BiggerPockets Real Estate Podcast - 269: How the New Tax Code Affects Your Real Estate Investments with Amanda Han and Brandon Hall

Episode Date: March 8, 2018

Big changes are underway in the U.S. tax code—and it could make a huge difference to your bottom line. Thankfully, today on the BiggerPockets Podcast, we get to sit down with two CPAs who focus entirely on helping real estate investors navigate the tax code! Amanda Han and Brandon Hall join us today as we dive deep into the new changes—plus tackle some of the most common questions new real estate investors ask! In This Episode We Cover: Who are Amanda and Brandon? Changes of the new tax bill What is passthrough deduction? Increasing the depreciation schedule The concept of cost segregation The 1031 exchange provisions have been modified Using 1031 Business interest limitation What is a tax shelter? Section 179 — write off 100 percent as an asset What can a investor do now? When do you need a CPA? Some more free tax advice And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Money Show Forget BRRRR: Introducing the BARRRR Strategy for Investors (Blog) IRS Schedule E (PDF) BiggerPockets Blog How the Final GOP Tax Bill Will Affect Real Estate Investors (Blog) Books Mentioned in this Show The Book on Tax Strategies for the Savvy Real Estate Investor by Amanda Han and Matthew MacFarland Rich Dad Poor Dad by Robert Kiyosaki What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures by Frank Gallinelli The 4-Hour Workweek by Timothy Ferriss Building a StoryBrand by Donald Miller Tweetable Topics: “Hire the right people right away.” (Tweet This!) Connect with Amanda Amanda’s BiggerPockets Profile Amanda’s Company Website Connect with Brandon Brandon’s BiggerPockets Profile Brandon’s Company Website Brandon’s LinkedIn Profile Brandon’s Facebook Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 269. This is very important. I'm really glad that we're doing this podcast today, because it does also impact those individuals who have not yet filed 2017 tax returns. So before September, I think it was towards the end of September 2017. Okay, so January to September of last year, what we were allowed to take was a 50% bonus depreciation. What does that mean?

Well, if you're running an Airbnb business and you bought new furniture for, your business, you were potentially able to write off up to 50% of that purchase price immediately, and then the rest you would depreciate over the life of the asset. Effective in September of last year as part of the tax reform, they've upped that deduction now to 100%. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online.

What's going on, everybody? I'm Scott Trench, co-host of the Bigger Pockets podcast, here with my co-host, Mr. Brandon Turner. How's it going, Brandon? Man, I'm fantastic. How are you doing? I am doing great, although it's a nine-degree day here in Denver, Colorado. Nine degrees, wow.

It's a little different from Hawaii, huh? A little bit different. Four surfing trips this week already, so, you know, it's not bad. It's been good weather. I think I'm actually going to go on a business trip to visit Brandon here in the next couple of days. That is what I hear. Yeah, we actually, when this show comes out, I think you will have already been hanging out here. But we'll see.

Anyway, what's up, everybody? So today's show is all about taxes, which everyone just turned off their podcast. I don't want to hear about taxes. But no, today is important because there were a lot of big changes that happened recently under the new tax plan that was just announced. And today we're actually lucky to sit down with two CPAs that we look up to. quite a bit around bigger pockets. And they dish out the dirty details about what's all involved and how it affects you guys. So it's really, really good information today.

Yeah, there's a ton of detail on the changes and how they're going to impact various different investing strategies, what rumors kind of were going around about some changes that didn't take place. And so those strategies aren't changing. So there's lots of information on both sides of this. I think that's really important in directing your strategy going forward. One thing to note is that much of what we talk about, today does not affect what you're going to be filing in 2017. So a lot of these changes are going to

be taking place up January 1st, 2018 or later. There's one exception. Yeah, that is the one exception actually is super, super important. It's about the way that, what is it like changing from 50% bonus depreciation. Anyway, you guys are here all about it, just to listen up. But like Scott said, a lot of this stuff doesn't take place until later. But anyway, yeah, no, I think today's, I learned a ton on today's show. You know, sometimes our shows are very inspirational and they're like stories of people who are doing stuff, and then sometimes you just become a whole lot smarter after listening. So today is one of those, you get really smart. One thing I'm excited about his little teaser is I think a lot of entrepreneurs must have

this question, at least you and I did, but we've been too afraid to ask it, like maybe in a public setting, which is what happens when you have a business that just fails? It doesn't produce any revenue and you've put a lot of expenses into it. Can you write that off or not? How does that work out? When you try to sell wooden sunglasses online for a year and end up selling hardly any? Yeah, I know all about that. Yep.

I actually have a pair of wooden sunglasses. I got them for free. That's why I probably reason you didn't make you money. I just, you know, give them out to everyone free. But we don't. Maybe bigger pockets someday we'll have wooden sunglasses for sale because they're pretty legit. Anyway, before we get into that, would it?

I almost ruined your great pun. All right. Before we get into the rest of the show, let's hear today's quick. Quick tip. All right, short and sweet. Today's quick tip is taxes are important. Taxes are important. Taxes planning and knowing.

what to make sure you get the most money out of your taxes and back and all that good stuff. So we actually put the tax book on sale. I think it's 20% off right now up until tax day. So the book on tax strategies for the savvy real estate investor written by Amanda Hahn, who is one of our guests today is on sale at biggerpockets.com slash store until tax day. But get it now because it's one of those books that it's hard not to make back the cost of a book. It's like, what, like 15, 20 bucks or whatever? Like it's like really hard not to make that back 100 fold over your life if you learn just one.

tip. So it's stupid not to own it. Go own it. Get it on sale right now. BiggerPockets.com is a store. And that book was written before the tax changes that have taken place. However, it is not a specific tactical book. There are specific tactical discussions in there. But what that book will give you is a fundamental approach of how to manage your business, how to set up your accounting, that kind of stuff so that you can apply those fundamentals in a way that enables your accountant to do things much better, pick a good accountant, that kind of stuff. Yeah. And there's some cool bonuses that come with it as well when you buy it on Bigger Pockets. So check it out.

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And now I think we should just jump into this thing. I want to hear about taxes. Does that sound good to you, Scott? Sounds fantastic. All right. All right, Mr. Brandon and Ms. Amanda Hahn. How are you guys doing? Doing good.

Check how I used Amanda's last name by not yours, Brandon. Brandon. Yeah, I know. Okay. Yes, yeah, Hall Not Hahn. Yeah. So welcome to the show. You guys have, you know, been on the show before.

