What we can learn from Trump's and Biden's Tax Returns | Main Street Business Podcast

Welcome, everyone, to the Main Street Business Podcast with Matt Sorenson and Mark Kohler. We're excited to talk to you today about, I think, you know, very newsworthy topic and one that actually has a lot of content that, while it's in the news, can actually use today for yourself and in your business and tax planning.

Yeah, you know, I'm just tired. I feel like Tommy Lee Jones in the Fugitive when he finally caught Harrison Ford in the car and he was just like, I'm tired. I lost so much sleep over the Tax Cuts and Jobs act, then the CARES act, then the PPP. And last night I'm up till 2 in the morning reading Joe Biden's and Donald Trump's tax, I want to say tax returns, but those are still somewhat elusive. But I'm tired. But this is exciting and we are. No, no politics here.

Right? And you didn't even catch the Fugitive. You didn't even catch the Fugitive and you're tired.

Yeah, that's right. Just think me up one of those donuts with those sprinkly things on it. Come on, let's go.

Yeah, that's a great movie, by the way. And that is a classic Tommy Lee Jones.

It's like almost 25 years old. I told my kids we need to watch the Fugitive.

They're like, what?

Anyway, okay, but everybody, politics aside, rhetoric aside, no puffery, we're not going to give our personal comments on New York Times, Wall Street Journal, cnn, none of that. We're just going to tell you the real strategy and we're going to get right to it. What are the real tax strategies that any of you could use and what can we learn from on these tax returns?

Yeah, yeah, we've heard a lot about. Yeah, we've heard a lot from Trump, of course, on what you on, you know, people asking big questions. How does he pay $750 in tax? Well, there's a lot of great tax planning in it, and Trump himself is. That's because I'm smart. It's smart to not pay taxes. And I think for everyone here, the point of this is as a business owner, we want to pay as little taxes as possible. That's the number one cost of a small business owner, is paying taxes. All right, we want to decrease costs, right? You want to take more money home. You want to pay your employees more, you want to grow your business. I don't care what it is. But taxes are a cost to your business, so we want to minimize that. Now, if you don't, then just stop now, if you're like, actually, I don't. So, okay, cool. I get it. Just stop now. But we're gonna go through this. And there's also stuff you can learn from Joe Biden. Some just really common but good tax planning that Joe Biden's done. Yeah.

And there's articles out there that talk about Biden's aggressiveness on his tax returns, some things that people didn't realize, that he's made $13 million in the two years before he ran for office and what he paid in taxes. Okay, fine. And Matt knows I love political commentary, but Matt told me, don't go there, Mark. And I said, I won't. And so you don't know if I'm going to you if I would beat up Trump or beat up Biden. I'm not going to go there. We're just going to talk strategy. But we are going to assume this. And Matt just said it. If you have a side hustle, if you have a small business, if you sell something on ebay, if you drive Uber, you have a rental property, you're a small business owner. We want strategies. I meet with people that are Democrats and Republicans every day that want to save taxes, and that's okay. And now if you think saving taxes is evil, and I'm Matthew McConaughey, and, you know, I'm a. Some sort of criminal defense lawyer that should, you know, be drugged through the streets, fine. But most people kind of like tax lawyers. They like us saving money. So.

And can I. Can I steal one of your lines that you told me already? Okay. Which I think is really important at the outset. This is. I just want to give. Given some Marc J. Kohler credits.

You know, I'm excited. I don't know what line.

Yeah. Is when we're going through the strategies before this, Mark and I. One of the things I think Mark said that's really critical, the front end, is the strategies Trump's doing is the same that any business owner could do. There's just more zeros behind it. So for those of you that are small business owners, don't think this. These are tax strategies that the big business gets to do or that Trump gets to do, you know, because he's done some wizardry. Okay. No, these are the same things with just more zeros on it that good tax planning you can do on a small business in a size.

Absolutely. I didn't learn anything new from President Trump's or former Vice President Biden's tax returns. I was like, okay, yep, that's good.

Cool.

