Avoiding Capital Gains, Tax Strategies to Save you Thousands - LIVE Q&A | Mark J Kohler |

here helping you out with your main street business tax legal strategies trying to do the best i can with an amazing team behind me at the law firm of kqs lawyers accounting firm caney cpas and directed trust company now here for the next hour we're going to break down topics do live q a around the world here on facebook and youtube through entrepreneur and our own sites through our our firms please if you're participating give me a second to explain the topic for today because it is a tricky one but we've been this has been by demand in fact my marketing director jack said you're doing the show on this topic i'm like really this is what everybody wants to talk about he's like yes i'm like all right i'll break it down um do the best i can so we're gonna let me explain the topic here but please get involved down below give me some love give me a question let us know how you're feeling um once in a while we get some folks in the comments section that are just trying to promote their own stuff or be reckless and just be a headache plea please we ask of you this is an opportunity for all of us to work together and learn about small business let's keep it to the topic be respectful of one another and have a great session here learning about how to make money and live the american dream all right my mom would say i've got to take the gun out of my mouth here too all right um boom we're going to rock i should be drinking a rock star right now but there's none in the house we got to restock the fridge oh the fridge is full ah this is a good day all right okay now here's our topic today we are going to talk about and i can't believe you guys have been requesting this we are going to talk about capital gains that's what you guys want to talk about now what this means is you bought a rental property you sold it for more you bought your home you sold it for more you bought some cryptocurrency you sold it for more you bought some tesla stock some lululemon stock and you sold it for more you bought a piece of equipment you bought a car p truck you bought sold your business you're gonna pay capital gains tax that's what the topic's about everybody keeps texting going how do i get out of capital gains tax what's the rate how do i pay it when do i pay it blah blah blah so that's it jack right that's what we're doing and a lot of people are making some money on crypto not this week not me took a hit this week didn't we that's right next week elon musk will you know twitter tweet something else out and we'll make money come on elon give us some love all right now okay here's the first thing i wanted to mention there are two tax rate systems out there there are ordinary rates okay and then there are capital gain rates now my goal oh well they're cold for crying out loud let's see what we've got here anybody need a rock star huh huh yeah this is big i'd say i'd give these away here on the show i should i should just like sign when i'm sponsored from rockstar you know totally legit will do okay capital gains ordinary rates now oh boy i've got a table here that i wanted to show you here we can this is going to be tricky um basically you've got 10 to 37 percent in ordinary rates 10 to 37 percent based on your income this is single or married so we can kind of zoom in on this a little bit let's do that so if you're single i'm going to pay anywhere from 10 on my income to 37 and capital gains is going to be 0 to a max of 20 percent if i'm married different income level 10 to 37 capital gains 0 to 20. so you have different brackets based on single or married okay so that's so when we start looking at these rates we need to say well which one do i want do i want ordinary rates or i want capital gain rates well capital gains are better than ordinary rates so sometimes right off the bat people go i don't want to pay capital gains how do i get out of it i'm like i got people trying to get it they want capital gains so we have to remember on the continuum or well no no on the comparison of just ordinary capital gain capital gain is better lower rates so if you make a hundred grand in capital gain let's do that for fun let's say you're single you made a you made 100 grand okay i'd be between 84 and 160 so i'd pay 22 percent on the money between 84 and 100 grand i paid 12 on the money between 9 700 and 39 no no i'm going to pay 10 on 97 to 39 oh no i want to get this right 0 to 97 is 10 97 to 39 is 12 and then it's graduated see what i mean so if you say i made a hundred grand i've got to pay 22 in taxes no you're going to pay 10 on this chunk 12 on that chunk and everything above 84 up to 160 you're gonna pay 22. so what they say is you're in the 22 bracket right here now capital gain if i had a hundred grand of capital gains so i have no w-2 no w-2 and i'm just living on an island and i sold my bitcoin and made a hundred grand i'm gonna pay 15 0 on the first 39 15 right here so that's kind of how it works that's how capital gains works all right now questions are already flying in but i want to do one more example then we're going to stick with questions there's a continuum of the worse taxes so i go left to right i'm going to go left to right so we're going to go the worse taxes are over here and worse tax rates let's do that the worst tax rates are over here and how about no taxes sign me up i want no taxes all right so over here the worst taxes on this continuum is going to be ordinary income plus self-employment tax oh my gosh the worst and if you have a c corp you might be paying double tax corporate tax plus personal so this is one of the worst equations when i see someone getting killed with self-employment tax or corporate tax then let's say you don't have self-employment tax but you have ordinary um and then you've got capital gain capital gains right in here and and then we get over here into boy i'm just gonna say roths no tax now what we're trying to do is get as many deductions as we can or tax credits to reduce our tax rate and so let me i think a lot