But today is an important time of the year because it's tax time. It's like everyone's favorite holiday that lasts like four months. And so we're going to go really, really deep and boring into taxes. We're actually going to read the tax code for like an hour and a half before we get into this thing. And then we're going to talk. I'm totally kidding. We're going to try to keep this light, fun, and helpful. I mean, kind of our goal today is like, what do investors that are listening to this need to know today?

That's going to help them this year going forward, tax code stuff, all that. So with that, before we get any further, I want to make sure people know who you guys are. So maybe Amanda, you want to go first? Let us know who you are, what kind of your story is, and then we'll move to Brandon and find out the same. Sure, sure. I guess ladies first. Ladies first. Thanks for having me back on the show.

I'm really excited to be here with all of you fine gentlemen. My name's Amanda Hahn. I am with Keystone CPA and we're a boutique small firm located in some in California. And we specialize in working with real estate investors on how to save money on taxes and make best use of their funds, whether it's cash or retirement investing. Outside of that, outside of my time at work, I also am a real estate investor myself. Mainly my stuff is the boring long-term holds. We have clients that do all sorts of stuff in terms of syndications, fix and flips, wholesale, but I'm a pretty boring investor in that, you know, it's strictly

long-term holds because my passion itself is actually still intact and the planning side of things, although I love having real estate as one of my vehicles. And I'm very fortunate to be able to see all the inside detail to our client's numbers and be able to kind of mimic what it is that they're doing. So excited to be here, lots of new things to talk about. And I'm looking forward to the next 30 minutes or an hour. Cool. Brandon Hall, I run the real estate CPA. We're a virtual CPA firm. and we work with solely real estate investors. So similar to Amanda, where we're exclusively focused on the real estate niche. I also invest outside of the tax realm.

So do hold my own rentals. And then I've got a capital group that we just started middle of last year with a partner of mine. So we've been investing in some larger syndicates and kind of expanding our knowledge there, which is cool because then I can go and talk to our clients that are doing the syndications and talk more on a one-to-one rather than just purely from a, well, this is what I've seen. now this is what I've done. So let's really talk about it. Cool.

All right. So go ahead, Scott. Awesome. I was going to say, you know, could we get a quick overview of the changes that occurred in the new tax bill maybe and talk about that for a few minutes and kind of go through the high level changes and how they might impact real estate investors? How quick is quick.

Let's see if we can do it in five minutes or so. All right. Amanda, do you want to start or do you want me to start? You can start. Okay. All right. pressure. So there are lots of changes. I guess for me, the two biggest ones or the three biggest ones would be the new pass-through deduction. That's for sole props, sole proprietors, LLCs and S-corporations. We've got 100% bonus depreciation. So that's up from 50% bonus depreciation. And then we've got the business interest limitation. And I'm thinking that the business interest limitation is probably one of the bigger negative impacts. It's going to be affecting a lot of people. even though there's a huge exclusion.

If you're earning less than $25 million, you're excluded, but then there's an exclusion to the exclusion, which subjects a lot of what I think, a lot of real estate investors, even small time to the new business interest limitations. All right. So I want to take each of those and go a little deeper on those three, if we could.

So what is passed through deduction? Maybe we start there, the first one you said. What does that even mean? Do you want to take that, Amanda? Sure. So that, well, the boring term for that is section 199A, for those of you code heads who want to write it down. What does that mean like you think, Brandon? Essentially it means that for certain types of income that we earn as taxpayers, that the first 20% of net taxable income could be at zero tax rate.

Okay, which means if you made $100 of the right type of income, then maybe $20 of that would be at no taxes at all. So tax-free income, essentially. One of the biggest myths or misconceptions we see is in the media, you hear a lot about this flow-through entity tax benefit flow-through deduction. So one of the questions we're getting a lot, especially now and also at the end of last year, is do I need to set up an entity? Do I need an S-C? Do I need an LLC to take advantage of this, you know, 20% tax-free money? And the answer, like Brandon mentioned earlier, is no, you don't need to have a legal entity is strictly depending on what type of income. So one of the greatest things for investors, for those of us who own rental real estate, who are doing fix and even syndications who are earning acquisitions fees, these all potentially qualify for this

deduction or tax-free treatment, whether or not you have a legal entity. And that's an important point, too, because we've had a lot of clients ask us, hey, should I change my entity structure? Like C-corporations, they have a 21% pass-free rate. That sounds awesome. Well, C-Corps are still subject to the double taxation. So we're still saying, no, this pass-through deduction that Amanda just described allows you to pretty much get a freebie deduction on your business income.

And you don't need to go set up an LLC in order to do that. Like Amanda said, you can be reporting on Schedule C or Schedule E and still qualify for the deduction. So let me put this into like a hypothetical sort of scenario. Let's say I as an investor, I'm going to make, I don't know, let's say $50,000 next year on rental income, just from cash flow. And that's all the money I made next year. It's $50,000 in cash flow. Are you saying that like the first 20 of that we just knock off and now I only pay tax on 30? Is that essentially the idea?

Essentially, potentially. So if you're talking about the key definition is what we're talking about is taxable income. And we all know as real estate investors, when you say you're making 20,000 cash flow, the reality is you're probably having zero or very low taxable income because from your cash flow, we're claiming home office, travel, depreciation, right? But assuming that cash flow equals your taxable income, then your example will be correct. Basically, 20% of that 50,000 would be taxed at zero rate. One of the reasons this particular tax change or loophole is really beneficial to those of us who own rentals. And also, again, it does apply to people who are in the fix and flip business too. So the active real estate. One qualifying question on this. So suppose using this example of $50,000, does my taxable income now go down to $40,000 or am I still, do I still have a taxable income as my tax bracket going to be calculated based on that $40,000 or $50,000 number?

