Open Forum: Your Questions Answered With Mark J Kohler CPA, Attorney

Hey, welcome everybody to a little tax and legal open forum and what that means is this time is yours now I’m a CPA and an attorney small business advisor around the country best-selling author blah blah blah But I’m here for you for the next half hour. I want to answer any and all tax and legal questions I can I’m gonna do my best if I don’t have the answer I’m gonna give you to point in the right direction give you the best resource I can my name is Mark Kohler and thanks for being here I’m on YouTube live on my own YouTube channel Facebook as well as entrepreneur Facebook want to give a big shout-out to Ryan Shay the CEO and say thanks to entrepreneur and all the people over there That helped support me and the tax and legal Message because it’s so important. I know many of you have small businesses and you’re thinking tax and legal I don’t want to talk about it. I’m gonna make it fun interesting We’re gonna get on the whiteboard and hit it Now if you have a question, I normally have a topic of the day. But today it’s open forum. I’m all yours and Rosalie and Mallory my assistants here. They’re amazing. They’ve already got their microphones ready to read off some of the questions you type up and Rosalie already dug up ten questions from my social media and YouTube this morning when they heard it was open forum So I’m gonna just burn through these as quick as I can and we’re gonna do it I’m also gonna give away three books today So if you stay here with me throughout this broadcast I will tell you how to win a book eight steps workbook on how to grow your business or start a new business the business owners guide to financial freedom and what your CPA isn’t telling you a Fictional and on fiction story about tricking you into learning about tax strategies. You’ll love it I want to announce a little later our winners for last week’s books We do a drawing for these books and I’ll announce those in a minute as well. Okay, so I’m gonna jump into some questions This is memo graphics. That’s their handle on Instagram. They said I have a rental with equity Should I wait to deed it to an LLC? Until I get approval for a HELOC or just do it I guess my question is would a bank give you a HELOC if your rental is in an LLC great question memo graphics Here’s the deal everybody out there. The first golden rule is if you have a rental property with tenancy There’s a short-term VRBO Airbnb rental that you’re renting out or a long-term rental You want to get it into an LLC as soon as you can to protect your personal assets from a tenant lawsuit That’s the reason generally cheap and easy a little maintenance every year that LS a mean issue if you’re gonna get a HELOC on that rental property a Home equity line of credit or any sort of line of credit mortgage on that property You’re gonna want to keep it in your own name until the mortgage is done. That’s because bankers are from Pluto men are from Mars. Women are from Venus and bankers are on a whole other frickin planet heaven forbid You have an LLC but Freddie Mac and Fannie made they will literally you know Their brains will blow up if you have an LLC so the point is do the HELOC do the lending do the Financing in your personal name and the minute it’s done and they’ve sold the mortgage five times before you wake up the next day Then you deed it to an LLC I have only had one client in 20 years have any problem with any bank? upset that you deeded the property into an LLC and then they’re gonna ask you to Stop doing that and put the property back, but that’s very very rare We have never had the due on sale clause called with any client They just ask you to put it back and that’s only been in a few handful of instances in thousands of transfers So memo graphics wait till the he locks done then deed it to the LLC Alexei Alexei I have a question regarding board of advisors now many of you know I love having a board of Advisors a board of directors and I’m going to start with my white board here because we’re gonna build on this throughout the day remember your operations are over here and your this is going to be your S Corp, generally and Over here is going to be your LLC and that’s where your rentals are gonna be now This is just your basic one-two punch. Very common Then down here is your family trust and we already have some trust questions as well. So on She says Alex he says I’ve got a board of directors Which could be up here bo d or you gonna have a Board of Advisors? Over here with your LLC and she says hey, well we transfer to another state on a regular basis We rent a van and travel to visit with my family spend a weekend and I meet with one of my board of advisers Could be a mom a brother a sister or best friend. Is this a tax write-off trip? Yes, it is now I don’t want to get extravagant you might spend two weeks in the Ozarks in your RV And you have one conversation with your board of advisor? I can’t write off all two weeks But it is common that you might get on a plane fly to meet with someone on your board of directors or Board of Advisors and pay for the airfare and a hotel night or maybe drive across the country or two states away or 30 minutes away and go meet with a board of directors or board of advisers that Are on your team? now the bigger your business is the easier it is to write this off but on the on Technically and on the face of it. It is a legitimate write off. I just don’t want to get too aggressive with that so Alex e mail or female I’m not sure I would make sure that you Keep track of those expenses talk with your accountant and I would