> 00:07:33,400 Speaker 1: if you set it up while you're alive and you 136 00:07:33,440 --> 00:07:36,200 Speaker 1: live in the house the rest of your life, but 137 00:07:36,360 --> 00:07:38,960 Speaker 1: when you do die, the house goes to the charity, 138 00:07:39,240 --> 00:07:41,440 Speaker 1: you get a tax deduction now, and that can be 139 00:07:41,480 --> 00:07:43,920 Speaker 1: a big tax deduction, and all kinds of fancy things 140 00:07:43,960 --> 00:07:47,200 Speaker 1: you can do. Same way with selling property. Suppose you're 141 00:07:47,200 --> 00:07:49,280 Speaker 1: gonna sell the property and you said, well, right, I'm 142 00:07:49,280 --> 00:07:51,480 Speaker 1: going to sell the property and then I'm going to 143 00:07:51,560 --> 00:07:54,520 Speaker 1: take the money and invest it in stock market, get tax, 144 00:07:54,600 --> 00:07:58,280 Speaker 1: the capital gains tax. But if you say, well, I'll 145 00:07:58,360 --> 00:08:01,840 Speaker 1: give the property to the charity and then you take 146 00:08:01,840 --> 00:08:04,240 Speaker 1: a stream of income back from them because they sell 147 00:08:04,320 --> 00:08:07,160 Speaker 1: the property and there's no tax on them. Your lifetime 148 00:08:07,160 --> 00:08:09,120 Speaker 1: stream of income is gonna be greater than if you 149 00:08:09,160 --> 00:08:12,160 Speaker 1: saw that. There's there's a of things like that. Why 150 00:08:12,200 --> 00:08:14,440 Speaker 1: can I can give it to a charity, but they'll 151 00:08:14,440 --> 00:08:18,640 Speaker 1: give me a stream of income in return. Yes, and 152 00:08:18,800 --> 00:08:22,160 Speaker 1: those are commonly done. And what happened is that charity 153 00:08:22,160 --> 00:08:25,320 Speaker 1: gets a little something. But the big deal here is 154 00:08:25,400 --> 00:08:28,320 Speaker 1: when charity sells the property, there's no capital games tax. 155 00:08:28,320 --> 00:08:30,960 Speaker 1: If you sell the capital games tax, there's more to 156 00:08:31,040 --> 00:08:33,439 Speaker 1: invest in the stock market. And the bottom line, the 157 00:08:33,520 --> 00:08:36,160 Speaker 1: charity gets more, you get more, the I R S 158 00:08:36,200 --> 00:08:38,080 Speaker 1: gets less, and that's a good thing. Another thing, I 159 00:08:38,080 --> 00:08:39,839 Speaker 1: know it drives you crazy, just because we've talked to 160 00:08:39,840 --> 00:08:43,080 Speaker 1: you for years, this idea that in kind of you know, 161 00:08:43,160 --> 00:08:46,120 Speaker 1: pop culture that you know the week of April fifteenth 162 00:08:46,240 --> 00:08:48,600 Speaker 1: is tax season, and there's all these stories about taxes 163 00:08:48,600 --> 00:08:52,240 Speaker 1: and everything. The tax seasons year round. It sure is 164 00:08:52,280 --> 00:08:54,400 Speaker 1: because an awful lot of people go on extension, so 165 00:08:54,440 --> 00:08:58,320 Speaker 1: that means we have until October fifteenth. But it's the 166 00:08:58,440 --> 00:09:01,439 Speaker 1: planning because so many things, so many things you need 167 00:09:01,480 --> 00:09:03,720 Speaker 1: to do before the year end. Not everything like some 168 00:09:03,800 --> 00:09:05,640 Speaker 1: of the pensions, you can still do in the next year, 169 00:09:05,960 --> 00:09:08,240 Speaker 1: but there's so many things that you have to sit up. 170 00:09:08,240 --> 00:09:12,040 Speaker 1: So tax is really a year round idea. Not it's 171 00:09:12,080 --> 00:09:13,880 Speaker 1: like going to the doctor. You don't just care about 172 00:09:13,880 --> 00:09:16,280 Speaker 1: your health the day you go for your annual physically, 173 00:09:16,280 --> 00:09:17,839 Speaker 1: that's a good one. Would be like if I eat 174 00:09:17,880 --> 00:09:20,160 Speaker 1: an apple and go run and go jog before I 175 00:09:20,200 --> 00:09:25,760 Speaker 1: go to the doctor's cigarettes a day, right, exactly. H 176 00:09:25,800 --> 00:09:29,760 Speaker 1: Steven Moscowitz as a tax attorney's the senior partner at Moscow. 