Ooh, little aggressive there. Like that. Ooh, nice. I mean, first, things I may not have done with one of their returns, but I mean, if I'm learning something from their tax returns when they hit the web, I'm not that great a tax advisor, so I'm proud to say whatever. I didn't learn anything new. But I want to share with you some of the things they're doing and add a few zeros and it sounds really bad or really good, depending on what aisle you're on. But we're not going to go there. We're just going to tell you. So let's get to it. Okay. Number one, Matt, I'm going to just throw it out. I'm going to just get it out there and you can do some color commentary and I will as well on one of them. Okay. One thing that Trump has done, and I teach at conferences, I was on a webinar with a thousand realtors and brokers three days ago, taught the same thing. Trump's doing it. I want to use rental real estate losses. I want to use real estate depreciation against my other earned income. So if I'm a dentist and I have a dental office, I want to write off the depreciation on my building against my dental income. If I'm a contractor, I want to have a duplex and take depreciation off the duplex against my construction income. That's very, very common. And whether it's a resort in Key Largo worth, you know, $500 million, or it's a little duplex down the street worth $150,000, the concept's the same. It's freaking awesome. I want tax free cash flow. I want to build equity and. And I want write offs. That's a strategy that Donald Trump is using to a T. Good or bad, Matt, what do you think? Good or bad? You like it?

Yeah, it's awesome because it's what I do. I'm doing the same thing. Mark's doing the same thing. We have our business income, we have our rental properties and income. Okay. And I have multiple rental properties. So the other thing you can do is, and this might be strategy two, I don't want to get too far ahead, but netting losses against the properties themselves. Right. So, like, you know, being Trump can have, you know, Trump stakes and Trump suits and Trump ties and the Apprentice and all these things that he's generating income for. And he's got this skyscraper, you know, with a huge loss on it from real estate that has A depreciation expense, which depreciation just every Stan understands when you buy a building, let's say it's worth $100 million, you get to write off the cost of that building every year. So the $100 million, even though Trump didn't come out of pocket for $100 million, he might have got a loan for a big piece of it. He's getting a huge expense of the piece of that cost, that building over time he can take and use to offset other income he has. So it's like this expense that you didn't really incur. That's very common.

Now, interestingly enough, Joe Biden on his 2017 tax return, which is right here in front of me. And yes, Joe Biden has been more forthright on his disclosure of tax returns to some degree. And we're going to talk about privacy. He disclosed and it's right here on the web. I've got 17, 18 and 19 right here in front of me. That's cool. I do not have his corporate returns. I do not have his S Corp return. I do not know what write offs he took on his corporate returns and he has chosen not to disclose those. And that's okay. My clients, we're going to come to privacy as a strategy. Both Joe Biden and Donald Trump are using privacy techniques to hide where their assets are and what write offs they take. If I don't want that stuff out there, I suspect many of you don't. Now we're going to come to privacy in a minute. But Joe Biden had a rental property in 2017 up in Delaware. He collected rent on that. What was interesting is he did not take depreciation. He took mortgage interest and real estate taxes and a couple other small write offs. But that's not good tax strategy there. If you're going to collect rent, you might as well depreciate it. Then in 1819 he didn't claim any rent. So I don't know, I think he's converted it probably into a second home, which is fine. But again, we don't have all the story on some of these things. But here's the bottom line. If you come to us and want tax advice, we're going to suggest that you look at rental real estate, commercial single family homes, duplexes, low income housing, whatever fits your fancy. Buy some real estate over time as you and we're going to come to leverage and wealth. But rental property produces tax free write offs. Sorry, tax free cash flow with great write offs. Meanwhile, you're building Equity, which is number two, we're coming to. So Donald Trump has done that with a $500 million property. You might do that with a $50,000 property. The concept's the same, the strategy is the same. It's very, very wise. It's wonderful. And you don't have to be super rich to do it.

Yeah. Let me hit one of the strategies, if I could. This might be out of order on your list. That goes with. This is one of the big news pieces we've heard on Trump is he's got 400 million in loans, you know, that he's. That he's guaranteed and he's got huge loans. 400 million. And we can't have a president that's beholden 400 million to banks and creditors. Okay, that's smart.

And that's normal.

And that's normal. What does he have behind those loans? More than 400 million in real estate assets. In many ways, that's a wealth building strategy, an asset protection strategy, and a tax strategy. Let me explain that. Why would I do that? Okay. If I. If. Let's say Trump has real estate worth $800 million.

Okay.

We don't know that, that the assets have not been disclosed, but let's just presume that 800 million worth of those

skyrises are worth a lot of money. Those golf courses worth a lot of money. Everybody knows our. Lot of.

A lot of money.

Yeah, everybody knows a ski resort and a golf course is more. The real estate's more valuable than the operation.

Exactly, exactly.

Why do you think he's buying golf courses? People.

Yeah, not for the operations or the real estate. Okay, that's right.

Yeah.

We've had. We've had a client that did real estate development at a ski resort. And it's like they don't open the ski resort to make money operating the ski resort. They open the ski resort to make money selling all the real estate around the ski resort.

