ACCOUNTANT EXPLAINS: The Real Estate Tax Secret

We're here talking about the truth of tax strategies when you invest in real estate and there's a lot of misinformation out there, but not here. You guys are going to get the real answers today and ways to save money by buying in real estate, ways to build wealth with real estate, tax deferred wealth, tax free cash flow. But are you really going to get a write off from that real estate and offset your W2 or your small business income? Maybe, maybe not. I will let you know. We're going to talk about it. So I'm a CPA attorney, senior partner in a law firm now for over 25 years. I've been teaching accountants, enrolled agents and CPAs in my main Street Certified Tax Pro program. For now over two years. We have a tribe, a community, a whole army of accountants that get it. And we're honest and we're strategic and we're freaking looking for the best strategies for our clients. So you're in the right spot. Now I want to take your questions. You can type them in the descript wherever platform you're in. We got several platforms going here and if you've got a friend that's in real estate, text them real quick, send them the link, get them in here because this is the real deal. I myself own rental real estate. I've got from single family homes to duplexes to commercial buildings to short term rentals. Boom. I'm all in. And I'm also again, a licensed professional in the task and legal space. And I recommend all my clients buy rental real estate. And I'll just give this last tip. Over the last 20 years, I've done over 10,000 consultations with clients, wealthy clients, unsuccessful clients, everywhere in between. My wealthy clients buy rental real estate, sometimes in a syndication, sometimes outright, directly. People buying real estate doesn't mean you're signing up to be a property manager with a plunger. There's great strategies out there that you can manage from an armchair even across the country. All right, so let's break it down. We're going to cover two things today. First, what are the three tax strategies in real estate that actually work? And then number two, using your tax advisor, someone that's not making any money on the deal, to help you analyze the deal so that you don't buy dumb real estate and chase a tax deduction with bad money. See, we can, we if we, it could be a great deal, but if we buy it for the wrong reason, it could blow up. We want to make sure we've got the Right reason and the right deal, that's when we have success. So first I've got to put this in perspective. And for those of you that watched me live before, you know where we're going, we got to put a big picture around this. It's called the trifecta. And the trifecta tells us where this real estate's going to go. The trifecta starts with your trust down at the bottom, revocable living trust. And your 1040 tax return is down here. Everything flows downhill. That's how I do it. Some of you might do it differently, but if you're going to talk to Mark Kohler or any of my tax advisors, money flows down, goes downhill, just like water. Now we're going to divide your life in half. We're going to put your operational entity over here, typically an S corp. And if you have a day job, we'll put that over here. Day job, small business side hustle, three different scenarios. Over on the right side is where we put our assets. And we could be doing real estate inside our IRAs or 401ks or a Roth. Or I could be buying real estate in my own name. My trust is going to own my llc. My trust is going to own my S corp. My trust is going to own my llc. My trust will own my own home. That, my friends, is the trifecta. So as we start to bring this together, we're going to know where this real estate goes. For example, if I'm a rehabber, a fix and flipper, wholesale realtor, broker, that's over here. I'm creating 1099 income in short term real estate transactions, not short term rentals. Buying, selling, flipping, rehabbing property. That's over here. Over here is where I'm going to do my short term rentals, long term rentals and even self rentals where I rent a property back to my S corporation. Very common. So we're going to try to bring this all together here for you in these two or three ways. Now I want to tell my producer here, my camera is now starting to move around. I think we're going to be okay, but I want to make sure I need to be over here or over here. There we go. So that we don't have that camera following me around, we want to keep it fixed. Okay, now here is where we want to focus today. Where we want to focus today is right here. Now I can buy real estate in my IRAs and 401ks and Roths, which I highly recommend I do as well. Even My health savings account owns a rental property. But that's a different type of strategy and I've held lives on that. We're not talking about fixing and flipping properties either. We're going to be dealing with that on another day. That's a whole other topic. What we want to focus on is this buy and hold strategy and where we go with that. All right, so if we take this area and blow it up. All right, my producer here, I've got to tell you one more time, this camera is all