WEBVTT - 🚨THE TAX CODE WAS BUILT TO HELP YOU AVOID TAXES! | 100% CAR WRITE-OFF, LLC SECRETS & $40K DEDUCTION 0:00:00.080 --> 0:00:02.360 Tax code is made up with seventy seven thousand pages. 0:00:02.560 --> 0:00:05.000 One percent is telling us how to pay taxes. The 0:00:05.000 --> 0:00:08.000 other ninety nine percent is saying, hey, if you follow this, 0:00:08.320 --> 0:00:09.799 you don't have to pay taxes. 0:00:10.000 --> 0:00:12.000 What's the biggest mistake that business owners and make it 0:00:12.000 --> 0:00:13.320 when it comes to taxes. 0:00:12.960 --> 0:00:15.680 Waiting until the next year to file their taxes. Your 0:00:15.680 --> 0:00:17.680 first steps need to be okay, how can I get 0:00:17.680 --> 0:00:19.360 on the right side of the tax code so therefore 0:00:19.360 --> 0:00:20.440 I can save on taxes. 0:00:20.560 --> 0:00:21.959 You talked to a lot of entrepreneurs. 0:00:22.040 --> 0:00:25.960 What's the biggest misconceptional lot that they think is true 0:00:26.000 --> 0:00:27.520 when it comes to taxes. 0:00:27.160 --> 0:00:29.760 That the tax code was put in place to make 0:00:29.800 --> 0:00:32.320 them pay taxes. The tax code is a wealth map. 0:00:32.479 --> 0:00:35.879 Everything that you need to generate wealth is a tax deduction. 0:00:36.040 --> 0:00:37.800 What's some advice for real estate owners? 0:00:37.960 --> 0:00:39.920 If you want to live tax free, you have to 0:00:39.960 --> 0:00:42.720 have real estate because when it comes to the tax code, 0:00:42.720 --> 0:00:45.479 the government's like, listen, we can't house everyone. You do 0:00:45.560 --> 0:00:47.720 us this solid will allow you to keep your money. 0:00:47.720 --> 0:00:50.600 If Warren Buffett said, thanks to the mini loopholes put 0:00:50.640 --> 0:00:53.520 in place by the IRS, I pay a lower tax 0:00:53.600 --> 0:00:56.280 rate than my secretary. If you have an LLC and 0:00:56.320 --> 0:00:59.320 you're trading in that LLC. That doesn't automatically make it 0:00:59.400 --> 0:01:02.000 business in. You have to be doing it full time. 0:01:02.080 --> 0:01:03.959 So is there qualifications that make you full time? 0:01:04.080 --> 0:01:06.840 It's a thousand hours. That's probably like three hours a day. 0:01:06.959 --> 0:01:09.600 The tax code does not incentivize you for working more. 0:01:09.720 --> 0:01:13.960 They incentivize you for generating income as passively as possible. 0:01:14.880 --> 0:01:18.000 All right, ladies and gentlemen, welcome back. We have a 0:01:18.000 --> 0:01:21.000 friend of the show, friend of the program. She has 0:01:21.040 --> 0:01:22.839 been on the show more than anybody, for. 0:01:22.800 --> 0:01:25.320 Sure, I have, Yes, I didn't know that. 0:01:25.440 --> 0:01:31.520 Yes, you've been on multiple platforms I have. You were 0:01:31.520 --> 0:01:34.440 our first guests and our most returning guess. 0:01:34.680 --> 0:01:35.160 I love that. 0:01:35.800 --> 0:01:44.200 Yeah, miss business, somebody has ven Vendom Marketplace sponsor. When 0:01:44.200 --> 0:01:46.479 you're thinking the Vendom Marketplace, she had the best booth 0:01:46.520 --> 0:01:48.320 for so many years that she actually just took over 0:01:48.360 --> 0:01:51.000 the whole thing and INVESTMST. 0:01:50.840 --> 0:01:53.520 Rightfully, So it was it was only right you changed 0:01:53.560 --> 0:01:56.400 the look of what the vendor marketplace was so rightfully. 0:01:56.400 --> 0:02:00.560 So, yeah, you spoke at INVESTMST every year. Oh yeah, yeah, 0:02:00.600 --> 0:02:02.120 you know. I don't think we have to introduce you. 0:02:02.160 --> 0:02:04.240 Everybody already knows who you are. If they watch her 0:02:04.240 --> 0:02:06.480 and your legion, they obviously know misbusiness. 0:02:06.480 --> 0:02:07.080 So how you been. 0:02:07.640 --> 0:02:10.160 I've been great under a lot of pressure. I got 0:02:10.160 --> 0:02:14.200 to make sure that investments is you know, it's great. 0:02:14.320 --> 0:02:16.120 You got to make sure that the people are feeling me. 0:02:16.160 --> 0:02:18.839 That's my main objective when I'm there. 