love it to be a write-off I just don’t really fully of your tax. Return Marsha says this is on Facebook. Last one was on YouTube She says how does offshore properties business mortgage affect your taxes in the USA? Oh, this is a good one people I love it when my clients buy rental properties or have businesses all over the country But can I have one in Australia in Europe and Puerto Rico? I’m gonna have a property down in Cabo or Mexico How do I treat that? Here’s the u.s. Rule whether it’s in, Arizona or Nebraska or Cabo, San Lucas? Sydney, Australia You’re gonna treat that property on your tax return as if it was just owned in another state even though it’s in a different country You’re gonna report your income your expenses, and that’s right You’re gonna have to fly down there to check on it once in a while, which is cool So the more income you make on this property or business the more that’s a write-off on your tax return for checking on your international Property versus your New Jersey property. It’s all good Again, your overall income and expenses need to be relative and reasonable based on your situation Now what’s you’re gonna have though is you’re also going to have foreign tax if I have a property in Australia I’m gonna pay tax in Australia that I’m gonna get a foreign tax credit on my US return so it’s kind of like if I have a property in New Jersey I’m gonna pay tax in New Jersey and then I’ll get a credit here in Idaho Even though I have a property in New Jersey So just treat that foreign country just like you would another state in the United States. That’s the general concept Of course, we could talk about it for an hour I’m gonna go to our live questions and then I’ll come back to these Henry’s got a question Mallory what he got? Do you have any tax tips for an eBay business scenario is reselling items from garage sales and consignments for non-business Okay, I like this an eBay business And any tax tips, and you know what? Um, this is another question that I kind of go to meth Andreea or meth andrew on Instagram said I own some rental properties, but I don’t feel like it’s quite a business. I don’t spend as much time managing them I have spent money for real estate Education. Can I write this off very similar to Henry’s question saying I got an eBay business. What do I do guys? any side hustle like that is a freaking business if you’ve got a rental property down the street or two states away or you’ve got a little eBay business or something you’re doing on Amazon is an affiliate. That is a business my friends I want you to track the income and I want you to track every gosh-darn expense that relates to it So if you’re Henry, and I’ve got an online business, I’m writing off Internet I’m writing off my computer my laptop my iPad all my electronics. I’m writing off. Maybe my even my cell phone a home office I want you to keep track of everything Henry and take that to your accountant and rub your hands together Take advantage of every freaking expense you can and I mean start following some of my YouTube bids I’ve got 70 plus YouTube videos on travel and dining and all sorts of good stuff in same here for myth and riyer Gosh, I’ve got some unique names here today. Forgive me myth Andrew. I Absolutely same story if you don’t feel like it’s a business because you don’t duel I do a lot then you better start doing a lot. I want you to write off every expense you can related to your real estate empire Think of it that way guys. It’s really A state of mind it’s it’s you you’ve got to take advantage of the American dream Do you know over 50 million Americans now have a side hustle? Some sort of side business where they’re making money to supplement their day job That’s a business gosh darn it and your accountant better be excited about it you better start keeping track of your expenses and We might structure it in a certain way and all of you that have a side hustle. You might just be a sole proprietorship Driving for uber that is a side business I want you to keep claim the income right off all the expenses you can and you start to make more money people You’re gonna graduate to an S corp or an LLC Taxed as an escort This is your side hustle people. Now if you have a rental business same thing that is a rental business You should be tracking the expenses Okay, we got a couple other questions online and I’ll come back here to Tyler in a moment off YouTube. What do we got? Asked are there any good tax reason not to pay off a rental property quickly? Ooh Beth says are there any good tax reasons not to pay off a rental property quickly? well from a very narrow Answer for tax reasons you’re gonna lose the mortgage deduction the mortgage interest deduction if you pay off a rental You just got rid of the mortgage interest deduction Beth what I tell everybody and I think I might make some of you mad here listening and others you’re gonna totally high-five me I’d like to use leverage. I don’t want to pay off a rental property that’s sitting there with 200 grand just sitting in it That’s not a good rate of return because I could take out a hundred on a HELOC and go buy another rental property now I’m getting the power of leverage OPM using other people’s money. Now if Beth is 75 years old and she’s got five rental properties and she wants to pay him off and just sit back and collect rent and visit Her grandkids and great-grandkids Beth I like that but for many of us that are 60 years and younger I want us to using leverage I want us to buy multiple rentals and I’m not saying leverage to the hill find balance in that But people don’t pay off all your rental properties