over. Let's see if it works over here better. Okay, there we go. Let's see if this holds. I gotta just not move around too much. All right, so we're gonna take that right side and move it into three columns. Long term rentals, a self rental or a short term rental. Those are the three main types of real estate. Now if some of you want to go out and invest in a syndication and someone's telling you, hey, come buy into this fund and we own massive rental properties and apartment buildings and commercial buildings and we're going to get you a 3, 4, 5, you know, percent return and it's going to be tax free because of depreciation. That's right. That's true. A syndication could be a great investment for those of you that want to invest in large projects. Nothing wrong with that. But you are not going to get a pass through loss from any syndication ever. And that loss wipe out your W2. It's not going to happen because you're not materially participating in the project. So syndications, they're down here and we're not going to worry about those because they don't create a tax deduction for you. Now you may again get tax free cash flow. That's cool. But they're not going to create a strategy for you today. So let's go over here now and look at these three strategies. The first one is a long term rental. Now this is where the real estate professional classification comes in. It's called a dash nine. And so I could buy two or three rentals. And rentals are going to produce write offs, depreciation, mortgage interest. We're going to get to analyzing the deal in a minute. Remember, I'm just giving you the strategies. If you want to buy long term rentals, and I own long term rentals, I think it's great. Tax free cash flow and I'm building wealth, it's wonderful. But in here, in my little llc, it's going to generate losses. Rental properties produce losses. It's Wonderful. They do. Even though I'm making money, even though it's cash flowing, I have losses on paper because of the big D depreciation. You might even do a cost seg analysis. That's great. But if you don't qualify as a real estate professional, the most you're going to get out of that is a $25,000 write off. And if you make more than 100 grand, it's going to whittle away until it's gone at 150. Now that loss will carry forward and you can use it in the future and pour it out when you sell any property. But that's it. So I love, so if you put this here, I'm going to bring this back up. So if we go back to our trifecta and you've got long term rentals and let's say we'll put these two are long term rentals, I put those in an LLC and I'm going to get a loss and that loss is going to flow through over here and wipe out my W2 or my K1. That's cool. But I have to be a real estate professional. Now the qualification to be a real estate professional is you or your spouse has to have a full time career in real estate. Being a realtor, a broker, managing your rentals, being a contractor. You, you can't have a W2 40 hours a week and say well I do real estate. More than that doesn't matter. IRS is not going to go for that. Now if you have a 20 hour a week job and you can show you do real estate 21 hours a week, maybe the second part is you've got to do 750 hours of real estate in that occupation. Well that's about 13 hours a week. Now for some of you that'd be easy. Realtors do that on Monday. But if you're trying to invest in rental properties across the country and you're not putting in 13 hours a week, you ain't going to be a real estate professional. Then the third issue is you can't be sitting on an island drinking my ties saying I'm a real estate professional. You have to materially participate, meaning being involved in decision making at the least. And there's seven tests there. It's not the easiest thing in the world. So if anybody's selling you on go buy a rental, you're going to get all these great write offs and you can write it off against your W2. Think twice. Now if any of you have questions that'll Be a chance for you to write it down below. Now the second strategy, it gets better. There's another strategy and I love this one. I'm using this one as well. You can create a self rental. So let's say this right here is my building and I'm going to lease it over to my S corporation. So let's say I'm a dentist, a doctor, an online marketer, an engineer and I have a business and I'm leasing from someone else, I can buy my own building and lease for myself. Now when I do that and I have continuity of ownership, meaning I have the same owners here or the same owners here, I can do a cost seg, I can take all those losses and they're unlocked. They're unlocked. I can write them off against any other income. That's called a self rental. It's a dash four election. Now if your tax advisor doesn't know that you got the wrong tax advisor. I'll give you a link here. Some of you may want to become a tax advisor in my network. You'll freaking love it. We'll get you some awesome clients too. Now remember, we've got option one long term rental, then we've got the self rental where I rent my own building to myself and I get massive write offs, no limit. The third option that could be a good fit