0:02:19.120 --> 0:02:22.520 Investments it's nothing like it. It's nothing like it. 0:02:23.080 --> 0:02:27.639 I think what's beautiful is that twenty nineteen we first meet, Yes, 0:02:27.840 --> 0:02:31.000 a lot of changes. Then our business has grown changed. 0:02:31.600 --> 0:02:34.400 I mean, your business has grown. You're I feel like 0:02:34.400 --> 0:02:36.440 you're everywhere. I feel like I need to be on 0:02:36.480 --> 0:02:38.920 some of these retreats that are happening. 0:02:39.240 --> 0:02:41.240 Talk to us about the growth over the. 0:02:41.200 --> 0:02:45.680 Past year or so over the past year, Oh my god. Okay, 0:02:45.840 --> 0:02:50.919 so I really just transition my mark. So marketing has 0:02:50.919 --> 0:02:53.240 always been at the forefront of everything that I've done, 0:02:53.880 --> 0:02:56.240 but I feel that it was more important for me 0:02:56.320 --> 0:03:00.000 to really get to the people and really get them 0:03:00.120 --> 0:03:03.639 to understand that business can really be their pathway to wealth. 0:03:04.040 --> 0:03:06.520 I think that a lot of times our mindset is 0:03:06.600 --> 0:03:11.480 business is our pathway to paying our bills or leaving 0:03:11.520 --> 0:03:15.359 our job, but not really thinking about like, wow, if 0:03:15.400 --> 0:03:18.040 I stop overpaying in taxes. If I take this money 0:03:18.040 --> 0:03:21.400 and I invest it, that that's my pathway. And so 0:03:21.680 --> 0:03:23.519 just doing that. I've just been trying to figure out 0:03:23.680 --> 0:03:27.560 different ways to touch people, so like you know, invest fest, 0:03:27.760 --> 0:03:30.480 miss business for the people, just really making sure that 0:03:30.520 --> 0:03:33.680 I'm touching people and then creating more moments where I 0:03:33.760 --> 0:03:37.920 can be in person. So I'm doing retreats, you know, 0:03:38.080 --> 0:03:41.640 I'm on a webinar consistently, right, I just feel like 0:03:41.640 --> 0:03:46.000 I have to touch people. I can't just it just 0:03:46.560 --> 0:03:48.400 it can be a distance between me and the people 0:03:49.480 --> 0:03:49.760 for it. 0:03:50.120 --> 0:03:51.600 Yeah, so let's get right to it. 0:03:52.960 --> 0:03:55.120 You know, this is always going to be informational session 0:03:55.120 --> 0:03:57.520 whenever we sit down with you. So, what's the biggest 0:03:57.520 --> 0:03:59.760 mistake that business owners are making when it comes to taxes? 0:04:00.480 --> 0:04:03.280 Oh, waiting until the next year to file their taxes. 0:04:04.440 --> 0:04:09.320 I think that right now, in twenty twenty six, I 0:04:09.320 --> 0:04:12.720 think most people know that their tax deductions available, they 0:04:12.800 --> 0:04:15.720 know that there are strategies that they can implement. But 0:04:16.040 --> 0:04:22.320 most business owners and individuals, they're waiting until let's say, 0:04:22.440 --> 0:04:25.159 in our case, right right now, they're waiting until twenty 0:04:25.240 --> 0:04:28.279 twenty six, when they shouldn't wait to twenty twenty six. 0:04:28.279 --> 0:04:31.640 They have to focus on tax strategy in twenty twenty five, 0:04:32.400 --> 0:04:36.960 and more importantly than just not focusing on tax plan, 0:04:37.080 --> 0:04:41.600 and what they're also missing is paying attention to who's 0:04:41.640 --> 0:04:45.840 in office, not being emotional about it because the reality 0:04:45.920 --> 0:04:48.720 is every single president has someone that they have to 0:04:49.680 --> 0:04:53.400 literally please, whether it be themselves, right, or whether it 0:04:53.400 --> 0:04:57.200 be someone that contributed to their campaign. Everyone has a 0:04:57.720 --> 0:05:01.000 have someone that they have to please. And so with 0:05:01.160 --> 0:05:03.960 looking at that, it's very important that when you're a 0:05:03.960 --> 0:05:06.800 business owner or even if you're an individual. So let's 0:05:06.800 --> 0:05:08.920 start with an individual, right, if your individual have W 0:05:08.960 --> 0:05:11.479 two income, your first steps need to be Okay, how 0:05:11.560 --> 0:05:12.880 can I get on the right side of the tax 0:05:12.920 --> 0:05:15.640 code so therefore I can save on taxes. Okay. Once 0:05:15.680 --> 0:05:17.279 you do that, you now have to make a decision. 