and just sit back. You’re not a land You’re not an embed stir your rent collector and Nestor’s get a better rate of return Nicole would I mean Mallory? Go ahead we have Nicole Nicole. Yes She just bought a xxx and she’s going to live in one of the units which depreciation interest should she deduct from which unit? Okay, this is good. Nicole says she’s got a three Plex so she’s buying a little three Plex over here One two three, and she’s gonna live in one piece of it That’s gonna be her home and then she’s gonna rent out the other two sides you’re gonna Question one of the questions I get I had it just this morning and I met with one of the attorneys in my office They said should I put this in an LLC? See if an LLC is trying to protect your personal assets From your rental properties. Well, guess what? Um, You’re gonna want to think twice about an LLC unless you have a bunch of other assets and So that’s just an asset protection comment, but for taxes, you’re gonna depreciate two-thirds of the rental property. You’re gonna Track that depreciation on two-thirds of the deal and one-third. It’s gonna be your home So just split it as if you had two other rental properties down the street in your home Even though it’s all in one three Plex. Okay. Now I’m gonna hit a couple others now Jeff This is a I don’t know if Jeff was trying to be funny or a snide comment I love it Jeff cuz I know who you are he says how does your firm handle and a Client’s IRS audit well clients call my office and they don’t get the same services if I answered the phone be patient Send me an email and go mark you got to do a little more training with your people So there’s number one Jeff. So don’t anybody get upset. We’re a firm. I’m not everybody’s gonna answer the phone cheeri every moment So be patient, but if our clients get into an audit and it’s our fault, we’ll pay for the penalties We’ll pay for any interest and we’re gonna solve the problem at no charge to you But if we did your return right and your number just came up and maybe your prior account and did it wrong and we did It right and now you get audited that’s not our fault. We’re gonna help you out and we need to rush to your side so if anybody uses our accounting firm I want to know about it if you’re getting audited it’s very rare to be honest We have a lot of people coming to us that are getting audited in other places But sometimes people’s number just comes up and we’re gonna be there for you So I’m gonna stay in touch with Jeff and other people that go through that situation Jeff thinks Okay, I’m gonna get one other question here I like this one and then I’m going to come over to our other questions online. This is from the DIY couple on YouTube They said my husband and I have income from YouTube consulting and other businesses. We own and operate together Cool many people have multiple businesses going into one company entity so you remember you have multiple businesses and one entity very common and they say can my It’s his full-time. It’s our full-time job We plan to set up a solo 401k for him, but I’d like to set up a SEP IRA for me, too I’m confused as to my options and which one is best. Oh my gosh This is an answer for all of you that you’ve got to hear If you are a husband wife Married couple whatever partners whatever the situation is in your domestic life and you’ve got an entity and you’re running multiple Businesses together we are using the solo 401k Amazing stay away from the set In fact don’t want to tell you the DIY couple just type Kohler SEP strategy and you’re gonna see a video that says I screwed up and did a SEP. How do I solve the problem? Compare the SEP to the 401k. I’ve got several videos out there on this topic. The SEP is an old-school strategy It’s only used in a narrow situation. You’re gonna find that both of you joining that solo 401k which a married couple can Including the kids. It’s gonna rock your world. You’re gonna love it. So look into that calls for a consultation We have a $4.99 setup 401k or a 999 401k setup that includes an hour with an attorney plan in your world So give my office a call if any of you need that, I’ll give you our phone number here in a minute Okay, I’m gonna do two more questions that we’re gonna raffle off these books or at least tell you about it And I’ve got some more questions here and I’m loving this Jeremy even asked how do I start a non-profit? We’re gonna hit it. All right. What do we got Rosalie? He asked what is the best structure for a Holdings company can a holding company be an LLC? Okay Lionel or Leon Oh la la Arnold. Okay, Leon. Oh, okay. I’m at Lionel Richie fan so just know that my partner Matt Sorenson went to a Lionel Richie concert on a Dare with some friends that said you’re gonna have fun come Said it’s the best concert you ever been to he’s like, dude I knew every song and Lionel Richie freaking owned the concert. He was like a great performer So hold back on your Lionel Richie, you know jabs there. Okay. He said a holding company Is it best to be an LLC or how well guys a holding company is kind of a broad term. I I’m gonna use it this way. This is how Mark Kohler does it a holding company to me is an LLC That’s usually guys for my clients that are usually worth a million dollars or more and they’re gonna set up a cope Holding company and this LLC is gonna own all their other LLC’s which might be rental property triplexes commercial property raw land money so you’re gonna use this holding company to hold all your other assets and it’s going to give you two layers of asset protection and It’s gonna make my tax return reporting more efficient. I also