Year End Tax Strategies for Passive Investors with Special Guest Susan Geist - November 2025 Meetup

All right, welcome back to our monthly virtual meetup. This is your host, Wayne Courageous. We're going to be talking about year end tax strategies for passive investors. We just finished up our 15 minute or so breakout groups for networking and so we're going to dive in on this. So we are recording this in this presentation and so whether it's a podcast or a YouTube recording, et cetera, this will definitely be a great resource to, you know, come back on and listen. So we meet monthly the fourth Monday of every month. We don't meet in December so this will be our last meetup for this year. And then we'll actually, I take that back, we're going to move. Next month's virtual meetup is going to be on the third Monday. So there we will be having a meetup for 2025 in December. So more information to come on that. But for the most part we meet on the fourth Monday of each month, 7pm Central time for the first 15 minutes we do networking breakout. I just find that like really important. It breaks the ice and you know you can always listen to a recording and do follow up questions but taking advantage of that networking is huge. So definitely invite y' all to join us each month. Then we do our guest presentation from 7:15 to about 7:50 Central Time and then we follow up with Q and A and networking. So a little bit about myself. I'm based out of Central Texas and I started CRI partners back in 2019. I am full time at this and we have three full time team members on, you know at our company we manage about 60 million assets under management between Texas, Alabama and Louisiana. Majority of those assets are in the Texas triangle where we're based. So we, we are active lead sponsors where you know, we're running, you know, point on the asset management. So but prior to that I was working with CBRE for 16 years. So my entire life outside of high school in the Marine Corps was, has been commercial real estate. So I've been beaten up. Good times, bad times, like it's full grid, you know, resistance, resiliency, etc but you know, it's been a blessing and it's really taking good care of our family and investors which is, which is great. My background, I have an MBA at the University of North Carolina, Master of Arts in Economics from University of Oklahoma, Bachelor's of Business Administration and a certified Property manager. So, so enough about me. I want to introduce you all to Shelby who many of you have already spoken with but she is our chief of staff and runs our Investor relationship relations program to us. That was like a huge hire to have a full time person who is a point and somebody who can build relationships and help investors perspective and current investors through their investments. So she's focusing heavily on investor relationships, transparent communications, she handles all of our monthly communications communications and really, you know, is our point to you know, building relationships outside of me within the company. Before I introduce our speaker, I did want to also mention that passiveinvestorcoaching.com is a resource. It's free, it's about 5 hours of content. I recorded it about a year year or so ago and you know what I find is a lot of people join our monthly virtual meetup and it's, it's great. You know, people are joining and they're, you're getting bite sized information but sometimes you just want to like eat, eat the whole pie at once and just you know, help that learning curve. So check out passive investor coaching dot com. There's no sales pitch or anything. It's just straight up education and knowledge that hopefully will be useful to you all. So enough about us and all about Susan. So Susan is the co founder of Rising F Wealth and a passionate advocate for women building financial freedom. She retired early from her W2 job in 2023 after years of investing, including in real estate. Since 2008, Susan has helped many clients save six figure sums through powerful tax strategies and is finishing her enrolled agent IRS tax certification later this month. I've known Susan for a few years now and just know her to be a quality good person. I love that she travels a lot with her son and her husband and truly is helping others through, you know, tax savings. So I'm excited to introduce y' all to Susan. I'm gonna go ahead and stop sharing on mine and I'll turn it over to you, Susan.