It's the story of Aspen. Yeah, the story of Aspen.

All right, okay. So it's a great tax strategy because, see, when that property goes up in value, Trump could sell it. Right. But if he sells it, he's going to pay capital gains tax. Now, we could do a 1031 exchange and roll it into another property. But how can he get money out of that cash out paying tax? By taking debt. So he's just stripping out the equity on the property that's worth way more, getting all that debt that he can use to do whatever the heck he wants with. And you pay no Tax. You know, if you have an $800,000 rental property or portfolio, you can take out $400,000 of loans. That's smart. Why sell it and pay capital gains tax? Strip out the equity.

If they're good property, Matt, I love it. That was number two. Number one and two go together because number one is buy rental property, use depreciation a close second, and they're intertwined is use leverage to build equity in property, even if the cash flow's not great. We're building future wealth. Now, this is where a lot of Americans see the political rhetoric going. Debt is bad. Because we have this really great guy out there named Dave Ramsey, and Dave Ramsey says, get out of debt. Debt is evil. Debt is bad. And for a lot of people, it is. It can be just as addictive as alcohol or smoking or something bad. If you can't control your drinking, don't drink. If you can't control your debt, don't go into debt. Now, is debt in of itself bad?

No.

If I can have highly valuable real estate with some debt on it and use that leverage to get a better rate of return and save taxes, that's what wealthy people do. And they're not reckless. They're not bad. If you come to meet one of our tax lawyers over the phone, we do consults every day with clients around the country. This is what we're teaching. Just with fewer zeros, it's okay. So be careful what you hear again in the media saying that that's bad when that's a great tax strategy. Not trying to defend Trump as a person or his crazy tweets. I'm not trying to do that. I'm just saying I have very, very strong Democratic clients. I mean, clients that are Democrats, that are very wealthy, and they want good tax strategies. Yeah, that's number two.

All right, what's number three?

Number three.

Drumroll.

Let's go to Joe Biden. President Joe. Vice President Joe Biden. Someone sent me some hate mail going, you're saying President Joe Biden to subliminal. Get people to vote for him? No, no, I just. Vice president, former vice president, presidential candidate Joe Biden, which. Which is a lot. Siri was like, what are you saying? Okay, President, Vice President Joe Biden, former vice president. So hard.

We know who you're talking about.

Don't worry about that. Biden has two S corporations. After he was out of office as vice president, he immediately hit the speaking and book writing circuit, which is what every presidential, every former president, former vice president, former cabinet member, everybody does this, they leave Washington and hit the speaking circuit, write a book or they go into private companies as a consultant or a political lobbyist and that's more used to that. Nothing bad about that. Joe Biden did that. That's great.

That's what you get. You get a cash in. You go to your high profile public service and you go cash in.

Yeah. He spent 40 years in D.C. and since 1973, if he goes out and gets a book deal for 5 million, God bless you, that's great. Go do it now. Where do you funnel that money? If you were a client of mine and Matt's and our firm, the tax attorneys in our office would meet with you and say, let's set up an S corporation. S as in small square. And let's run all that revenue through your S corp. Spin off a little salary for you. So you pay your FICA and then everything else passes through. It's called a pass through entity. Joe Biden worked it to A T in 17 and 18. Approximately $10 million in revenue those two years each and salaries of about 750 grand. Huge savings. And it's been reported all through the web. Just go look at it. He saved close to 500 grand in the F word. FICA and Medicare and Obamacare. He got out of 500 grand in taxes. I can show you the numbers, I could run through them, but it's right here. About 500 grand. That's great. That's a great strategy. Matt, do you have an S corp?

I have an S corp. I did the exact same thing. I mean, you know, me and Joe, we're just doing the same tax planning. We have different CPAs, but you know, same tax money. And that is what every small business owner should be doing. And this is the entity structure we want every small business owner to be in. You've got consulting income or speaking income or you're selling a product or getting commission. We don't care what it is. Run that through an S corp. Be like Joe, okay? Or if you hate him, you know, at least learn this strategy from him.

Politics aside.

Yeah, politics aside. And you're going to save. So like let's say you're the, the business owner makes 150 grand a year. By doing an S corp strategy, you're going to save probably 10,000 bucks a year at least. At 150 grand, which I think is a lot of small business owners, self employed people. If you're just being a sole proprietor or you're an llc, just going on schedule C on Your personal return. Simple. By switching to an S Corp, you're going to save ten grand every year. Joe Biden did it. If he was just a sole proprietor and ran this through on schedule C on his personal return, he would have sent the IRS $500,000 more. He did tax planning.