0:05:17.560 --> 0:05:20.120 Am I going to invest or am I going to 0:05:20.160 --> 0:05:23.080 start a business? And it really is just that I 0:05:23.080 --> 0:05:25.080 tell people all the time, like listen, if you're looking 0:05:25.120 --> 0:05:29.560 for a strategy for W two employees, they're very slim. 0:05:30.120 --> 0:05:33.640 It's just not there. And so really focusing on and 0:05:33.640 --> 0:05:35.440 making a decision and say, okay, you know what, I'm 0:05:35.480 --> 0:05:38.200 going to start a business whether big or small, or 0:05:38.279 --> 0:05:41.440 I'm going to start to invest. Then after that you 0:05:41.600 --> 0:05:44.640 have to say, you know what, I'm going to look 0:05:44.680 --> 0:05:48.400 at my income throughout the year and make a decision 0:05:48.520 --> 0:05:51.640 on how much I want to pay the irs. We 0:05:51.680 --> 0:05:54.600 don't treat the IRS as though it's a decision. We 0:05:54.680 --> 0:05:58.200 treat it as though it's something we have to pay. Right, 0:05:58.240 --> 0:06:00.240 because we were never really taught we were to talk thought, 0:06:00.480 --> 0:06:04.000 go to school, get a job, make money, get a promotion, 0:06:04.400 --> 0:06:07.120 make more money, buy that house, pay you know, and 0:06:07.200 --> 0:06:09.960 so with that what happens We start making more money, 0:06:10.520 --> 0:06:14.279 we start paying more taxes. But if we're never really 0:06:14.279 --> 0:06:18.240 focused on any sort of strategy and implementation, then we 0:06:18.400 --> 0:06:19.680 end up in a really bad place. 0:06:20.160 --> 0:06:21.800 So what are the things? Right? 0:06:21.839 --> 0:06:24.520 Like, we have conversations all the time and again paying 0:06:24.520 --> 0:06:26.600 attention to what's happening in the task com We had 0:06:26.600 --> 0:06:29.120 a conversation about the salt tax, like all the things. Yes, 0:06:29.160 --> 0:06:31.640 what are the things that people should be considering before 0:06:31.720 --> 0:06:34.039 we get to December thirty first of each year? 0:06:34.240 --> 0:06:35.520 Right? Because we got to plan this thing. O. 0:06:35.760 --> 0:06:38.520 Absolutely, if you are a business owner, your entity structure, 0:06:38.560 --> 0:06:41.520 so you have to start at your foundation, LLC S 0:06:41.600 --> 0:06:44.640 corpse ce corp, nonprofit trust. How do you need to 0:06:44.680 --> 0:06:48.200 actually structure your entities what is important to you. I 0:06:48.200 --> 0:06:50.400 think a lot of business owners don't think about that, 0:06:50.760 --> 0:06:53.159 so they're not really considering in saying, hey, you know 0:06:53.240 --> 0:06:54.800 what I want to go for funding, I want to 0:06:54.800 --> 0:06:57.040 apply for a house, I want to do certain things. 0:06:57.320 --> 0:07:00.320 You have the leverage to make all of those decisions, 0:07:00.600 --> 0:07:02.960 So you have to understand where you're going. You need 0:07:03.000 --> 0:07:05.120 to make sure that your structure is correct, and then 0:07:05.160 --> 0:07:08.320 you need to actually tap into the tax code. So now, 0:07:08.360 --> 0:07:11.200 based on the big beautiful Bill, there's been so many 0:07:11.320 --> 0:07:15.080 changes that has been at the benefit of taxpayers. Granted, guys, 0:07:15.920 --> 0:07:18.080 Trump is taken on when he leave in twenty twenty eight, 0:07:18.480 --> 0:07:22.800 but they are here, so some of them being the 0:07:23.480 --> 0:07:28.680 which actually parents can start contributing to their Trump account, 0:07:28.880 --> 0:07:31.480 right they have their Trump account, and so that's really 0:07:31.520 --> 0:07:33.960 important because a lot