Ep 177: Optimizing Your Investments for Taxes with Chase Ravsten

Obviously, just like any deduction we take, we take anything more than the standard deduction. We allow the IRS to poke their head into the business, whether it be at a partnership level or dual level. We have to be aware of the risks that are pertaining to that because if they disagree, the IRS disagrees. We were paying back our tax.

Welcome to the Next Level Income show, where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larsen. If you haven't yet, get a copy of our book for free at our website, Next Level Income.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if you put your address in. On today's show, we have Chase Ravston. Chase is vice president, Vista Capital. In this role, he oversees capital raising, business development and providing the best alternative investments and opportunities for his clients. With over 14 years of experience in the financial services industry in a variety of sales and advisory roles, Chase brings a personalized approach, utilizing his knowledge of investments, retirement and strategic planning.

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Chase and his wife have three beautiful girls and spends much of his free time with his family. As an avid outdoorsman, Chase stays active playing sports, mountain biking, skiing, or any number of activities. As an active member of his community, he has been involved in Boy Scouts, different charities, and helping those in need. Chase, great to see you again. How are you doing today?

Oh, I'm fantastic. It's wonderful to see you. Thanks for having me with you today.

Absolutely. Now that you're done your lunch, we can, we can jump in here and. No, in all seriousness, what was awesome is Chase and I were talking before the show about, about stuff that really matters. Like we're going to get into the financial stuff today, of course, and how you can tweak your investments and look at different tax situations. But, you know, the reason we do this, Chase, is we, we want to have more freedom. We want to have the ability to spend, you know, more time, you know, with our families, with the ones we love. And as the audience heard in your intro, you know, you're a father first, you're a husband first, and you're an active guy at that. So if you don't mind, share a little bit more about your background and, you know, what you're all about.

I appreciate that. So, you know, I think it's, excuse me. Good to know that, yes, I am a father first. It's interesting, I heard a quote years ago that stuck with Me that says the one job that you cannot replaced in is being a father. That is the job that is unique to me. No matter what, I will always be a father. And I was always be the only father to my kids. And it hit me, it hit me pretty hard because everything else, yeah, you can get replaced. People like, oh, you're not replaced. Well, you kind of are. Except in fatherhood you can't be replaced, which is amazing. And so it struck me hard. So that's again is why I appreciate you saying that is I am a father first. I love my kids. I have three daughters, 13, almost 14, 12 and 7. And they are so different in personalities. But some ways all, all get my stubborn aspects. My wife appreciates so much. And so my wife, she does a great job of corralling all of us and keeping us all going in the right way. But really. And she supports me in the work I do. I've been in the financial services space for 15, 16 years throughout that time frame and a few different pieces inside the space. But it's always been really centric on unique investments, alternative investments, tax strategies, things to really that are necessarily. You don't hear about every day. Kind of like Chris with your company. It's not an everyday investment that people make. It's not your 401k. It is something that's more unique to us and maybe a little bit more personalized and outside of the stock market per se. And the reason I love that and I love the background that I've been in is because I've seen a lot of diversity, a lot of options. But it's kind of like our, our lives. We all have activities and hobbies we do. You know. Chris, you race bikes. I like mountain biking. My bike racing is more putting bike going down a hill and going we.

Which is the best part.

Yeah, which is the best part. Let's be real, you know, whether it's the gym, cooking or whatever it is, we all have personalized hobbies are. And that's really what we do is we find we personalize our investments to people and really find a person, get to know them at their core and see if it fits what we do into their life. And that makes it unique to them and helps us bring our personalities, you know, their personality all together to say, hey, what really makes sense and build that relationship. And so, you know, whether it be working out, spending time with my kids, my wife doing whatever it is, I like to personalize it and bring a personal touch to everything because hey, you may have all this other minutiae you're doing, you may have this, you may have your 401k, you may have your stocks, you may be doing this. How else can we personalize your portfolio and read investments to you so they're more unique to you as a person? Because everyone has a different angle and viewpoint how they view life and money in the relationship with that.