of people don't realize this is a lot of times what i'm trying to do with my clients is in between this capital gain and ordinary i'm really trying to reduce your amount of taxes based on deductions and write-offs and tax credits so deductions and credits is really what i want to be and i want to look at how much money did i put in your pocket divided by how much did you make and or how much did you pay in taxes by how much we put in your pocket and we're going to find your effective tax rate and we want to get it as low as possible over here i want to minimize self-employment tax i want to minimize corporate tax i want to move you down this line as far as i can and get you to a no tax realm i guess what i paused on and i'm going to just say it but it opens up a whole can of worms is some people are like well are roth's really here i'm going to erase this roth iras or no tax insider retirement account which i love it's really puerto rico okay we got puerto rico in here that you could be as low as three percent in taxes but you gotta move to puerto rico to get it then we've got our roth and tax free bucket and there we're talking iras and and all these cool strategies 401ks and all that so my goal everybody is to get you over here paying us no tax called opportunity shifting now let me give you one example ever take a breath then i'm gonna go over here okay everybody hang tight let me give you an example we all know chuck sorry chip and joanna that do fixer-upper on uh one of the home networks they build homes and resell them down in waco texas they are in the business of flipping homes now if i was meeting with chip and joanna and i meet with developers like that all the time had a phone call this morning like it literally we talked about this very topic on the phone call and they go mark i want to quit paying so much in tax and i go do you have another deal you're looking at yep we're going to go develop that house down the road or we're going to go develop that apartment building down the road and i go okay cool you want to save taxes don't do it they're like mark you're freaking idiot i i know what i'm doing i know the market i'm going to make money on this deal what do you mean don't do it i say don't you do it let your retirement account do it and pay no taxes or very very little there's a lot of strategies involved here but why deal with all this crap over here even capital gains someone calls up and says mark i'm going to buy does coin i'm going to put down five grand on deuce coin and i know i could make a million dollars or 100 grand it's going to come back hey i own some deutsche coin cool all right i'd love to make 100 grand on my 5 000 investment in deutsche coin but i'm going to tell you right now don't do it put the money in your roth ira and let your roth do it zero tax you still made 100 grand but you didn't pay tax on it and you may say well mark i'm 25 years old and i don't want to wait till i'm 50 to have that million dollars or 100 grand hey you want to pay the penalty in the tax to pull it out early you can you're not going to jail but you know what you've got a long life ahead of you and i meet with too many people that are broke at age 50 and they're freaking out you don't want to be there so let's start opportunity shifting and try to get into a better tax-free scenario when possible so the moral of story is we're going to focus on capital gains today i'll tell you what the rates are how to get out of it what to deal with what's short term what's long term i've got some killer slides here that are going to blow your mind and i'm going to answer your questions and hopefully help you out so see how it goes sound good we're rocking it warm rock stars seriously warm rock you know it's like i come over for the super bowl and i have warm beer you know i come to do a show and i got warm rock stars it's ridiculous okay all right okay so cory do you want me to read some of these questions that came in in advance yeah let's do it all right i texted you some questions oh you did should i go with those okay they're most current okay all right first these are instagram we're gonna go to instagram first if i made 300 000 this is jerry69 if i made 300 grand with crypto how can i avoid paying taxes also if i'm from california can you file my taxes jerry we'd love to help you out and yes i've got a full service accounting firm over 50 employees we're helping clients around the country we would love to be of service be patient we just filed extensions for a lot of folks we're going to be working on taxes till october but jerry i've got some bad news if you made 300 grand in crypto you're going to be paying tax and california is going to kick your cam too so let's let's see what how this works okay everybody so here's how this works take a breath and you don't this i'm not going to get too geeky on you but you've got to know this this is what successful investors and sexual successful sexy investors too but successful business owners and investors know sorry freudian slip there okay when you go to cap how do you how do you tax or track capital gain okay even my guys here in the studio you're gonna love this let's say jerry went out and bought bitcoin so here's his little bucket and he bought bitcoin when it was just five thousand dollars ah that was only six months ago can you believe it okay so he bought bitcoin for five grand that is what we call and i'm going to put it in red you want to learn this we call it basis all right so he's got his basis that's what he bought his cryptocurrency for okay then we turn the corner into freaking february and march of 2021 bitcoin is at 60 grand it's out of control and so we get this huge gain so we have this gain on bitcoin and now jerry sells this bitcoin for 300 grand sales price sp sales price so we've got purchase price five grand sales price um 200 no 300 and 5 000 okay so you take your sales price minus your basis and you have 300 dollar gain now when you have this gain we have to say okay i gotta gain now my next question of jerry is how long did you hold it okay so now