$50,000 Tax Free AIRBNB! Rent Out Your Home For The Super Bowl..

Welcome, everybody, to a live broadcast today on a very interesting topic. And that is, can you really rent your house for 50 grand, 100 grand, 5 grand, and pay zero taxes during the Super Bowl? Well, we're going to clear up some misconceptions, but there's, there's a lot of truth to it. It's pretty cool. And so I want to say thank you for listening here. We've got Twitter spaces going. We've got, we're on two Facebook platforms, YouTube Live. I just want to say thank you for all of you that are small business owners, you're investors, you're trying to make money, and everybody's rah, rah, rah, but no one's talking about the tax rule. What is the technical strategy here that you need to have in your pocket to really make big wealth? The number one cost in Americans lives are taxes. And one of the things people don't really like to talk about, it's got to be in the top three are taxes. Well, I'm here to make it fun, interesting, and engaging and answer your questions in a simple, easy to understand format. I'm a CPA attorney, bestselling author, podcaster, blogger, YouTuber, and I'm here for you. So I'm really excited. Now, please, in the chat, Whether you're on YouTube, Facebook or Twitter, please ignore any scams that may replicate my image. And they're trying to get you to do anything with cryptocurrency, ignore it. If anybody else is trying to talk about some sort of strategy, benefit or what, just ignore it. Let's focus on the topic today. Post your questions, and my guys here in the studio are going to help me out with your questions. I'm going to open it up for Q and A here in a little bit. For those that stay on until the end of the broadcast, I'm going to give away a book or two. We'll give away a book on the YouTube platform, the Facebook platform, and the Twitter spaces platform. I want to keep you guys educated and excited. I love to give away information about the American dream. And when you need additional services, tax training, legal, setting up a Roth ira, you'll know who to call. That's us. So it's all for you today. So no hidden major upsell. This is not an infomercial. It's just about some cool strategies. All right, so what we need to do. And we're doing all right, right? We're, we're live everywhere. Tristan, we're good to go.

Okay, you're live.