No, that's so important. And, you know, I think unfortunately we were talking about, you know, kind of some health stuff before we, before we started recording today. And when I set my goals, the number one thing, actually earlier this morning, I actually was on a call with my coach that I get on every quarter. And you know, we start with, we start with my health goals every quarter. And you know, if you don't have your health, then all the money in the world doesn't really matter if, if you don't feel good, if you can't use your body for what you really want to do. And I think family is, is right there, right? It's, it's, it's like, you know, I heard a great expression once, it said, like, hey, if you're juggling a bunch of balls, it's okay to drop, you know, your career or even your health sometimes if, you know you can, you gain a few pounds, you know, you can make it back up. But if you drop your family, that's the glass ball that you can't drop because if it shatters, you're never going to get that back. So I love what you said about the uniqueness of being a father, Chase. And we just had. If you, if you're listening today and you haven't listen to episode 171. We just had Jim Shields on the family board meeting. Have you read that book, Chase?

Oh, I don't. I'm gonna write that down, though, as I have.

Oh, yeah, you gotta, you gotta read it. It's fan. It's fantastic. You know, Jim Shields, very accomplished in, in his field, real estate guy as well, but he wrote this great book called the Family board Meeting. And I'm not gonna spoil it for, for everybody that's listening, go listen to episode 171. But it's a fantastic thing that you can do for your family if you, if you have kids and spend more time with them. It's something we've implemented this year. But Chase, I wanted to start today by talking about kind of the, the pillars that I developed for investing. And, and you're, you're pretty unique, actually. Very unique, I would say, as a as a financial advisor. But, you know, when it, when it comes to investing, investors are like, well, Chris, how did you develop your invest investment framework? And I say I'm, I'm a lot like, you know, Benjamin Graham, Warren Buffett. Like, we want to buy companies, businesses, real estate that are stable, that have income, that have appreciation capabilities. And the four pillars that I talk about with investors are one, the ability to preserve capital. Two, the ability to generate income. Three, the ability to have an appreciating asset. And then four, those are all wrapped around, hopefully, tax benefits. Real estate has a lot of depreciation. And while you were talking there a few minutes ago, it made me think about this Chase. Everybody's tax situation is different. So when you work with a client, how do you, how do you incorporate all those different things, their tax situation, their risk to really figure out what, what's the best, what's the best strategy for them?

Oh, you know, Chris, I think you hit on it right there is. Let's see, you invest in state, you're gonna have depreciation, right? Well, I don't have any depreciation in my books. So right there, Chris, that's, let's just personalize it to you and I. Yep. Depreciation. Well, you may have depreciated assets that you're not taking advantage of that those losses. So how do we marry up your depreciation, those losses you have to an investment that's going to take advantage of that. What's investment can you get into? So now you're using that depreciated asset. Or let's take me, I have any depreciated assets. So how can I take advantage of what investments do I have spitting out income or returns? So then I can get into something that does depreciate. Because as I talk to people all the time is I have, oh, I'm a real estate investor. Okay, what does that mean to you?

Right?

Well, means I buy rentals. Okay. What do you do with rentals to do, say, to depreciate the asset? What is it that makes sense? And then what are you doing with those deductions that you're getting on the back end? How are you handling that? And it's asking questions and diving in a little bit deeper. Or are you just a W2 employee?

Right?

Well, if I'm just a W2 employee, and that's. I work for a company, well, none of this stuff applies to me because I'm just a W2 and I can't take that depreciation. Well, There are things out there you can do, these strategies you can do. Oddly enough. I had a guy, he actually moved from Colorado. I'm sitting in Colorado. He was 20 minutes away from me. Tax strategy. He moved from Colorado to Texas.

Really?

Yeah, that's. He met with a cpa. We talked, we. I was part of strategy team and his rec. The recommendation he came to to save a lot of money as a single guy. He moved to Texas. He's buying a house in Texas. And I was like, hey, you go boy. That is a really, it's a neat idea. It's something I wouldn't have thought of before. But when you personalize the, the recommendation, you personalize the investment or whatever it is to the person to marry up with their income and their goals. I think that's important and that's kind of where and I are so different but similar because we all make money.