Right. So from what we understand, it's taxable income, minus. your 20% deduction. So your taxable income will be 50 or I guess gross taxable income would be 50. And then you would have the 20% deduction of 10 and then you would have the 40k deduction. But that's also assuming that the $50,000 is the qualified business income. So your net operating income after depreciation, amortization, amortization, interest, taxes, all that stuff. So at the end of the day, what are we reporting on the tax returns as net income? If that's equal to taxable income, then yes. Yeah. You'd pretty much be paying taxes on 40,

instead of 50. Okay, awesome. Let's talk about the second point you mentioned earlier, which was moving the increase in the depreciation schedule, advancing it from 50% to 100% bonus depreciation. Yeah, I can just add a little tidbit to that. This is very important. I'm really glad that we're doing this podcast today because it does also impact those individuals who have not yet filed 2017 tax returns. So before September, I think it was towards the end of September 2017. Okay, so January to September of last year, what we were allowed to take was a 50% bonus depreciation. What does that mean? Well, if you're running an Airbnb business and you bought new furniture for your business,

you were potentially able to write off up to 50% of that purchase price immediately, and then the rest you would depreciate over the life of the asset. Effective in September of last year as part of the tax reform, they've upped that deduction now to 100%. So in that example, if you spend $1,000 on, furniture and fixture, you're writing off the entire thing. And it's really important for those who haven't yet filed their tax returns to know that, because if you're providing information to your CPA now, I know sometimes we say, well, you know, I bought it sometime last year. Let's just use middle of the road

June. Well, that could mean you're losing out on the bonus depreciation. So you want to be pretty accurate about your date. Awesome. So that's really helpful. Brandon, you wrote an article maybe three, four, five months ago about the B-A-R-R-R method, which is by advertised rehab, rent, refinance, repeat. And the reason you suggested that is because you wanted to begin marketing the property prior to making some of these repairs so that you could potentially have the option to write them off or, I guess, get this accelerated depreciation schedule or call expenses. Does that strategy change in light of this new rule? No, it doesn't. So that strategy, by the way, most of our clients wait until the very, very end of the rehab to advertise their property for rent.

So all they're doing is they're saying, hey, Mr. IRS agent, my advertisement date occurred after I was done with the entire rehab. So what we were saying is just advertise it right up front, then do the rehab. You're not going to place it into service the day that you advertise it because you still have to do a big rehab. But at some point along the line, we might be able to argue that the property is now in service and now some of the costs become operating costs rather than capital and preempties. improvements. That doesn't change with the 100% bonus depreciation. Well, I guess, no, no, that's not

going to change because the 100% bonus depreciation is going to be focused on the capital improvements. And just a quick note about that, we can't go buy a rental property and deduct the cost of the rental property. The reason for that is 100% bonus depreciation applies to property with a useful life of less than 20 years. So rental property has a 27 and a half year period. But what you can now deduct is like carpeting. If you get your driveway redone, if you do any sort of landscaping, like say you take down a tree and plants a new one, that can all be 100% expensed now, well, starting September 2017 and going on into the future. I just wanted to add to that. And that's a great point, Brandon. I do get that a question sometimes from clients. You know,

I bought a property for $100,000. Can I write off $100,000 now with a bonus appreciation? And I wish the answer was yes. Unfortunately, it's no. However, just another kind of layer of strategy, some of our listeners might be familiar with the concept of cost segregation. And that's essentially saying, instead of saying the whole thing is building, we're going to accelerate this purchase price of $100,000 into carpet, flooring, and things like that. So what you can do is you can combine the two strategies and say, well, by doing a cost segregation, I'm moving some of that into 100% deductible item. So that could be an extremely powerful tool as well. And on that note, I'm glad you brought up cost segregation. So anybody with a relatively large property, especially if you're syndicating

any sort of deal, cost segregation is going to become extremely important for you to take advantage of in the first year. You want to apply that cost seg study to the first year that you buy the property because at that point, all the components in the property are new to you. So bonus depreciation only applies if the components are new to you. So we wouldn't want to do it in the second year, apply that cost sec study to the second year because at that point we can't qualify for the bonus depreciation. So big, uh, big benefit there to cost sec. I guess another point. Amanda, maybe you have some thoughts on this.

The 1031 exchange provisions have been modified to only include real. Amanda's laughing. Yeah. And she knows where I'm going with this. The 1031 exchange provisions have been modified to only include real estate. Sorry, real property. So then the question is if I do a cost segregation study where I, I specifically do the study to identify personal property components that I can depreciate over a faster

timeframe since I've self-identified personal property and personal property is no longer included in 1031 exchange provisions. When I do a 1031 exchange, can I roll over the gain associated with the personal property? And I don't know. I know that we're waiting on technical guidance to come out to really see, but I don't know if Amanda had any thoughts on that. Yeah, I mean, it's really interesting you bring up that point because even yesterday I was having a conversation with a couple of different colleagues. Actually, one, a cost segregation expert. Another one was a 1031 exchange intermediary, someone who Brandon Turner, you've worked with in the past. And, you know, it's kind of the three sides of the coin. We're all talking about it from our perspective. I think we are in agreement that ideally, if you had broken out, accelerate property, we still want that to be part of 1031 exchange.

But as of today, it's an unknown. that does not mean we should not look at cost segregation though, because the reality is even if you have accelerated depreciation, breaking it out into furniture and fixture and carpeting, what you can potentially do is exclude that from the 1031 exchange, right? Because if you're going to break out property, you sell it, well, how much is the carpet going to be worth? How much is the fridge going to be worth? Those things don't actually appreciate and value. So even if they said that's not part of the 1031, are we really going to end up paying a lot of taxes? Probably not because used carpet is not really be valuable. And just for the listeners that are maybe a little step behind here in the conversation,

the reason this has a lot of impact is because when you fully depreciate personal property like this, you're not, it's not an expense. You're going to have to reclaim that depreciation when you go and sell the property. And so one way to avoid that or at least defer that tax is to 1031 exchange, just for some folks out there who might have been not following this whole thing. Yeah, recently, so I did a 1031 exchange. Amanda, you're very aware of that. Like, was it last, I don't know, October or something like that. I sold my 24 unit property. And we cleared a couple hundred thousand dollars in profit. But because I had done a cost segregation study, I had to then go and repay, if I was going to pay tax, I had to pay all

that back. And I think we figured I was like 120 grand out of in taxes if I didn't do the 1031. So then I had to go do a 1031 and I did it and I bought two more properties because of it. So anyway, there's a, yeah, there's a whole fun story there. Maybe I'll tell it someday here in the podcast. But today is not that day. So let's move to the third thing that you mentioned there. So we talked first about the bonus appreciation and we talked about the other thing. But what about the business interest limitations? I think that guys wrote note here.

What was that? Yeah. So a lot of this was breezed over, even by me initially. But after we did a second dive, we realized that it's probably going to apply to a lot more people than we originally thought. So business interest limitations, what it is, it's a 30% limit on pretty much your operating income, at least for the next four years. I think it goes through 2022. So what it is, it's a 30% limitation on what they call EBITDA.