of people want there's a lot 0:07:33.960 --> 0:07:36.320 of misconception around that. So I do want to just 0:07:36.360 --> 0:07:38.880 take a moment to explain that, because when it comes 0:07:38.920 --> 0:07:42.000 to the Trump account, most people think when you fouled 0:07:42.000 --> 0:07:44.440 your taxes, you were supposed to fill out Form forty 0:07:44.480 --> 0:07:47.040 five to forty seven to say, hey, I want my 0:07:47.160 --> 0:07:52.160 child to actually get this see I like forty five 0:07:52.240 --> 0:07:57.800 forty seven. Yes, yes, you know Trump, Yes, so you 0:07:57.840 --> 0:07:59.480 know it's so crazy. I didn't even picked up on that, 0:07:59.640 --> 0:08:03.080 but I know how your mind works. So yeah, So yeah, 0:08:03.080 --> 0:08:05.480 you had to complete form forty five to forty seven 0:08:05.800 --> 0:08:08.480 to say, hey, I want my child to actually be 0:08:08.600 --> 0:08:14.360 able to receive this thousand dollars contribution retirment contribution. Most 0:08:14.400 --> 0:08:17.120 people did not do that. Now most people are like, 0:08:17.120 --> 0:08:18.920 oh my god, I missed my opportunity. You didn't miss 0:08:18.920 --> 0:08:22.840 your opportunity. You can still download the app, sign your 0:08:22.920 --> 0:08:26.040 child up, and then you can complete the forty five 0:08:26.080 --> 0:08:30.040 to forty seven form online, and so that's really important. 0:08:30.760 --> 0:08:33.960 They do contribute one thousand dollars to it for children 0:08:34.000 --> 0:08:36.679 that were born January first, twenty twenty five through December 0:08:36.679 --> 0:08:40.360 thirty first, twenty twenty eight, so it's not something that's ongoing. 0:08:40.400 --> 0:08:43.760 So if you've had a child within that within that timeframe, 0:08:43.800 --> 0:08:46.160 then make sure that you go ahead and get that 0:08:46.200 --> 0:08:49.960 for your child. Now, the big thing here is that 0:08:50.040 --> 0:08:52.319 what most people don't know is that you also can 0:08:52.320 --> 0:08:55.920 make contributions to You can make personal contributions. It's not 0:08:55.960 --> 0:08:59.520 a tax deductions, but still an actual benefit to your child. 0:08:59.640 --> 0:09:02.440 So that's one that I definitely want everyone. 0:09:02.960 --> 0:09:04.640 I think is it captre like five thousand. 0:09:04.400 --> 0:09:06.679 Yes, cap that five thousand. Yeah, in terms of the 0:09:06.679 --> 0:09:09.120 personal contribute, I know you've got no. 0:09:09.080 --> 0:09:11.280 Kids at that age, but try to help people. 0:09:12.360 --> 0:09:16.400 Yes, but yes, it is six thousand, well five thousand 0:09:16.800 --> 0:09:20.319 additional that you can contribute. So that's that's a good one, 0:09:20.360 --> 0:09:22.200 and I want everyone to take advantage of it. I 0:09:22.200 --> 0:09:23.920 think the big thing. Sometimes people are like, oh, I'm 0:09:23.960 --> 0:09:25.160 not going to do it. Oh I have to do 0:09:25.200 --> 0:09:27.839 some additional work. No, if it's there, if it's available, 0:09:27.960 --> 0:09:32.079 take advantage of it. So that's one that I think 0:09:32.120 --> 0:09:34.760 it's current that we really need to focus on the 0:09:34.800 --> 0:09:37.880 other now when we really start getting into the tax deductions. Right. 0:09:38.400 --> 0:09:43.280 I love the fact that they brung bonus appreciation back, right. 0:09:43.400 --> 0:09:47.720 That is amazing. You've used bonus appreciation with your g wagon, right, 0:09:47.800 --> 0:09:50.880 And so I think that it's so important for us 0:09:50.920 --> 0:09:53.959 to really tap into bonus appreciation because we were losing it. 0:09:54.480 --> 0:09:56.200 We were losing it. We were down to only being 0:09:56.200 --> 0:09:59.320 able to take forty percent of the value of your asset. 0:10:00.360 --> 0:10:04.840 Explain what that is. So basically, when you have an asset, 0:10:04.920 --> 0:10:08.360 the irs says, listen, you have an asset, you cannot 0:10:08.679 --> 0:10:13.040 just in all cases take the full value. Right, it's 0:10:13.040 --> 0:10:14.400 not an actual expense. 