Yeah. And it's, you know, it's like geographic arbitrage. So one of my coaching clients was in the Bay Area and he's like, well Chris, like what's the number one thing you do? I said I, I'd leave California because making a lot of money paying double digigit in state income tax. I'm like, dude, if you just, you know, if you're able to move to Nevada, you know, on the other side of Lake Tahoe, then you know, you could save, get an immediate. And we've seen this, right? So just like you said, we've seen people move from California, Colorado to Texas, people moving from the Northeast to Tennessee to Florida. We're even seeing financial firms do that. As the world becomes more digital, have more flexibility, more nomadic if you will. Look, if you're a young person listening and you're in a high tax state and it doesn't really matter to you where you live, look at where you can optimize your quality of life and your tax situation. I think that's a phenomenal, like I didn't even think about that as being like the first thing that pops in. But I think it's a great idea. Chase.

Well, and I think that's. It is. I think you also hit the, hit a nail on the head here. If you're not tied to the state in which you're in, great. But you may have other ties to the state. There is a lifestyle for everyone. There's legal. I know that they live in Orange County, California or San Diego.

Phenomenal. Beautiful areas.

Beautiful areas. You couldn't pay them enough to move out of that state. Like I Will pay is like this one. He's like, I love to pay my, my sunshine tax. I got my beach tax. My. I'm happy to pay that. I am my happy place here. And there's others say, I love where I live because I love the environment. I love the Aztecs. I love whatever it may be. And I think that's all part of the personalization. It doesn't go beyond like, you're a numbers in a box kind of scenario. It's what is your lifestyle container. For me, I know what the number would be to get me to move to like, Louisiana or Florida. I don't. Like, someone would have come in with a very, very, very high number to get me to away from the mountains again. I've lived in humidity. I've done.

I love the mountains. Yeah, I love, I love Colorado. It's beautiful out there.

Yeah. If you're going to be like, hey, I'll pay you. Is it going to take you Louisiana? I'm like, that's going to be a very big check every day.

I love it. No, and look, that's. We're all people, right? And it's, it's so important to figure out, like, why are you doing this? It's not just, it's not just for the numbers. And you know, there's people that move to Puerto Rico. 4% tax rate. That's not a, that's not a terrible place to live. But mountains are there, but they're a little smaller. So I'll tell you a quick story here. And if you're in the, if you're listening to. You might have heard this before, but 26, 2015 ish. I go to see my accountant and 2015, 2016. So 7, 8 ish years ago, I sit down and go through my taxes and he pulls out a bottle of whiskey and he pours me a shot and he puts it in front of me and he says, chris, what number are you prepared to hear today? And I'm like, this isn't good when your accountant pours you a glass of liquor to ease the pain that you're about to hear. So it was a good year. We had some investments pay off. I had a good W2 year, but I owed a lot of tax. I'd already paid a lot of tax and I owed even more. So I had to write a big check that year. I wrote a check for more than I made in my salary the first year. I worked as a professional. So, you know, if, if you're out there and you know, you're a professional. You're like, that's a decent sized number. So we talked and I said, I said this, this can't happen again. Like, we got to figure out a different way to do it. He goes, we're going to have to make your money in a different way. So if you're a W2 employee, you have your, you know, you have a lot of handcuffs and you have, you don't have. Or you have handcuffs. In a lot of ways, you don't have a lot of options unless you have your own business. I ended up, because we, we had started syndicating properties that that same year, I ended up moving to what's called a real estate professional. But if somebody's listening, they're a W2 employee. You know, they're like, okay, Chris, that's great. You and Chase are talking about all these things. What are some investments out there, chase, that give W2 professionals that don't have their own business or don't have the ability to deduct depreciation from their real estate. You the option to. To, we'll say, optimize their taxes. Like what, what's. What are some of the categories out there that can help them do that?

Love that. So there are a few ideas. So I like to classify as need, you know, which.

I'm sorry, say that one more time.

Needle movers.

Needle movers.