for some of you is the short term rental. So I'm going to take these two properties and put them in an llc and those would be the Airbnb or the write off with vrbo. So with short term rentals, what's cool there is you just have to provide material participation. You do not have to be a real estate professional. And in the easiest time to do it is in the first year. You buy the property, you have to show you put in 100 hours getting the property fixed up, ready to go. You're done. Now that's 100 hours more than anyone else, which is easy to do because you're just getting it launched. It's really nice to buy that short term rental in the second half of the year. This is the next six months is really a good time to be looking for those short term rentals. And that property is going to be able to be cost segged, depreciated. And all the write offs in that first year, they're unlocked too. Now you can write off all those write offs against your other income. For example, let's say I've got a dentist that lives in Minnesota and he's going to take a month off Come to Phoenix, Arizona, buy a short term rental and he and his wife, let's say dive in and work on this short term rental, put it on Airbnb, step away and have at least three rentals that average less than seven days before the end of the year. Let's say that property costs four or five hundred grand. They could cost Sagitt, probably get a $200,000 depreciation write off and take that all on their tax return in the first year, even if they only put down 20,000 to buy the property. Huge opportunity. That's the short term rental write off, which is also dash four. So you've got the dash for short term rental, the dash for self rental, and then the Dash 9 is where we're going to take this long term rental strategy. And by the way, I've got to correct myself. The dash four is the self rental. It's dash nine. Oh my gosh, I'm embarrassed here. I got to confirm that anyway, do them all the time. I've just got my fours, nines and sevens all mixed up at the moment. All right, now this is the three strategies that can work and give you massive tax deductions in the year you buy real estate if you meet those tests. So if any of you have any questions, let's talk about it now. The second topic today, and then I'll field your questions is whether or not it's a good deal. Because we could be chasing a great write off and buy a bad deal and we don't want to do that. And so there's a four quadrant analysis. I do when I look at a rental property and I want to just take you through it real quick. This is one I've made my kids know how to do. I think it's super important and really powerful and I want to make sure that all of you can see and plan on this in your own life. So here's what we would do. I want to look at four different benefits from your rental, your property. You're looking at. I want to look at appreciation. I want to look at mortgage reduction. I'm going to put mortgage reduction. Some people go, mark, I can't read your handwriting. Well, I'm trying to write it quick here. Appreciation, mortgage reduction. Then I'm going to look at tax benefits and cash flow. Now I've got spreadsheets in my office and that we help all of our tax pros. They, they can analyze a property and I know in other real estate organizations they might have multiple areas. They look at benefits that could come through with a rental property. These are the big four. And all real estate investor gurus are going to hit these big four. Then they might add a few others. But I think these tell the real story of a property within 90 to 95% accuracy. So let's say you could add more zeros. But the point is, let's say I buy a property that's 100 grand, I put down 10,000 as a down payment, I have a mortgage of 90 and I'm off to the races. I put down $10,000. That's my investment, 10 grand. Now what I want to find out is what's my rate of return in each one of these quadrants if I buy a property for 100 grand? National Association Realtors, the markets everywhere we've seen for the last 50 years is that real estate is going to appreciate and an average of 5 to 6% across the board. Now some markets you're going to see it higher and faster. Other markets you might see a little lower. But the average is very, very common to be in this 5 or 6% range. So if I buy a property for 100 grand this year, I want to hope that it's going to be worth 105 next year. In 10 years it'd be worth 150. That's bare minimum. So if I that property goes up by 5%, that means it's worth 105. I just made five grand. Now I didn't sell the property, but I built five grand of wealth. So when we go out to look at properties, we want to not bank on appreciation, but we want it in the model. If I invest 10 grand and I make five, what's my rate of return? 