All right, thank you, Wayne. Let me get mine pulled up. All right. Can you guys see that we do on our side? All right, great. So Wayne asked me to come today and talk about 2020 five year end tax moves and it's, it's a great time to talk about this, right, because we've got a new tax bill coming into play. So there are some things that are changing. So we're going to talk about some of those interesting things and also it's a, it's a really good time to review your 2025 tax situation and also think about your 2026 tax planning. Also, I wanted to mention my business partner Caitlin Muldoon is here and she can also answer Questions in the chat too, while I'm talking, if anything comes up that you don't want to save to the end. All right, so I have to give my disclaimer. Right, so this is not personal, financial or tax advice. So this is for educational purposes only. And you should always do your own due diligence and consult your appropriate professionals about your situation. All right, so before we get into the tax moves for the end of the year, I wanted to start just by talking a little bit about how income taxes work, because this will allow you to set up your tax planning in a way that is most optimized for you. And we'll look at this a little bit later in the presentation after I go through the year end tax moves, I'll show you how all this actually works in tax planning and we'll look at some examples. But first I just wanted to show you guys how it's set up so you'll understand what to look for. So the IRS divides your income into three pretty distinct income tax buckets. And so because these are distinct, oftentimes you can't combine deductions from one bucket into another bucket. And this trips a lot of people up, right, because they'll say, oh, I've got all this W2 income, but I've got all this, these real estate losses and they'll offset each other and I won't have a tax bill. Well, unfortunately, that's not how it works. Right? So the goal of good tax planning is really to find deductions that can combine with the type of income that you have in that particular bucket. All right, so if you're still working a W2 job or you have a lot of like 1099 income, you're going to want to look for deductions that are going to go against your active income. Right? And if you have like a big real estate portfolio, you're going to want to look for deductions over in your passive bucket. And so that's really the goal of optimizing your tax planning. So the first bucket here, which I've been mentioning is, is the active bucket. And so that's your active earned income, right? So that's W2 income, 1099 income, hourly income. If you're running a business that's passing through onto your own tax return on schedule C, that's going to be here in your active bucket. If you have a short term rental that you are taking material participation in and claiming as an active business, you're managing it yourself. That'll be over here in your active bucket. If you are an active real estate flipper and that's your business full time, that's typically over here in your active bucket. Also, any Roth IRA contributions and 401k withdrawals will be here because those were earned income. The portfolio bucket. This is oftentimes what people think of more as their like paper portfolio. So stock and bond sales, dividends, interest. If you're doing any owner financing with someone and you're getting interest payments, those are going to come in here in your portfolio bucket. If you're invested in private debt funds that are paying you interest, those are going to come in this bucket and then also sales of non business assets. So this would be like if you are a collectible, if you have a collectible car, right, and you're selling that, that income would come in here. If it's not like your full time business, but it's just a thing that you did and you made a bunch of money, that income would be here. And then over here in the passive bucket, we've got rental real estate, real estate, syndication income. And so all of this even though as those of us who have rentals know, right. Rental real estate is not typically very passive, but is considered passive by the irs. And so typically your rental real estate income will be over here in, in your passive bucket. Unless you're a real estate professional. But yeah, syndication income. So these passive syndications, like with crei, that's typically over here in your passive bucket. Also passive business and rental income that you get a K1 for. So if you've invested in a business, but it's, you know, you're just a limited partner, a lot of times it'll come in here in this, this passive bucket. And if you have a short term rental, but you're using a property manager, that's also over here in the passive bucket. So just wanted to kind of lay that out there and show you how that works for tax planning. So this is essentially what you're looking for when you're doing your tax planning. So you've got these three discrete buckets and then you've got deductions that pair with each bucket and you're wanting to pair as much as possible to get your taxable income as low as possible. And so like I said, we'll come back to this at the end and I'll show you some examples of how this works and how you can get your tax bill down to zero even if you're making hundreds of thousands of dollars. But first, let's talk about some of these year end tax moves for 2025. So number one, and this is one that you might not have actually heard about yet. So the new tax bill, the one big beautiful bill act, OBA I'll just call it, the new tax bill, actually changed the deductions for charitable giving, but they don't go into effect until 2026, which is actually unusual. Most of the bill is going to going into effect in 2025, but these aren't going into effect until 2026. So it's opening up kind of a unique opportunity to look at your charitable giving between 2025 and 2026. So right now, if you take the standard deduction on your tax return, you cannot deduct charitable donations. This is changing in 2026. So in 2026 there is a new charitable giving tax deduction Even if you take the standard deduction, it's $1,000 if you file single, $2,000 if you are filing joint. So you may, if you typically take the standard deduction and you're like me and you're, you know, at the end of the year and you're like, oh crap, I didn't make any of my charitable donations this year. Let me donate a bunch of stuff. You might want to wait until January and make your donations then. And then you can take this deduction on your 2026 taxes. Now