use The word in my terminology. I call it a parent company for operations I don’t call it a holding holding means you’re holding assets to me this is a parent company which in my world is an S corporation and I freakin love it and Escorts gonna own all my other LLC’s that I have partners with or just different operations I set what up these today for a client in New Jersey We have their S Corp and we set up a separate holding company. Hmm a separate LLC For owned by his parent S Corp and this is all operations rentals over here operations over here and I’m going to say it now cuz I just saw a little Pete ping here if any of you’d need a Consultation with one of our attorneys pay for a half hour an hour We’re going to try to save you ten times. We want to look at your tax return your overall plan Put it in a diagram You may spend three to five hundred bucks and we’ll throw in an entity for a few hundred dollars more if that’s what you need We kind of have a our with any entity So if you want to give us a call I’m just gonna say it now cuz I’m getting a little note here for three five five eight six nine three six six and that’s for the law firm and we Can transfer you over to the accounting firm if you need help with the tax side for three five five eight six nine three six-six Now there was another question someone asked about this They said um Tyler asked how difficult is it to convert from a c-corp to an s-corporation? so let’s say Sorry about that people. Let’s say you’ve got a c-corp and someone set it up in kind of old-school fashion I usually don’t like a c-corp for small business owners You can convert to an S corp with one form. We charge 125 bucks really simple But sometimes if you have carry forward losses or appreciated assets or equity in this C Corp It can cause a tax consequence to convert to an escort So it’s simple and easy and it’s cheap But the question is when you do it and is it the right time for you? Talk to your accountants? One of our accountants can do an analysis for a couple hundred bucks Run you through it tell you what the options are and how many more taxes you would save and you generally will Mallory Eh asks, would you put can you put a home in a trust? That’s not paid off yet? And if so, which type of trust would you recommend? I also would like to know when is it appropriate to put your retirement in the trust? okay, so D H asks, when is it a good idea to put your business or property in a trust and then Your retirement. Okay. I call this the trifecta because what I want down here is a revocable living trust revocable living trust It’s easy to change easy to amend no extra tax return does not save you taxes but it avoids probate and it keeps all your assets from owned small businesses or real estate or using the trust and it goes with a will you’re gonna have a will and a trust and a whole Estate planning package. We’re doing a special this month I didn’t plan on bringing it up But I’ll tell you about it here in a minute the trust should own your LLC’s the trust Should own your S corp or your operational businesses the trust should own your personal home your life insurance the Beneficiary should be your trust and your investment accounts and retirement accounts IRAs 401ks any sort of investment account I want all of those the beneficiary to be the trust now, some of you financial advisors are freaking out going well There’s special tax elections with an IRA and a 401k and all this stuff I get it the IRS passed a rule Will the IRS Congress did called see-through trust provisions where you can have a trust as the beneficiary? But the surviving spouse or the kids can still make the tax elections They need to it doesn’t create an automatic withdrawal or tax consequence a good tax planner We put this in all of our trusts allow all of your assets to be owned by the trust So you get the trifecta the trust your operations and your holdings. It all goes into the trust This year. I’m every year for seven years. We do a special on trust 999 for married couples 600 bucks for single individuals we do the entire state plan with will trust the whole nine yards and you get an hour With a real tax attorney to design it for you So again call that phone number if you want it or go to our website I’m sure Mallory and Rosalee will put it down there below. Okay. Now here’s the winners of our books from last week Dylan my photographer my videographer my amazing. Dylan is saying move it along mark. We’ve got lots of questions. I’m in a hurry man Okay. All right. I’m gonna give away these books. Here’s who the winners were last week Financial freedom was Andrew talansky Congratulations, Andrew and the tax and legal book was Valencia Alan oi alene Valencia a lien and then the 8 steps workbook $99 on Amazon and it’s kicking butt. It’s getting great reviews. I’ll tell you about it is Brian Roman, so I’m gonna give these away today anybody that shares this video on your social network Rosalie put you into a hat and draws it out in the morning I autograph it and mail it to you for free eight steps workbook is 60 plus little videos with QR codes that you can start watching immediately if you bought this on Amazon Tomorrow today on my website you can start watching videos Look at diagrams get a business plan a marketing plan and a strategic plan dirt over on Amazon And I’ve given one away today Well, Rosalie will give it away in the morning what your CPA isn’t telling you published by entrepreneur yours truly is the author And the business owners guide to financial freedom, we’re gonna give away both of these books. They’re kicking butt out there on Amazon and Barnes