So here and we're live. Okay? So everybody here is what is known. And if you're watching and you're going to know this, this is like freaking perfect for this weekend. At your dinner party, you're going to be the most popular person by the. By the hors d' oeuvres, and you're going to be talking about taxes and people are going to be blown away. So this is a good social tip, too. I want you to understand what is called the Augusta Rule. Now, it's been around for 30 plus years. It's kind of been called that for a long time. And the Augusta rule is dealing with these rentals that some people might do with their personal residence around the Super Bowl, World Cup, Olympics, big sporting events, big concerts, big events, PGA things, whatever. So if there's a demand for rentals in the area, you might be able to rent your home and make some money. Well, in fact, this weekend, in two weeks. Sorry, in two weeks for the Super Bowl, I hear Motel 6 is at $850 a night. And there are story after story documented in the news of people renting out their home for 10 to $15,000 a night. People from overseas are coming and renting out their homes to go to the super bowl. And people making 40, 50 grand. Now, how is that taxed? What's this Augusta Rule? All right, for those in Georgia, you know where Augusta is? Augusta is where they hold the Masters. The Masters is a major golf tournament every spring. It's been around a long time. Don't. I don't have that exact date. It's been around 30 plus years. And what happens in this small town in Georgia is every corporate jet in America descends on Augusta. A lot of wealthy people, a lot of people that love golf, and a lot of a listers, whatever. Everybody wants to go to the PGA tournament known as the Masters. And it's in Augusta. Well, there's not a lot of hotels there to handle this onslaught of people. And corporations up the east coast love to rent homes and throw big juggernauts. Those are big parties for corporate executives, corporate employees, and they'll just rent houses, pack it with food and booze and give them passes to the Masters and they'll rent these homes for 30, 50 grand for the time of the Masters or more. Well, when the IRS passed with, well, Congress passed the Tax Paper Reduction Act. The Paper Reduction act back in the early 2000s, the IRS's objective was to save paperwork. They're like, we need to do this Taxpayer Paper Reduction act for a reason. We've got way too much going on. And they said, here's the deal and I, and I probably should be able to pull it. In fact, Tristan, you help me. When the Taxpayer Paper Reduction act was passed, I'm embarrassed. I want to make sure I got the right date. I'm a little anal about these things. The IRS was told by Congress, you know what, if someone wants to rent out their house for less than 14 days, we don't want the paperwork, don't fill out the form, we don't want to hear about it. It's a pain in the butt. Are you going to depreciate your house? It's just a nightmare. We want to reduce the amount of paper in the system. So if you rent your home for less than 14 days out of the year under federal law, not taxable. Keep the money, keep it and run. We do not care. The IRS says, just don't deluge us with more paperwork. Well, all these folks down in Augusta, Georgia that were renting out their home during the Masters were like, oh, this is sweet. I am not going to rent my place for more than 14 days and I get to keep all that money tax free. Woo hoo. That's the Augusta rule. Well, you may say, well that's easy. Overn's done, Mark, thank you, I'm going to rent my home out. Well then we get all sorts of strategies that start to play into this. Let's first deal with state tax. Some states conform, that's the term accountants call it, conform to federal law. Some states are like, yeah, we don't want to pass a bunch of state tax legislation. We'll just follow whatever the feds say. So if the feds say you get to write this off, or not that, or this or that or whatever, I mean the massive federal tax tax code states say, we'll just do the same thing. Whatever the feds do. Well, Arizona is one of those states. Arizona, where the super bowl will be held in less than two weeks, conforms to the federal law. So the rental income from your 2 week rental 14 days or less is tax free at the state level. Now some of you that live in one of the nine state taxes tax free states like Florida, Washington, Texas, Tennessee, all these states that have no state tax, you get to enjoy that ride for free. But here in Arizona, people are like, well, if I rent out my home for two weeks or less, what does Arizona say? Well, Arizona state says no state tax. So first point or recommendation is if you're going to rent out your home for Two weeks or less. You're gonna be good with the feds right now under current federal law on this Augusta rule, keep the money, don't even have to report it. It's not tax evasion, it's not tax cheating. But you want to look at the state rule and see if your state conforms with the feds on this issue. And you could talk to your accountant and they can run some models in their tax software. It can be a very obscure thing. I've got the tax code up on Arizona here. For the last hour I was combing through it going, I, are they going to let this through? I couldn't find anything to say. They couldn't, but. And I couldn't find anyone said that they do tax it. So I'm going to. And they do conform to fed. So I'm going to go with it with Arizona. But make sure that whoever's signing your tax return is in full understanding of what you're trying to do and what state you did it in. Now with that said, you have state, you have state tax, but you also have local tax. All right, this is where right now around the super bowl we have Maricopa County. The saying, ah, we have a short term rental tax here in Maricopa county and you've got to register your short term rental. We don't care if it's your own house and you only rent it for two weeks. We want our local tax. We don't care what the state does, we don't care what the feds do. We have a short term rental local tax and a lot of municipalities do around the country. So again, if you're going to rent your home, third issue is make sure that you check with the local municipality. You may have to register your short term rental. You may not be zoned for a short term rental. Sometimes you want to ask forgiveness later. I don't know. But the point is there is a lot of times a county tax or a municipality tax now in Arizona, it's going to range based on some of the surrounding counties between 5.5 and 7.27. So theoretically one of these folks that was in the Arizona Chronicle, they rented their home for $40,000. It was $10,500 a night. They did four nights for overseas. NFL fan. And so if we take that $40,000, just to give you a ballpark here, the local tax is going to be $3,000. So that's your local short term rental tax in Maricopa County. So there's, you're gonna Want to be looking at those things next issue. And be careful. Okay, sorry. And what's going on with Twitter? Oh, I have to keep it. The Twitter. I have to keep it up though, in front of me the whole time. You can't scroll around my phone. All right, I'm sorry. My Twitter folks, I did the math and your tax is around $3,000 in Maricopa county and for the super bowl, if you rent your home in Maricopa County. So you want to. Again, the third tip there, I was just saying is make sure you look at your local short term rental taxes and if you need to register your rental. All right, now, last issue, I want to make sure you guys go in with your eyes wide open. I think it's a great strategy. There's websites called superbowlrental Us where they'll take. If you want to rent your home, rent a room. You can rent a room. I saw a room rental for $900 a night. I saw another room rental for 2,500 a night. It's crazy around here getting geared up for the super bowl. So. And what's neat here is there's a lot of run up events. So if you're coming to the super bowl, you're coming three to four days early because there's so many concerts and fun things going on. So you can really get some extra rental days in there. All right, so here's the last issue. Let's say you're like, this is great, I'm going to head over to grandma's, we're going to rent the house for freaking two weeks, we're out of town. And then you rent your house to this family and they freaking destroy the house. Gotta make sure you've got proper deposits, proper contracts, proper agreements. So make sure that is taken care of. Next issue. Let's say they create a liability. You've got a pool, someone gets hurt, they have a big party, someone falls, slips and falls, whatever. And do you have liability coverage for anything that could go wrong? Now a lot of these companies like superbowlrental Us also, you know, the Airbnbs and of the, of the world, they're going to require you to add some extra insurance or call your insurance agent and say, can you add a rider? I'm going to be renting my home. And they'll be like, oh, well, your home insurance doesn't allow for that. Well, add it. So you may want to buy some extra insurance for that week or two that you're going to rent out your home. Finally, some People may say, well, I've got other issues. I just don't want to rely on an insurance company. I might put my home in an LLC to protect it from this short term rental scenario. You can do that. Many of you, I want your revocable living trust to own your home because we want to avoid probate and be careful with privacy. But if you have an llc, you might want to pop your home into the llc. Now you're going to have recording fees and potentially in some of your counties or states around the country, you got to look at transfer taxes. Be careful. But for some counties, it's really cheap to just deed your property into an llc, do the rental, then deed it back to your trust so the LLC could provide some additional protection. Now people, here's the last issue and then we're going to open it up for Q and A and whatever you guys want to talk about small business, building your wealth, let's talk about it. I'm here for you. I'll try to do my best to answer all your questions is when you go to do this project and rent your home, some people go, well, do I get write offs? No, you don't get any frickin write offs because you don't have to claim the income. So since you don't claim the income, there's no write off to go with it. You just don't pay any tax at all. So don't think you're going to be writing off utilities or some depreciation or some other expense. Maybe you're going to leave some food for your tenants, make it really nice so they come back in the future. I don't know. But those are not going to be write offs because you don't have to claim the income in the first place. So enjoy that perk. All right, let's see. And your most, your municipality taxes, they're going to be on the gross rental amount, not the net. So go from there. All right, well I'm going to now open it up for questions. I've got James in the studio in back in Idaho, Christian here in our Phoenix studio. Tristan, do you need my Twitter spaces where you can see people's comments or and we'll cover any of those or not? No, Kirby will be fielding them to me if we get any, if we get any questions on Twitter spaces.

Cool.

I want to say thank you to Kirby who's running the Twitter space remotely from Nashville. And Kirby is going to pick up any questions and make sure those are submitted. So I'm here for You. Any questions? Go ahead, James.

Our first question is, and I hope I pronounce this correctly because I've tried it a few times. Tiago Costa. I believe it's Tiago. Mark, I've learned so much from you, so thank you. You've inspired me to consider becoming a tax preparer. Would you, would your certification training be enough to allow me to work as a tax prepper?