if you typically itemize and you do deduct your charitable donations, you may want to front load those this year because the amount that you can deduct is going down next year. So they've capped it. The first 0.5% of your AGI will not be deductible anymore. And if you're in the 37% tax bracket, you can only get credit up to the 35% tax bracket now on those. So if you typically give a lot in charitable donations, you may want to go ahead and maybe do both years up front here in November or December so you can get more of that write off. So it's definitely something to think about. And then the second one, bundling the salt deduction. So the salt cap, this is the state and local tax cap, it was $10,000, which here in Texas was not particularly useful for those of us who have to pay pretty significant property taxes. So if you're in a state that has high property taxes like Texas, this new expansion of the salt cap can be huge for saving on saving on taxes. So this is for people who itemize, right? You can itemize and take a credit for your State and local taxes. The new salt cap if you're single is $20,000. If you're filing jointly is $40,000. So in my county, we are allowed to pay our property taxes. So I paid last year's property taxes in January of this year because I had a feeling the SALT cap was going to be lifted. So I went ahead and paid in January of this year. I can go ahead and pay this year's taxes in December and take credit on my taxes for both of those payments. Right, Because I've paid them both in 2025. I paid my 2024 taxes in January of 2025, and I've paid my 2025 taxes in December. Right. And so my property taxes are $21,000 a year. And so that pushes me all the way up to above that $40,000 cap. But that's way above the standard deduction now. Right. And so it would make sense for me to itemize at that point. And so then I get a much bigger deduction. And I can also at that point take a mortgage, the charitable donations, any like medical expenses that are above the threshold. I can do all sorts of itemizing at that point. Right. And so this can be a really good strategy every other year, right? So to bundle these property taxes or whatever state and local taxes you have together that you can pay in the same year and then take the standard deduction the next year, then bundle again and itemize and keep doing that until the bill changes again and the whole situation is different. But this can be a really good strategy for being able to take a pretty high deduction now above the standard deduction. All right? And bonus depreciation, you guys have probably heard that it is now back to 100% again. And so this, this is something that would apply to CRIS deals and a lot of real estate deals. So typically, and the way it has been is, is bonus depreciation was on the decline, right? So they had set it up at the beginning of the year, it was actually down to 40%. And so this new bill, if you've bought a property after I think it's January 19th of 2025, you're now eligible for 100% bonus depreciation again. So this allows you to take accelerated depreciation up front on your properties. So in my case, I was able to take it a few years ago on some short term rentals that I bought. They were cabins. And so I did a cost segregation. And you can either do like a DIY cost segregation. I use KBKG online it's about 500 dol. Or you can do an engineering cost segregation, which is thousands of dollars. Typically you don't need those unless you have like a big apartment building. But what it does is it segregates out different aspects of your property that are going to depreciate on different schedules. So you guys are probably familiar with the standard depreciation schedule. So for residential real estate it's 27 and a half years, and for commercial properties it's 39 years. So you take the building value, not the land value, just the building value, and you would divide it by either 27 and a half or 39. But what accelerated depreciation does and the cost segregation is it says, okay, well there's things in this property that aren't actually going to last that long. Right. So let's pull those out and depreciate them on a faster schedule. And so the cost segregation is going to pull out things that would depreciate on a 5 year, 7 year and 15 year old schedule. And so that would be like your appliances, some of your flooring, ceiling fans, things like that, landscaping. There's a lot of things that wouldn't actually last, you know, 30 or 40 years, right? And so you pull those out. And so at that point, once you've done the cost segregation, you can take that accelerated depreciation on those schedules, the five, seven and 15 year schedules. But what bonus depreciation allows you to do is combine all those together, those accelerated items, and take them all as a deduction in year one. So on my cabins when I did that, they were short term rental cabins, so they had a lot of stuff in them, right? A lot of furniture, appliances. I had curtains, all sorts of things. And I was able to take I think 160,000 of depreciation in the first year on one of them and like 120,000 in depreciation on the other one. So this can be a really powerful tool because you get that write off right up front. So if you're offsetting other income, this can be great for kicking that tax bill down the road. So if you have, if you've sold another property and you've got a big gain coming your way that you're going to have to pay taxes on, buying another property and doing bonus depreciation can be a great way to kind of roll that gain and kick that can down the road. And you don't have to pay a tax bill yet because you've got this big loss to offset it through Depreciation. So this can be great. And this is a really good tool when you're investing even in passive investments, right? Because you can keep doing this. So if you've invested in an apartment complex and then, you know, they hold it for a few years, they're exiting, you're going to have a big gain. Well, you can roll some of that money into another investment that's going to take bonus depreciation and keep rolling those gains. And you just, your pile of money just keeps getting bigger and bigger. And so at that point, you either have the choice of exiting at some point and paying the tax bill, or what most people do is they die and then that passes on to their heirs at the stepped up cost basis and no one ever has to pay the tax bill. So that, that can be a really great tool for building generational wealth for your family, right, to just keep rolling and rolling and rolling