and Noble and everywhere. Thanks so much everybody. I’ll give those away Man I’m talking fast. I hope you guys are enjoying this. Where are we at on 20 minutes? We’re 20 We’re good for 10 more minutes. You guys good Hopefully you got your bullet popcorn in a diet coat or a rock star. I am Drinkwater Yeah, my rock star I only get one rock star day and I already drank it. Okay What do we got? Victor is it legal a spark as a Parent to start a Roth IRA for your kid instead of a five to night plan in case she doesn’t go to college Oh my gosh, Victor. I love it and Victor says should my kids have a Roth IRA Even if they don’t go to college or should I do a 529 guys? I am NOT a fan of the 529 account now I know if some of you already have them going let them ride let go just keep letting them grow But don’t put any more money in it I love to set up Roth IRAs for the kids and you can pay them out of your business Pay the kids down here and they can go and open up a Roth IRA This year up to $7,000. I mean, this is a big six or seven. Yes. No, it’s six thousand 55 and over 7,000 boy Freudian slip sorry a fifty and over – I’m just blowing it today but kids can open a Roth IRA and the Roth IRAs Can be partners in your next LLC. So all my kids have Roth IRAs. I love it. It’s a great Tax strategy and if they don’t go to college, they built the retirement account They can pull out contributions tax-free for college. I love it Okay, Valerie Nicole asks if I claim a loss on paper against my rentals. Does that deduct from my w2 income? Okay boy, Nicole Hard question. All right, I take it all you heard that wonderfully so Nicole says I’ve got rentals and I don’t have a small business. I have a w-2. All right, cool. Remember short term long Rentals over here w-2 over here down here right below your trust is your 1040 and so nicole says I’ve got Losses from my rentals and will that offset the pluses? from my w2 the answer is Yes, usually here’s the rule when you go to do your rental property. You’re gonna be one of three types of investors passive That’s number one Active Or a real estate professional I’m gonna put our ePro now I’ve got little videos on this as well chapters in my book It’s a secret strategy in this story. That’ll change your life. It’s a story I should read you the first paragraph, okay? Since nicole has a day job. I doubt she’s gonna qualify as a real estate professional I don’t want any of my clients to be passive so have these three options what I love the most is active and Nicole or any of you if you’re making decisions regarding your real estate Even if you have a property manager you qualify as active all of our clients are at least active That allows you to write off up to twenty five thousand dollars of losses against your w-2 Unless you make more than a hundred and fifty grand if your AGI is greater than 150 grand You lose the write-off or do you know you don’t lose it? It goes into a bucket and you get to carry forward those losses for the rest of your life They never go away and whenever you go to sell a rental property You can what use those losses against the sale of any other property. This is a big deal So Nicole keep track of those expenses. It’s a business If you don’t get the write-off Did you make too much money or you can write off up to 25 grand against your w-2 and I’m talking refund Or you keep track of the losses until someday when you sell another rental, so it’s good Alright, I’m going to take another email question that came in before This is a good one. This is from C&T The NT says hey Mark. I got a w-2 full-time job. I make pretty good money per hour My wife makes pretty good money for our we both have day jobs but hurt my wife’s company told her that we’re gonna file a 1099 instead of a w-2 Now that’s a little precarious because if you look like an employee act like an employee or treated like an employee they really can’t 1099 you but I’m just gonna assume that C and T here says my wife acts like a Subcontractor and they contend ninety nine her legitimately. Okay, let’s assume that’s the case. What’s better? He asks is a 1099 better or is a w-2 better. He said I said no. No. No, we want a w-2 Because we won’t get as much of a return next year if we do a 1099 Now the husband in this situation, I don’t know if he is the C or the T But I hate to tell you you’re wrong. You’re gonna have to sleep on the couch tonight. The reality. Is that a w2 Withholds a ton of money Because you work for someone else and you might get a refund, but that doesn’t mean you save taxes That just means they withheld a ton of money and you gave the IRS alone all year freakin long That’s not good tax planning But if your wife got a 1099 now I could write off home office dining Auto mileage Computers electronics internet cell phone then she’s gonna pay less in taxes and you’re right She’s gonna have to withhold from herself She’s gonna have to put money in the bank to make sure she can pay her taxes in the spring and you may not get a big as refund Because you didn’t give an IRS the loan but you’re gonna pay less taxes cuz the 1099 Freaking rocks if you qualify for that so don’t worry about the refund worry about your net tax your pain and the 1099 kicks butt so Okay marce Mario where we going Mario where Joshy, okay Sorry Mario can a professional meet with a client at a remote location from an office such as Cancun Mexico and deduct this? expenses from that meeting with the digital professional Oh digital professional so Mari says I’m gonna go to Cabo and sit by the pool and then call my professional advisor that’s in New York and I get a write-off No, I’m sorry making