we've got our capital gain here that's step one we tracked it step one i know that i've got a three hundred thousand dollar game all right boom now we go is it short term or is it long term all right this is what accountants do i know you're gonna love it you're like man mark you're turning me on i go i know when my wife is like feeling a little frisky i just start talking about capital gain boom she loves it all right of course not okay everybody in here is like i just vomited on my mouth all right okay all right okay all right short term means you held it less than 12 months long term means i held it more than 12 months okay so some people go if you want to save money in crypto hold it 12 months okay all right so we call it we go i call up jerry jerry when did you buy your bitcoin uh i bought it last year did you hold it 12 months nope okay crap all right so we held it nine months so his capital gain is now short term jerry you're not gonna like this show today maybe if it's short term you pay ordinary rates ordinary equals short term capital gain accounts call it stcg short term capital gain short-term capital gain is subject to ordinary rates now let's say jerry gives us some great news he's like mark i bought bitcoin last january held it 12 months sold it in march boom okay we got long-term capital gain so now he pays long-term capital gains rates on the 300 grand well that's cool all right okay so we got to figure out step two in our little diagram here step two is we had to figure out is it short term or long term okay step one how much is the capital gain step two was it short term or long term now if it's short term it's pretty easy jerry's screwed he's gonna pay ordinary rates in california and federal so let's go over and look at his rate now i don't know if jerry's married or single but if he made 300 grand we have to say also how much was your w-2 did you make any other money and he goes well mark i have a day job and i live in california so i live in a shack and make a hundred grand a year no i'm just joking i live in a place in california too and it's so expensive though right let's say he makes 60 grand w-2 just you know maybe a young guy buying bitcoin so he's got 60 000 in his w-2 plus he has 300 grand in his bitcoin sale short-term capital gain what is his adjusted gross income holding everything constant he made 360 grand now let's say he just does a standard deduction 12 grand we're at 350. now i don't like jerry's situation i want jerry to say i got a small business on the side i got some rental property i'm putting money into a solo 401k mark i'm going to bury that 300 grand in like five different places i got all sorts of things to do but if jerry says i got a day job and i bought crypto you're giving me nothing to work with jerry it's gonna suck so if that's the case he's got 350 grand of income so i have to take your short-term or long-term capital gain and step three i have to add it to all your other income what other income did you make all right so now we got 350 of ordinary income all right let's go to the chart okay 300 grand oh 32 oh i felt that in my gut that's just fed jerry that's just fed now it's graduated you're going to pay 10 percent on the first 9 700 12 on 9 700 to 40 grand 22 on 40 grand to 84 8 24 on 84 to 160 and 32 on everything over 160. that's just federal california what do you guys think darren i mean nine percent at least probably nine california so jerry i i hate to be their bearer of bad news your effective rate at the very i don't know what your effective rate will be because it's after all of this is meshed together but for about 150 grand of your income you're going to be at 32 plus 9 41 of about 150 000 of yours taxes if you came to me with 350 i'd say you're going to be dropping at least 120 k in taxes so now last last point we're using jerry as an example here let's say jerry goes no no no mark it was a short-term capital gain oh step four step four calculate your rate that was step four you gotta calculate your rate okay now well jerry comes back and says no mark i held it 12 months so i only paid long term capital gain on the 300. okay now guys this is gonna make you so mad i'm sorry i don't don't hate the player just hate the game it's not my fault i'm just telling you what the gov does all right hate the man okay all right i'm trying to save you taxes okay now this is really important he had 300 grand so now jerry we got to say he had 300 grand in long-term capital gain and he had 60 grand let's do that in black he had 60 grand in w-2 which is ordinary and you're gonna go well sweet mark i pay a lower rate on the 300 and a higher rate on the 60. true true okay what's the rate on the 300 well you go okay he's single 300 grand i'm in the 15 this is great 15 range i don't i don't pay only 15 not this 32 yep okay so let's go back over here 15 on that and 60 on the other is ordinary okay now here's the problem jerry's gonna go well i take the 360 separately right no now this is deep so i've got 300 grand here but your capital gain rate is based on your adjusted gross income your overall income so i've got to look at 360. now luckily he doesn't get into the 20 range until 510 grand and his 0 kicks in disappears at 40. so we got this huge swath here so his capital gain rate is going to be 15 that doesn't change but he says well my 60 grand ordinary oh my gosh that's great i'm right here in the 12 bracket no your ordinary rate is based on your adjusted gross income so you're gonna pay that's a higher rate on your 60 grand but you're gonna pay the lower rate on your 15 on your capital gain so it's it's it's complicated that's why you use account um accounting software to kind of figure this all out but um it's tough so it's it's jerry you're gonna you're i can't get you out of it what i wish jerry would have done is bought all that bitcoin cryptocurrency in his retirement account and he'd be paying zero taxes right now all right i'm gonna go to the live viewers right now over on facebook ashton says what happens if the cryptocurrency crashes as it does every so often what