that tax bill out. All right. And then the fourth thing is to look at your withholding now before the end of the year, right? Make sure that what's been withheld from your paycheck is the right amount or you've paid the quarterly taxes you needed to pay. Also look at what's been withheld for retirement, what you've put into retirement. You're not overshooting the limit or way undershooting what you wanted to put in. This is a really good thing to do before April 15, right? So you don't get hit with, with a big surprise. And a lot of people, especially couples, will end up with a tax surprise, right? Because they've set their withholding for their personal salary. Usually it'll be set, they'll just set it by default, right. Based on whatever they personally are making without considering what the spouse is making. And then they'll be in a much lower tax bracket on their tax payments than what actually their tax bill is. Right? And so that's definitely something to consider. Like, are you having enough withheld if there you actually have two people working or say you have your W2 job and a bunch of rentals that you're making money off of or a side hustle that you're making money off of. So now's a good time to look at all that and just make sure everything's on track before the end of the year. All right? And then another good thing to do is to finalize your Roth IRA conversions. So these actually have to be done before December 31st. A lot of people don't realize this because you can contribute to a Roth IRA and your traditional IRA until April 15th. But if you're doing a Roth conversion, it has to be done by December 31st. So if you're thinking about that, if you're moving money from a traditional IRA to a Roth ira, you've got to go ahead and get that done. And they're kind of. There are two schools of thought, actually, about when you should do a Roth IRA from a tax perspective, a Roth IRA conversion from a tax perspective. So there are people who feel like you should go ahead and do it all at the beginning of the year. So you can go ahead and get that rolled over and let it grow tax free for the rest of the year, which I think is great. Or there are people who do what I do and wait until the end of the year to do it, because I don't know exactly how much I'm going to want to convert. Right. So I'm kind of waiting to see where my income is settling out. Because you have to pay taxes, right, on that money that, that you're converting from a traditional IRA to a Roth ira. And so I don't want that to bump me up into some huge, you know, tax bracket. And I also don't want it to ruin my, my ACA number that I'm using, you know, to get ACA Affordable Care act subsidies. Right. So I don't want to, I don't want to cause a lot of problems. Right. So I tend to wait on most of my Roth conversion and do it towards the end of the year. But you definitely want to get it done. And I would say don't wait until December 31, because the paperwork usually takes a little while to go through. So probably mid December, I would say go ahead and get that done. All right. Another thing, of course, is if you're having to take RMDs from either your own retirement account or a beneficiary retirement account, you've inherited a retirement account, you need to go ahead and do that because the penalties are pretty high if you don't take those before the end of the year. All right. Another thing to look at is tax loss harvesting, right? So if you have capital gains this year that you can offset with losses, great time to do that. Also, you can do $3,000 of capital losses and apply it towards your active income. So we were looking at those buckets. So typically your tax loss harvesting is going to be offsetting things in that middle bucket, the portfolio bucket. But you can take $3,000 of losses and apply it to that red bucket, the active Income bucket. So this is a really good time to start looking at those numbers. So with tax loss harvesting, typically you're just generating a paper loss, right? So you're selling typically stocks that have a loss and you're buying right back into the market. You're not buying the exact same thing because that's a wash sale and you're not allowed to do that. But you can buy things that are close. And so you still have the same market exposure, but you've created a paper loss, right, that now you can use on your taxes. So a lot of people will go back and forth between like AN S&P 500 index fund, so like Voo, Voo and a total stock market index fund Vti. And they'll go back and forth doing tax loss harvesting between those two. And you're allowed to do that. They're very similar, but because they track different indices, you're, it doesn't count as a wash sale. And so that's, that's a good example of, of what you can do and still have the same exposure, but you've generated this loss on paper that now you can use to reduce your tax bill. All right? And I'm sure a lot of us are dealing with health insurance right now. It's open season for most people. So a big tax advantage is being able to participate in a health savings account. So choosing a health insurance plan that's eligible for a health savings account can save you a lot of money. And so for 2026, this is new, all bronze and catastrophic Affordable Care act plans are now eligible to enroll in a health savings account. And so this means that you can put in a tax free contribution of $4,400 if you're single or $8,750 if you're part of a family in 2026. And this does come off of your adjusted gross income, your AGI. So it's an above the line deduction. So this gets your AGI down for tax purposes and you put this money in tax free and it grows tax free. And then you can take it out tax free to use on medical expenses. So this, this is probably the best tax advantaged account that's out there, right? Even better than an IRA or a 401k. All right, and the last one is go ahead and start your 2026 tax planning, right? Go ahead and start thinking about what your income sources are going to be for next year, how much you think you'll make. Go ahead and start planning your contributions to your tax advantaged accounts. And start looking at what deductions might make sense for you. Does it make sense to, you know, max out your 401k? Does it make sense to purchase a rental property? Does it make sense to plan on doing some tax loss harvesting? So to just kind of lay out, and I do it in a spreadsheet, I lay out essentially my three buckets and I say, okay, well, I think I'm going to have this much coming in from, you know, dividends and maybe this from some