177 00:09:29,840 --> 00:09:32,439 Speaker 1: It's l l p uh Steven Will. We got to 178 00:09:32,480 --> 00:09:35,720 Speaker 1: do it again soon. Uh. It's you know, just to 179 00:09:35,800 --> 00:09:41,000 Speaker 1: remind ourselves as voters how insane the tax code is. 180 00:09:41,280 --> 00:09:43,920 Speaker 1: But then as taxpayers, you point out there are some 181 00:09:44,000 --> 00:09:45,959 Speaker 1: things a lot of people aren't doing that we probably 182 00:09:45,960 --> 00:09:48,679 Speaker 1: should be. So it's always great to talk. Thanks the 183 00:09:48,760 --> 00:09:51,160 Speaker 1: pleasures mind, Thanks for inviting me, right, thanks, Yeah, I 184 00:09:51,200 --> 00:09:53,320 Speaker 1: tell you that's the funniest thing about Steve. He will 185 00:09:53,400 --> 00:09:58,520 Speaker 1: stand there and talk about tax with fire in his eyes. Yeah, 186 00:09:58,559 --> 00:10:01,720 Speaker 1: for as long as you want to talk about and 187 00:10:01,720 --> 00:10:04,920 Speaker 1: and he's also you know, I hate to characterize him, 188 00:10:04,960 --> 00:10:10,520 Speaker 1: but he's a real lover of liberty and American principles. 189 00:10:10,920 --> 00:10:14,120 Speaker 1: And he's no great fan of the tax code and 190 00:10:14,160 --> 00:10:16,480 Speaker 1: how complicated isn't what it does to people. So he's 191 00:10:16,520 --> 00:10:19,839 Speaker 1: got this enthusiasm for making sure that people don't give 192 00:10:19,880 --> 00:10:23,120 Speaker 1: the money grubbers of the government more than a dime 193 00:10:23,160 --> 00:10:25,719 Speaker 1: more than they should. And it's so damn interesting, frustrating 194 00:10:25,760 --> 00:10:28,040 Speaker 1: and scary to find out that a lot of cases 195 00:10:28,040 --> 00:10:30,240 Speaker 1: that he's fought, where you know, he's represented people in 196 00:10:30,280 --> 00:10:32,920 Speaker 1: a in a in a court of law, this judge 197 00:10:32,920 --> 00:10:35,160 Speaker 1: will go this way, this judge will go that way. Right, 198 00:10:35,200 --> 00:10:37,040 Speaker 1: I mean, you just you need to know the judge. 199 00:10:37,400 --> 00:10:41,520 Speaker 1: You literally have tax laws where there have been twenty 200 00:10:41,559 --> 00:10:46,320 Speaker 1: one decisions on whether this is legal or not yes 201 00:10:46,480 --> 00:10:49,280 Speaker 1: and ten no. You would think on something like tax 202 00:10:49,280 --> 00:10:51,600 Speaker 1: should be completely black and white and it's not just 203 00:10:51,640 --> 00:10:54,160 Speaker 1: like everything else, right, And so you go into an 204 00:10:54,160 --> 00:10:56,000 Speaker 1: audit and the auditor will say to you, the government 205 00:10:56,040 --> 00:10:59,520 Speaker 1: auditor will say, oh no, no, no, Jones versus Mississippi 206 00:10:59,520 --> 00:11:02,520 Speaker 1: says is completely illegal. They don't tell you that there 207 00:11:02,520 --> 00:11:04,719 Speaker 1: are a dozen cases that say it's fine. Right, you 208 00:11:04,760 --> 00:11:06,840 Speaker 1: talk about un American. To me, the most non American 209 00:11:06,880 --> 00:11:09,520 Speaker 1: thing is that my own government, who I'm paying for, 210 00:11:09,880 --> 00:11:13,360 Speaker 1: if they audit me and they and I make a mistake, 211 00:11:13,600 --> 00:11:15,600 Speaker 1: They could point it out, but they won't know. It's 212 00:11:15,600 --> 00:11:18,360 Speaker 1: a prosecutor prosecutor to get as much as they can, 213 00:11:18,480 --> 00:11:20,120 Speaker 1: not to be fair, not to come up with the 214 00:11:20,160 --> 00:11:22,800 Speaker 1: fair amount they're trying. If they can screw me, they will. 215 00:11:22,880 --> 00:11:26,680 Speaker 1: It's like, which is amazing To sum it up, baby 216 00:11:28,640 --> 00:11:34,480 Speaker 1: through that's a way to cut through the clutter. Now 217 00:11:34,520 --> 00:11:37,440 Speaker 1: I'm fired up. You are listening to the arms Strong 218 00:11:37,559 --> 00:11:38,320 Speaker 1: and Getty Show.