And we can calculate this down to the penny because he shared with us his personal returns that show his W2 and his K1. That's what his S Corp spitting out we do not have. Now, this is where I'm not trying to be political. I will just say, Matt was like, mark, be careful. New York Times apparently has Donald Trump's 16 and 17 tax return. They do not have his 18 and 19, and they have not shared those with us. I cannot look at Donald Trump's personal tax return and see how his 500 entities, which we're gonna come to in a minute, funnels down into his personal return. I would suspect he has an S corp. I would suspect he's taking some salary. And that is on some of the information New York Times is leaking. And to their credit, they've got done a lot of work. Someone's given them some inside information. We may see that news story elaborate come out in the future. Who shared that? That's not a good thing. But New York Times is going to piece and part that out and milk it till election day, and they can do that. That's up to them. I'm not going to get political on that. But we don't have a full picture of Joe Biden's S Corp, nor do we have a full picture of President Trump's personal return. So we're just taking what we're given and talking about some killer strategies. Matt, did I get through that okay?

I thought. I thought you did. Great.

Yeah.

Way to really thread the needle on that, you know, just try not to make one person upset, you know. Okay, well, I think the other thing that's just, you go to strategy.

Next strategy, you got one you want to throw out. So S Corp is our strategy. That's very common. Every dentist, doctor, engineer, lawyer, accountant, contractor, plumber, electrician, public speaker, book writer, developer. They're all S corporations.

Yeah.

Joe Biden did the same. Now, one political not. This is not too political. But I will say this. In a lot of the articles, they pointed out that Hillary Clinton, Barry Sanders and others have not used the S Corp. They feel like they're kind of a hypocrite if they use that S Corp because they're out there saying, you need to pay Your fair share in self employment tax. So I'm not going to do the S Corp. Joe Biden chose to do the S Corp. So. And that. But that's what they said. Did I get too political again?

No. It's so funny. I think you said Barry Sanders, and I was like, why would Barry Sanders, the NFL football player for the Lions, be in this conversation? Then I was like, bernie Sanders. That's what you meant.

I'm looking forward to the weekend and some football, I guess. All right, Freudian slip there. Bernie Sanders does not have an S Corp, as far as we know.

All right, I want to roll back the video here and see what my face was. And you said Barry Sanders. I was like,

I'm sorry.

I want to hit talk about entities for a second. I want to talk about some losses stuff. Let's talk about entities, because that came up. That's in Joe Biden's. He's using an S corporation. Okay. There's liability protection in using an S corporation. Okay? He's at a speaking event, something happens, whatever, they sue him there. They can't sue him. They got a sue with US corporation. All has been made of. Trump always got 400 entities or whatever. Right? Was the number of entities that are like, he's got like 400, 500, over 500. And that's crazy. Okay. Why would he be doing that? Well, liability protection to privacy. All right. And there could be some tax planning in there. We don't know. Because Trump's business returns are not disclosed and no one has the tax returns like Mark said, except the New York Times right now. So they're dripping this out, but that's fine. What's wrong with having business entities? Those business entities employ a lot of people. They're providing asset protection to them that all of us can use. So it's not like he's using something that you as a small business owner, can't use. Okay. Use an entity for your rental property. Use an entity for your operational business. We want to separate those two things. It's just a general planning strategy. If you have an operating business where you sell goods or services, that's a separate entity than the entity that you might hold, like a rental property. Okay? You want to separate those two things out. You're going to have that end up having two entities. That's okay. Something wrong with that.

And it's sad that there's a lot of rhetoric out there or people in social media today just on fire saying, this is ridiculous. Why would Trump need 500 entities and then some of the Republicans commentators are saying, well, Joe Biden's got an S corp and he's not telling us what's in there either. So politics aside, we love, we don't have to overdo it. If you're worth millions or billions or whatever, is Donald Trump very well on paper? When you fair market value all this real estate of his, he probably is. You might need four or five hundred entities. I know he's got at least 20 in regards to his jets and planes and helicopters and all that. But when it comes to structuring, it's okay. And if you come to us as a Democrat or Republican and you've got, you're building wealth and you want to save taxes and you want privacy, you want to build corporate credit, you want to make sure your address is not out there to everybody and no one can look at what you might be making. And only your banker or those who you might get a loan from would see that. And IRS is very, very strict with privacy. So our accountants and lawyers, we're going to hold that sacred. And that's okay. That's a strategy. So privacy is a chapter in one of my books here. And s Corps and LLCs are a great way to do that. Both Joe Biden and Donald Trump are using structures for privacy. And that's a great strategy. Yeah, no problem. Okay. So, Matt, privacy, that was number four that we went on. Okay, I'm going to go to number protection, let's say. You would say what?