Okay, which one's going to move the needle? You know, we look at kind of like on a gas tank is. We look at a gas or even at rpms is which one's moving the needle the most? Yeah. And so there's some out there like you can look into. Hey, I'm a debt to employee. Which one's going to move the needle for me the most and which one's least? Great example. Oil and gas. It is a needle mover, but it's like, it's some. It's a great diversification of an asset. Again, personalizing it to the person. But another one is there's something out there called a charitable land donation.

Okay, so.

So let's be very specific on what it is. And this is what I like about this, this idea is it's very specific to the. Specific to the investor. And so what it is, is allows an investor to get into a real estate development project. This real estate development project is a way for them to invest in raw land. You know, Chris, you see raw land, you're like, ooh, what's your first thought? What can I do? Development, Right?

Yeah.

What can I be Profitable, this. It's the middle of a city. Can I put a car wash on there? Can I put an apartment complex on there?

Sorry. Sorry, people. That's what I think. I'm. I'm not, not ashamed of that.

No. And you shouldn't be.

Unless it's in my backyard, I think park, which is right behind me, actually. So there you go.

Oh, I like that idea. So when I see raw land, I'm thinking, what, what are the main. What are the ways we can make out of this? We all think that as what it's going to be, the value to develop it, everything else. So I work in scenarios where I say, if I can find a piece of land, like I have one in North Carolina, one in South Carolina. Currently, it's 100 to 500 acres of land, depending on the piece of property I can find, that I can potentially turn this into a granite mine. A granite quarry or a rock quarry. You know, we all know parents.

Yep. My grandparents lived right next to a rock quarry. We used to. We used to go hike around there and look at all the weird colored water.

Yeah. And so you know exactly kind of what the thought process is. And so just. Or maybe I could turn it into a solar farm. But let's go with the rock quarry example.

Okay.

We have a piece of land and I'm like, man, this land sits on a granite fault line. I know there's going to be granite in there. And I'm not talking granite. We put in our kitchen counters. I'm talking, granted, that's going to be used to make roadways and bridges and construction material. Granite things that we need to build America. To build your car washes, actually.

Yeah.

With that we say, right, if I know I can take this piece of property and turn it into a quarry, a rock quarry, and dig up all this rock, it's now going to be big hole. So we go from Ambi bumper trees, butterflies, nice and beautiful to this. Well, with that, like any good business, there is a pro forma. There's a model saying, hey, if this has this much rock in it, this is what I'm going to get out of there. This is what I can do. Great. And that's just an X amount of return. Like one of my projects, it could produce a 13 rate of return starting in year five, roughly. So we're in it for three to five years. It's going to take three to five years to produce any income. So I'd invest today and see nothing for three to five years. But it's Going to run out pretty well over the next 15 to 25 years. Lots of money, right?

Yeah.

Great rate of return.

That's solid. Yeah.

Or I can say, all right, that's one option. Another option, say, like, all land, it appreciates over time. Doesn't matter where it's at. Eventually civilization is going to catch up and it's going to appreciate.

Right? Yeah.

Yeah. Right. And so with that in mind, I can sit and like, let's do nothing with this land and sit and hold and do nothing. The one weird piece that people don't know about, everyone's like, is he talking about this? I don't see any tax benefits. The one piece that people don't know about is you can voluntarily choose to give up that land and donate it to charity. Chris, I probably know the answer to this, but I'm pretty sure. Have you ever donated something to Goodwill?

Every quarter, my wife and I clean out the closets and yeah, absolutely.

One of them was that beautiful leg lamp you had with pantyhose on it, the whole nine yards. Right?

Yeah. Jack Black knew it. On. On the prices, right. Or the. Was it Wheel of Fortune? He said, full size leg lamp, baby.

Full size leg lamp. That's exactly it. Or my favorite Christmas story, you know, throwing it way back, Christmas story time, Alfie and everything. They had one, it got donated. Here's the deal. Let's say you take what is that piece of item down to Goodwill, clean out your closet, you give them some items. What do they give you in return?

They give me a receipt.

Yep. That little paper. Right.

Y.