happens then all right good question ashton okay so i've got crypto and it crashes now to me everybody crashes means it went in the toilet and it's gone forever i don't think that's gonna happen what aaron might be saying is cryptocurrency is doing this and right now we're here well the first thing i'd say is option one don't sell you know just wait it out i i had crypto go in the toilet this week for me i'm i'm just gonna wait it out if some of you are living on crypto trading you might want to get a day job you're trading crypto all right other than trading crypto i i i just don't like to see all my clients throw all their money into anything i want to diversify i want real estate i want stocks bonds i want crypto i want a small business i'm going to be doing a variety of things i probably have nine sources of income so option one is weight now what you can do is option two you could sell take the loss on paper and then re-buy a lot of people call this harvesting losses so you when you sell down here in this part from here to here you get to take that loss against other gains that you might have had earlier in the year so you get to take this loss and wipe out real estate gains wipe out other income possibly and then rebuy it and wait for it to go back up now suddenly i think that's that's great but let me go back to the slides all right so we got to start over on some of these slides got to get this down there we go oh how do i get out of the presentation mode uh there we go all right here's how for you accountants out there i'm going to say this right now all of this property we're talking about in the irs code it's called 12 21 12 31 12 45 and 12 50. if you take a cpa exam you've got to know all this crap if you're preparing taxes i don't want you guys to worry about it just start throwing that out okay now this is important 1231 property is real estate and equipment whenever you lose money on the sale of real estate land buildings anything affixed to real estate office furniture equipment machineries trucks cars goodwill you sell your business at a loss jerry could deduct that loss against his ordinary income as w2 that's great that's not cryptocurrency we gotta go over here now okay so now we go to 1221 property 1221 property are capital assets such as stocks bonds mutual funds and cryptocurrency [Music] okay what happens if i gave a gain i've got to look at short-term and long-term and go through my steps how much does my gain was it short-term or long-term what's my um calculate my rates i got to go through all these steps losses oh i can only deduct my crypto losses against other crypto gains or stocks bonds and mutual funds so i can only deduct against other capital gains ouch okay now i can use these losses against gains over here on 1231 i could use it over here but if i don't have any other gains and jerry says all i have is a w-2 these losses go into a bucket and these buckets go away and so i mean sorry these buckets stay there they don't go away and you have this bucket that just stays here and you can only dump it out when you have future capital gains so if you go to harvest this loss then all it's doing is sitting there with the freak doesn't do me any good might as well just sit and wait see some people are like i better sell and harvest the loss i'm like oh you got other capital gains no who the hell cares set it out white stress so this 1231 pro 1221 property is a little unique and so this is why i go through the in this presentation here okay we'll go this way sorry 1221 capital gains short term or long term deduct against other capital gains and not against rent i can't deduct this against rent but i can deduct it against the sale of real estate or the sale of other stock now we've looked at our chart of different taxable rates and then i get into 12 40 and 1250 that's if we're going to talk about rental real estate whole other conversation all right so we go out of here we go back um so aaron that i'm sorry ashton that's what i do i'm sorry i may have called you aaron along the way there sorry ashton but if your cryptocurrency crashes just set it out wait it's a long-term hold candace says what can be done for sale of property with 400 gain of property after sale single not married any way to reduce capital gains boy no wonder people are asking these questions these are hard ones all right they're not hard i know the answer it's just hard making it sense to the average person because his accountants and lawyers were geeks all right let's draw it out so candace has a house let's put it in let's put it in black here all right so candace has a house she has a 400 000 profit now i'm going to assume it's not her primary residence if it's a primary residence i can exclude 250 grand if she's single 500 grand if she's married she says she's single so if you sell a home you buy it for 200 purchase price you sell it for 600 what's your gain 400 000 holding all things consonant it's candice's house this is candace's primary residence primary res so she's got this 400 000 game if it's her primary residence we can exclude 250 right off of the top no tax so that means she has wow 150 grand of additional capital gain because to get the sale of home exemption you've had to hold it at least two years so i know it's going to be long-term capital gain it's a long-term capital gain 150 000. now if canada says why ashton this is a good point if candace is selling her home she has a 150 000 gain and her cryptocurrency is right now in the toilet i want her to sell take the loss harvest it and use her use her crypto loss against it see so i can use a crypto loss and reduce my taxes that would be an idea to do before the end of year and one example so candace any way to reduce capital gains yes harvest any other capital losses that's number one harvest any other losses um oh boy candace one option is if you've got a small business i might try to create a loss over in your business or a solo 401k create a write-off that we can offset so number one is office harvest losses what i want to try to do is create offset with other