Privacy and asset protection.

Okay.

Ooh.

Okay. What's your privacy and asset protection in the same bucket? Okay, now I'm going to throw out second homes again. I don't have the ability or the to, you know, really drill down on Joe and Jill Biden's Delaware home that was on the return as a rental and now it's not. I would suspect it's a second home on the return.

It's called the cottage. Yeah, that's what they call it on the schedule.

And then the, the Donald Trump one is like the estate or the compound, but again, no loaded language here. They have a second home. I think a lot of you watching here might like to have a second home someday. Near grandma, near the kids, near the ocean, near the mountains, a ranch, a cabin. I don't think that's bad. I think the American dream is really exciting for a lot of people, Democrat or Republican. And tax strategies come along with the second home. We are hearing from the New York Times that Donald Trump took a lot of write offs against his Second home. And I would suspect he has rental income on that. He's maybe Airbnb that out. That's a very common strategy of our clients. So Matt and I talked about doing it together. We haven't yet. We talk about it. We both like this one area. I won't say where it is. And we're like, let's get a little rental property there. Let's Airbnb it out when it's possible. If we break even, great. It's a rental property. We can both go there up to 14 days a year and have personal use. And the days we go there and work on it are considered business trips. Very common. Great strategy. And I would suspect Joe Biden and Donald Trump and millions of another of other Americans out there that have a vacation rental, use it personally once in a while and it is a great tax write off. And that's what we're seeing on both these returns.

Yeah, yeah. And there's, that's a wealth building strategy too. There's some personal use and enjoyment out of it and there's some good tax benefits to it with the expenses to the property and depreciation. Again. So, again, so when you're thinking of a tax strategy, this is one of the things I want to, I think the New York Times is missing in some of this and is, and some of the media is this. A lot of this has to do with wealth buildings, particularly for Trump, you know, because Trump has a lot of assets behind what he's doing on Biden's return. Biden's return is more income. Right. He has a couple of rental on there that it looks like was converted to a second home. But it's mostly like speaking fees and book fees and money. You know, it's not asset based. Trump is more asset based with properties and the things that he's known for, you know, the buildings and all that stuff and the hotels. So that's, that's more asset based, which gives him a lot of these depreciation expenses and also allows him to take the loans against those properties that create cash for him that he doesn't pay tax on.

Yes. Now here's an interesting piece that we have to extrapolate. I'm going to, we're going to lean on our amazing co host here, Matt Sorenson. And this is where being this is kind of like forensic accounting, which is a career. I mean that's what accountants do at the FBI and the CIA and the nsa. They look at tax returns and bank transfers and try to piece together what's going on here. So I'm going to piece together something along here that's interesting. Joe Biden has IRA pension annuity income. Now he didn't take a deduction. I'm looking at his 2018 return right here. He did not take a deduction for an ira, which he could not because he makes too much money. But he may be doing a backdoor Roth IRA that's very doable. That would not show up on a return. And the tax free income from a Roth IRA would not show up on a return. Matt, wasn't there a candidate that used that strategy that kind of came out in some disclosures a year previously?

Yeah, it's funny. Every, every prince presidential cycle there's something you can learn from the president's taxes. And it's one of these weird things where we just like show us your taxes, you know, and you can see from Romney, Mitt Romney's presidential returns, which by the way, let me, I am going to say one political thing on the show today. I love the Romney Obama debates. Those debates were so good. Those guys were, they were sharp. They were both really smart, respectful, stand up guys. Totally different than Trump Biden, it was like a 180. Oh my gosh. Oh. So anyways, but Romney, if you remember him back, you know, running the Republican candidate for president against Obama on Obama's reelection. And it came out, I think the Wall Street Journal did the reporting on that one that he had an IRA with reported up to $100 million in it. And it's like, how can you have $100 million in an IRA? You can only put six grand a year into it. Right. Over 50 and put in seven grand a year. Well, you get $100 million by investing it and growing it. And so that's the self directed topic that Mark and I talk a lot about. And we have a separate podcast, by the way, the Directed IRA podcast, which you're gonna be able to find soon. It's already up but we're start getting that out with more episodes. So where we teach that and we're always helping clients learn how they can use their retirement account to invest in alternative assets, rental properties, small businesses, note lending, private companies, startups, all that type of stuff. So really cool strategy that came out on Romney's returns was kind of daily work we do here actually at directed IRA.