And your responsibility is write down how much was the value of the stuff that you gave them. Y. Let's say those. That items you gave away, your favorite pairs of shoes worth $1,000. You take that receipt, give it to your CPA. Your CPA then's like, great. That comes off your YouTube, your income. So now you're saving some money. Fantastic. They go and sell it, whatever.

They get a tax deduction. They. They employ people and somebody else picks it up and sells it at the vintage shop down here in Asheville for. For twice. You know, what, what, what it originally cost. Right. And they make.

Yep. Yeah. And so with that in mind is you say, great. Everyone's making money. It's a good business. We all love it. So now with that in mind, you can do the exact same thing with this piece of. Interesting.

Right? Yeah.

So I have this beautiful. Let's say it's a 200 acre piece of land. I could turn it into an Investment property by doing for you. You would be, hey, that's gonna be a great apartment complex for some. They could turn it for me. My example, I can a rock quarry, a granite quarry. Great. I know the investment return off that. Or I can donate that land to a 501C3 just like Goodwill. I can take that piece of land, I can donate it to a qualified 501C3 and then when doing so, I can get a tax deduct for what they call the highest and best use case.

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And the whole point behind that is they're doing that because they want to see what this land would be worth to see if it's worth purchasing, if it's worth going through the development, whatever it is. Because I know a car make X in a apartment complex or a high rise, they all make different income levels. What is the one that's going to give me the best use of this land to give me the most return on my money?

Yeah.

In this example, I said it's a.

Rock quarry because it's in. Maybe it's in the middle of nowhere. You're not going to build an apartment there. Right.

40 miles from anything that's really use it. We're not going to put an apartment complex there. Doesn't make sense at this point in time.

Yeah.

Well, if I get that, if I donate the land, I get to take that highest case, the piece that I could have made off of that appraised value as a tax deduction. Now, if I'm an investor in this partner, I come in as a limited partner. That deduction will offset my W2 income.

Really?

Yeah. And as all states today, like all charitable deductions, we can write off up to 30% of our adjusted gross income.

That's the rule as of today.

Yeah, that is the. It's tax code 170A. It's not like I'm just making this up and it's some gray area and it was hard and fast tax rule. There's court all about this, who's been adjudicated. So there is precedent set that this is absolutely can be done. And I love that behind this because it's not someone who's like, you see the first pioneer got the most arrows kind of scenario, weird terminology to use. But we're not the people making it up and trying to figure it out on their own. It's been done and it's being done. And so what I love about this is allows us to work with individuals who are W2 employees or are business owners who. Or even real estate investors who don't have enough depreciation or whatever else to take advantage of something to buy into a piece of land and make a decision. Do you want to develop? Do you want to donate it? Do you want to sit and wait for appreciation? But the nice thing is we can write off up to 30% of our adjusted gross income. And typically, like most thinking about it, there is going to be leverage inside of there that leverage changes per project. But it's a way to do that and there's a way to make that happen.

Yeah. So I love this because for anybody that knows me, yeah, I'm a capitalist. I'm also an environmentalist. And you know, I love, I love living in nature. I love to see this. And I don't know if a lot of people aren't aware of this, but these types of public private partnerships have created now. Correct. You may know this statistic better than I do, Chase, but they've created, I think, more parkland, more preserved land in this country than the US Government itself. Is that accurate?

Yeah. So if you look at the history on this is the idea of preserving land. Yeah. Goes back to Teddy roosevelt's time, like 19. That's when the idea of preserving land and started. He kind of started that process. And when you look at it, if you fast forward to like 1980, the only name in the game was certain private people who were buying land and just holding it. But really there wasn't a huge incentive until 1980 for individuals to conserve land. Were some spread throughout there, but not huge and fast. In 1980, the government came out with a couple rules that allowed for this to happen. But from 1903 to 1980, the government conserved an ex. A fair amount of land. But from 19 today, through consumer. And using these tax laws, we've been able to conserve twice as much land in the lower 48. Let's not include Alaska.

Okay.