Oh, I love it, Tiago. Thank you so much for the question.

It was the first question.

I know.

Off topic.

That's kind. Hey, I'm here for all of you on any tax or legal or business question. That's what we do here at the law firm, accounting firm. And so a service, a program that I just launched this year is the Main Street Tax Pro certification, Become a certified tax advisor. And so I've created 12 modules, 75 videos, white papers, exams. They're not the hardest in the world. Don't stress. Much easier than the enrolled agent or the CPA exam. But there are questions about being an advisor. These are questions about strategy. So anyway, if you want to become a certified advisor, I do weekly trainings. We have a forum where we all collaborate. I have monthly trainings. You get to come to my semiannual workshop for free. It's all included. You can look at pricing and everything. It's the cheapest, I hate to say cheapest, but I'm going to say the most affordable and the most comprehensive certified tax advisor training in the country. Get over to my website, marcjcolder.com if you want to look at it. Now. Tiago says, well, I'm going to be a brand new preparer. Would that help me out? Absolutely. But let me be clear. Any of you looking to get certified with the Tax Advisor program? It is not on how to prep the return. It's not. You may use tax layer paper forms, cch, Lacert, you might have a software pro acx. So whatever software program you're learning in order to input data and spit out your return and file electronically and all those goodies, that software is going to train you on how to prepare a return. What my training does is help you charge more, provide more benefit and save your clients more taxes. So it's a win win. Your clients are excited to pay you because you're saving them fricking money. And you've learned how to do a comprehensive consultation reviewing their tax return, going through my 30 ultimate tax guide strategies again, 12 modules, 75 topics from 1031 to opportunity zones. So anyway, sorry, getting all infomercially here, but freaking A if any of you are tax preparers or want to become a tax advisor in any way, shape or form as a financial advisor just for yourself, go to remarkj kohler.com so Tiago freaking do it. But remember, you're going to still learn your strategy on how to fill out the form. I'm teaching you the strategies to use and teach your client so they both come together. Huge, huge opportunity. Next question James so I'm going to

skip some of the other questions that don't pertain to what we were talking about and if we have to go back to them we can. So forgive us for that. We will get back to you. SDP Hypothetical Would the Augusta Rule apply if I rented a cabin located on my farm slash ranch for agritourism purposes?

Yes, anything you want to a real property. The Augusta Rule applies to any real property that you want to rent for 14 days. So it could be a cabin. Now let's say it's your cabin. You go use it all year long and it's Christmas time and someone calls you and says will you rent it to us for 13 days over Christmas you go yep, 13, maybe 14, but no more than 14 days. And here's my price. You can rent your own cabin that you haven't rented any other time during the year, haven't used it for business at all. Now you're going to rent it for 14 days or less. You do not have to claim the income on that. So it's that real property 14 day exemption. Now let me tell you how the flip side of this works. It's kind of interesting. Let's say someone out there, you've got a rental property that you've rented all year long and then all of a sudden there's a break. You're in between tenants. You are allowed to go use that rental for 14 days or less personally and you don't have to pay yourself rent and you still get to claim it as a rental for the whole year. So the personal use of a rental you have you get 14 days or with a non rental you get to rent it out for 14 days and not have to claim the income. So this paper reduction act was kind of like, let's just keep it simple. In these two situations we don't want to deal with the headache of more, you know. But if it's more than 14 days we need to hear about it. So that's how it works.

All right, Next question from Rich4:08 Rich do these IRS regulations apply? If I Have a timeshare in Atlanta for Super bowl reasons.

Yes. So if you guys have a timeshare and you rent out a timeshare for less than 14 days, a timeshare is generally considered. Oh man. It's a real property interest. I'm not saying you could 1031 exchange it because the tick ownership would have to play into it, but no, my understanding is confirm it with your cpa. If there's another CPA here in the chat that wants to pipe in, maybe one of my certified advisors in our program. But my understanding would be is that you would still be exempt from claiming the income even on a timeshare. That's my take.

Next question I've got is from Mary Gonzalez and it's interesting. Augusta Rule S Corp shareholder wants to rent his house for shareholder meetings. Can he use this? Rule Corp pays him for shareholder meetings in his home and tax free to owner.

Yes. So technically that strategy exists. I won't repeat it. James summarized it perfectly there. And this is where the Augusta Rule really gets abused. It's pretty straightforward if you rent your home to some third party during the super bowl or World cup or whatever, World Series, blah blah blah. But when you start renting it to yourself, the IRS is like, what? What are you doing? Is this legit? Are you really just kind of screwing over the gov. Not that many of you wouldn't mind doing that. But here the deal is if you're going to rent your home to your own corporation, it is true. You could do that for up to 14 days and not have to claim the income personally and your S corp gets a write off. Now hold on, that's true, but there are some caveats. One, it has to be fair market value. Rent. What would the local Hampton Inn charge for a conference room? Now you may say, well we got a kitchen, we got a swimming pool. It's very social. Okay, fine, charge, maybe a little bit more. What would a nicer hotel in town charge or whatever. But you can't just choose some arbitrary number that's off the chart. So you get a freaking awesome write off in your S Corp and tax free income to yourself. It better be justifiable. Meaning you've got some comps of what it would cost to rent that and maybe go on Airbnb and find out what it would cost to rent an equivalent home for a day. And that could be your rental reimbursement amount. You get a rental write off in your S Corp tax free to you personally up to 14 days. The second area caveat and where you've got to be careful is these better be freaking legitimate meetings. Having a shareholder meeting once a year at your house for $900 of rent reimbursement, whatever. Okay. Oh well, Mark, we're having a shareholder meeting every month. Happens to be on Sunday afternoon where all the board members, my kids and the shareholders, my family come over and we have a spaghetti dinner and blah blah blah and talk business. And we're going to write off 14 days of that bullcrap. You're going to get audited. It's not going to be pretty. And if your accountant signing your return knows that that's your game, they're not going to want to sign your tax return. Now that's where it gets abused. But I have clients that have S Corps and once a month they hold a dinner sales meeting. They invite clients over. They might be selling a product or a service. They're having a collaborative meeting where most of the attendees are not family, they're not owners, they're not highly compensated, they could be customers, they could be employees. And you're having a meeting once a month for training or rah rah rah sales, who knows what. And you want to pay yourself a reasonable rental rate for that and take a tax write off and have tax free income. I love it works. Keep good records, don't abuse it.