Yep. And we would not see a solo 401k deduction on the returns that Joe Biden has released nor on President Trump's because we don't have the full picture

W2 or the company return.

Yeah, but we as clients. I'm sorry, when we're helping clients, a very, very common strategy is to talk about funding retirement accounts. And that could be through a SEP, a backdoor Roth, a 401K. And I'm looking through what is called the Joe Biden and this is on his financial disclosures on his website. It's called the OGE form 278E as an echo. And this is a disclosure that he provided. And I'm thumbing through his retirement accounts and he talks about speaking engagement, assets, income and retirement accounts and he talks about his speaking gigs. But I just. Okay, now just a second, Matt. I'm going to let you talk. I see a 457 plan, American funds 50,000 to 100. I'm not seeing a specific IRA yet. And you really have to comb through these things. It's kind of tricky, but if I come across it. But the strategy we want to take from this for all of you listening is funding a Roth IRA, funding a SEP, funding a 401K, very, very common. Joe Biden is getting self employment, I'm sorry, retirement income already. He is the oldest candidate that's ever ran for president. So obviously he's already collecting Social Security too, which is interesting. But he's using life insurance as a strategy. We see whole life insurance policies on his disclosure. That's a good strategy that wealthy clients will implement as a whole life strategy. So

let's talk about losses though, and prior year losses carrying forward. Mark, wasn't that a big part on Trump and you know, yes, talk about that strategy because that's gotten a lot of Press on the 750 bucks. How does he pay $750? Certainly he had more income than that. How does he end up only paying $750 in taxes?

Well, Donald Trump only paid $750 in taxes because of these other offsetting losses that we presume are going to be very real estate heavy off operational losses like a golf course, even though it's worth 20 times the interrelationship there. And smart business owners don't always run to cash flow. They also run to equity and the value of properties. We already talked about that. But also if you have losses in a given year, let's talk 2020. How many of you watching this webinar or listening, watching this video or listening to the podcast have had a crappy year? And I get a tinge of emotion when I say that we meet with a lot of clients that are doing. They're having an incredible year due to the COVID equation and other people that have lost everything due to the COVID equation. And some people have said to us, well, I've got so many losses this year, I'm not even going to need to file. And they say this, not choking up in very tearful conversations, they're saying, I can't even track all my losses. And we go, whoa, whoa, whoa. Track those losses. Because under the CARES act, if you have a big loss in 2020, you're able to go back into prior years and get a refund, which is what Trump is fighting with the IRS right now. Yeah, but in the New York Times article, ooh, the Trump, you know, sorry, I'm getting political, but the New York Times is making this big deal out of a refund that he went and claimed due to passive loss. Carry forwards and carry backs. Well, people, if you have a loss this year in your business, I want you to eke out every possible write off, write it down, and I'm going to go request a refund. Just like Donald Trump did in a bad year that he had, guess what? Back when the real estate crash occurred, that's when he went and got his refund. I want you to do the same thing. It's just his has a few more zeros involved. And guess what? The IRS is not going to roll over and just give you a check for $20 million or $20,000 or $200,000. You might get audited. And that's what Trump's going through. Is that a strategy? Yes. Is it okay? Yes. I want the same thing to happen to you. I pray that the same thing happens to my clients, that they get a big refund and they get audited and they walk away with a check from the irs. That's what he's doing.

Yeah. So there's certain tax laws that have passed, what, just to reiterate what you're saying, that allow you to take losses you had in your business or rental real estate, let's say, and take it back to prior years. So you can go back and be like, actually, I've already filed 2018 and 2018 was a good year. Ended up paying a lot of tax. You mean I can take a loss in 2020 and go back to 18 and amend. Yes, in, in certain situations you can. That was something that happened in the CARES act. That's allowing you to do that now. It's going to be a tax planning strategy coming up in planning right now, but also happened on the Obama administration. Right. As they came in after the financial crisis, which is what Trump did, they allowed Kerry to take losses and carry them back to prior years to get a refund. That's exactly what he did. Now, you can always carry forward losses.

So.

So for those of you new business owners that are like, I just started up, I'm not making money this year. Covid's terrible. I shouldn't be tracking my expenses. Right. I don't even worry about it until I make money.

No.

Track every penny of that, because all these losses you may have in 2020, if 2021, you crush it and you make a lot of money, we're going to carry forward that loss and help offset that income. All right? And that's how you get the taxable income down to end up paying a $750 tax bill. And it's fair. Why would that not be unfair? Right. It makes sense. I've lost money. I get to carry a four. All those expenses. Yeah.