0:10:14.520 --> 0:10:16.959 The asset we talked about sphyfically about cars or. 0:10:16.920 --> 0:10:20.600 Any cars that can be equipment. It doesn't necessarily just 0:10:20.679 --> 0:10:23.400 have to be cars. It can be any asset. But 0:10:23.559 --> 0:10:26.360 a vehicle in the case of a business, is considered 0:10:26.400 --> 0:10:29.920 an asset. So if you have any asset in your business, 0:10:29.960 --> 0:10:34.200 the IRS typically says, listen, you can depreciate the value 0:10:34.400 --> 0:10:37.719 of that asset over specific period of time. So that's 0:10:37.760 --> 0:10:41.000 standard depreciation. Right, vehicle is five years, the home is 0:10:41.040 --> 0:10:43.600 twenty seven and a half years. Every asset has a 0:10:43.600 --> 0:10:48.600 different life. They call it a useful life. But bonus depreciation, says, listen, 0:10:48.600 --> 0:10:50.320 we're going to allow you to accelerate some of that. 0:10:50.360 --> 0:10:52.960 Will allow you, depending on the asset, to take one 0:10:53.080 --> 0:10:55.840 hundred percent of the value of the vehicle or the 0:10:55.920 --> 0:10:59.640 value of the machine, the machinery, whatever it is, whatever 0:10:59.679 --> 0:11:03.240 asset that you purchase. And so that is key, Right, 0:11:03.280 --> 0:11:07.120 that's key because I use that for business clients, I 0:11:07.240 --> 0:11:09.920 use it for real estate clients, and I am wiping 0:11:10.000 --> 0:11:14.600 out hundreds of thousands of dollars, right, because the tax 0:11:14.640 --> 0:11:16.920 code says, so the tax code says that we can 0:11:17.000 --> 0:11:20.440 do it, and so bonus appreciation is a really, really, 0:11:20.520 --> 0:11:25.720 really good strategy that I'm always encouraging, Like, you know, 0:11:25.880 --> 0:11:27.640 I've used it. I got you. 0:11:28.040 --> 0:11:29.680 We had the phone. 0:11:29.880 --> 0:11:32.040 This is this future as we had this phone call 0:11:32.240 --> 0:11:35.080 in twenty twenty four when it was getting down to 0:11:35.160 --> 0:11:37.640 forty percent, and we're like, we might lose this, but 0:11:38.120 --> 0:11:40.560 just wait on getting the car because potentially it could 0:11:40.559 --> 0:11:40.880 come back. 0:11:40.880 --> 0:11:41.800 And here it's coming back. 0:11:41.840 --> 0:11:42.360 It's coming back. 0:11:42.400 --> 0:11:45.520 Now we have another conversation about potentially investing in your 0:11:45.520 --> 0:11:49.280 business but also maybe using another business right where there's 0:11:49.400 --> 0:11:51.920 multiple partners, where there might be two partners, so it 0:11:52.040 --> 0:11:54.280 changes the amount of depreciation that goes to you as 0:11:54.280 --> 0:11:54.880 an individual. 0:11:55.240 --> 0:11:56.280 We really be on the phone. 0:11:56.320 --> 0:11:59.640 We'll be on the phone. We'll be talking because guess what, 0:11:59.679 --> 0:12:02.560 when you're making money, I do not tell people. I 0:12:02.559 --> 0:12:04.880 don't care how much money you make. Most people think, Okay, 0:12:04.880 --> 0:12:06.680 you know what, I'm going to make more money and 0:12:06.720 --> 0:12:08.400 I'm just going to focus on making money. No, when 0:12:08.440 --> 0:12:11.000 you make more money, the first step is making more money. 0:12:11.080 --> 0:12:13.960 The second is keeping it. The second is keeping it. 0:12:13.960 --> 0:12:16.120 And so I know you guys are always like, listen, 0:12:18.120 --> 0:12:20.200 do I have to pay that? What is this? What 0:12:20.320 --> 0:12:22.280 is the tax deductions? Let's make sure that I'm doing 0:12:22.320 --> 0:12:24.920 these things. And that's how it should be. But the 0:12:25.000 --> 0:12:28.280 reality is most business owners don't have a CPA that 0:12:28.320 --> 0:12:31.560 they can consistently communicate with. They're filing their taxes with 0:12:31.640 --> 0:12:34.360 like tax preparers and they're there January through April and 0:12:34.360 --> 0:12:37.320 then they're out after that, and so that's important as well. 0:12:38.280 --> 0:12:41.520 My brother actually called me recently he was doing his 0:12:41.559 --> 0:12:44.200 taxes and he was talking about the salt deduction, which 0:12:44.320 --> 0:12:45.079 actually changed. 