50%. I just made 50% of my money back. That's huge. Now mortgage reductions, a unique one because I want to rent it to someone that's going to pay the mortgage for me. That's called a break even property. And what we want to cover is P I T I principal, interest, taxes, which is your property taxes and insurance. That is P I T I if I have a property that can at least cover piti, it breaks even, that means someone else is paying the mortgage for me. Now I want a little more than that, but if I can at least cover that, look what's happening. The property is going up in value, the mortgage is going down. I'm building equity and I didn't put any more money in. That's a big deal. So that would be if I my mortgage went down by say 2000 throughout the year. Okay, goes down by 2000. Well I just. And the tenant paid the mortgage for me, so the mortgage goes down by 2. My property went up by 5. I have $7,000 of equity. What's my rate of return? I made 2, I invested 10. That's a 20% rate of return. Now tax benefits, remember if we go back to those three or four benefits. Where did my paper go? Here. All right, and these three benefits, if one of those benefits comes through and wipes out income, that's a tax benefit. Now the average long term rental is going to generate about $6,000 in losses. Now if you do a cost seg on a short term rental or on a self rental, it could be massive. But let's just be conservative. Let's say I get a $6,000 write off that I can use against my other income. And if I'm in a 30% bracket, Fed and State, I just made 2 grand in tax savings. I bought a rental, I saved taxes, Boom. What's my rate of return? 2 grand on a $10,000 investment? 20%. Now the important piece of this entire equation, as does the property cash flow. I don't want to chase a frickin write off if it doesn't. Cash flow. This is what your tax advisor should be helping you go through, is analyzing the numbers to help it see if it's going to fit on your return. And is it a good deal? Let's say it just cash flows. $100 a month. $100 a month after piti hoa property management, any loose ends? I'm going to make 100amonth. Very realistic. 100 times 12. I'll even round down thousand dollars. You get $1,000 of cash flow. $1,000 of cash flow you didn't have before, but now you do and it's tax free. So you got a loss on paper, but you got $1,000 in your pocket. What, what's your ROI? 1,000 divided by 10. 10%. So look it, 50%. 20%. I'm now at 90. Another 10 in this example, I made 100% rate of return on my $10,000 in the first year. You think it's too aggressive? Fine, cut it in half. You made 50%. Well Mark, that's too aggressive. You can't do that. Okay, cut it in half again. Oh, I didn't get this quarter. I didn't get that one. Okay, you're at 25%. Oh that's right. Your money in the stock market's killing it, huh? Oh, but your Money is in an IRA or 401k. Great. Buy rentals in your IRA or 401k. We can do that too. I've got video after video of teaching that. We've been doing it for years and it's legit. So you want to analyze a property and go by the way of all these quadrants, the one I care about with my clients cash flow. Analyze the properties cash flow. Don't worry about the tax benefits, depreciation and all that crap. Start here. How much comes in from rent? How much is the mortgage payment, Property taxes, insurance, property management, hoa. Anything else? Maybe a reserve. It's a good idea. What's my cash flow? If it's not at least 5%, you got a problem. Now I can do some more examples but I want to make sure my cash on cash return is at least 5%. Then everything else is gravy. Gravy my friends. Huge. Huge. So number one, be careful of believing anybody that says you're going to get a big write off when you buy real estate. Unless you have a real tax advisor. Analyze that for you. Short term rental, long term rental, which means real estate, professional short term rental material participation or a self rental that you're renting back to your own company. Make sure though you fit in one of those buckets. Then start analyzing those real estate deals with extreme vengeance. Kick the tires, run the numbers. Don't talk yourself into a property, try and talk yourself out of a property. That's the mentality we want to have. All right people, now with that said, I want you to check out. I'm going to give you a discount on my next event. It's a three day event in December. That's the far enough out you can plan for this. We took down the whole entire hotel. It's going to sell out. Our last one did as well. This is at the Scott hotel in Scottsdale, Arizona December 567. Three day event, 25 classes, 20 plus speakers, parties, networking professionals, real estate investors, accountants, lawyers. All together building the American dream. With 15% off, it's less than $1,000 to come for three days. I don't charge these big ass expensive tickets that some gurus do. Do not expect that I want this to be affordable for the average American to come. The main street business owner, investor, that's you and me. Number two, if you would be interested in getting to be a tax advisor for yourself or for others, just do a demo on my website. It's free. Come check it out with a real person walking you through the Main Street Tax Pro program. It's amazing. That's@marchacoler.com. you'll see the link down below. You're good to go now. I'm all yours. I just want to help you out. I love this. And this is my happy time of the week. Yeah, it's just water. No fun. Okay, we've got my producer here. Zach's going to help me out. Do we have any good questions, Zach?