So earnings before interest depreciation or interest depreciation, amortization, taxes. I think that was it. Yeah. So if I have like $10,000 net operating income before I take into account interest taxes, depreciation and amortization, I amortization. I am now limited to a $3,000 interest deduction. So 30% of my net operating income. You're excluded from this if you have revenue, annual revenue,

less than 25 million. So that's like almost everybody, I'm assuming that's listening to this. It's definitely me. But there's an exclusion to the exclusion. And that's probably not the right way to say it. There's an exception to the exclusion that basically says if you're running a tax shelter, then that $25 million allowance does not apply to you. And the interest limitation at that point does apply to you. And in the past, a tax shelter has been a bad thing. It's, it's an entity that's set up purely for tax avoidance or tax evasion. There's no real economic. benefit, but in this new code section, a tax shelter simply means an entity in which more than 35% of the ownership is held by limited partners. So if I'm a syndicator, I have probably given away

60 to 70% of my entity to my limited partners, my investors. All of a sudden, that subjects me to this business interest limitation. And all of a sudden, I'm scrambling to try to figure out how to not be subject to the business interest limitation. But this also applies to people that like, let's say I set up an entity and my dad comes in and he's a private equity or money guy or whatever, but he takes a 50% stake of my entity. It's just me and him. We're not doing anything big. We're buying like a little $50,000 homes. If he's not actively involved in the business, he's limited in that case. He's a limited partner in that case. And all of a sudden, I'm that entity, the small entity is now subject to the business interest limitation. So it is going

to apply to multiple people, not just the bigger, the bigger fish. Can we go through a specific example for maybe someone who's syndicating on a $500,000 deal with two or three partners? Can you tell how would this, or you make up the numbers, how would this apply to a listener for your pockets? Like, let's say that all four of us partner, and we all own a 25% stake. And let's say that Scott and Brandon are the limited partners. So they're bringing the money to the table. Amanda and I are hustling, we're flipping and wholesaling and whatever. If Scott and Brandon are not actively involved in the business, then they could be classified as limited partners in the business.

And because your combined ownership is greater than 35 percent, this business is now classified as a tax shelter per this section of the code, which means that we are now subject to the business interest limitation. So any amount of net income that we receive, we now have a 30 percent limitation on that, a 30 percent interest limitation on the net. property income. So we net $100,000 and we have $50,000 in interest expenses. Well, because we neted 100K, we can only take a 30K interest limitation. So the net 20K of our interest just carries forward until it can be utilized. We're not going to be able to apply it this year. Yeah. This is really interesting because, you know, for larger deals, syndication, specifically speaking, they're almost by definition, the investors are almost by definition going to be passive, right? If most indications, you're going to have 100 investors, you're not going to take a vote of 100 people every time you fire manager or hire property manager. So that does become an issue just by definition of most people are going to be passive. I think the trick or the strategy going forward is to look at, well, how can we shift the definition and have less interest expense? So maybe in the past, you took on a lot of private lenders, bank financing and then you generated a lot of interest expense. But instead of having private lenders, maybe they become your equity partners.

or they get some sort of a profit share so that it's no longer under the definition of interest expense, therefore being limited. So, you know, I think there will be a lot of more planning or new ways to look at how we structure these types of joint venture agreements. My brain's spinning. I'm thinking already about how to get out of this. Like, for example, could you do like a preferred equity or preferred return, something like that? Yeah. That's exactly. Yeah, that's exactly what we're saying instead of saying you're getting, you know, you're paying me or I'm paying you interest instead I'm giving you equity split. You're going to get more participation on the capital gain down the road or something like that.

And we'll have more guidance come out on this. Right now, what we're telling our clients is just start thinking about if I'm going to engage in a new partnership. How am I going to write that operating agreement to not clearly indicate that somebody is a limited partner in my entity? Right. So if we're coming back to what we were talking about where all four of us are partners, I'm probably going to Scott and Brandon and saying, hey, we need to build a paper. portrayal of you guys actively participating in the business at this point. And there is, there is an exception. So, so real estate businesses can elect to be treated as a real property

trade or business. Amanda, did you want to touch on that at all? Well, I mean, like you said, it's just that you can make an election to be excluded from this. The caveat then is you're limited to certain types of depreciation calculations. That's different from the norm. So that is an analysis that you kind of have to go through. I imagine, I mean, for most real estate investors, you know, we're looking at accelerate depreciation, you know, right off as much as possible. So that's going to be a real thing. You have to kind of work the numbers through and say, does it really make sense for me too? Like out of this limitation.

So to expand on that, if I make an election to be treated as a real property trade or business, then I've elected out of the business interest limitations. But the downside is that I'm no longer eligible for the bonus depreciation. So the 100% bonus depreciation we just talked about, I can't take that anymore. but I can take my full amount of interest. Okay. So, okay,

so we just talk about those three things. Amanda, is anything you want to point out as well? So I want to give you, like anything that stood out to you is, besides those as influential or impactful for our listeners from the new tax code? Yeah. I think kind of going,

taking a step further beyond the 100% bonus depreciation. There's also section 179, which essentially is the same thing that allows you to write off 100% of an asset that, you're purchasing. In the past, it's always excluded real estate income. And under the tax reform for the first time, it is now also available to real estate. Again, not available for the property itself, the purchase price of the building, but it is eligible for a lot of other things that you would otherwise capitalize for non-residential real estate. And also, this is pretty significant for our short-term real estate operators, dormitories, apartment, student housing, Airbnb,

So, you know, similar to the bonus depreciation, the 179 allows a deduction of up to, I believe it's a million dollars now. Another one that I thought was interesting was an opportunity zone credit. So that's a new thing that came out. I don't know if you guys remember many, many years ago, there was the go zone credit where you invested in property. You're actually allowed to write off up to 50% of the purchase price of a real estate. This is something a little bit similar to that. Now, the government is going to identify what they are considered. opportunity zones.