0:12:45.080 --> 0:12:47.160 You want to just give the people the the in 0:12:47.200 --> 0:12:47.679 phone us. 0:12:47.760 --> 0:12:52.000 Yes, I love that the salt deduction increased, because back 0:12:52.040 --> 0:12:56.360 in two thousand and eighteen, the salt deduction was decreased 0:12:56.520 --> 0:12:59.760 to ten thousand dollars, which means the salt deduction just 0:12:59.840 --> 0:13:02.280 means your state in local taxes, so you get a 0:13:02.360 --> 0:13:06.080 deduction for all of the state and local taxes that 0:13:06.120 --> 0:13:10.920 you pay. And it was it was it was a 0:13:10.960 --> 0:13:14.160 hard tax season for us that year because a lot 0:13:14.160 --> 0:13:19.120 of homeowners were being impacted because under the salt you 0:13:19.200 --> 0:13:21.280 have your state taxes, your local taxes, you also have 0:13:21.360 --> 0:13:26.520 your property taxes. So if you are making a certain 0:13:26.559 --> 0:13:28.800 amount of money. Let's say you make one hundred thousand dollars. 0:13:28.920 --> 0:13:31.280 Let's say you live in New York, New York City. 0:13:31.520 --> 0:13:34.360 Between state and local, you're already at that ten thousand. 0:13:34.520 --> 0:13:36.800 So that means you were used to getting a bigger 0:13:36.800 --> 0:13:40.720 refund because your real estate taxes were going to also 0:13:40.760 --> 0:13:42.560 be added to that. But they were capping it at 0:13:42.600 --> 0:13:46.440 ten thousand dollars, So that was that was a very 0:13:46.480 --> 0:13:49.880 hard tax season, a hard pill to swallow. But they've 0:13:49.920 --> 0:13:52.760 now increased it to forty thousand dollars and it has 0:13:52.800 --> 0:13:56.319 been a game changer. Everyone's happy this year because they 0:13:56.320 --> 0:14:00.800 are seeing larger refunds, which is really good. But yeah, 0:14:00.880 --> 0:14:03.640 so I definitely think that paying attention to the tax 0:14:03.640 --> 0:14:05.840 code is so important because of little things like that. 0:14:06.080 --> 0:14:08.760 Some people don't even know why they're getting a larger refund, 0:14:08.800 --> 0:14:11.240 and you must know why you're getting a larger refund. 0:14:11.679 --> 0:14:11.920 What do you? 0:14:12.080 --> 0:14:12.440 What do you? 0:14:12.520 --> 0:14:14.960 What's some advice for a business owners, not business owners, 0:14:15.000 --> 0:14:17.160 real estate onners in, real estate investors. 0:14:17.200 --> 0:14:21.480 Oh yeah, real estate. So one thing I want to say, 0:14:21.560 --> 0:14:25.760 real estate, come, come, come to me. I need you 0:14:25.800 --> 0:14:28.600 all to understand that real estate is great for cash flow. Yes, 0:14:28.680 --> 0:14:31.640 real estate is great for appreciation obviously if it's purchase right, 0:14:31.920 --> 0:14:36.520 But real estate is also great for tax purposes. And 0:14:36.560 --> 0:14:40.240 that is really the secret weapon that most people don't acknowledge. 0:14:40.480 --> 0:14:42.600 And they're most like, oh my god, if invest in 0:14:42.600 --> 0:14:44.600 real estate because you know it can produce cash flow, 0:14:44.880 --> 0:14:47.840 invest in real estate because you know it's going to appreciating, 0:14:47.880 --> 0:14:49.800 you can leave it, and all of those things and 0:14:49.920 --> 0:14:52.840 can be true. But what most people don't talk about 0:14:52.920 --> 0:14:55.320 is that real estate is the ultimate tax asset and 0:14:55.360 --> 0:14:58.600 it is the way to help you live tax free. 0:14:58.680 --> 0:15:00.680 So if you want to live tax free, you have 0:15:00.720 --> 0:15:04.120 to have real estate. And why is because when it 0:15:04.160 --> 0:15:07.160 comes to the tax code, the government's like, listen, we 0:15:07.200 --> 0:15:09.480 need you guys. We need you guys to be landlords. 