Recent Blog Posts

  • Do I Need a Living Trust?- What You Need to Know
    Millions of Americans die each year without any type of estate plan in place, and this forces their families into the court system, where they experience huge expenses with probate and significant time delays when they would rather be mourning. Nobody wants to think about dying, but being prepared for a disaster is important in every instance, and dying with your assets disorganized could be just that: a disaster. In fact, more than 50 percent of Americans don’t even have a will or any type of estate plan whatsoever. So is a ‘Will’ the simple answer for everyone, certainly not. Many need to take a little extra time and money to implement a revocable living trust (RLT) as part of a coordinated estate plan.  It could your family thousands of dollars later and tons of time. Truth be told, there are a number of reasons for an RLT, and far ... Read more
  • Why a Series LLC May be Right for You
    Most business owners understand the concept and importance of isolating assets or ventures that may expose them to personal liability. As a result, business owners have historically had to pay to create separate Limited Liability Companies (“LLCs”) for each property, asset, or business venture. Various states have tried to resolve the problem of having multiple entities and the administrative cost it creates by enacting statutes to create “Series LLC” laws. When structured properly and respected, a Series LLC gives its members limited personal liability from claims that arise from within the entity and charging order protection from claims arising outside of the entity, just like a normal LLC. What makes a Series LLC different is its ability to provide for the establishment of designated “series” or “mini-LLCs” within the original LLC (“Parent LLC”).  Each series of the Parent LLC can have its own specified property, assets, investment objective, or ... Read more
  • When to Use a Benefit Corp
    By Mark J. Kohler, CPA, Attorney   These new types of corporations have been around for twelve years and are now recognized in twelve states throughout the country. The first state in the Union to pass this new legislation was Maryland in April 2010, and as of January 2019, Arizona, California, Colorado, Delaware, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and Washington D.C. have all passed laws recognizing Benefit Corporations.   Recently I have had more and more clients asking about these types of companies and if they are a good choice for them in their business. I am still somewhat skeptical and caution clients to not get caught up in the hype.   The main purpose of this type of company is to provide a sort of ‘public awareness’ that your company is different and better than ... Read more
  • How to be Successful with Short-Term Rentals
    Short-term rentals are a topic that is just buzzing with excitement and opportunity these days! Many real estate investors typically devoted to year-long lease agreements are seeing bigger profits partnering with companies like Airbnb and Vrbo. But as it is will all investments, higher earnings also come with higher risks. There are several strategies that will allow you to take advantage of the short-term rental opportunity and avoid the land mines in the process, so let’s get into the details. What are some of the benefits? Short-term rentals provide a completely different set of benefits compared to those of long-term rentals. Now remember this doesn’t mean one is better than the other, in fact, having a portfolio of different types of rentals is always advisable. Your income should increase. Lots of my clients have been able to double or triple their rental income with short-term rentals. For example, an average ... Read more
  • 10 Steps to Purchasing Your Next Rental Property
    As many of you know, our law AND accounting firm recommend to ALL of our clients to purchase at least one rental property a year for tax planning and wealth building benefits. It doesn’t have to be big, but at least something. Thus, I have created these “10 Steps to Purchasing Your Next Rental” as a guide for many of our clients that are real estate investors. I hope this may even help some of you that are seasoned investors. HERE is my AMAZING, yet SIMPLE list: Make a Goal. Set a deadline to purchase your first rental. Stay committed. Let friends and family know your goal. Write it down and set short deadlines to be looking at property and making decisions, rather than just ‘buy my first or next rental by X date’. Set manageable goals to get you to closing. Start Shopping. Just get out and start looking at rentals. Engage ... Read more
  • Why Entrepreneurs Need to Keep Their Day Jobs- At Least for Awhile.
    I know this may sound a little odd coming from a man that has been advocating small business since age 8. I was out there on the street trying to talk my little brother into helping me with my lemonade stand and various other hair brain schemes even through high school. However, one thing I’ve learned all these years in business myself, and also consulting thousands of clients, is that although there can be amazing rewards and benefits of entrepreneurship, it is still is an ‘up and down’ financially volatile roller coaster ride…especially in the beginning. Thus, whenever I have a new client call me on the phone with unbridled exuberance tell me they are marching into their boss’s office tomorrow to quit their job and quote the song made famous by Johnny Paycheck telling their boss to ‘shove it’…I tell my client to slow down and hold on for ... Read more
  • How to Hide Your Home Address from the Public
    Privacy is NOT asset protection…however Privacy can enhance Asset Protection. In fact for example, protecting your home from a lawsuit and protecting your identity from the public are two very different things. To tackle this difficult topic of privacy protection, earlier this year we had international privacy expert JJ Luna join our podcast and it was phenomenal. Listen here. I also used JJ’s book as a starting point and inspiration to dedicate an entire chapter to Privacy in my book, “The Tax and Legal Playbook”. I have absolutely loved JJ’s book, “How to be Invisible”, now in it’s 3rd edition. For those with a serious interest in privacy protection, I highly recommend his book. Over the years, I have had many experiences with clients who have shared traumatic ‘violations of privacy’ and I have been encouraged to continue studying, speaking and writing on this topic. One the more SHOCKING EXAMPLE’S ... Read more
  • Opportunity Zones when Selling Real Estate can Save you Thousands
    Opportunity Zones (OZ) investments were created under the recent passage of the Tax Cuts and Jobs Act, and designed to essentially help states jumpstart communities that have historically struggled economically. In theory, they have a two prong benefit; help revitalize dilapidated areas and stimulate the economy with development and jobs. If you remember Hurricane Katrina and the devastation it caused in the Gulf States in 2005, the government passed Go Zone legislation that played a major role in helping rebuild and renew areas impacted by the Hurricane. The government hopes for the same results with OZ. In a nutshell, this tax incentive allows investors to reduce taxable gains and possibly obtain tax-free growth if they re-invest capital gains into real estate within designated Opportunity Zones. The strategy can produce incredible benefits, but the window of opportunity is relatively short (especially if you consider the full development cycle), so you won’t ... Read more
  • Avoiding problems with the IRS and the “Dirty Dozen”
    All of us want to save taxes, but at the same time stay out of trouble with the IRS. In fact, I would hope we would even have a higher standard of being honest and ethical in the manner in which we all report our income, deductions and file our tax returns. We live in an amazing country. Yes, it has its’ problems. But I don’t think many of us would trade our opportunities and freedom for citizenship in a lot of other countries. So, let’s be honest on our tax returns. Let’s pay our fair share – but not a cent more! Here are the realities of what can happen if you push the envelope too far and get greedy in trying to save taxes by sacrificing your morals and standards. Below are the top fraudulent practices the IRS is targeting known as the “Dirty Dozen.” But first, let’s ... Read more
  • Pay Your Taxes by Credit Card and Score Some Points!