Based on our understanding, this is going to be low-income areas or areas where they're looking for real estate investors to bring in money to build up the infrastructure. And the opportunity zone, what it's going to allow people to do is if you wanted to sell your stocks, for example, you have Apple stocks or Tesla stocks and it's gone up significantly. In the past, you'd have to pay the capital gains. You couldn't do a 1031 exchange to move it into real estate. However, if you were interested in buying real estate in the opportunity zone, or if you were interested in using that money to invest in a syndication where the real estate is in an opportunity zone, then you can potentially sell your stock and pay no capital gains tax, defer it almost like a 1031 exchange, as long as you're reinvesting your money into the opportunity zone areas. And the other part that's extremely interesting for me was that currently it looks like if you actually held on to that opportunity,

zone asset for over 10 years, then your capital gains goes away permanently. So there's no more capital gains at all from the sell of your initial asset. So I thought that was something very interesting. We haven't really seen any deals come through yet in the opportunity zone because they're still trying to identify what those areas are. But I bet when they do, there's going to be a lot of real estate investors flacking over there to buy up all the real estate. There you go. Cool. Yeah, I've never heard of anything like that at all. And that's that's that's, yeah, Fantastic. I would love to hear from you guys after one or two of these have come through of like how that works in practice. Yeah, yeah. I mean, we're just hoping those were actually good deals

because several years ago when they had the go zone with, you know, from the hurricane in the golf, we had clients that had really, really great tax savings. Again, writing off 50% of the purchase price of an investment. That's huge. But some of the issues is you had, you know, not so good syndicators and the deals actually weren't so good. So that's where we're hoping for this time around good tax savings and good real estate investments. All right. So let's kind of summarize where we're at now. Is there anything, first of all, when do all the changes that are happening, all

these tax changes, when do they take into or come into effect? And then is there anything that our listeners should be doing now to prepare or to better their situation because of them? Yeah, most of them were taking effect January 1st, 2018. At this time, I mean, Amanda might have some specifics. I don't really have specifics. we are kind of waiting on technical guidance to come out from the Treasury before we really start like implementing some of this stuff. But it's really just just getting familiar. I mean,

if you're running any sort of deal management and that's that's all the way from the syndicators to the person who's buying a single family home, it's just getting familiar with the different changes. You don't have to know the nuance like, I don't know, the technical details. But understanding what 100% bonus depreciation is, understanding what the business interest limitation is understanding the pass-through limitation, just make sure that you understand what these things are. And then we can start, we can really start building things out. The one, the one piece of advice that we give to all of our clients, and we've always given this advice, but now it becomes even more imperative. When you're getting a rehab done, just make sure that

it's all itemized. I don't want you to send me an invoice that says kitchen rehab, $50,000. I want to know exactly what went into that kitchen rehab down to the nuts and bolts. You don't have to get like that detail. But as much as the contractor will allow without throwing his hands up and getting really mad, right? Cool. All right. Yeah, I think on my end, I would just say the main thing to do is just keep that line of communication open with your CPA. I agree with Brandon Hall. You know, it's it's not up to the investor to memorize all the roles. And I think even some of the stuff that we talked about today, it may or may not be actually finalized or in its final format. But the key really is just to keep your tax advisor updated.

You're buying a property. You're selling a property. You're getting to some kind of creative deal. You're thinking of refinancing or relocating to Hawaii. These are things that you want to talk to your CPA about way in advance so that you can plan ahead, you know, instead of kind of knowing that you did something wrong after the fact. You know, and I want to expand on that. Like that's really like my biggest takeaway from all this is like you don't necessarily

need to know all this stuff. People listen to right now. A lot of you guys are probably like, well, this is way over my head. I don't know what I'm doing. And I, like, you don't need to know all this stuff. Just find somebody who does know the stuff. In other words, hire the right person. You know, like, I, if I could look back on my career and one of the biggest mistakes

I made in my entire investing was I waited until, what, two years ago Amanda to hire, like, at a CPA, like, to hire you. Like, it took me, like, forever because, I don't know, I just was arrogant and I was like, I don't need a tax person. Come on, taxes aren't that complicated. But, like, I would, I would recommend people, like, just put that in your system, build that into your team early on. I mean, even, like, maybe you're, I don't know, would you guys actually.

she'd say, first property, should they have a CPA? And obviously, there's some, you know, you guys are CPAs. But do you think first property is, like, when does somebody need that? You know, I, well, I mean, for me, I think it depends, it depends, right? That's everyone's favorite answer. Yeah. So I don't know that you, you have, you know, if you have a first property, do you need to have a CPA? It really depends on, I mean, it depends on how financially savvy you are, how much time you like to spend researching and things like that. You know, we have clients who, who make maybe half a million million dollars a year. You know, if they have their one property, first property should I hire a CPA?

Probably if they're not someone who's financially savvy because, you know, if they're paying 37, 39% taxes, they could be saving a lot even with just one rental property, right? But if it's someone that, you know, maybe as an accounting background themselves, not really making a whole lot of money yet and just buying a first property with, you know, and pretty much strap for cash, then, you know, you might be able to work through some of these with a lot of great information on bigger pockets or, you know, podcasts that you're hearing. So I think it kind of comes down to the person and what they have going on to. Yeah, to follow up on that point, kind of along the same lines.

If you're analytical, I would say you could probably handle your first by yourself, maybe even your second. You just have to make sure that you really catch everything. We always find mistakes in people that have done it on turbotax or even H&R block. And we're always finding these mistakes. What I would recommend that you do, if you're unsure, you pull up Schedule E or whatever schedules you're preparing, just Google IRS Schedule E, pull up the PDF. I think you can scroll all the way down to the bottom and you can see the projected hours that it takes for a non-expert to fill this stuff out. I think

Schedule E is like 80 hours. I don't think that it would actually take that long for you to do that, but just like something that you should keep in mind. And then the other thing too, like we always get these people that have like really high net worths and then they want to do their own bookkeeping. It's like, man, your time is so valuable. Don't waste your time doing this. Just offload it. Go focus on what you're doing. So in that case, I would agree with Amanda.

Yeah, if you've got a high net worth and your time's not worth digging through everything, offload it as quick as you can. Yeah, I would generally, anybody who asks me my opinion, I will always tell them, like, hire the right people right away. Like, I'm such a big believer in that because I've seen it. I've seen myself fail at it time and time again. And that's like the big lesson I learned. Like if I can sum up 2000, like the last couple of years of my life, it's like hire the right people right away.

So, all right, let's move on. And we're going to actually shift gears here and head over to the fun part of the show, which we lovingly refer to as our fire round. It's time for the fire round. Wouldn't it be great if your houseplants paid rent while you were out of town? I mean, they've got the whole place to themselves, lots of sunlight, zero responsibilities. But no, they just sit there waiting for someone to spray them with some cool mist like a bunch of leafy loafers. But guess what? Your home actually could be earning you money while you're not there.