a phone call from a beautiful resort at Sandals Resort in the Bahamas. Wouldn’t that be nice? You’re out on one of those little Hut’s out on the water with a little walkway. That’s my dream vacation Right, and then you make a phone call on your Skype video from your little Hut not a write-off but let’s say your New York adviser flies down to the Bahamas and Meet you in the buffet before you go out to the pool. Is that a write-off? Yes, it is because you’re having a business meeting at a remote location At least four hours a day, or at least one day critical meeting if you’re there multiple days I need to see four hours of conferences or meetings every day I can write off your airfare down a travel day back at the airfare back of the whole nine yards But you have to meet them there in person. Sorry the Skype call will not cut it Joshy Josh, okay Is there a minimum age for kids when we could start a Roth IRA for them? Okay, so joshie says mark and I’d like this. So let’s go to the board. I’d love to write things out So joshie says he has kids. Joshie could be a boy or girl again some of these names. I just don’t know. I’m sorry. Joshie so let’s say Joshy has kids and so here are these little kids down here and He wants them or she wants them to start a Roth IRA, which I love Well in order to start a Roth IRA they need to have Earned income so these three kids want to start a Roth Now maybe your kid, you know is an actor in Hollywood for the Disney Channel at age 2 that’s cool They got earned income they can open up a Roth But in your little business because you’re a landscaper and you’re gonna have the kids run around and hold a weedeater Folk put lawn and you know grass clippings and garbage cans or help file paperwork in the office or run the paper shredder I Normally don’t put kids on payroll till they’re at least 6 years old where they can have a nominal job and maybe you pay them a hundred bucks a month for Shredding paper emptying the garbage sweeping the you know the shop or helping vacuum the office on a Saturday. I worked for my dad Cleaning the office when I was six or seven years old. I could pay my kids $100 a month $1,200 a year and they could put it right into a Roth which I love But they’ve got to be old enough to have a legitimate job So I say usually six or seven years old I do have some clients that pay their kids a modeling fee Because they’re on images and pitchers in the business on the website on the wall Think of a pediatric dentist that might have some pictures of his children in a commercial at the movie theater on the wall But guys most of your kids are not going to be model quality. I’ve seen some of my kids I’m not gonna sign the return it’s not pretty yeah, you know what I’m saying? Yeah, that was rude. I’m sorry. That’s a that’s a drop here. Okay All right more question is just as good as making money and the business owners Sometimes take a while to learn that you buy a rental property and all you’re worried is about cash flow Why don’t we worry about the tax savings that comes with it? That’s just as valuable as the cash flow Oh, I just got chills. I’m crazy. I love this. Okay What do we got Mallory dan from Maryland here? My wife and I plan to each have our own LLC and a solo 401k am I allowed to fund my wife’s IRA or 401k if her business does not have income to contribute. Okay, Dan We were all jacked up do not go on LegalZoom and do not do this You’ve got to call us My tax attorneys would rock your world and it would save you ten times what you’re gonna pay on some freaking website He said he’s gonna have two LLC’s. No, I do not do that now You may think that’s bad, but Dan hear me out everybody listening. I’m gonna set up one LLC, and we Might tax it as an S corp to because we want to save on FICA and get the qbi pull-through deduction I mean there’s lots there but when I have a husband and wife I let them both own the business now. I only have to do one setup They both have a DBA so you can run two different businesses in the same company you Each could have your own checkbook your own debit card your own set of books But then we merge them into one company at the end of the year, dan I just got chills saying that because just saying that hopefully saved you thousands of dollars of Setting up two LLC’s that you don’t need now in some instances. I might set up two LLC’s I’ve got a doctor and a realtor a pharmacist in an engineer and for professional licensing They have to have separate LLC’s but nine times out of ten I’m doing one company two DBAs two URLs Then we do one solo 401k and that solo 401k can be carved into two pieces for both of you Husband wife, they could be Roth 401 case they could be traditional 401ks But it’s all one 401k all one company you’re getting the efficiency and the cost-effectiveness of one 401k and one entity guys. We have a set service for this We this could be under 1,500 bucks and you get both and up to two hours with a tax attorney helping you do this I’m so glad you’re watching and this is not an infomercial but shop around and if you set up an online 401k for 400 bucks and don’t know what you did that’s why we have an $800 $900 401k where you get a Time with an attorney and we setup the right entity and then we’re here every year to review it with you So shop around doesn’t mean you have to use us But be careful doing too much DIY online because we end up having to fix it later in a costume or okay next question Tim asked you Hi mark, I am 1099. What’s the best way to fight loans for flipping houses without shoving a lot on taxes? Oh my gosh. Okay now say that again, I was multitasking Tim flips homes