Yep. So the first one coming up is from 22 video over on YouTube. And they ask. I, along with my siblings, inherited a home in California. And in 2016, the appraisal for the home is $310,000 and is worth 620K. Now I am having a problem figuring out the capital gains we would owe.

Okay, 22 video, we're going to come back to you. He's got a comment. When did you inherit the property? When did you inherit it? One year ago. Six months ago. Six years ago. And number two, how much was it worth when you inherited it? Then we'll talk. Put that in your chat. Next question.

All right, next question. Here is from Alexi over on YouTube. My wife is a transaction coordinator for various real estate transactions. Does it qualify her as a real estate professional for tax purposes?

Alexi, I need to know a answer from you. Is she a W2 employee or is she independent? Getting a 1099 answer. Type it down below on YouTube. Next question.

I'll look out for those answers for you guys. Nicole, if I build a accessory dwelling unit on my property and also a pool, can I write the pool off? If the ADU has access to it,

a portion of it. So for those that don't know what an ADU is, it's an accessory dwelling unit. So you own a home and you're going to build this little rental property off on the side. You get to depreciate the home and everything you put into it. I don't know if you're going to str it short term rental it or long term rental it. That's going to be a big factor. Now, if you put in a swimming pool for the for the ADU that only the ADU gets to use, you cannot use it at all, which I doubt is the situation. If it's only for the ADU, then you can write off 100 of the pool. But if you're going to share that pool with the tenants in the ADU, fair enough, maybe we'll write off 50% of it. The issue here is how much of it do you get to write off? I'm sorry? Let's say you write it all off. Does that mean you get to take a loss against your other income? Is it a long term rental? Are you a real estate professional? Is it a short term rental? No, they're long term tenants. Are you renting it to your business to run your business? Is it a self rental? There's a good chance. All those write offs are great, but they're going to go into a bucket and they're going to stay there until you sell your house. Now you're going to wipe out the rental income. You won't pay tax on the rental income. It'll be tax free rental income. But don't think you're going to get a big ass write off that you can use against your other income. You got to meet one of those three tests. That's the the lies that are out there. Sorry, I got to be the bad guy today. I hate this. All right, next question. Did we get an answer back?

Yes. So back to Alexi's question about the transaction coordinator. He says his wife, who is the transaction coordinator, is a 1099, works about a thousand hours per year as her main activity.

A transaction coordinator for real estate deals. I was hoping you weren't going to say that because it makes it a much more harder analysis. In the code, the IRS gives 13 occupations that can be interpreted broadly on what qualifies as a real estate professional. I don't have them in front of me. I'm going to tell you it's going to be a stretch. For example, a plumber that works on real estate does not qualify because they're not the general contractor. A broker of mortgages does. A broker of real estate does because they're but a transaction coordinator for the broker. If I had to put down 100 bucks, I'd say no. But I think you need to research it. And I would Google or look it up, make sure you get the right facts. Don't read someone's blog. Get the freaking right off the IRS website or a real resource. Hire one of my tax pros. I'll give you guys a link where you can find a tax pro. And I don't make any money when you hire a tax pro. I just train them. But you want to look at these 13 categories of real estate professional in the IRS code. But it's a good thing that they're 1099 if they're W2. All right, did we get an answer back on our inherited property?

Yes. So for 22 video. He commented that they inherited it in 2017 and the appraisal at the time was 310.

Well, I don't care what. Okay, so I'm assuming it was worth 310. Sometimes an appraisal is not what the property is really worth. Was it a county appraisal for property tax? They're never going to be accurate. But if it was a legit appraisal of 310 in 2017, then your basis starts then. So your family inherited the property in 2017, your basis is 310. Now it's worth 600, let's say 610. So let's say you were able to find someone that buys it and 10 grand in selling costs, whatever. Let's just say you net 300 grand, whatever. You've got a capital gain between 610 minus any selling costs and 310, that's going to be your gain. Now if you. Boy, I love how we got this all zoomed in. Now this is pretty cool. If you. If you. Now we're back out. All right, this new camera, mine's pretty funky, but if you depreciated the property as a rental property, then you're going to reduce the basis further. So it could be 310, it could go down to 290, 280. I don't know if you've done depreciation, but your gain is going to be between the basis of when you inherited it minus any depreciation and then the gain minus any selling costs. That's going to be your gain. And you're going to divide it amongst your siblings or whoever owns that property with you. All right, next question.