business income, this from the rentals. And, you know, it's, it's not going to be exact at the beginning, but I have a pretty good idea of, of what my taxes are going to look like next year. And especially if you're applying for an Affordable Care act health care plan, you have to estimate your AGI, right, that you're going to have next year. So you already probably are doing this whether you realize it or not, right? Because you have to give them a number of what you think your income is going to be. So this is a great time to start looking at it and then be ready next year so you can kind of hit the ground running. All right, so let's look at some tax planning examples. So I've talked a lot about these buckets, right? So I wanted to show you guys some examples. And I'm also going to incorporate some of the things that we've just talked about so I can show you how they actually flow through the tax planning and reduce the tax bill. All right, so this is an example of a couple paying 9,000 in tax on 240,000 of income. So typically, the tax that you would have to pay on that level of income would be probably 30 to 40,000. Oopsie Daisy. Hold on. There we go. So you can look at how everything is set up here. So they have pretty good incomes, right? So they have 200,000 coming in from their W2 jobs. They're going ahead and maxing out. Each of them is maxing out their 401k, and they're also maxing out a family HSA. And here is where you can see what we talked about with the salt bundling here in the active bucket, right? So they're taking advantage of this and they're going to itemize for this year. And so they're taking the max $40,000 state and local tax deduction. They've also got mortgage interest, and they made a $10,000 donation to charity. And so because they're itemizing, they get to deduct all of Those things from their active income. And so that gets them down from originally 200,000 of active income to about 79,000 over in the portfolio bucket, they have $5,000 coming in from qualified dividends. And then they had $20,000 in long term capital gains, stock sales. And so they went in and did some tax loss harvesting and generated a $20,000 paper loss. That's not a real loss because they still have that exposure to the market, but it's generated on paper now to offset that. And so that leaves them with just $5,000 in portfolio income, which will put them in the 0% capital gains and dividends, qualified dividends tax rate. So they're not actually paying any tax on that $5,000 over here in the syndications, right? So in the passive bucket, they invested in a syndication, they got $15,000 in distributions for from their syndication. And that syndicator took bonus depreciation. And so they had actually more than a $15,000 loss, but they'll carry over the rest of it. So that's a $0 passive income bucket, right? And so they have no income tax to pay on that. And so now what would have been this huge tax bill is now only about $9,000. And, you know, if they have kids, they get another tax credit off of the tax bill. So there's the child tax credit. And because it's a credit, right, you get it off the tax bill. It's not a deduction. And so each child is worth, I think, 2,200 now. So if they have two kids, they can cut this tax bill in half. Even from this, they have more kids, they could get down to zero, right? So this is how all this stuff starts working, right? And I think a lot of times, you know, you hear all these terms thrown around, but it's really hard to kind of visualize how all this actually gets set up in your income buckets, right? What does this actually look like when you're setting up a tax portfolio? And so I think this is really helpful to see. Okay, well, here's this bucket. Here's what's coming in and here's what's coming out. And so let me show you another example here. All right, so here's an example of $0 in tax on 465,000 in income. So that's a lot of income to pay, no taxes on, right? So in this case, and this is a pretty common situation with real estate investors, one spouse will continue working a W2 job, and the other spouse will get real est estate Professional status. So you have to have, you know, the 750 hours in real estate. It has to be the primary thing you're doing. Typically you've got to manage rentals or be a real estate agent. There's different things that qualify, right? So in this case, one spouse was continuing to work their W2 job, making 200,000 a year. They also had a big rental portfolio that the other spouse was managing. And because she was managing the whole portfolio, she was able to take real estate professional status. And what this does is this is going to take all of those, all that rental and real estate income that you typically would have in your passive bucket. And we're going to dump it into the active bucket because that makes the real estate an active business at that point, right? So when you claim the real estate professional status reps, you're saying, this is my business, this is my active business. This is what I do most of the time. I want it considered an active business. And so that dumps all of that passive real estate into the red active bucket, which is really helpful if you've got a lot of real estate losses, you've got depreciation and you're trying to offset some active income from, say, your spouse's W2 job, right? So in this case, they were able to do that. They were able to dump all that income, rental income over here into the active bucket. And then they also did a Roth IRA conversion that they were able to do because their tax bill got so low. So they didn't do that up front. They did that later on when we were like, okay, well, you're 35,000 in the hole. Let's go ahead and do a Roth IRA conversion and you can move that money tax free. So the spouse that was still working the W2 job maxed out the 401k. They maxed out Health Savings Account, also put some money into a limited expense fsa. So that is for dental and vision. Some employers will offer those. They got their standard deduction. And then they also had, like I mentioned, these rental losses. So these are expenses. This is depreciation. And it was depreciation from that year and depreciation that they were carrying over. And then they also had invested in syndications that were throwing off bonus depreciation that year. So they were able to take a huge deduction from that too. And so if you claim real estate professional status, something you can do on your taxes is do a grouping election and you can group all of your real estate investments into that business, even