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slash BPPod. That's N-R-E-I-G dot com slash B-Pod. Today's fire round, obviously these questions on the fire round always come from the Bigger Pockets forums. Today we're going to be focusing on tax questions that people in our forums asked and because they knew you guys were coming on the show. And so we're going to use this time to get some free tax advice. Of course, you are not officially, any of them, probably none of them, CPAs.

So, you know, this is just general advice, right? Do you guys have any, like, disclaimers to throw out there? You're not telling people exactly what to do. How does that work? Yeah. I would just say we don't want anyone to go to jail. So before implementing anything, do speak with your tax advisor to come from the right action item. Nice.

Okay. Well, Scott. On the record. Scott, you want to kick us off? Yeah. So I house hack, this is a business. This is not my question, but it is very, I can relate to it very much. I house hack in my duplex. I'm learning that the homestead tax exemption doesn't apply to my full property since I rent the other side out. Is there a way I can still qualify for the homestead exemption without getting into trouble with the county?

And then just basically how do I manage my, what are some basic tax tips for people that are house hacking? How do we declare income? What's personal property? What's a business expense? So what's the, so if you're house hacking, what's the best way? to account for everything. I would say that you, so there's one, let's say if it's a duplex, one side of it is your primary home. The other side of it is the investment property. Generally speaking, unless you're going to be selling the primary home portion soon, improvements you're doing to your primary home really does not have a lot of tax benefits, right? It's just kind of like if I own my own home and I just want to make it beautiful, great, that's a personal

preference. It's personal money that you're spending on. Now improvements you're making to the duplex where it's going to be rented out, that definitely is going to be. be, you know, we talked about depreciation, bonus depreciation, maybe even immediate write-offs. So it's really important to make sure you're tracking those, something that Brandon said earlier, and we say this to our clients too, keep detailed record of what you're doing. We don't want to see $60,000 in improvements because that's not very helpful. But of the $60,000, you know, split out between carpet, flooring and all those different

things so that your advisor can help accelerate. And again, this is important on the portion of the duplex that is going to become a rental property. Okay, so to follow up with that, the homestead exemption, I think, is where you sell, if you live in a property for more than two years, as a primary residence, you can sell it for a tax-free capital gain without having to do a 1031 exchange and that up to certain limits. How does that work when I go to sell the duplex in a few years? So assuming that you did live in that property for at least two years, right, you meet that the primary home gain exclusion, then what you can actually do is you can do a 1031 exchange and a 121 exclusion. So we have lots of clients who do. that, that they're able to, you know, defer part of the gang using a 1031 because technically this is a rental property. But they can also sell and take cash out of this transaction to the extent that the gang was related to their primary home using the 121 exclusion. So it's actually the best

of both worlds and that you can combine those two strategies together. That's cool. I did not, I did not know that either. That's fantastic. Yeah, I didn't know that either. All right. Next question. In a recent blog post in Bigger Pockets, they mentioned that the new tax reform provides certain flow-through business income with a 20% deduction, which we talked about earlier in the show, which essentially makes 20% of the profits tax-free. Does this apply to income as an independent contractor, like if you're a real estate agent, or is it only W-2 earners, or is it like rental property income or is it all of it? If your taxable income, not to be confused with your AGI, if your taxable income is below 157.5K and you're single, then yes, it applies that you just take a 20% to $20,000. on all qualified business income. If your taxable income is below 315K and you're married, then yes, the 20% deduction applies to all business income.

If you run a service-based business, so accountants, attorneys, brokers, property managers, real estate agents, and your income, your taxable income is above those two thresholds, so 157.5 and 315, if you're married, then no, the 20% does not apply. So service-based businesses get phased out. I do want to add one thing to this. One of the questions, I think I did read this on the forum. Unfortunately, the 20% benefit does not apply to W-2 income. So if you're someone who's strictly working a job and you're getting W-2, you know,

let's say you work for Google, you're getting paid W-2 income of $100,000, this unfortunately does not apply to you. And like Brandon was saying that, you know, they are, I don't know, for whatever reason, they don't like CPAs and doctors and all that. So if you're a higher income service provider, then you are either being, you know, potentially phased out or excluded from this benefit altogether. A really interesting real world example. We have a client who owns an assisted living house. So he owns the real estate and then he also has beds in there where, you know, elder patients stay.

And so for him, you know, he has two types of income. He has rental income and he has income from providing medical services. So in that example, it's really important for him to track those two income very separate. separately because there is no limitations on rental income versus there's, you know, on the service, medical service side, he could be face out or limited based on this 20% benefit. All right. Let's see. Next one.

Scott, is that your turn? I forget. Yeah. How about this one? I have several homes. I'd like to put each of them into an LLC, one LLC for each house. I would like to have an LLC as the holding company of all the other LLCs. So I can just have one bank account where all the income expenses would go into and flow out of.

Is that a good structure? is that a practical one that you've seen before? Or do you have any advice on structure for a business with this many properties? Sure. So obviously, the more properties and the more LLCs that you add, the more complicated it gets. If you're running a series LLC, you can likely get away with this by having one bank account in the primary or the overarching company. But generally speaking, even if you have sub-LLCs, if they're not series-based LLC,

then you would need to have a bank account per LLC. I mean, that's just from a liability perspective. That's not even from a tax perspective. You need to show that the business is actually operating like a business. So if you're going to break it all up, just understand that it's going to get really complicated, really quickly. And you're going to have a lot to manage. But this is a conversation that you should be having with your attorney because it could be very worthwhile to do just that. The other caveat I would add is to make sure you're aware of all the fees that are.

required, especially for any investors in California, as an example. California recognizes series LLCs as different taxpayers. So in what you describe, if you have a holding entity and you have three babies underneath that, that's four entities in California, each subject to $800 annual fee. So again, you know, like Brian was saying, it could get costly and complicated really quickly. Not to say it's a wrong structure, but again, you know, from our end, I always look at the cost benefit. How much benefit are you getting by having all this complexity and what? is the cost. On a related question on that, this is something that I give the advice all the time.

When people ask me about LLCs, I say talk to your CPA and attorney, but then the question I get back sometimes, and it's a really good question, who do I talk to first? And what do I do if they disagree? Right. Like, how do I even start that process? I don't, I don't think there's a preference in terms of who you speak with first. Okay. What I often recommend for our clients, if they're talking to me first or attorney first,

and if there's a disagreement, what I recommend is get. getting on a conference call or a joint meeting because then we can bridge the gap. I want to know why is the attorney recommending all these? What are actually the legal benefits? And the attorney probably wants to know what is the cost? What is the tax issue associated? And at the end of the day, we try to bridge the gap so that the taxpayer can make a decision maybe somewhere in the middle, right?