write-offs now for those of you that have a side hustle i might be able to create write-offs or even a retirement account in your side hustle create a loss or a write-off that we can use against the capital gain that's an idea the other thing let's say this is not candace's primary residence let's say this is her a rental property so if this is a rental your only other option at this point because you've already sold it is an opportunity zone so you could take the money and go reinvest it in an opportunity zone that can defer the tax and reduce the tax not entirely but it can help so you might want to look at opportunity zones number four is if candace would have called me before she sold it i would have done a 1031 exchange and exchanged it for another piece of real estate maybe somewhere else pay zero tax and defer it down the road another option if candace is like i just want a stream of income i might have created a charitable remainder trust now if you type kohler 1031 or kohler charitable trust or crt i've got some awesome youtube videos out there and you guys could study up on it candace you'd have to do the 1031 and crt before you sold not now the only thing you can do is look for offsetting write-offs harvest losses or do an opportunity zone those are the only thing the three things that come to mind uh oh bird says look at buff keep going brother look at this i've been working out but this is a new shirt it's just it's it's just more trim you know i think if i work out up here i get the v so instead of working out this i just work out up here and i this is still fat i just anyway okay thanks bird all right kristen says uh christine brooks all right she says how much time do you have to spend money from the sale of rental to rebuy another rental or can i use it for a rental i already bought whoo christine or kristen i think it's christine i'm gonna go with christine um all right christine asked about the 1031 exchange so we're gonna dive deep is that okay darren is that what i'm hearing okay for anybody out there you ready you bought a rental property let's go to the same example as canvases i bought it for 200 now it's worth 600 and i've got a gain here in the middle we'll put this in black i've got a gain of 400 grand all right now christine and everybody out there if you've already sold the rental there's nothing i can do except like i told candace harvest losses offset with other write-offs or an opportunity zone that's all i can do christine you can't go buy a new rental if you've already sold the one so we're toast you have to get involved on the 1031 before you sell anybody out there if you've got a property for sale and it's not your home your primary residence it's a rental property and you're going to have a gain holy crap let's start talking 1031 right away all right so let's say you haven't sold yet here's the rule okay so this is the this is tricky you've got your selling property and you want to go buy a replacement property that's what you want now what the irs says if you christine if you sell your property and buy another one of equal or greater value you don't pay any tax the gain slides to the next property well i've got to go find a property that's of equal or greater volume and exchange it yeah no one's gonna the stars are never gonna align you're never gonna find another property for 600 grand that you want and they want your property i've never even heard of that so what happens well you sell your property and the money goes into what's called a qi a qualified intermediary so you sell the property to a buyer so here's the buyer that wants your property and so they give you cash actually i'm going to put the money up here the cash of 600 grand minus any debt you might have had goes in here and you give them the property let's clean this up a little bit okay so i'm going to clean this up make it look pretty here for you guys all right okay so the buyer comes over here and you give them the property so the property goes from here property goes from here down to here to buyer the buyer doesn't give you the money you can't touch it now to answer christine's questions question you've got 45 days to decide what you're going to buy and 135 days to close after the 45 days so you have a total of 180 days to go by what the freak you're gonna buy now here's what's cool you can sell one property and buy two you can sell two and buy one i once had a client that sold one property and bought 27 other properties you just have to buy a property or properties of equal or greater value so if she sold her property for 600 grand she could go out and buy three properties of 200 grand each i met my 600 i'm done no tax so now the money that's here in the qualified intermediary goes over to the replacement property seller this is the seller and then the property comes back to me that's a 1031 exchange and you've got 45 days to identify in writing what you're going to buy christine and then 135 more days or a total of 180 from the day you sold so 180 from here or 45 plus 135 from the day you get the money and you're qualified in marrying okay that's a 1031 exchange i hope this helps um steve says i'm just gonna say i love you man that makes me feel so good i appreciate that steve thanks so much candace from canyon lake california oh we got the sale property of 400 grand already did that uh now over to youtube long term holder when are your cpa team going to start calling new clients i'm on the list just waiting for the call um long term holder thank you so much if any of you are on kind of the waiting list to get cranking i'm going to say this right now talk to maxwell rogers he's going to hate i put his name out here today he's going to be like mark my phone's ringing but we we're doing the best we can to grow and hire new people and all that but if you want to get a call over to there to the accounting firm call maxwell and just go max how am i looking bud when what are we doing get keep me posted so it's k 435-865-5866 cpas so go check it out and maxwell can hook you up um abdil palamo says when the tesla trucks come