Next question we've got from Kona. Any additional tax implications I should be aware of for Section 8 HUD housing? I'll be starting a long term rental portfolio for Section 8 housing because it's guaranteed income with low vacancy.

I actually have a Section 8 rental myself. It's been great, it is consistent and it is guaranteed income. But you have to be careful. The first thing I want to tell all of you when it comes to low income housing rentals, you're dealing with a tenant that may not take as much care with your house inside and outside and they're not going to be able to show up with a huge deposit. That's why it is a Section 8 rental is for people that have lower income. So if you're trying to build up a pretty good deposit for this low income renter that's going to trash your place, it can be challenging. Now mine's generally worked out great. It's cash flow. Little cow. Low income housing a lot of times doesn't appreciate a lot either. Some clients have a lot of luck getting a low income housing rental that appreciates. But be careful. So tax strategies, there's nothing different that you would take a Section 8 approach. Nothing different in your approach based on a Section 8 rental, a commercial rental, an individual single family home rental, a duplex, an Airbnb rental. People, I want you writing off travel, dining, electronics, computers, home office, everything at Best Buy, everything at Apple Store, putting your kids on payroll, writing off depreciation. You're going to use all the same freaking strategies for a Section 8 that you're going to do with commercial or duplexes or whatever. So a rental property is a rental property. Get your LLC structure in place at in the state where your rentals are located and you can talk to any of our lawyers at kkos. Got very affordable company set up consultations where you meet with a real lawyer and we set up the entity properly wherever you're located. So check that out. Thanks James. Next question.

Kona also asked any updates on the calendar. Also, when will your CPA list be released? This month.

Oh my gosh. And what will be released? What?

Our CPA list.

Okay, two questions there, everybody. One is I produce a calendar every year. It's the fourth year, we literally had to go fire the printer, pick up what they had printed and take the entire calendar print job. A thousand calendars. Can't tell you how many pages and cost of doing this calendar. And we really market it. Pretty much cost. We sell it for 25 bucks. Very, very affordable. It's got all the tax deadlines in it and everything. We've been pre selling it since mid November. I know, but we had to wait for certain tax data to be released by the IRS and then sent it off to the printer first week of January and then the printer fell apart on us. So thanks for letting me explain that. The printer, the printing, literally. I think today's Wednesday should show up at our house, our house at the office today. And we're going to start sending out calendars tomorrow. I would hope all of you that have pre ordered a calendar have it by next week. For those who are interested in it, get over to markjkohler.com it's a great calendar, huge resource. I think you'll love it. His next question is, Mark, when are your certified tax advisors going to be coming off the assembly line? You've been training them for four weeks. When are they finished? We've got three modules left for production and well, they're in the middle of production and release and most of the certified advisors are right up on pace to finish those quickly. I think we're going to have certified advisors ready to go by mid February. So two weeks from now and so everybody out there, if you're looking for a good accountant, I don't make any extra money with that referral system. Those are certified advisors that have been through my program that do weekly trainings with me. And you can go on my website@markjcohler.com, go to the Resource Tax Network, certified network, and you can sign up and say, let me know as soon as certified advisors are available. They should be available again in the next two to three weeks. And all of you, you can hire an advisor near you across the country, interview them. Their pricing will vary, but their strategies are all uniform. With what I've been teaching for 20 years, you guys are gonna freaking love it. And I love my advisors because I collaborate with them. I, I'm not all knowing, all powerful. I love what I learned from my advisors. They're excellent. Next question.

Yeah, Kona, we can't wait to get the calendars. Also, we're asking every day. Our next question is going to be from Meryl Torado. She's a regular. We have a spare room that we are renting out. Can we write off for depreciation and other deductions as a rental property?

Well, I'm going to answer that in two ways. If you're doing a spare room for 14 days or less during a sporting event like the super bowl, then you get no write offs and you also don't have to claim the income. Option two, they're saying we rent out a room in our house to make some ends meet. And it's a long term rental, it's month to month or whatever, and it's not a 14 day or less deal. Can you take a write off for that? Abso freaking lutely you should. You're supposed to and you're supposed to claim that income. Now some people that are just renting a room out of their house to just kind of make ends meet may do that under the table because by the time they do the depreciation and write offs, they're going to break even anyway. They're like, come on, irs, bring it. You know, there's nothing here. So some people may take that position, but technically you need to claim that income and you get all those write offs for that portion of your home. I would also say you've got to look at the liability issue. You've got to be really careful when it comes to liability because if you're renting a room and that renter gets hurt somewhere in the house, make sure you're really looking at your Insurance policy because you can't just pop one room into an llc. This is kind of the bed and breakfast quandary. The mother in law apartment. You're like, I can't use an llc. I got to just make sure I've got great insurance. So make sure you look at your liability issues too.

Next question is from Ramble tc. Let's see if you can help me with this one. Calendar and Rockstar CPA contact on the wait list for KKOS, but need a CPA that can assist with 2022 filings. Move LLC from Washington to Texas and convert to S Corp. Does that make any sense?