Low 48 in Hawaii. In the lower 48, we've conserved more land and, and kept more land as green space with a better spectrum of an animal life than the government did in the previous time frame. So in half the time, they've doubled, they've conserved double the amount of land and created more open space with a better plant and animal life than the government did in the previous 80 years. Love that, because it's like you're seeing 100 to 500 acres tranches being done and not acres in one spot.

Yeah, no, I love that. That's, that's. And that's an amazing statistic which I think is, is fantastic. Now, I know through some, through conversations here over the past couple of years that these types of structures have really come under a lot of scrutiny from the government because, well, frankly, people have taken advantage of them and, you know, they've, they've not done things the proper way. What. Have there been recent updates to this? And what, what should listeners know if they're looking at, at these types of investments?

That's a great question. So, yes, there's actually been some major legislative changes in the last year. We know at the end of last year, President Biden cited some new tax law that affected both solar credits and investment credits and a few things. There's a whole lot in there. Let's be real. I didn't read through all of it. It's like thousands of pages. There was a lot, but I picked out the pieces that were important to these tax codes. There was a tax code that changed significantly last year to the 170H tax code. And when that got changed, is it changed the way these investments are done? Like if we would have been talking last year, the tax code that would allowed us to work in last year was able to write off up to 50% of our adjusted gross income.

Yep. So just, just if you don't mind pausing for a second. So what that means is for somebody that has an adjusted gross income of $400,000, they could write up up to $200,000. Is that accurate? Okay. So you could, you could take your, your marginal tax bill at 400 and drop that down to, to what it was at 200. Okay. Okay.

Yeah. So you can. And so the way it was written is there was the word, like you said. You said people were abusing the system. Right. And where they were abusing the system, they say, well, I think this piece of land is worth $100 million. Well, in reality, it wasn't worth anything more than, you know, a tumbleweed patch and maybe worth $1 million.

Okay. So somebody was saying, hey, this is going to be a granite mine, but really it was just a dirt field somewhere. Yeah.

No intrinsic value. Yeah.

Okay.

It's really to. It is what they call it.

Okay.

You know, if you've been paying attention at all, you want to see fraud, look at employee retention credits.

Oh, yeah, It's. It's huge. This past week in the news. Absolutely. Yeah.

In the irs. Because the IRS just put a kibosh to it and said no more. And because there's been a lot of fraud in it. Great. We get that waiting. People are going to do something fast. Unfortunately, that's the world we live in. It is what it is. But with that in mind, when we look at it is the. There was enough that came up. The IRS petitioned the senators and congress people to change the law. They made some changes to it. So when President Biden signed a law last year, it's now underneath that old tax code, the most you could do is get a 2.5 multiple, meaning if you were to put in a dollar, you get a return at most of 2.5 up to 2.5. So I invested into a partnership that did one of those today. You would be able to write off up to 30 of your adjusted gross income. Again, this is the new rule. Old rule was 50, but you couldn't get any more left than 2.5.

Okay. Yeah, let's walk through that.

A lot of numbers.

Yep.

And I get. That's a lot of numbers. And I'm at sometimes very visual person. So let's just do it. Off of old rules. If I were to invest in an investment last year, that was before law changed. Let's say I made a million dollars just because I like simple math.

Okay.

That means under the law, I could have gotten. I could have written off through a charitable deduction, $500,000 of my adjusted gross income.

Okay. So step one, the limit is 50% of your adjusted gross income. All right? So 1 million, you could write off half a million. Okay, step one.

Yep. The partnership. Let's say the partnership brought out the partnership. And they said, hey, your leverage inside of this partnership, if you were to choose to donate or do the process was a 5x leverage. So let's make sure that makes sense. So if you were to put in or your deduction, that would come back to you if you choose to in this scenario, conserve the land was five times what you put in.

So just, so, just so we align these. So if I make a million dollars and I want to have that $500,000 deduction at 5x leverage, I would have to put in $100,000. Correct?

Right.

So I'd put in 100,000 into this investment. I would get a half a million dollar deduction. And if you're in California and you're paying 50% of your marginal tax rate, that's a pretty good return on your investment.

Yep, it was.

Okay. Okay.