Not having a holding company with 10 subs. Maybe it's a holding company with three subs or something like that where they get the asset protection, but not at the high cost of $10,000, $20,000 a year. And in terms of like who should you talk to first, I think it just depends on the personality of your service providers. Like me personally, I like to quarterback the relationship. So I like to make the introduction to the attorney and the attorneys know what page I'm on and what we're doing. But it could be vice versa too. Like if you go to an attorney and they like to quarterback the relationship, then you start there.

The key, though, is like Amanda said, make sure everybody's in agreement before anything is executed. We've seen, we have seen attorneys execute agreements and execute plans. with our clients and they have horrible tax consequences. And if they would just would have dropped us a line, literally a short email before they executed that, we would have saved them a lot of money. So just make sure that you do talk to both before you do anything. All right. Good answer.

Next one. I've heard that in the new tax bill that home equity lines of credit and home equity loans, he locks and heels. The interest is not tax deductible. I've also heard that it may be in some situations tax deductible or maybe not. Can we get some clarification on that? Yeah. So, helox, you can still take helox.

You can still deduct the interest as long as the loan proceeds have been applied to either rental or business use. So that's the key. You can no longer take a heloc and pay off your student loans and deduct the interest. You can no longer take a helic and buy a vehicle and deduct the interest. You have to use it for some form of business use. All right. So I can't.

So, okay, I got to dig on to this. So I really want a Tesla. I really want a Tesla, right? Can I go and call my Tesla a business? business expense because I'm, you know, let's say I'm a real estate agent or even just an investor. I want to drive around, look at properties. I need a new car. Can I call my Tesla that and then take the $100,000, 100% depreciation then this year?

Can I do that? Why or why not? Or can I use a HELOC to buy that Tesla and then do that? Well, there's nothing that says you cannot drive a Tesla for your real estate business. And if your name is Brandon Turner, I don't see why you would not be required to have one. Exactly. But in all seriousness, you know, there's nothing that says you can't drive a Tesla or a Mercedes or a Hummer for your real estate business. The question is just, you know, is it reasonable that you would be needing to drive a car for a business?

Okay. So, yes, if you're driving it for your real estate, for your book, for, you know, any kind of business that you have as a realtor, as an agent, as a syndicator, then, yes, if you took out key lock loan proceeds, use that to purchase a business, you know, a vehicle use for business, the interest is. the interest is still deductible. Like Brandon said, the only time it's not deductible is if you're using it to, you know, go on vacation or something like that or for your primary home. In terms of the bonus depreciation, unfortunately with the Tesla, it is not eligible for a 100% write-off. So, you know, I mean, if you paid $100,000, I didn't even know how much they cost. But if it was $100,000, it would not be an immediate right-off for it.

For cars, there are still certain limitations in terms of how much you can deduct every year. However, I do believe if you were actually going to buy Tesla, I do believe there's still tax credits for federal and the state, if I'm not mistaken. All right. Awesome. So can we talk about how passive losses from real estate investing can or cannot be used to offset income from other sources like other investments or your job? Sure. So I've gotten a lot of questions on has anything around this changed?

And the answer is no. So we've still got the, if you if you're aGI, adjust to gross incomes 150K, you're face. out of taking passive losses against your ordinary income, that's still all the same. So nothing along those lines has changed. If your AGI, technically it's modified to just a gross income, but we always just go to AGI because our clients are like way over their heads. If your AGII is between $100,000 and $150,000, you can take anywhere between $0 to $25,000 and passive losses from your rentals. So if my rental generates net income of $10,000 and then I take depreciation and amortization and all the other expenses, I've now got a $2,000 loss.

I can probably take that loss if my income's below $145-ish-K. What happens, though, is that if my AGI exceeds $150, at that point, those losses become suspended. So I can't take those losses anymore. And then we're talking about strategies that we can utilize to take those losses. So they might be buying better deals, buying better property, that cash flows, might be looping your spouse in as a real estate professor, or maybe you qualify as a real estate professional might be investing in a business as a passive partner so that you receive passive income to offset the passive losses. There's a lot of

creative things that we can do there. So I always tell people don't get depressed when you can't take the passive losses and don't not write things off because you can't take the passive losses, right? You still want to write everything off because at some point we will be able to utilize those losses. They get suspended until we can offset them with passive income or liquidation of a rental. All right. So this is this is one of the next questions that we're going to ask in the fire round, but you just mentioned it here. Can you talk about what it means to be a real estate professional and how to qualify for how to qualify as a real estate professional? Sure. So real estate profession, one of the most common myths that we hear about real estate

professional is people are under the impression that they have to be a realtor, you know, get licensed, do open houses, you know, take people around. And that's actually not true. Real estate professional is only defined in the IRS code. And you don't have to have a license. You have to be showing real estate. All that means is that you have to spend at least 750 hours actively involved in real estate and you have to be spending more time in real estate than all of your other non-real estate income activities combined. So, you know, common examples we see would be like a stay-at-home spouse, right? We have someone who's outworking, you know, kind of a middle high-income earner, and then we have another person who's a stay-at-home spouse and

then they own, you know, a handful of real estate. If their income was over 150, thousand, generally they wouldn't be able to use any rental losses. But now if the non-working spouse decides to take the active role in leading up all the real estate transactions, and that's, you know, rentals, looking for more rentals, you know, doing wholesale, being a realtor, anything that's actively involved in real estate. Now, if she can qualify as real estate professional, then you can use the rental losses to offset the W-2 income and any other income of the other working spouse as well. So it's strictly an hours and activity. test and it's not related to any sort of licensing or, you know, state requirement.

All right. Awesome. All right. My last question of the fire round. So this is a really good question. I've always wondered this as well. I'm currently looking for my first deal. If the deal fell through, and this could be first deal or a millionth deal, right?

If the deal fell through during inspection, can I still deduct all the money spent on the deal, like travel, inspection costs, whatever? So we personally would probably capitalize those costs and apply them to the next deal. instead of deducting them currently. I don't know if Amanda does anything different, but that's typically how we would approach that. Yeah, I think generally speaking, that's what we would do if this was a very first deal for someone.