0:15:09.520 --> 0:15:12.840 We can't house everyone. You do us this solid we'll 0:15:12.880 --> 0:15:15.000 allow you to keep your money. Right, you house these 0:15:15.040 --> 0:15:17.000 people and will allow you to keep your money. And 0:15:17.040 --> 0:15:20.120 you do that through depreciation. So I was just talking 0:15:20.120 --> 0:15:24.240 to you about cast about bonus appreciation. I implement that 0:15:24.720 --> 0:15:29.040 and cost segregation. So just how it works with real 0:15:29.160 --> 0:15:32.400 estate is instead of going in when you have real estate, 0:15:32.560 --> 0:15:34.760 if you have real estate, which and I'm going to 0:15:34.800 --> 0:15:37.440 say this because while it is a requirement, most people 0:15:37.480 --> 0:15:41.640 aren't doing it. You must depreciate your home if you 0:15:41.840 --> 0:15:44.680 are investing in real estate, not your primary residence. So 0:15:44.680 --> 0:15:47.840 if you're invested in real estate, you must depreciate your 0:15:47.880 --> 0:15:50.880 home every year. But that's twenty seven and a half years. 0:15:50.880 --> 0:15:53.120 So obviously you know you're dividing something about twenty seven 0:15:53.160 --> 0:15:55.160 and a half years. That's a big number. So while 0:15:55.200 --> 0:15:59.000 you do get some depreciation expense, it's not the largest. 0:15:59.560 --> 0:16:03.240 So what you should do is you should perform a 0:16:03.280 --> 0:16:06.720 cost segregation study. And what a cost segregation study does 0:16:06.800 --> 0:16:09.720 is it dissects the property. When you have a building, 0:16:09.760 --> 0:16:14.480 your building is made up of the building, land improvements, 0:16:14.560 --> 0:16:17.680 a roof, HVAC. It has so many different compartments. It's 0:16:17.720 --> 0:16:20.880 not just the building. And so me as a tax strategist, 0:16:20.960 --> 0:16:23.920 I'm like, m well, let's dissect that building. Because the 0:16:24.000 --> 0:16:28.200 IRS says land improvements can be depreciated over fifteen years, 0:16:28.240 --> 0:16:32.000 and they say, okay, well personal property can be depreciated 0:16:32.040 --> 0:16:35.200 over five years. So how about I dissect the property 0:16:35.280 --> 0:16:38.680 versus making my client just only divided over twenty seven 0:16:38.760 --> 0:16:41.400 and a half years. And so that has to be 0:16:41.440 --> 0:16:45.400 done through a cost segregation analysis. You dissect the property 0:16:45.680 --> 0:16:48.800 and then what happens there is then bonus appreciation comes 0:16:48.840 --> 0:16:53.000 into play. So bonus appreciation says, okay, well you have 0:16:53.600 --> 0:16:57.560 these assets, let's accelerate some of that depreciation. Let's take 0:16:57.600 --> 0:17:00.920 one hundred percent of it. Now, to be clear, you 0:17:00.960 --> 0:17:04.040 cannot take one hundred percent of the value of a building, 0:17:04.280 --> 0:17:06.880 but you can take one hundred percent of the value 0:17:07.080 --> 0:17:12.639 of let's say personal property or land improvement. So on average, 0:17:12.640 --> 0:17:14.960 what happens when I do a cost segregation study, most 0:17:15.000 --> 0:17:18.080 clients are looking at about twenty five to thirty percent 0:17:18.240 --> 0:17:22.560 of the value of the real estate property. So therefore 0:17:22.600 --> 0:17:25.479 now they're able to deduct that. And the great thing is, 0:17:25.480 --> 0:17:27.960 there's so many different strategies that's like probably a whole 0:17:28.000 --> 0:17:31.120 another episode, but there's so many different strategies to make 0:17:31.119 --> 0:17:34.480 sure that you can use those losses from your real 0:17:34.640 --> 0:17:38.560 estate to wipe out your real estate income, your business income, 0:17:38.600 --> 0:17:41.600 you're even your W two income. So therefore now it 0:17:41.680 --> 0:17:44.120 puts you in a position where you're getting larger refunds 0:17:44.160 --> 0:17:45.320 and lowering your taxes. 