    How many of you build, track and utilize credit card points for personal benefit?  It’s a great tax strategy (credit card point redemption benefits are currently tax-free), AND it’s an added bonus when you have to pay one of the most dreaded bills of the year. No matter how you file your income tax return—by mailing a paper copy or electronically—you can pay your taxes using a major credit card or a debit card online. Individuals can make these payments 24 hours a day, seven days a week, using certain cards as long as they follow the proper procedure. There are actually several advantages when turning to a credit card to pay your tax bill: Delay paying the actual cash for your taxes Hopefully get a lower interest rate than the IRS would give you if you were on a payment plan Avoid any penalties if you don’t have the ... Read more
  • What to do if You Can’t Pay Your Taxes
    Many of us at some point in our lifetime are going to experience at least one year where we are faced with a daunting tax bill. Even the most careful and successful people can have a problem paying their taxes due to an unforeseen situation. First, don’t stress…well, maybe a little. But there are things you can AND need to do that will lessen the pain, and frankly minimize any collateral damage. Next, always, and I mean always, file your personal and business tax returns by the final deadline (after extensions). Even if you can’t pay.  If you don’t file your tax return, it only makes things worse! The penalties for ‘Not Filing’ are far worse than for ‘Not paying’. Third, if you can, include as much of a partial payment as possible, and consider borrowing the funds for payment. As discussed below, just filing without full payment can ... Read more
  • 199A Deduction for Rental Real Estate Investors
    Unless you’ve been hiking through the Amazon jungle for the past year, you have most certainly heard about the Tax Cuts and Jobs Act (effective January 1, 2018). Furthermore, if you own a small business or own real estate, the topic of the 199A or 20% pass-through deduction has crossed your mind, or at least your email. This little gem called the 199A Pass Through is a 20% deduction off the bottom line profit of your business, but also comes with a lot of twists and turns and complexity. In fact, many don’t realize it also applies to rental property. That’s right! If you’re a landlord and have net rental income, you may qualify for one of the best tax benefits from the TCJA tax reform. Rental Real Estate under the New Law When the 199A was first passed, tax professionals didn’t think it would apply to passive income from ... Read more
  • The Domestic Asset Protection Trust may be Your most Effective Asset Protection
    The Domestic Asset Protection Trust is the most cutting edge and most affordable asset protection tool in America today. However, they aren’t statutorily recognized in each state, and because of this one has to be careful when and how to use this specialized trust. They are most commonly known as the DAPT and act as a type of trust that can give you significant asset protection in any type of lawsuit. They were created as one of the best ways to protect a personal residence from creditors, particularly in a situation where there is a great deal of equity in the home. The Basics The DAPT is a self-settled trust in which an independent trustee controls and/or distributes trust assets to the beneficiaries.  This allows the person who created the trust (known as the “settlor” or “trustor”), to reap the dual benefits of: (1) asset protection from outside creditors; and (2) ... Read more
  • 6 Ways to Protect Your Home From a Lawsuit
    For most of us, our home is one of our most valuable assets. It truly is our “castle,” but can also be one of our most vulnerable assets. Although we need to protect it at all costs, we face several dilemmas that create significant hurdles to protecting the complete value of our home. Is an LLC a solution for your primary residence? First, I’m concerned about the LLC being a simple ‘silver bullet’ solution to protecting a home.  An LLC wasn’t designed or built for this purpose. The LLC is obviously perfect for income producing assets, or even a cabin, beach house, farm or 2nd home in a VRBO or Airbnb strategy. But how is a personal residence a business asset, it’s not. If I was a litigation attorney going after a debtor’s home in an LLC I would immediately attack the corporate veil and claim a co-mingling of personal ... Read more
  • Choice of Entity – Is an S Corporation right for you?
    I get asked almost daily if an S Corporation is a good fit for their business and I can tell you that there is a lot at stake. So much so, that it is well worth your time to know the basic differences between an S Corp and LLC before you ask a licensed professional for a recommendation. You are the captain of your own ship! You need to be able to determine if your professionals are advising you under standard and well recognized basic concepts. Surprisingly there are advisors across the country that miss the mark and give truly damaging advice that costs small business owners thousands of dollars. Here are five of the major factors that the lawyers at our office considers when making a recommendation of an S Corp to clients. Before proceeding further, I would like to clarify that when you have an LLC ‘taxed as ... Read more