out how can we write it off for our business use oh i love it i already got my tesla truck where is it at is it outside parked on the street oh here it is okay abdeal i already got my tesla truck check this out [Music] loving it yeah i signed up for my tesla truck but all i've got is a 3d model 164th size of a real tesla truck but i'm on the list okay now everybody i love this okay let's get down to some fun tax planning here this is where the offsetting write-offs come on because if you have got a capital gain over here on real estate or crypto and you need a write-off i want to go buy a tesla truck and get a freaking write-off okay so we do our left side right side i've got operations over here i've got assets over here i've got my little side hustle okay cool i might have an llc or a little sole proprietorship but then i'm going to graduate to a full-time small business and i'm going to ultimately get my s corp going now that could be an llc taxed as an s corp and i may even have my day job over here w-2 so i got my w-2 off to the side or i could be married and my spouse is working the w-2 we got a side hustle we're kind of working and then i've got my full-time small business there i'm really cranking this is where we do the s corp when you're making 50 000 or more net so if you're netting 50 000 or more that's when i that's looks ugly net 50k if you're netting 50k i want to do the s corp got plenty of videos on youtube on that now let's say some of you are like well mark i'm buying rental property i got a little llc over here i'm funding my 401k i'm doing my ira i'm doing my roth and so this is kind of my tax-free side but over here i'm still buying eric reynolds and i love this i buy rentals too you might be doing long-term rentals or airbnb and you're just out cranking it all right down here it's all owned by your trust okay now the question was where do i put my tesla truck or your ford f-150 or my little um prius or any sort of car you have got you got different places i could put let's do it in red i could put a car over here and write it off mileage or actual i could do it out of my s corp mileage or actual mra i could do it over here and right off my car mileage or actual so when i meet with the client or any of our tax attorneys i've got darren here in the house with us we'll have darren introduce himself in a minute same you can do a consult with darren within the next week and just say i need some help but um he's also answering questions online for many of you typing his little heart away he's getting blisters i can see it break the record he's trying to answer questions as fast as he can for you guys give him a shout out and tell him thanks if he's answering yours but any of you that have a vehicle i want to write it off in your side hustle in your full-time small business or in your rental property and if you're going to go out and get a tesla truck if it's more than 50 business use i can do actual with depreciation but i have to be greater than 50 percent business use if it's under 50 i'm just going to do the mileage and the mileage this year uh hang on we got to get the calendar i carry it around with me everywhere i go some of you may already have your calendar too the market caller 2021 calendar sold out you might do another print run we'll see at the very front of this i've got my table of all the tax strategies and little tables of what to do in your various state to save money and oh you're going to love it okay so i go over here the mileage write-off is 56 cents a mile in 2021. so 20 21 is 56 cents all right um uh chris says how much of the of this reducing tax strategy can you do after the year end versus have to do this before december 31st chris that's a great question everybody take a breath it's been a whirlwind right i'll go back to instagram questions here in a moment too just hitting youtube and facebook um chris everybody chris just asked a great question how much can i write off for 2020 now that we're into may of 2021. it there's not a lot of options except going back and trying to dig up everything you can with cash maybe on credit cards your business debit card anything you paid for that's business related at all i want you to scour the bucket and try to find as many write-offs as we can that's the first good thing to do really work on your books that's why extending is a good idea i extend sixty percent of our clients we don't even do their taxes until summer and fall we're going to extend so we can really help you carve out as many write-offs as you can really um the only thing you can do that would be significant at this point is possibly a solo 401k or a sep contribution it depends on if you have employees in your small business everybody please sign up for my newsletter pay attention when i do webinars and my fall workshop because chris i do webinar and broadcast after broadcast in november and december saying here are the year-end strategies if you're going to write off health care you got to do an hra if you're going to pay your kids or your spouse you got to do it now if you're going to go buy a truck you got to do it now now i'll give you guys a little tip here this is this is a deep one i haven't done this on the show you guys might like this darren okay let's say you've got your small business in 2020 now we're in 2021 but you started last year and i don't care if it's an llc an s corp or a sole prop now this is good some people may say well before the end of year at 12 31 did you go out and buy a truck no i didn't go buy a truck for my business we're in 2021 now is it too late to go buy a truck well under the new tax cuts and jobs act that donald trump and the gop if you hate him that's fine but this was a big bonus that we got and it's called bonus depreciation you can take a vehicle that you personally owned that had never been in your business before this is again something that some of you might be able to do and contribute it to the business backdate that contribution to the business back in 2020 and bonus depreciation the whole darn thing off now this assumes it's over