He as what is the best way to find loans for flipping houses without shoving a lot on taxes to find loans Okay tim is a fixer flip. I’m gonna think of chip on A fixer-upper, you know if you love chip and Joanna on fix her up or down in Waco test, Texas I love chip chip. If you’re watching. I’m still trying to get you on my podcast. I think you’re Just a complete stud. We’d love to have you on the show now Tim here is also a fixin flipper. So what Tim needs to have if he’s fixing and flipping properties? Do we do an LLC? No, he’s not holding rentals. He’s fixing and flipping So we’re gonna have an S corporation if he’s making more than 40 grand a year so he’s an S corp or an LLC taxed as an S corp and He’s off to the races now when he goes to buy properties He might be buying him in his own name to get the bank loan and then soon as he closes He’s gonna deed it over to the S corp do the rehab and then put it up for sale. The 1099 goes into his escort Now a lot of my fixin flippers they’re partnering with others They’re borrowing money from people’s IRAs and 401ks. They’re doing hard money loans A lot of times they might be doing seller financing loans from the buyer that owns Sorry from the seller and they’re havin a partner on a JV There’s so many ways to find money for this You could partner with others Uh seller financing borrow from retirement accounts use hard money Until you get enough capital where you’re doing the whole deal start to finish in your own money And I’ve got clients that that level doing one rehab a month making a hundred to two hundred grand every three months so there’s lots of options here, but you want to do this in an S corp and Maybe consult with this once in a while we could help you out We’re still getting questions or we aren’t you guys tired of this. I’m having fun. Maybe a couple more minutes Oh Rosalie he’s calling the time of death. She says last question is Eric. I might look here on our email Dhrd emailed and I’ve got El Toro and DJ Schneider and Jeremy. I’ve got three more questions after this Okay, Eric, Eric asks, I have a digital marketing business set up in an S Corp I’m starting back up in the real estate wholesaling. I had dormant LLC from previous I need to spend $2,000 ASAP. Should I open up the bank account first? Okay, Eric. You’re killing me bud now listen to what Eric’s doing He said he has an S corp and he’s been doing wholesaling in the past and he’s got also an online marketing business Sounds like One S corp to me Eric. I’m not kidding. You may say well mark. You’re an attorney. You’ve got teams of paralegals You’re a national expert on this you must have bunch of s corpse. No, I have one S corp Seriously, I’m not kidding people. I just got chills saying that cuz it’s so true Eric use your one S corp Run your wholesaling through it Run your online marketing through it run your hair and nails you do on the weekend Which we know you do you just don’t tell anybody just do this on the side do your DBA do your URL? Do your side business run it all through the same frickin S corp Let this pay the bills Now you’re gonna use QuickBooks and you’re gonna run books for all these different operations And you’re gonna do good accounting and you’re gonna do your minutes and you’re not gonna have one sheet of paper from Legal Zoom You’re gonna call my office and we’re gonna get your books organized And why in the hell do you have a doormat LLC either use it or get rid of it? Where am I gonna use that LLC? I’m gonna use it over here to hold your rentals Because you’re gonna now whole sale everything you’re gonna pick up a rental once in a while, or I’m gonna use this LLC for a business with a partner, but seriously guys just be careful doing too much of this online by yourself spend a few hundred bucks here and there and get some advice and Don’t get taken advantage of and call me if you ever have that problem my office. I want to take care of you but yeah, Eric just Consolidate baby don’t overdo it. Okay now el Toro said mark I would would I be making a big mistake to open to Roth accounts a solo Roth 401k and a Roth IRA That’s what I’ve got. I got both do it Someone mentioned I should keep one pre tax and other post tax strategies with tax advantages later on before retirement Oh now we got were jacked up here. El Toro. This is good everybody. Listen listen He said a Roth 401 K and a Roth IRA and then someone mentioned I should do Keep one pre-tax in the other post tax. No, no, no, no No, here’s what’s going on people and I have a lot of my wealthy successful clients doing this They’re gonna have a Roth IRA They’re gonna have a Roth 401k and Then they may even have a traditional IRA and a Traditional 401k you can have all four But remember these might have their own LLC To buy rentals, but you’re also going to have your own LLC owned by your trust See think of it this way. I have clients with different buckets This is their pre-tax bucket or their post tax bucket and you can have a little of both. I’m okay with that el Torro, but If I had to bet and the best way to go with my money is I’m gonna go Roth in the long term Every time I don’t want to have any post pre-tax money that I’m gonna have to pay taxes on later But I’m gonna have LLC’s in my own name, too so I’m gonna have rentals in my own name and rentals in my Roth IRAs if you have some traditional Pre-tax retirement accounts, that’s cool. But I’m gonna try to convert them to a Roth later. That’s me That’s just rinette. Okay, DJ says I filed I only have two questions left I filed for a single-member LLC for my lawn sck lawn care single landscaping business a couple weeks ago