Well, it sounds like he's just summarizing his personal life there, and we'd love to have you as a client. Thank you for working with the law firm. And those certified tax advisors will be available in the network in the next couple weeks. Anybody that's moving to a new state, you typically want to take your entity with you. And this listener is just letting us all know they moved from Washington to Texas, moved their LLC there, made an S election. Freaking love it. So a little summary of their situation and we're grateful you're a fan and you're with us. We'll have a network of advisors here for you soon.

Next question is from Jay Brown. Any special paperwork for IRS on non deductible contribution to a trade ira. Sorry, IRA looking to convert to Roth IRA but wanting to know about forms paperwork for non deductible contributions.

Okay, so everybody. And what's their first name?

Jay.

Jay. Okay, so Jay asked a fairly complicated question and I wish Matt Sorenson, he was just here. We were recording the podcast earlier. This is right up my partner's alley. Let me throw this out, everybody. What Jay is talking about is he wants to do what's called a backdoor Roth. He wants to take a Roth ira. I'm sorry, he wants to contribute to a Roth ira, but he makes too much money and there's levels and you can just Google phase out for Roth contribution. And a lot of people think, oh, I phased out. I can't play. Jay's on it. He knows the rule. He can go make a non deductible contribution to an IRA and then convert it to Roth on day two. And there's no tax because he didn't get a deduction on the first run. So there's no tax on converting it to a Roth. It's called the backdoor Roth. Now if you just go to YouTube and type backdoor Roth Kohler, I've got even if you type backdoor Roth, you're going to see videos from me. So over on YouTube, I've got a lot of education on how that process works. But Jay's saying, what are the forms? Well Jay, I got to be honest and just say they're forms you don't need to worry about. When you come, when you come to directed ira, we have a one step application process. You fill out your application, we set up the traditional ira, you make your contribution and on day two, we move it to your Roth. But you only pay for one account setup. You don't have to set up a traditional and a Roth. We just, we save you money there. A lot of the big broker dealers, you want to set up your traditional, then you got to wait 30 days, then turn it to the Roth. It's kind of a pain in the butt. But when you do that, at the end of the year, the financial institution is going to send you the 1099R. They're going to indicate what you did. You don't generate a form, the financial institution does. And then you take it to your accountant. Now it's very, very important that when you get that 1099R or maybe you didn't get any form at all, you've got to tell your CPA what you did. You want to stay to your enrolled agent, your preparer, your CPA and go, hey, in 2022, I did a backdoor Roth. I made a non deductible contribution, then converted to Roth. And there are some boxes where they may want to put that on the front page of the 1040 because it's a non deductible. And you've got these Roth conversion issues. Sometimes you need to report it, sometimes you don't. It depends on the transaction. Did you do it inside a 401k? Do you have old IRA money? And so it's technical, so I'm going to forgive me for not giving you the exact lines. You're going to put this on and how. But you don't generate the form. The financial institution is going to do that for you and you take it to your tax preparer and they deal with it. So should be a little easier than you imagine.

Got a quick question from Stephanie Okada on 401K. Hi. When will the 401K Roth match take in effect and how will that work?

Work? Well, when will it take into effect? And Stephanie, you may want to rephrase your question. The solo 401k Roth strategy has been around for years. So when you say take into effect, let me take a stab at this for everybody out there. Let's say you're a solo entrepreneur. You got an LLC or an S corp, you got a business that's making some good money. You're already funding your Roth, you're already funding your hsa, you already bought your rental this year and you're like, mark, I want to throw down some more cash. Well, the Solo 401K is a great way to go. Some of you are going to see ads out there for the, you know, this is a qualified QE, this plan. And what is a frickin solo 401k? People that aren't lawyers or accountants are trying to sell this instead of going and getting licensed or whatever. I'm gonna leave that alone. But the point is, don't worry about different acronyms and names that people might call these. It's a solo freaking 401k. So if any of you out there, Stephanie, you want to Fund a Solo 401K, you can designate your contribution as a Roth and then the company match or the profit sharing can be converted to Roth. So it's not like the company is going to match with Roth money. They match it and then you convert it to Roth. So it's kind of a two step process but you accomplish the same thing. So that's why I say having a 401k. Roth has been around a long time because you, you kind of take that strategy and two step it. So talk to one of the attorneys in my office and they can help set up your solo 401k and walk you through the match contribution thing. Or make sure you're talking with your certified advisor. They can help you with the process too, but it's not that complicated. You'll be able to get the match in a Roth format quite easily.

Got a thanks from everybody by the way that you've answered questions.

Oh, thank you everybody for being here. I love this stuff and I just love making money, saving money and building wealth, protecting it and the American dreams alive and well people. And I'm grateful that you're taking time for a podcast or a, a YouTube video or a live or a Twitter space on this topic because everybody wants to talk about how to make money and marketing and rah rah rah. And that was sexy. But no one else talk about how do I write this off? What about my bookkeeping? How do I put this on my tax return? People, that's the second. That's day two. I'm the day two drug. You know, everybody goes to cool class on day one, and then on day two, they're like, I guess I got to really learn how to run my business. What should I set up? That's me, that's us at our firms trying to keep that clear and easy for you. All right, James, thanks. Next question.

Got another, got another question from Kona. Question, crypto question, by the way. Low nine figure wallet to wallet transfer, not the entire portfolio. What kind of CRT do you recommend? In your CRT video, you mentioned there are different types of CRTs. Okay, everybody, he knows you well.