Yep, Next question is coming up from personal. They say, what about the credential requirement for these write offs? Can one be an attorney to be eligible?

A real estate attorney is not going to be a real estate professional. I'm sorry, I handle real estate deals. I'm not a real estate professional. So you're generally everybody. You're going to be a realtor, a real estate, a real estate agent or broker, a contractor, general contractor. Managing your own rentals, fixing and flipping your own rentals. You don't have to be licensed, but I'm just saying those help. But you're in the real estate occupation. A hands on real estate. Managing it, fixing it, building it, repairing it, selling it. That's a real estate professional. Real estate attorney. Transaction coordinator, probably not. Plumber? No. Electrician? No. Got to be a gc. Sorry, next question.

All right, next one is coming up from Angelo, they ask if I do gig work and my business expense lowers my income via standard mileage deduction, does that change my AGI?

If his gig income. So he has. Say that again. Gig income. So he has repeat that. That's weird.

So he does gig work and his business expense lowers his income via standard mileage deduction, is asking if that changes his AGI.

Okay everybody, let's say I make 50 grand on a W2 and then I go out and I drive Uber and I make 10 grand and I take an auto deduction mileage of 10 grand, I'm still at 50, 50,000 minus my. Then I have to add my Uber income minus Uber expenses, I'm back to 50. What I think you're asking is that if your side gig by, by the way people side gig is a business, you have a business side hustle business. So you have a side hustle business that makes money and if you wipe it all out, you're still at zero. If that side hustle loses money, it can wipe out your W2 income and lower your AGI. But you have to lose money in your business. The IRS is only going to let you do that for a couple of years, then they're going to say it's a hobby. So everybody, here's the thing. I love side hustles and side gigs. It's a gateway drug to small business ownership. You have a small business when you're a side hustle side gig. Now we want to create as many write offs as we can and wipe out that income. But it's not going to take us negative and wipe out our other income maybe for a year or two and then the IRS says nuh. But what I want you to do with that side hustle and side gig and I know many of you do it just to pay the bills, but what I'd like you to do is start living with as much frugality as possible. Take that money from the side hustle and side gig and pumping it into investments, real estate, your Roth IRA, your 401K and HSA and building wealth with that side hustle and side gig paying off debt. And I know it's tough out there and we've got to sometimes make ends meet with the side gig or side hustle. Let's double down on it and cut our expenses over here as much as possible. That's the real missing link. It's I don't want to do a side hustle to save taxes. I want to do a side hustle to create more income that could be tax free, but it's not going to wipe out my income from my day job. I hope that makes sense.

Next question, next one coming from harshall over on YouTube and they're asking a question regarding the trifecta. So is it possible to invest and in ESA account from the asset side LLC of the trifecta if they are pass through? And then he has a follow up question, if I have an S corp, can I invest in ESA via that?

Invest in the S corp or invest in the ESA esa? Well, you don't invest in an esa, you contribute to an esa. Now everybody, what? An ESA is an educational savings account which is called a Coverdell. The ESA is the old word so don't use ESA anymore. Called the Coverdell. And it's an education savings account which is cool. And let's maybe go to our whiteboard, see if we can see this here. And if we go over to our trifecta, let's do that here. What I want to do is take that. I can create an LLC owned by my ira, my esa, I can take this LLC and go buy real estate and my ESA or Coverdell could own it, my Roth could own it, my HSA could own it and I create this llc. So I love what you're saying. That's great. And if you have an S corp, you're going to take draws and then fund an esa. You can't get a write off on an S corp funding an esa. You would do that with personal money. So you take a draw out of your S Corp, fund the ESA fund your Roth, fund your 401k and then go buy real estate in that mix. That's how that would work. Great question. You can do it. You want to research, you know what, do this, go to my. Sell my directed IRA podcast. The directed IRA podcast is where we help clients understand how to buy real estate with their ESA HSA IRA 401K. You'll love it. Next question.

All right, next one coming up from Jacob over on YouTube. They're asking how do I live off and use the money if it's on the right side of the trifecta picked up. It's never made sense to me that it's just future wealth, not something I can use today.