the Syndications, which are technically passive, you can group them and say, this is part of my real estate business and you can move all those two into this bucket. So at that point, they're down to $0. They're paying 0% taxes on this active income. They had $10,000 in dividends, qualified dividends coming in. So that's going to be in the 0% tax rate bracket. And so this also gave them the opportunity to do some tax gain harvesting, which is interesting, right? It's the opposite of tax loss harvesting. So this is when you go in and you sell your stocks that have grown and you go ahead and harvest those gains at a lower tax rate. So they knew that they were going to be in the 0% tax bracket for long term capital gains and dividends. So that tax bracket goes up to currently a little over $96,000 for married filing jointly. So they went ahead and maxed most of that out. Right. And they harvested those gains. And with gains, when you're doing tax gain harvesting, you can buy exactly the same thing. Again, there's not a wash sale rule like there is otherwise with tax loss harvesting. So if you've got a bunch of gains from say Amazon or Google or Nvidia, you can sell that and just buy right back in. And so they harvested these huge gains that they had and didn't have to pay any taxes on them. Right. That resets their cost bases higher now. And we're here in the passive bucket. We don't have anything left because we've moved it all. So they ended up paying $0 in tax on almost half a million dollars of income. And the last example I'll show this is what a lot of people who are early retired end up doing or retired. So this is a case when you no longer have active income coming in, so you're not working, it'll be two anymore. You're living off of your portfolio and your passive investments at this point. So in this case, this again was a couple. And so they wanted to really push up that qualified dividend tax bracket, right, Like I mentioned, the zero percent tax bracket, which is a huge tax savings to take advantage of. So they knew that they would be paying 0% up to 96,700 in qualified dividends and long term capital gains. But they also had two children, right, that were going to give them a tax credit at the end of $4,400. And so we knew that we could generate some taxes and then offset that with the tax credit. So we went ahead and pushed that up to $126,000. And so they had the 0% up to 96,700 and then 15% tax rate between 96,700 and the 126. And then that was the 4,400 tax bill, which was offset by the two kids. And then they had the standard deduction they knew they'd be able to take. So we went ahead and used that on a Roth IRA conversion. So they were able to convert 31,500, which is the standard deduction right now, for that money. And so that was pretty amazing, right? So they originally earned that money, didn't pay taxes on it. They put it in their 401k, rolled it to a traditional IRA without paying taxes. Now they've rolled it to a Roth IRA without paying taxes. And now it can just grow tax free forever, right? So that money was never taxed. If you can find a way to do these Roth IRA conversions when you're in a 0% tax bracket, it's pretty amazing. And then in the passive bucket, they had a bunch of real estate income coming in. They invested in, you know, syndications and rentals, but then they also had all these losses, right, because some of them took bonus depreciation. I think as you invest more in real estate, especially in these syndications, you'll find that you tend to accumulate passive carryover losses. So me personally, I have over half a million dollars of passive carryover losses right now. So I don't pay taxes on any of my real estate income coming in because it's just absorbed by these losses. And so when I get to a point where I have something exiting or I've used most of those losses, what I'll do is invest again, right, in something else that's going to take bonus depreciation upfront and I'll repopulate those losses. And so I can continue, hopefully not paying taxes on that real estate income. And so this is really, I think, something that a lot of people aspire to is setting up a portfolio like this where you can be generating a lot of dividends and long term capital gains and be in that 0% tax bracket in your portfolio. And then you, your real estate, you can have enough losses. And a lot of them are paper losses, right? Depreciation is a paper loss offsetting whatever income you have coming in. So you're not paying any taxes on that. And then you can do these Roth conversions using your standard deduction every year. So you're moving this money tax free. And so you can have this portfolio that's really sustaining you. Like, this is not a shabby income, right? Like this person is not eating ramen noodles for dinner every night. This is a good income, but they're, they're paying $0 in taxes on it. And this also will help grow your wealth a lot faster too, right? Because I mean, normally they would be paying over a hundred thousand dollars in taxes on this amount of income, but without that tax bill, I mean, it will, their wealth is just going to skyrocket, right? Because they're not having that drag on their income all the time. And so I think this is a good example of where you can get to with your portfolio if you start thinking about the tax planning, right? And how can you set up your portfolio to eventually get to this point? All right, so in closing, I did want to mention don't let the tax tail wag the dog. This is something that really bothers me. With a lot of tax professionals. You'll hear them throw out all these things, especially at the end of the year. They're like, oh, you need to go buy a heavy vehicle because you can write it off for your business, or you need to go invest in oil and gas because, you know, you can write a lot of that off of your active income. And so people end up making bad financial moves to save a little bit on taxes. And, and that typically doesn't work out very well because I'll see people spend, you know, $150,000 on a Rivian that they don't need, right, to save $10,000 on their taxes. And that typically is not a great financial move. Same with oil and gas, right? You'll make a $100,000 investment to save, you know, 20,000 on your taxes and then lose the whole investment, right? So it's a big net negative overall. And I've seen that happen to a lot of people. And so a big thing is to really think about your overall long term wealth building plan and how your tax strategy fits in with that. Right? So start off by thinking about what