Yeah. So everybody, if you've got appreciated real estate, appreciated stock or appreciated crypto. So maybe you bought this crypto for 200 grand and now it's worth a million. You don't want to pay tax on that or that real estate or that stock or whatever it is. So you can put it into a charitable remainder trust, get a tax deduction, get a disbursement of cash based on your life expectancy, a percentage that's allocated to you. I run numbers when we design it. And you get money every quarter for the rest of your life. Asset protected, you get a tax deduction and you don't pay tax on the sale of those. That crypto. That's a crt. We like the crut. We like the Charitable Remainder Unit Trust. That's the one I'm going to lean on. 98% of the time is the best fit in this situation. There are Nim Cruts and Krats and reverse this and back, blah, blah, blah. But the CRUT is so cool because you can keep investing the money, increase your distribution amount, have asset protection, and not pay any tax when you sell. So that's everybody, what the conversation's about, that's called a CRT. You can YouTube Kohler Charitable Trust, and I've got several videos out there. Now, here's the one thing. Tell me his first name again. James. I'm embarrassed.

That's Kona from Hawaii.

Kona. Thanks, Kona. Thanks, Kona. Kona says he's doing a wallet to wallet transfer and then he says, then he jumps to crt. Wow, that's a big leap to go from wallet to wallet transfer. Crt. In some ways, I'd say those are totally separate conversations, issues and yada yada. So for everybody out there, I do want to say if you're going to transfer money from one wallet to a wallet, another wallet, that's a non taxable issue. If you never sell the crypto that's in that wallet that you're transferring from. And you don't change to a different type of crypto. You may say, well, I went from Bitcoin to Ethereum. Well that's a taxable gain. Well, I went from, I didn't go from Bitcoin to cash. I just traded for Solana. That's a taxable transaction. And so wallets to wallet transfers don't have to be taxable. It depends on what you're trying to do inside those wallets. And you may need a crt, you may not. So anyway, Kona, again, my tax lawyers can help walk you through a lot of that. And our certified advisors have a whole section on crypto training. They'll be there for you too in the next few weeks.

By the way, you got Jay, you got Zap, you got Kona. They're all saying, win Hawaii. Are we doing Hawaii this year?

Hey, if you guys want to put together anybody in, this goes nationwide. I been a hired gun and speak spoken at 20 different cities in the country over the last 10 years and I love it. I love getting on the road and going and teaching business owners or tax advisors. If any of you in Hawaii or another city say, hey Mark, we'll put the butts in seats, we'll charge whatever, you can charge whatever you want per day. Do a two day event, one day event, whatever, I don't care, you can call me and say, mark, what's your fee to come out and speak for half a day or a day? And we'll, we'll find a way to fund it, we'll sell tickets, we'll do this, we'll do that. Hey, I'm all ears. I would love to do it, but me putting on an event over in Hawaii, so much more work. It's just put such a huge demand on my team, my staff, my energy that I'm out selling tickets. It's just, and it's just I gotta focus somewhere every day. And that's an area I'm just cutting down my tour around the country. I'm doing my three day mid year Main street growth con in Salt Lake City in July this year. Three day event, it's where business owners collaborate with tax and legal professionals. It's going to be an incredible event. You can't register yet. We'll have that out in the next few weeks. But that's the only event I'm doing until the end of year in Phoenix. So anyway, Kona, you put together an event in Hawaii, I'm all ears and you can contact my assistant, Deborah, Deborah Stanton, and she can talk to you about fees and speaking fee and blah, blah, blah. We'll make it, make it really worthwhile. Oh man. If I go, I'm surfing. That's for sure.

I got Sergeant Sam. He's got a question for you. Turned my primary home, which he restated full time STR, his full time home, into an STR in 2022. I materially participated. I'm sorry. Participate. I understand losses are limited by at risk amount. What part of my investment is considered at risk? The amount financed. Is it the amount financed?

It's more. It's more than that. So Sergeant, let me repeat, everybody for what's going on. Sergeant has a house. It was his primary residence, it sounds like for several years, and then he

turned it into his full time str, but he lives elsewhere now.

That's what I'm. That's what I took from it. Is that what you took?

Yep. Just wanted to make sure we're clear.

Okay. Yeah. So Sergeant has a home. He's living in it as his primary residence. And then last year he converts it to a str. That means he's deeded it to an llc. He better had. And Sergeant Hovelly worked with one of the lawyers. Get your LLC done. Get it done. Right, you got your revocable living trust in the mix, you got your llc, and he transfers his home into this LLC and lists it with Airbnb. He's off to the races. Now what he, Sergeant. And any of you out there that does this, you have to set up your books. You have now taken a rental, sorry, a home that you owned and converted it into a rental. Now, if you just went out and bought a rental, what you bought it for is your basis. And what your at risk basis, Sergeant, in a new purchase, is the money you put down and the amount of debt you personally guaranteed. So if you bought a $300,000 house, you put down 10%, 30,000 and got a mortgage for 270. Your at risk basis is 300 grand you put in cash plus the mortgage you're on the hook for. That's your at risk basis. So when Sergeant goes to depreciate it, he can write off losses or depreciation up to the 300 grand and then he runs out of basis, which you, and you never, you rarely ever get to that point in a single family home rental, in that example. But now Sergeant saying, well, I didn't go buy a new rental, I contributed my house into this llc. Well, Your basis is carryover. You don't get to hit reset and say, well, it was worth this. Well, you didn't buy it, maybe worth that, but what's your basis? And that carryover basis becomes your at risk basis. And it's how much money you put into it and what your debt is. So if you've got a mortgage of 200 grand and you can calculate, you put 50 grand into the place since you bought it, down payment and improvements and you're into it 250 grand. You're going to find an allocation for the land and you're going to put it on the books. You'll work with an accountant to do that. You're going to start calculating depreciation, but you're going on the books is the lesser of fair market value or your basis. In a real estate scenario, it's going to typically be your basis. So there you go. Next question.