And, you know, maybe this is considered a political comment, but think of how many employees are in the Trump Organization. And some of those businesses that he's running that are giving jobs to people do have a loss, and he's taking the risk on that. So that this golf course that's worth 500 million or 20 million down the road, even though it has losses now, is employing a greenskeeper somewhere. There's a greenskeeper out there right now mowing a lawn, that's got a job. And I think we forget that in this. We think of Trump as this big mogul. These are all assets in a bank sitting somewhere. But there's people at the Trump Tower in New York cleaning a room today. There's a caterer making breakfast or lunch for someone. And so. And it takes a lot of work and a lot of risk to put together a project like that. And if he is trying to build equity for the future, you want to kind of reward that. And I know it's hard to swallow when you say that, because some people want to villainize any capitalist, not just Trump. And I beg of you to make sure you always look at the big picture, because I want my clients to hire employees. I want them to build wealth. Democrats come to me and say. And Republicans come to me and say, mark, how do I build wealth? How do I do this? How do the rich people do it? And they're like, oh, I'm okay. I'm giving people jobs. I'm developing areas that were dilapidated. I'm remodeling a home that was vacant. Now there's renters in there. Is that a bad thing? And I would love Joe Biden to take his Delaware rental and make sure it's got Airbnb for families that want to go tour D.C. for a weekend.

Boom.

Sorry, Matt. Okay, I've only got one more, Matt.

Okay, let's hit it. Is that a good one?

Yeah, I think so. This is the reason why I pause is it borders on business strategy more than tax strategy. And that is Donald Trump did something a lot of business, successful business owners would like to do, and that is make money on his brand and his image and his likeness. And that's exactly what just Mark Cuban has done on Shark Tank. If he wasn't on Shark Tank, millions of people would not even know who he was. But he's got a value to his name. Now, as other. The other commentators on there. I'm just picking on him for a minute. And so Donald Trump, with his name on business ventures, said, you know what? I'm going to do the Apprentice show. I'm going to do a beauty pageant. I'm going to do this. I'm going to get out there and see if I can make name off my brand or image. People write books. Joe Biden's writing a book. That's great. So the point that I want to make there is diversification as a small business owner and making money when you're asleep at night, there's nothing better. Well, there's a few things that are better, but that's.

Yeah, that's pretty good.

Yeah, it's pretty good. But, Matt, I mean, you meet with clients that are diversifying their IRAs, that are diversifying their 401ks, they're making money in ways they never thought they could. Do we turn that down?

Yeah, I mean, you've earned that. You've done the hard work to build that reputation and put yourself out there. Why not capitalize on it? And a lot of good business people do. A lot of people who become leaders in their industry do that. And some of them write the books and send the proceeds to charity, you know, or whatever. You know, it's like you're Bill Gates and you're in the public sphere. You know, you write the book. It's like everything goes to charity. Okay? But there's nothing wrong with profiting from that and your name and likeness. In fact, it'd be unfair if someone else got a profit from it. You know, isn't every celebrity an actor and, you know, a lot of performer, that's what they're making money off of is their Persona and who they are and their image and stuff. So I think it's totally fine. And I think, and that's, you know, it's interesting because I've heard the New York Times basically say, you know, Donald Trump's made money by pretending to be a business person like the Apprentice, and he's lost money by actually being a business person. And I think what they're missing there is they're missing the assets. The big part of the equation. And I think one, to keep your eye on the ball from any tax planning, good business planning in your business is accumulate assets. Income comes and goes. And you can see that on Trump's returns and all the reporting that's happened, he's up, he's down, you know, but what's constant is those assets and those assets stay when you're not working. They build value.

Yeah. I'll give another practical example that, and this is not defending Trump, this is defending the strategy that I think is very relevant and evident with what we're seeing in the New York Times report that for some reason gets a bad twist. Let's think of, I'm going to go to a dentist again. We all go to the dentist. I've got several successful dentists that run a practice, live a great Life, fund their 401k, pay off their home, buy a little rental property, they retire. Very common. And you could put chiropractor there, restaurant owner, dentist, engineer, whatever. The dentists that take it to the next level in this example are ones that start partnering with other practices. They start buying buildings and rent them to other dentists or practitioners. And that real estate they're building up while being a dentist with their spouse, they might be considered a real estate professional as a couple. Because now not only is he or she a dentist, the stay at home husband or wife is running the real estate empire that's coinciding with the dental business that's going to generate great write offs where their income tax return several years might look like they're a very unsuccessful dentist, when in reality they're very successful as a dentist. But this real estate empire that's taking on its legs of its own, meanwhile is growing in value and spitting out write offs. So when, and I would be, I don't think any of us would like our tax returns or financial life under a microscope. The American public and millions of people. Would you? I mean, I'd be devastated. That would be so embarrassing. Because if I'm doing it right, I want my Business to look like it's losing money. Meanwhile, I'm building up wealth that I'll be able to retire on in the future. That's the equation tax attorneys build upon every day. Yeah. Add a few zeros. Look at it.