do I want my life to look like? Like, what are my goals? Do I want to end up in that last tax situation, right. That I presented just a minute ago, where I'm not having to work a W2 job, but I have plenty of money coming in and I've got this really good tax strategy, right. I think a lot of it is figuring out what you want your life to look like and how you can control your spending and saving to get there, what you should invest in to make the situation that you are aiming to have. And then how can you finesse your tax strategy around all of that? Right? And so all the pieces kind of fit together. I get, you know, a lot of people will come to me and say, oh, well, I just want to do, you know, a one hour tax strategy session with you. And that's really challenging because, you know, I, I have no idea where they're trying to go with their life, right? Does it make sense for them to get into real estate? Do they like real estate? Do they want to start a business? You know, are they interested in investing in stocks? Or do they want to stay at their W2 forever? Like, there's so many questions around that, right? And so I think that's why it's really important for people to take control of their own tax planning, right? And really think about where they want to go and then either work with someone or start figuring it out yourself, right? Like how, how does this fit in with a tax strategy? How can I set my buck buckets up so this will start optimizing my taxes? Right? And I think education is the most important part of all this. And a lot of times when you go to a cpa, they're just running your numbers, right? Like, you just bring them your numbers, they put it in their tax software and they send your form in. They are not doing tax planning for you, right? They're not investing in real estate for you. They're not contributing to your 401k. They're not doing tax loss harvesting for you. Like, that's really on you, right? To start thinking about and figuring out, okay, these are the things I need to be doing so I can bring these really good numbers to my cpa, right? So I think it's really empowering too, right. To have that education and to really start getting your head around how to set up a good tax strategy. All right, so if you want to learn more, Caitlin and I, we run Rising from Wealth. And so we're all about empowering people, especially women, around their finances and their taxes and really what they want to see for their lives, right? And we have a weekly newsletter that's free and we talk about a lot of these concepts there. We talk about finances and taxes. And we've got a blog and you can feel free to reach out. I put my email here if you have any questions. And yeah, I just want to say thanks for having me. I love talking taxes. I know it can be kind of dry topic sometimes, but I think getting your head around the tax buckets like, that was life changing for me when I figured that out. And so I hope that maybe this is life changing for some of you guys too.

Susan, I'm very visual and your buckets like it. It just drilled in my mind. So great job. For those that may be listening to this in a PO in a podcast format in the future, do you mind reading out your email so, you know, somebody listening to it could reach out.

So it's Susan risingfimwealth.com and it's rising f e m-m m e wealth.com and our website is risingfemwealth.com so Susan and.

Caitlin, thank you all for, for both joining. So we have some time, if you're good with it, to answer any questions, whether you want to put them in the chat box or just unmute yourself. Maybe we spend 10 minutes or so at most on any questions and then definitely reach out to Susan and Caitlin afterwards. So any, any questions or, you know, you don't have to. I know we're recording still, so if you want to put them in the chat box and I'll, and I'll read it or, or we'll call it a night. Whatever works for the group.

Wayne, will you. You may have stated this, but are you going to send out a copy of the recording?

Absolutely, yes. We will add you to our email list as well, if you're not already, and then you'll have the recording. We also put it on our YouTube as well and so you'll definitely have access to it.

I have a question. So for the end of year, like tax planning, Susan, you'd mentioned that you wait till the end of the year to do your rod conversion so that you can figure out if it's going to push you into the next tax bracket. Is there any software that you'd recommend for people to use that's available to everyday users to do like that? Tax planning? There are a couple of things online you can look up tax calculators and they'll help you estimate what your tax bill is going to be. And those are free. Also, you can use whatever. If you do your own taxes like you're using TurboTax, you can go ahead and start running your numbers in TurboTax and do kind of like a projection right for yourself. If you have a cpa, a lot of times you can pay them to do a projection for you. You have to pay extra. It's usually not included with your typical tax filing fee. But they can also run a projection for you, something that's helpful. You know, I mentioned the, the tax bracket thing. A lot of people, a question I get asked a lot is, what's the right amount of Roth conversion to do, right? And so I, I'm a big fan of the 24 tax bracket. It's a really large tax bracket, and the next one up is 32%. And so there's a big jump after that. And so if you're in the 24 tax, 24% tax bracket, that can be a really good one to try to max out with your Roth conversion. And just don't go over it, right? And just go ahead and max that out at the 24%. And so that's, that's something I tell a lot of people when they're asking, well, how do I even use these tax brackets, right? And for me, I mean, I'm limited by my Affordable Care Act AGI that I've estimated, right? So I don't want to go over that, especially starting next year, right? Because there's a cliff, the 400% FPL cliff is back. And so if you go over that number, you lose your entire ACA subsidy. For the past few years, they've had it like a gradual descent past that number. Now the cliff is back. And this is one of the reasons the government was shut down, right? They were trying to do away with the cliff again to help people out, but now the cliff is back. And so if you go over that number, you're going to lose your whole subsidy. And so that's a good reason for me to wait until the end of the year because I really don't want to go over that number and have to Pay, you know, two or $3,000 a month in premiums. Right.