Got a question from Laura Martins. So it starts off with MFJ and I'm assuming my full time job made about 596k, had over 100k withheld in federal taxes and still owed an additional 40k. What should I do to reduce my taxable income going forward? Already maxing out 401ks.

All right, first name again?

Laura.

Laura. Thank you, Laura. I was writing down 596 and 100k and I forgot to write down your name. Laura, you are my problem client. And I say that nicely. When I have people call me up and they go, mark, I need to save taxes, I'm like, all right, give me something to work with. They go, well, I got a W2, I max out my 401k. I'm a. Anything else? Nope. Do you have any rentals? Nope. You have a small business on the side? Nope. Doing an hsa? Maybe. Yeah. I mean, Laura, any of you out there, it's hard to work for you. I want to find tax strategies for you in my 30 ultimate tax guide, which you can download on my website for free. I talked about a few things in the first five, six items that a normal person. I don't want to say normal. An average corporate W2 employee can do. To me, an entrepreneur may be normal. For others, that's not normal. So I sad I use that term. I shouldn't have. But if you're a corporate W2 employee, I gotta have something to work with. And so Laura, the first thing is you need to change your W4 withholdings. You gotta go into your employer and go, you need to withhold more because I ended up owing 40 grand and have them withhold more. So at least when you file your taxes you don't have to write a big check in the spring, which is never fun. The second thing is I'm going to recommend you look at some small business strategies for fun. Maybe there's a hobby. Maybe whatever. You're like Mark, I got a W2 for 596. I'm working my butt off 50 hours a week. I don't have time for a small business. I don't have time for rentals. I'm not going to have a lot for you strategy wise. Now if you're married, I'm going to say what's your husband doing? Lauren, could we use some strategies with I've got a lot of clients that the spouse is the real estate professional. They've got rentals. Those are wiping out the W2 of Lauren you and if you're single, I'm gonna recommend you get out and start shopping for a realtor. You know, really cute, some guy drives a good car dash E. You know. So anyway check Lauren, I hate to tell you I don't have much. I need you to adopt the small business rental real estate strategy and there's some other unique ones but probably be on the scope of today. So get with a good tax advisor and keep asking those questions.

I'm sorry, got a question from Zap Martin. I have a newlywed financial course set up for 10 couples in San Diego. What's your fee to come out for a half day and give a summary of taxes or it will it be cheaper to have a certified tax advisor? Also he has a second part of that. It's how can I get Deborah, your assistant?

How can I get Deborah? Well, we'll put down in the chat is debarkj kohler.com I think right James, you'd email Deb every day but yes sir. Put down in the chat if you could debarkj kohler.com and our phone number is 435-586-9366 and Deb can talk about travel and a fee for the day. I would love to come. And 10 newlywed couples. Man, that is right up my alley. I freaking love that. And there's so much I would love to teach on the tax and legal strategy now hiring one of my certified tax adv that's in my program to come probably would be cheaper but then and and they could do a phenomenal job presenting but being on stage and keeping someone engaged and training and in a training format and answering questions on the fly. It's taken me a lot of years to master that art and what I'm doing. So you could definitely get one of my certified advisors to do it. Would they be as involved, engaging and dynamic? You might want to interview several to do that. But keep talk to Deb. I'm interested. That sounds like fun.

E B. Debart.

D as in David, E as in Echo, B as in boy deb@markjkohler.com awesome.

All right. Okay. We use our home. This is from S11P312MAN. We use our home as a care home, not our place of residence. In previous podcasts you advised to rent property to a business. If I rent our home to our care home, business rent becomes income and.

Okay, everybody, this is a great question. Let me answer it this way. First of all, they've got a home care facility. Let's call it that. They have a home. They've obviously got it licensed with the state and they have a business in there. Maybe they've got five or six rooms and they do elder care, hospice, whatever. But they have this home care business in a house, multiple rooms, they get rent per room, maybe some state funding, Medicaid, Medicare, I don't know. That's a business. That's great. What's throwing me off here is now you're going to rent your personal home to the business. Are you still living there or are you going to rent that home to the main business and create a second care home? That's great. I don't know if I'd rent it to your other care home to start a care home there. But I have a feeling what you're trying to do is get a write off for your own personal residence. And I could be wrong. Forgive me, but people, you never, ever, ever rent your own home back to your business. Now, we talked about the Augusta rule for up to 14 days of legitimate business meetings or presentations in your home and your business pays rent back to your person for their use of your personal home for less than 14 days. Okay, that's the Augusta rule. That sounds great if you can legitimize it. But in this question, I. They didn't say Augusta or short term. So I'm feeling like they want to rent their home to this business on an ongoing basis. We would never do that. You're just going to take the home office deduction. And I've, I've got videos on that. I teach strategies on that. But we never. You're right. You don't Want to rent your own home back to your own business because now you have rental income and a rental write off, but you're right back where you started. Doesn't work. So stick with the Augusta if that's what you're talking about. But if you're talking about just getting a write off for your personal residence you still live in, just stick with home office. So hopefully I answered your question there.

I would say we should do another disclosure on the bitcoin fanatics.

Oh my gosh. We have more bitcoin bots going nuts on Facebook and YouTube. People, please ignore that crap. I so mad that they just use my image and then they start trying to hawk bitcoin or crypto. It's so sad. So ignore all that. Everybody, let's focus on the questions.

Yeah, also, I know.

Anything on.

On what?

Sorry, no, no. Go ahead, James.

We joke about the matchmaking, you know, tax matchmaking.

You're.

It's kind of going on in the comments right now. Just so you know. I love it.

Taxmatch.com People, I want to match up tax returns. If you're saving taxes level, follow.

What is it? Double no kids. Isn't that like a thing now?

Double income, no kids. That sounds like fun. Anything from Kirby on Twitter or she getting any comments on Twitter?