Should I convert to an S corp right away after approval and then get my ein? My intentions were to keep the business finance away from my personal finances I will still be the owner of the business in an S corp okay now DJ I Hope it sounded like you may have done this online. And now you’re trying to save a few bucks and I get that and I want to tell everybody if uh, Nina, um, DJ may have done this for a couple hundred bucks But he’s got he’s missing the pieces and parts and he doesn’t even know what questions to ask. This is one of ten questions I might ask so get some advice and maybe DJ give us a call, but let me answer this He has a single member LLC and he says when should I turn it into an escort right away? Well, you’re gonna get an EIN right? He said should I get the ein? After my escort, no So you’ve got it all mixed up bud when you set up the LLC get the ein Start operating if you’re gonna make more than 40 grand this year profit I’m gonna retro actively convert it back into an escort. You get your EIN before you make the escort decision That’s the way it works It’s okay. The S election comes later. We charge 125 bucks So get making money get your LLC out there market the hell out of it makes a bunch of money But I love it then if you start making money call your mom and then call us We’ll get your escort done and get you in the right structure. So you can start doing payroll and all that good stuff Keep learning. I didn’t mean to be insulting to anyone keep watching my broadcast the YouTube mites daily social posts I’ve got a little workshop and I’ll say it now. I’ve got a self-directed IRA 401k workshop, Chicago I’m also doing it in Honolulu. I know I did it for you so you can get a tax write-off to come to Hawaii on August 10th So check those out I had to look over here because Rosalie is making sure I don’t miss the dates But come out and get to my website Mark J Kohler comm and you can sign up for any of these workshops And I’ve got five around the country in the fall that I do business building. So that’s Mark J Kohler calm and just get over there in it and and check out those workshops and Finally Jeremy says, how do I start a non-profit? Well, there’s a new Non-profit application that’s out that we’re using that if you’re gonna be a small potato nonprofit we can even do it for about 2/3 or about 1/2 of the cost we normally would so there’s full nonprofits that are we charge around 3 grand and then a simplified non-profit around 1,500 bucks This is a great way to go for any of you that want to set up a non-profit. We set up a corporation It’s a nonprofit corporation in the state where you live? then we register it with the IRS and Then we give you the tools to go register it with the state or we’ll help you do it It depends on what you’re gonna do Are you gonna do Black Tie Affairs golf tournaments roulette raffles and and all sorts of things to raise money And then what are you gonna do with the money? You’re gonna put shoes on kids in the Navajo Nation down in Arizona or down in Peru You know deliver tents to kids in a refugee camp. I don’t know So you want to I want to meet with you we’re gonna spend two to three legal hours getting you through the nonprofit depending on how extensive we’ll give you a quote right up front and But they’re easy to do and they can take a few weeks or a few months and we set them up all the time So anyway a couple other things share the video Rosalie’s gonna do a drawing in the morning follow me on the social media the newsletter if you get over to Marge a Kohler comm I’ve got a free ebook 30 pages on the top ten strategies for small business owners Sign up for the newsletter and if you need a phone call with an attorney Give us a buzz and what all I want to say. Yeah, keep living the dream. Don’t give up. It’s hard It’s hard. I was at the office last night till 10 o’clock I was at the office till one o’clock on Monday night, and I didn’t go to bed till 11:30 on Tuesday night I’ve had three nights in a row Working late cuz it’s hard as a small business owner now, it’s Memorial Day weekend So I’m gonna play a little bit but that’s the freedom I get to with it being a small business owner Don’t give up on it People doesn’t mean you have to quit your day job But get a small business on the side and start paying off your debt building a retirement and doing what you love. Thanks, everyone

8 thoughts on “Open Forum: Your Questions Answered With Mark J Kohler CPA, Attorney

  • Thinking about renting out rooms from my primary residence to take advantage of the depreciation and % of expenses like my utilities, pool service, etc. Is that a good idea? We cannot claim our mortgage interest any more with the new deduction?

  • Thanks for addressing these questions. I would like to know if you dealt with SPENDTHRIFT PROVISION IN A WILL OR TRUST. How common is a self settled trust and does this only pertain to certain States?

  • This is related to your podcast about sba loans; can you use an sba loan to buy an LLC the holds several properties?

  • Wow, is anyone just as annoyed as I will all these people telling you how much money in the stock market wanting to teach. Such bullshit they are peddling, just wait until this market crash unless they are shorting they are idiots. Humans never learn.

  • If you use non IRA funds to partner with your IRA to start an LLC, are you permitted to take out profits made by the LLC based on your share in the LLC as a co-investor? Or must all of the profits remain in the LLC just because your IRA is involved?

Leave a Reply

Your email address will not be published. Required fields are marked *