So we also got a question. It says, how do you handle a loss on a syndication? I just found out that a deal was foreclosed on and I lost all equity in the investment.

All right, so this is an interesting question, right, because it can be handled in different ways. It depends on what your cost basis is right now in that deal. So if you were in the deal and they took a lot of bonus depreciation, right, Your cost basis could be close to zero already in that deal, and you're not actually going to realize a loss. And you could even have a phantom gain. And this has happened to me before where I actually had a tax bill and a loss. So that could be the case. And you can look at your last K1, and, you know, there's the section on the left where it shows you what your percentage is in the deal and it'll show you what your remaining cost basis is in that deal. So there you could be in that situation. Or if that's not the case, if your cost basis is still, say you put 100,000 in and your cost basis is still there, they never paid anything out. It's a really interesting situation because with these assets, so These are called 1231 assets and they have a really interesting property where if you have a gain, it's classified as a capital gain. If you have a loss, it's it re categorizes itself into an ordinary loss and you can use it against W2 income. You can move to your active bucket, which is really an incredible property of, of this, these 1231 assets. And I'm sure it was some congressman deciding to pass this. So it can, it actually can be a really powerful tool. I mean, it's terrible to have a loss. Right. But it may actually be a good tax tool, sort of a silver lining, I guess, if you still have some of that cost basis left in the deal.

Great question. Any other questions? What I'm going to do if not. I'll pause there. Any other questions? Okay, wait, was somebody else going to go? No, go ahead. We have just a few few minutes left, so definitely ask the question and we'll go from there. Thanks, James. Sure. Hey, Susan. So maybe I just don't know enough about. I know that the difference between the Roth and the traditional is basically your pre tax and post tax and all that, but this is the first time I'm hearing about the conversion. So why would somebody choose to not like right now I'm kind of split between both in terms of my contributions. Why would someone choose to convert them at a later time instead of just having them split that? Right.

So a lot of people can't contribute to a Roth directly because their income is too high. Right. So that's the main reason is people are trying to get their money into a Roth, but they're not eligible to contribute to a Roth. And so what a lot of people will do is they will do the traditional, like regular backdoor Roth, and they will take the amount that they were going to contribute to an ira. Right. They'll put it in their traditional ira and in the same year they're going to roll that to a Roth. And that is your standard backdoor Roth conversion. Right. And that's different from just a regular Roth conversion where you're just taking the money that you have in a traditional IRA and just rolling it so this will be maxed out at, you know, the $7,500 limit that you can put in an IRA, and you'll go ahead and roll that in the same year to a Roth ira. And this is how a lot of people with higher incomes are contributing to a Roth every year is they're doing that because they have to pay taxes. Their income is so high they have to pay taxes on that traditional IRA contribution. So they've already paid taxes on it. Right. And they're going to go ahead and roll it into a Roth so they don't have to be taxed on the growth. And that makes sense for a lot of people, too, because otherwise. Right. I mean, what, what they would be doing typically with that money is just taking it out. They've paid taxes on it and putting it in a brokerage account. Right. So why not take it out, put it in an account that's going to grow, but then you don't have to pay taxes on the growth. Right. So it's a little bit better in that way. So a lot of people will just do that straight back to a Roth with their, with their contract, their IRA contribution every year. Or you can do just the regular Roth conversion, which is what I do, where I have just my traditional IRA and I'm just moving whatever amount of money I need every year to the Roth and paying taxes on it, or not paying taxes on it, as it may be.

Man, this is so much information. Especially everybody on this call has a different, you know, tax need. Right. Whether you're active or you're W2, or you're like me and just all in on syndication. So, but I do, I think the important thing is, is like so many people, and I was there, too, where I just thought I just needed a cpa. And you hit it right on, where a lot of the CPAs, like, they're taking your numbers and putting it through the system and submitting. So having a tax strategist along with the cpa, sometimes it's the same group, same company, but definitely reach out to Susan and Caitlin and, you know, or, you know, whoever your strategist is, and this is the time to start thinking through it. Not, you know, February, March of next year. So, Susan, thank you so much for your time. And Kaylin, thank you for joining as well. We will send the recording. Our next meetup will be Monday, December 15th, and we're going to be talking about 2026 real estate market outlook for passive investors. So thank you all for, for joining us, and thank you again, Susan and Caitlin for your time. Such great information.

Thank you. Thanks, Wayne. Thanks for having us. Yeah. Have a great night.