Well, let's say you buy, you buy a rental property over here and it's going to create cash flow. You can live off that today. Live off the cash flow. Love it. I have rental property that creates cash flow. It's also growing in value. It's Also building me wealth, I might rip out the equity and buy two more rentals five years from now. I can do all sorts of things with that wealth as it grows. But the cash flow, you can live off of it. Take it all day long and in nine times out of 10, it's tax free because the depreciation is wiping it out and the mortgage interest from your tenants. I hope that. Give me a follow up question on that one if you want. Buying assets creates tax free cash flow and wealth. I want to knock out both birds with one stone. So you, you please go there, do it. That's what I'm doing.

All right, next question and we'll wrap up with these last two. So harshell over on YouTube asks, should my wife have a different trust than me?

Oh, I like this. Good question. So Herschel, is that you say it, Herschel. Herschel is married and he's saying, should we have each of us have our own trust? And that's this piece down here at the bottom. Revocable living trust. Harshal. I would say 90% of the time, no, you're going to have a joint revocable living trust. It's easier, it's more efficient. You have, you're going to, you have marital assets together. That's why that works. If you have a prenup or a post nuptial, his, hers and our kids, separate trust, that would be the, really, the only time it would make sense to have separate trusts is when you have a second marriage or a first marriage with prenups and then you want to keep things more separate. Other than that, go with a revocable living trust. And we, we do these at our law firm for clients all over the country starting at like 16, $1700, never more than 2500. It's a great deal and you can really get it done affordably.

All right, wrapping up with the last question from Jacob Padgett. He asks, if rentals are in an ira, can we touch the cash flow?

Yeah, you can touch the cash flow from a rental in an IRA once you turn 59 and a half. And what's his name?

Jacob Padgett.

Jacob. Jacob. That's a wonderful thing. Do not touch it until you're 59 and a half. Do you know 60% of Americans between age 55 and 65 have zero retirement because they wanted the cash flow? I don't know how old you are, but invest. Some people go, well, I don't want to buy real estate in my Roth IRA because I can't have the Cash flow. That's the point. Holy. 25% of Americans don't even have $1,000 in a bank account. 70% of people age 55 to 65 have $100,000 or less for retirement. That's nothing. Do you know the average Social Security check this year is about nineteen hundred dollars a month? That's it. That's almost poverty level. Please buy real estate in your Roth ira. Invest in your Roth IRA every year. Buy stock, crypto, real estate notes, anything. And don't touch the cash flow. Let it grow, let it build. Because when you're 59 and a half, you're going to be better off than 90% of America. So. So please do it. Don't what I recommend clients. Buy one rental every year in your own name. Buy one rental a year in your froth and you're going, mark, you're rich. You can do it. No, I can do it with no money down because I might partner with others. I might have a buddy over here that's got cash flow and a buddy over here that's got great credit. Let's go. I can form an LLC with my Roth IRA and a little bit of cash and two people and I can be making money. You don't have to be rich. Build wealth. You just have to learn and work your ass off and just be as smart as you can. And people, you watching this right now, I applaud you. This is huge. You're watching a podcast on how to build wealth. God bless you. There's millions of Americans out there that have no concept of this. Please keep watching podcasts like this. Be careful. Look for people out there that are of like mindset and want to invest and build together. You don't have to do it all by yourself. The American dream is real. Main Street America is going to save America. And you can do this. Keep learning. Get over to my podcast, the Main Street Business Podcast, my directed IRA podcast. Please do a demo down below on how to be a real estate and crypto and legal and tax advisor. It's called the Main Street Tax Pro program and it's affordable. And I will help you build a business as a tax advisor. People are leaving the tax industry because they don't know how to do it. I will give it to you on a silver platter. Please get engaged in this plan. It's amazing. And if you want to just get your feet wet, come to the360 event in December. Super affordable, complete tax write off to come and you're going to have a blast for three days, learning about building wealth, creating cash flow, saving taxes, protecting your assets. It's like magic. Thanks, everybody. Thanks for being here today. And I'll see you next week for another live on Thursday. And bring it. And I'll be bringing it to.