fifty percent business use if it's a hundred percent business use i write off the whole hundred percent of the truck not what you paid for it but it's fair market value on the day you contributed to the business so instead of doing mileage i'm going to go back to 2020 contribute my truck to the business which i truly used for business you can't just make this crap up you got to say yeah i used my car or my truck i used it in my business i i never bought it last year but i used it for my business and i never put it on the books of the business and i never wrote off mileage see this is i'm just giving you an option for some of you so if you've got a vehicle you've never used for mileage never contributed to the business you don't have to actually go out and buy a new vehicle you can contribute it last year this could be your spouse's truck or car bonus depreciation the crap out of it we're talking refund i don't know could be an option cool right did you know that i did not see i learned that a couple months ago i'm gonna give a shout out to tom bradford love him and the bradford tax institute learned it from him um jamie says i would would i pay capital gains tax even if i reinvest the proceeds now jamie do you um corey can you look at jamie acevedo's question and go up a little further he may have asked would i pay capital to gains tax even if i invested it i don't know if he's talking about stock or real estate um let's figure that out okay um i'm gonna go over to instagram while corey looks up that how do you avoid capital gains on a flipped property held only for three to five months see elmore elmore elmort gage guy um says how do you avoid capital gains on a flipped property held only for three to five months elmore it would be a blessing in your life if you got capital gain does that make sense this is why i was telling jack i'm like why are we talking about capital gain there's people need capital gain i want you to get capital gain unless you did it in your retirement account capital gains the best darn thing you can freaking get an elmore gauge guy on instagram says well how do i get out of capital gains freak dude you're paying ordinary income tax possibly self-employment tax capital gains would be a blessing and you ain't getting it you are not getting long-term capital gain so if we go back to our continuum here and look at this okay elmore guy says well i flipped a property in three to five months if you're in the business of flipping property that's ordinary subject to self-employment tax dude you're all the way over here and you're saying how do i avoid capital gain i'm trying to get you over the capital gain because you're screwed so capital gain is a good thing um and i'm trying to get you long-term capital gain so if you only held it three to five months not good so we're so i hate to say this is why tax planning in advance so some of you may be going mark what's the solution we plan in advance before you sell that's when we gotta talk so many people start calling our law firm and accounting firm when they've already made the money and i know it's hard because you're like mark i can't pay you guys because i didn't make the money yet but then i make the money and i call you guys and it's too late i know it can be frustrating but just listen to the podcast read the blog articles come here on the live show this didn't cost you anything i do this every thursday for an hour we're almost done here i'm going to do everything i can to try to wrap this you know a bubble around this so if any of you did you find out what acevedo okay so go back to his question and i'll try to do the best i can jamie acevedo says would i pay capital gains tax even if i reinvested the proceeds well if you if if jamie's talking about real estate and you reinvested in real estate in a 1031 exchange you avoid capital gain but you got to do a 1031 and plan for it in advance would i pay capital gains tax even if i reinvest the proceeds when i sell stock or crypto yeah you're going to pay the capital gains tax and then go re-buy more stuff but all of you i would go look at opportunity zone strategies there's some options there i've done a podcast on opportunity zones and i've got blog articles on it and youtube videos check those out because you can take a capital gain from stock or crypto and go buy real estate and sometimes delay the tax and reduce it a little bit so it's called an opportunity zone i'm going to take my capital gain and put it in a zone the government has said we need to be rebuild this area okay now so here's the perfect model everybody i'm going to finish with this you're going to love this i'm going to do one of my master diagrams right here this is going to blow your mind now this is what people do with my tax attorneys when they call up they go mark i just need an hour we can do a lot of good things in one hour so here's what this would look like i we want to build water runs downhill and some of you have seen this before but i might say something that really is powerful for you down here is your 10 40. everything goes down to your 1040 tax return i want to owned by your revocable living trust we've got a special this month right now we're doing 20 off we do it every year at memorial day this is our 11th year in running we do 20 off on estate plans to get your trust and will done check it out on our website you're going to love it get in the sooner you get in the sooner we can get you out because a lot of people wait to do this during the year when we do our special okay if i have a client that has children under age 18 we're going to use this little bubble in the middle and also if i have clients that are married with a lot of medical expenses we're going to come back to that over here i have some clients that have a w-2 or their spouse has a w-2 they also one in three americans have a side hustle and it's just a little sole prop and that's okay i think that's great you're just gonna report on a schedule c i have other people that have a side hustle with an llc so this is a side hustle llc side hustle llc now what