Again it's basically take, took your dollar that you put in your a hundred thousand and turned it to a $200,000 hard tax benefits. Because you do the taxes, the math, you do the calculations. Again, CPAs do that all the time. They've already steps ahead of us in engineers. But yes, it turned into a $200,000 hard tax benefit for.

Yeah. So for those of you listening, just to recap, I put a dollar in this side and I get $2 out the other side basically immediately in that tax year. That's a pretty good investment. 100% return in within a year. That's, I'll, I'll take, I'll take that all day long.

Again, going back to it, Obviously like the ERCs, there's people out there who used it and didn't do it right. So as warranted and valid, the government came in and said hey, we're going to make it hard so there's less abuse. Fantastic. Fast forward today that law has changed. You can't do it anymore. Now the law that said underneath old rule, if you were to follow that old rule and that old tax law, you can only get a, again a multiple of 2.5. So went from say 5 to 2.5. And so really becomes a dollar for dollar matching at that, that million dollar income earner that AGI. Now they'd only be able to get rid of 300,000. And at 2.5 multiple, basically for every dollar they put in, they get a dollar back. And so.

Okay, okay.

Which basically killed the tax code because if I'm just getting a good wash, why not just pay my taxes?

Yeah, okay, I, I can see why they would want to do that. And the government says, but, but the government is ignoring the potential benefit of preserving this land. And frankly, if I'm gonna If I'm gonna give the government a dollar, I'm gonna, you know, use, use my money the way I see fit and save, you know, a parcel of land that may be my choice. So is there anything left in the law that allows that to still, still occur?

Yeah. So now, so kind of going back to the example.

Yeah.

We went on the tirade of good, you know, good. All that.

Yeah.

So the tax code that is out there to be used today again is the important piece on this is you have with anything I'm talking about, you have to be an accredited investor.

Okay.

That's because there's rules around that. But everyone has to be an accredited investor. If you have questions about what that is, Google Accredit investor rules, it's pretty simple. But there's an income or net worth limitation of who can take advantage of them, which makes sense. And so that's a whole nother conversation for another day.

Yeah, but really. And, and we talked about this a lot. But in reality, if, if you're not accredited, you know, these investment opportunities probably aren't going to be a big benefit. Essentially you need to make two, $300,000 or more a year for these to really make sense.

That's. You're very accurate. Male Net So when we look at these and when we look at this video is the new rule allows us to only get rid of 30% of our adjusted gross income. But since we're doing a donation in, the way the law changes is different and it's a different tax code. We can still do it like we do with goodwill. Donate an item fully, let go of the item from IT and still AGI by 30%.

Okay.

But on a leveraged approach, that is a greater than 2.5. So again, depending on the time of year when you're listing, depending on where it's at, there are projects that come out that are greater than 2.5, some that are 2.5. I have seen some as high as 5 or 0.4, depending on where it's at. Again, if you get super high, if you see ones like a 10x, it's a little risky. That's a lot. That's a lot of leverage. Yeah, but again is there is. Let's say you own your own piece of land and you want to do it yourself. Great. You could go out and do this for yourself and get a lot of leverage on it because you're laying, you're.

Giving up family donated the old family farm and it's a park now up in Maryland. There you Go.

Yeah, Huge donation created benefits to it. So there's a lot of ways to do it. But the law today says if you were to go through a process and donate land, you can write off the highest and best use case. And with that in mind, you can write off up to 30% of your adjusted gross income. So I'm going back to our million dollar earner.

Yep.

AGI is million dollars. Just start. You can get rid of you through this law. You can write off up to $300,000. Gotcha. Now granted, when you choose to do that, you have to actively choose to give up the investment return potential you could make from the ground.

So there's no there. You can't have your cake and eat it too. I see. Because you mentioned before, you know, you preserve this land, you can't donate the land and then turn around and sell it and, and turn it into a granite mine. You have to preserve it. So that makes sense.