I haven't come through yet. Not yet. We're growing there. I do have a question from Rob. If my Minor son earns $1,000 per year in farm income, this is per year, can I max out his Roth IRA or are we limited to the thousand dollars in his total income?

You're limited to the $1,000. Everybody you can contribute up to a Roth IRA this year, $6,500 of earned income. If you only earn $1,000, you can only put 1,000 in the Roth. If you earn 7,500, you can put 6,500 in your Roth. So you can do your earned income or the 6,500, whichever is less. So earned income is the barometer there. Now if your son. Now I don't know how old your child is earning $1,000 of farm income, but unless they're under age 5, I have a feeling we could get that thousand going up. Let's get, let's get that a little north and let's get them more involved out there shoveling poop or dirt and digging holes. There's a lot of work to do on farms that even an 8 year old can do and earn more than a thousand dollars. So let's put them to work. Put that little rip to work. You know, let's get on it.

That's how they do it out here in Idaho, that's for sure.

Yeah, I mean, if Beth was his boss, Beth would kick his butt. So have Beth get on it.

So s 11. He did say we don't live at the care home. He just commented that. I don't know if that helps you.

Well, I don't care about the care home. I thought he said rent our home to the care home. Maybe again, S11. Let's get more clarity.

Yeah.

So how many homes do you have? Maybe S11. Give me some more clarity. You got a care home, that's a business, that's a rental, 100% write off, blah, blah, blah.

If you can write the whole I thought you were talking comment would be great.

Okay, I thought he was putting a renting another home to the care home, but get a consult with one of my tax lawyers, too. You know, the purpose of this live is to get some good general answers, but not everybody. Go out and file your tax return after this live. You're scaring the hell out of me. Okay, next.

James Jay Brown, got a question here. Employer did not pass 401k test for HCES. If I get a refund, will the refund be their match refunded to me or all the money included my contributions?

Wow. I don't know the answer to that. What he's saying, everybody, is that he's participating in a 401k at work and the employer screwed up. They put too much money in all the highly compensated people's accounts and screwed over the little employees. And that typically means the owner put more money in his own account. But anyway, the listener there is letting us know that his employer jacked up his 401k. And it sounds like they're going to kick out some money to the other 401k participants. Our listener, and he's wondering, how is that going to be taxed? Is it taxed in a certain way? Is that a. Is it really a refund? I don't know if that's the term either, but you've got to get some expert counsel on that. I would talk in my office to Kevin Kennedy. Kevin Kennedy, he's one of our partners. He knows this 401k issue backwards and forwards. I don't know the answer. So be careful, people. Don't screw up your 401k. Next question.

James, I think we got time for one or two more questions. We should give some books away. This one's From Carlos Ramos. You'll love this one. What is the minimum age to employ your child with your business? Also, do you have to be at the S corp level to do that or can you do it with just an llc?

Okay, by the way, you choose the names. Let's give away four books from our four different platforms, James. So you, you choose. Okay, so Carlos, everybody out there, let's work in reverse. You can pay your kids out of any freaking business. It doesn't even have to be an llc. It could be a sole proprietorship. It could be a rental property, it could be a online business. It could be your uber business, rental restaurant, farm schedule F, schedule e, Schedule C, 10, 11, 20s S Corp. It could be any of them. Now there's a procedure to follow depending on your structure, but you don't have to have an S corp to do it. All of you that have kids that are helping you in your business, and they better be, we're going to take a freaking tax write off for that. So that's point number one. And if you don't know how to do it, call one of the tax lawyers at the office, get one of these certified advisors soon. Get my book study up. There's lots of ways to do it and it's very, very common. It's not high risk, just be legit. Then his other question was, well, how much, how young and how much could I pay my kids? Well, those are two different variables. If I, I've seen clients pay a child under age 5, 5 grand, they were a pediatric dentist, they had the child involved in some commercials and some photography because the kid was one of the models for showing how they did pediatric dentistry. Some clients literally have, I've got another client that does children's clothes and they sell them online and they use their kids in all the outfits and models and da da, da. I've had clients that say, hey, I use my 6 and 7 year old at the, my rental property rehabs and they pick up nails out around the property and on the driveway and they have little jobs of cleanup and pickup. And they, they're paying their kids several thousand dollars a year. So it, it's, you could pay a kid that's two months old, you could pay a kid that's 20 years old. You just have to have a job that justifies the payment, number one. And number two, you're not overpaying. It's got to be a fair payment that you would pay any other person. You can't overdo it. You get too extravagant. So but hopefully that helps everybody. You should be doing that. James, who are winners?

Well, I want to give KJ a book that's very much desired and that's going to be what your CPA isn't telling you.

Okay.

We should go ahead and give S11 the tax and legal playbook.

Okay.

And we'll give Jay Brown the financial freedom and Ryan Lee you want to give him self directed.

Well, here's the thing. I got a message from Diane today that she's waiting on a book order and I think she said we can only give away what your CPA isn't telling you, which is a great gateway drug. Folks, you're going to love that book. It just really gets you excited about taxes. So, James, let's use what your CPA is for, all of them. And if you heard your name, read off. Please email Diane D I A N N e Diane with two N's. D I a n n erkjkohler.com Let her know your name, that you won. She'll verify it. James is going to give her your handles. She'll get in touch with you and get your mailing address and get you a book. Well, another week has passed. Thank you, James in the studio for assisting with the production. The questions Tristan in our Phoenix studio. Thank you so much. Appreciate you. We've got Kirby on the on Twitter spaces. Grateful for all of those that helped out today. It's a team effort and I'm just so excited about again, small business investing in the American dream. Don't give up, people. Keep working hard and I'll see you next week for another live.