you're doing in these is you're getting 1099s for selling a product or a service driving uber driving doing landscaping consulting and so we've got these different little 1099s i'm going to write that a little better so it looks pretty we've got our 1099 income coming down here now for those of you that have a full-time small business with employees or not you might be a full-time realtor a consultant landscaper attorney account engineer whatever you're going to get into an s corp and this s corp is going to give you a w-2 and you're going to take draws and we're doing this because we want to save on self-employment tax okay so we're going to save on self-employment tax save se tax i do not recommend s corp i mean c corps for small business owners i want the s corp all right now all of this income this is a schedule c all of this income is going to flow down to your 1040. i want to take as many write-offs as i can right here this is a really important area i want to write off auto home office cell phone travel dining electronics computers microphones chargers headsets glasses cameras tables tvs monitors we want to write off everything we can in our small business to save taxes we're going to take our profits and we're going to pull these profits over and we're going to fund our roth ira our solo 401 k or regular iras i also am going to take profit and pull this money out and i'm going to go buy my own home i'm going to try to work to work towards home ownership good thing i want my own home and my trust is going to own it i also want to take profit and drive it up here and create llc's to buy rental property and i'm going to buy rental property all over the country and if i have multiple rentals in multiple states i might have multiple llc's and that's okay i could have several llc's going on i might get a little bit of life insurance i'm a term guy i'm very careful with whole life universal life uh in bank on yourself life insurance be careful with that if you can't maintain those premiums indefinitely you've got to be very careful with your income so i may even invest some money in my own name like stock bonds mutual funds cds whatever now here's where it gets interesting if i'm going to pay kids under age 18 i'm going to pay them here in a little family management company a company that's providing services legitimate services for my businesses so i might pay a management fee over here i might even pay a management fee for my llc's next if we have a lot of medical expenses we're going to set up what's called an hra a health reimbursement arrangement and i might hire my spouse if i'm married if i'm not married i might set up a little sister company with a c corp and an hra just for me this is where i take my w-2 and then i zero it out i don't want to pay any corporate tax so i use a combination of the s corp and the c-corp as a tandem structure if i'm single with a lot of medical expenses now i'm still writing off my medical insurance up here now for those with a day job which is a good thing we got credit we got a w-2 we're building wealth we're getting out of debt and i'm using this w-2 and i'm using the matching program at work and i want to play in the match and then get the heck out matching out and i'm going to take that extra money and run it through my own small business side hustle and fund my solo 401k and this solo 401k is going to help me really build a lot more wealth and i can have two 401ks next if i do have kids or a spouse i'm going to be funding their roth iras and we might even set up a health savings account but we're going to be building all of these tools here and you know me i've got cows rental properties a crypto mining rig i've got all of these different investments inside my retirement accounts see and look at this i've got a w-2 i may have a side hustle sole prop i may have a side hustle llc i may have an s corp in maximizing my write-offs and saving on self-employment tax i could be flipping properties up here i could be doing consulting in 1099s i could run multiple businesses through my corp me mark kohler i have one s corp but my s corp owns other llcs and partnerships i could be funding a solo k a main 401k an hsa a roth an ira i could have a little family management company pay my kids pay my spouse i'm going to build rental properties over here around the country create cash flow i'm going to be out of debt and i'm going to be building my value in my own home i don't do this very often but it's kind of exciting i hope i answered some of your questions i got a lot of people here viewing and a lot of questions and i want to say thank you i love what i do i love small business i love investing it's hard i work sometimes 50 or 60 hours a week i'm just like you out there trying to make it happen don't give up keep learning keep trying network be really careful what you invest in do your due diligence and don't feel like it is a sprint or a race against someone else it's your journey and your journey is going to look different than everybody else's my journey looks very different than the people in this room and it's it's not a contest don't judge yourself use social media to gain information and knowledge and enjoy it but don't compare yourself to others and take your time there's no get rich quick scheme out there i'll be here next thursday answering questions trying to help you on your american dream i've got a ton of videos on my website monthly webinars books videos workshops coming up this fall please sign up get involved my team is amazing lawyers accountants and our self-directed team helping you invest your retirement accounts where you want to invest them to thanks everybody have a great night

Channel: Mark J Kohler

Views: 765,677

Rating: 4.8802161 out of 5

Keywords: wealth building, asset protection, mark j kohler, mark kohler, Avoiding Capital Gains, Tax Strategies to Save you Thousands, Save you Thousands, Tax Strategies, crypto gains, stock trading, principles of capital gains, tax-saving strategies

Id: ezPs4ibFsNU

Length: 62min 8sec (3728 seconds)

Published: Thu May 20 2021