0:17:45.920 --> 0:17:49.400 So we talk about investing a lot and a lot 0:17:49.400 --> 0:17:51.520 of people have made substantial gains. 0:17:51.760 --> 0:17:54.240 I think, don't you guys have like one thousand thousand 0:17:54.240 --> 0:17:55.040 percent club. 0:17:54.880 --> 0:17:57.760 Shout out to the green jacket community, right, So these 0:17:57.800 --> 0:18:01.640 people that have made whole hopefully long term capital gains 0:18:01.800 --> 0:18:03.640 is going to be you know, taxed at a different rate. 0:18:04.400 --> 0:18:07.840 It feels like is real estate the next move to 0:18:07.920 --> 0:18:10.760 offset some of those gains or depending on obviously how 0:18:10.840 --> 0:18:14.800 much they've made, Like when we ask about mistakes, like 0:18:15.520 --> 0:18:17.240 the first thing is like, yes, we have the money. 0:18:17.280 --> 0:18:20.879 It's exciting and wow, I've never had this much in 0:18:20.920 --> 0:18:23.520 your mind. You know that part of this is going 0:18:23.520 --> 0:18:26.000 to the government. The person who's doing it is not 0:18:26.040 --> 0:18:28.840 thinking that because of any excitement. Is that the next 0:18:28.880 --> 0:18:31.000 phase or there other things that we should be looking 0:18:31.040 --> 0:18:33.880 at to offset some of this so we can keep more. 0:18:34.000 --> 0:18:37.800 Yes, So to my green jacket community and those approaching. 0:18:38.600 --> 0:18:42.760 One thing to note is that you there are different 0:18:42.880 --> 0:18:46.880 buckets of income, some buckets so you I just mentioned 0:18:47.080 --> 0:18:51.160 how you can use real estate losses to offset business losses. 0:18:51.560 --> 0:18:55.120 If you have capital gains, long term capital gains, you 0:18:55.160 --> 0:18:59.399 can't take that and offset your business or you you know, 0:18:59.640 --> 0:19:01.560 it won't be added to your business. It is going 0:19:01.600 --> 0:19:03.600 to be in a separate bucket and it's going to 0:19:03.640 --> 0:19:06.520 be tax So the only thing that can offset a 0:19:06.600 --> 0:19:11.520 long term capital gain is a short term capital gain, right, 0:19:11.560 --> 0:19:15.280 So you have to have it in that bucket now, right. 0:19:15.320 --> 0:19:18.199 Because again, and I want to just stay on this 0:19:18.240 --> 0:19:20.280 actually before I go into before I go a little 0:19:20.320 --> 0:19:22.520 further in terms of talking about how you can navigate 0:19:22.560 --> 0:19:25.680 that and all those things, one thing I want everyone 0:19:25.720 --> 0:19:30.399 that invests to know is that Warren Buffett said, thanks 0:19:30.400 --> 0:19:33.440 to the mini loopholes put in place by the IRS, 0:19:33.640 --> 0:19:37.280 I pay a lower tax rate than my secretary. And 0:19:37.320 --> 0:19:39.720 I want you guys to really lean into that and 0:19:39.840 --> 0:19:43.320 understand what that means. That means that Warren Buffett, one 0:19:43.359 --> 0:19:46.159 of the most wealthy people in the world. The highest 0:19:46.160 --> 0:19:48.439 tax rate he will ever pay is twenty percent on 0:19:48.560 --> 0:19:52.880 any gains that he makes, while his secretary the highest 0:19:52.920 --> 0:19:54.800 that he will and again I'm only talking federal I'm 0:19:54.840 --> 0:19:57.480 not talking state, local, Social Security tax, Medicare tax. 0:19:57.600 --> 0:19:57.800 Right. 0:19:58.480 --> 0:20:00.879 The most that she will pays third thirty seven percent. 0:20:01.680 --> 0:20:04.479 So we first have to understand, Okay, well, maybe if 0:20:04.520 --> 0:20:06.560 you are you do have that earned income that could 0:20:06.560 --> 0:20:09.199 be at thirty seven percent, Maybe a strategy is to 0:20:09.240 --> 0:20:12.680 shift some of that income into trading. So therefore, now 0:20:12.760 --> 0:20:15.439 those gains are only going to be tax at twenty percent. 0:20:15.600 --> 0:20:18.919 That's a seventeen percent reduction in the taxes that you 0:20:18.920 --> 0:20:22.000