Also, it's also the strategy that if you're working hard, you're running your business, your self employment, whatever it is, is that incoming. You have to be there every day for it. But eventually, at the end of the day, you bought the properties, you've got the mortgages, you've paid them down. Now at the end of day, you've got assets. That's what you live on. That's what real retirement is. You've got the retirement accounts, of course you're mashing out. You can be buying the real estate or doing what other things too. But for a lot of these business owners, owning your building, owning the properties, buying others.

Yeah. And I to be a little commentary here, we're almost done. Is this is where I reconcile the Dave Ramsey teaching with college students that I'm mentoring right now and my own children and business owners that come to me that are in debt and they're like, because when you're a small business owner, it's easy to get in debt when things are up and down. You rely on credit cards or a credit line and all sudden in a year like Covid, you're upside down. And we might say debt is bad or my business was bad. Well, sometimes the economy just knocks us off our feet and we got to pick ourselves up, dust ourselves off and look at what really is going on. And so I love what Dave Ramsey teaches and I've had his daughter on our show. We write very similar columns back and forth. I don't know if he knows I exist. That's fine. I've asked be on his show before. I've asked him to be on my show. But I want you to know, getting out of debt, paying off your home, funding your retirement account, having a great job and retiring on Social Security and a little money in the bank, that's the dream millions of people needed to hear. And Dave Ramsey saved their life. But there's another segment of the public that does that and they're like, Mark, I lived Ramsey for three years. I'm out of debt. I felt like I've had this huge financial education take place in my life, but I want to do more. I'd like to buy a piece of real estate. I'd like to use leverage carefully to create cash flow. I'd like to Start a business. Is that bad? No. And so I think we picked up where Dave Ramsey leaves off sometimes. And not that he's doing a bad job, it's just there's a target market for his audience that people are desperate to hear. There's a target market that our clients are desperate to hear about. And, and that's how to build wealth cautiously and carefully and save taxes at the same time.

Yeah, yeah, yeah. You've got to. You know, Trump's an interesting person on this and that's been coming out in the documents because remember, he's filed bankruptcy before. Trump's had companies, I think companies filed bankruptcy is probably a better way to say, I don't know if he personally did. So, you know, you can, this debt can be this weapon, you know, but it can hurt you too. And so it can be very valuable if you know how to use it right. Or a tool maybe is a better word, but that tool can hurt you. And so you just gotta, if you use it right, you know, I think Ramsey's just like, it's not a tool. It's always gonna hurt you. Don't even play with it, don't even touch it. It's gonna hurt you. But when we're talking about asset backed things, real property, again, would be the classic example of Trump and everyone out there. I mean, one of the ways people build wealth in the US Business ownership, real estate and paper assets and the lottery things. Anyway, so I think there's so much to learn from this and hopefully you guys learn some tips or two about what real business owners are doing and what these strategies that Trump and Biden have done themselves are two presidential candidates and something you can put into your own life and your own business and be better at saving taxes and building wealth.

And for anybody that was able to stick through this, an hour of talking tax strategy. And we hope this goes viral in any way possible, please share it with your friends and family. We're here every week talking about Main Street America. This cute little picture behind me, Main Street America. And I'm not kidding, my Main street looks just like that. My four wheeler's parked right out on the street right there. And I'm going to drive away here in a minute. But we want to save taxes, we want to pay our fair share, we want to treat people respectfully and kindly. And if I can say anything to anybody that's listening, we all need to just relax a little. I feel bad that our presidential debate was so antagonistic. It was embarrassing for both sides of the party, I think both parties. And so I know there's a lot of people ranting and raving out there about maybe tax returns and wealth in general. I want all of you, whether you're a Republican, Democrat, Independent, to have a little piece of your American dream and pay your fair share in taxes, build a little wealth and just relax a little bit financially. It's hard out there. And let's not politicize success. And that's my final words. Matt, do you have anything? Is that okay to say?

I second the motion. Meeting's adjourned.

See everybody next week. Spread the word. See y.