Sure, yeah. So what happens is when you donate to a charity, let's say we donate to the children's hospital, they own it, they get to do what they want with it. Like if you had stock, let's say you had stock you bought back in the day, there's a dollar apiece, and it's appreciated to $500 or whatever it is today. Well, you get to donate it at what the is today, not what you bought it for. It's the same concept. You're donating at that appreciated value and you get that as a deduction. But what the company you donate it to does with and is not on you, you gave up all rights in refusal to that land. So the same thing is here is you donate that land and you give up all rights to it. You're giving it up as a green space, and then you can't dictate what happens to it on the back end. So if they conserve it, turn it into a park, you know, do nothing with it, well, you have no say over that because you got in return the tax deduction that appreciated value potential, and you get a write off up to it. So in the scenario, let's see, let's just go back to the same example I used from last year. Whereas a five multiple, because you said you put in a dollar, you get two outlet. If you want to write off 500 grand, you put 100 grand, right?

Yep.

So in this scenario, if you want to write off 300,000 and that multiple, let's say a 5, you would put in $60,000 to get a $300,000 tax deduction.

Makes sense. 60 times 5. 300.

Yeah, I like simple math. Very simple person. And so with that in mind is it still allows people to take advantage, especially those W2 employees, people in those harder space looking for something. Again, it may not be a fit to you. There's risk to every investment. And just like a charitable donation, there's risks of audits. There's risk a lot of things. And the risk really is this is the IRS could disagree with the deduction that you take. Maybe not at a personal level, but at a partnership level, which is important. The IRS can say, hey, we don't agree with that valuation. Given we're going to disagree with it, then the general partner and the invest and the IRS have to fight over who's right. Yeah, obviously, just like any deduction we take, we take anything more than the standard deduction. We allow the IRS to poke their head into the business, whether it be at a partnership level or individual level. We have to be aware of the risks that are pertaining to that, because if they disagree, the IRS disagrees. Well, we're paying back our taxes.

Yeah, absolutely. And look, no one here has advocated to, to cheat or do anything illegal and do that. These are all, these are all tax rules. And I always like to say, you know, you look at the COVID of my book, you see Monopoly. It's like, before you play the game Monopoly, learn the rules of Monopoly, and you're probably going to do better at the game. If you want to improve your tax situation, learn the rules that the IRS has put in place, the tax code, sometimes it's nebula, sometimes it's a gray area. There's different rulings. And you have to work with a tax strategist or a professional that understands all this and then decide ultimately, is that the right choice for you. So my accountant may tell me 10 different options for deductions, and I may choose to do six, seven, or eight of those because they make sense for me. Chase, I know, I know you know that I could geek out on this for another hour, but unfortunately, we got to wrap up our time today. If, if listeners want to learn more about what you do, how to optimize their investments, as well as their tax situation, you know, as well as learn about other options that you have out there. What's the best way for people to get in touch with you?

Call me. That's really, it's going to be the fastest. You can call or email. If you call me, my Cell phone is 720-21231. 74 Let me repeat that one more time in Colorado. So it's a Colorado based number. I've had it forever and I'm never going to change it. 722123174 Even if you want to call me, I'm silly and I think it's a dumb idea. Happy to discuss it with you. Happy to discuss anything, really. We can talk about anything. That's great. If you want to email me again as possible. And now my you can see my name down here at the bottom. So just be aware it's C Rabson. So C as in Chase R is in rap, Robert A's in apple, V's in Victor S is in Sam T's and Tom E's and Earl N is in nickel at vistia.com Vistia spelled V I S T I A dot com Yep.

And we're going to have all this in the show notes down below so you can get a hold of Chase. Man, like I said, we're going to have to have you back. If you're listening to this, we're wrapping up the the end of the year. We're in November and there is still time. Is that right, Chase? To save on your taxes if you look at some of these strategies.

Yeah, this is just one of many ideas. Again, it goes back to how we start the conversation. Let's personalize everything to us. Let's make sure we get into things that make sense. Thank you so much. Time Chris for the time today. Chris, it's always being here with you. I enjoy the conversations immensely.

Likewise. Thank you so much for sharing your story and geeking out on these things with me. Chase. I appreciate it. Hey Chris, here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook, book and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also please like share and take just 90 seconds to give us a rating on Apple Podcasts.