On the other hand, if you own a rental property, you have another one to contract and it fell through. Generally, we would deduct that because you've already started your investing business. It does come down to, a lot of it does come down to risk tolerance level of the particular taxpayer. You know, if it's your very first deal fell through,

but you can show that, you know, you're in the flip business and you've made tons and tons of offers already this year. And, you know, you're someone who's more willing to take the risk, then there are instances where we do deduct it all in the initial year under the assumption that you are able to prove you've started actively working in this business. So this is actually a really interesting point that I'd love to follow up on with a more general question about business. So like if I start a couple of businesses a year and all of them fail and none of them generate more revenue than the expenses I put in, you're saying that there's you're allowed to potentially capitalize some of these expenses into a future business?

Or how does that work for me as a maybe a serial failing entrepreneur that's, you know, working a full-time job and starting some side hustles? Yeah. No. So what I was kind of referencing was related to rental properties, right? So if I, if I've gone through appraisals and inspections and the deal falls through, in general, we're going to capitalize those costs and we're going to apply it to the next rental property.

But if I'm doing like a business, let's say I go and start a consulting business and it just never goes anywhere. I can, I can deduct those costs. The key is going to be is your business in service. So you have to, your business has to be open and, and willing to accept clients or willing to, I don't know, buy flips like Amanda was saying, in order to deduct those costs until that point, until you place your business into service, you can't deduct those costs. So what I couldn't do, for instance, is say that I'm going to start a consulting business, literally take no action, and then, I don't know, deduct like a $2,500 a month, mind or group fee or whatever, subscription or something like that.

I can't do that. But I could say, I'm going to try to start a consulting business, do a lot of advertising, build out like my platform, and then just say, all right, well, in 2018, I just didn't get any clients, but I can still deduct it all in 2018. Awesome. Interesting. Yeah, I never really thought about that before. All right.

So let's shift gears one last time and head over to the world famous. Famous for. All right. These are the same four questions. We ask every guest every week. And I know you guys have answered them before, but we'll ask them or ask them anyway. Number one, and we can just go both of you. Number one, what's your favorite real estate related book other than anything you've written?

Amanda, you want to start? Real estate related book? That's a hard one. Can I say rich, dad, poor dad? That's not really real estate related. Yeah, everyone says that. That's good. Okay.

I said it. All right. I'm going to say Amanda's book. I'm just kidding. I mean, I'm not kidding. That was a great book. No, mine, I always stumble with the title, but it's the 26 things you need to know about cash flow, whatever that long title is. Yeah, Frank Gallinelli.

Yeah. Yeah. Yeah. Yeah. Yeah. That one. Great book. It is.

Cool. All right. Next one. Awesome. What's your favorite business book? That's not rich dad, poor dad. Mine is the four hour work week because I want to be as lazy as possible. Nice.

So that's actually why I ask. I love about systems. That's actually why I ask the question. I had earlier is because I read the four out work week probably like first for the first time five or six years ago and then I was trying to start all these online businesses none of them generated any revenue all of them incurred expenses and I just never did anything with the tax you know implications of that so I kind of missed out there but that was that was what I was thinking of when I asked that question yeah mine is the story brand so I literally just wrap this book up but it's it's an awesome book

yeah don't know too it's a very good great book cool all right next question Scott what do you guys for fun. For me, I love cooking because I love eating. So when I'm stressed out and taxis it, I love to just go home and cook a great meal and eat it all by myself. No, I do eat it with Matt and my child. But yeah, that's what I like to do. Nice. Awesome. I crunch numbers. I'm just kidding. Another joke, bad joke probably. Accountant joke. Um, no, I don't know. That reminds, wait, a counten joke. That reminds me of, you ever watch Parks and Rec? You ever watch that show?

Yeah. There's like that continual, like, running joke throughout the whole show of the, the CPAs that laugh at everything. I don't know. That's one of my favorite favorite shows because of it. Well, what you have to do is you have to be able to force it out, right? But make it sound genuine. And then, yeah, you get friends that way.

Anyway, good, good. Mine, I just started CrossFit a couple months ago. And it's been a lot of fun. And you're supposed to tell everybody about CrossFit if you do CrossFit. I'm telling you guys. Wow. So yours is the exact opposite of my hobby, which is just eating and no exercise. I like being in red wine, but I'm trying to have been workouts there.

Well, cool. All right. Last question of the day. What do you guys believe sets up successful real estate investors from those who give up, fail, or never get started? For me, I feel like, well, two things. Action and having good systems in place. I think if I look at all of my most successful investors, they're the ones who take the advice that's given, whether by us and their attorney or other, you know, mentor or someone.

And then they systematize it so they can repeat the process over and over again. Yeah, so those are two great ones. I would just throw on top of that just understanding that failure is a part of any business and not just throwing in the towel the first time that that happens. Just learning from it, figuring out how you can improve and rolling with the punches and then continuing on. And writing it off. And writing it off. Yeah, there you go. If we're talking about that type of failure.

All right. All right. Can people find out more about you guys? Well, on biggerpockets.com and also our website, which is keystonecpa.com. Yeah. And for me, bigger pockets, LinkedIn. I like to take stabs at the corporate world on LinkedIn with my posts. And then the real estate CPA.com and anywhere else, yeah, anywhere that I'm at social media-wise.

All right. Good deal. Well, thank you guys. It's been a lot of fun and super helpful. I definitely feel a lot better about the whole tax change code thing. And hopefully everyone here listening does as well. So thank you guys. And if people need to get in touch with you, they know where to find you. Everyone listen to this though. You can check out the show notes at bigger pockets.com slash show 269. You can leave comments there. Questions. I can't guarantee they're going to jump in and answer your tax questions. But you know, you can leave them if you really want to. And let them know what you thought of the show. And of course, if you enjoyed this, I was going to say shared on your social media channel, Facebook, whatever. whatever. Yeah, and I'll chime in there that both of these guys have written what I think are really good articles, kind of just giving a little, some overviews of some of the changes for the new tax bill, which we will also link to in the show notes here and see you guys can check those out. All right. All right, guys, thanks so much for joining us today. Thanks for having us. Awesome. That was Brandon Hall and Amanda Hahn, two CPAs. I thought it was fantastic and full of a ton of information. I know I'm going to use a lot of it and got to ask myself as questions.

Yeah, I know me too. There's one of the shows that I want to go back and listen to again because I need to like take some better notes. Like in fact, while we were doing this, I was like writing notes like, make sure I do my cost segregation this year in 2018. I'm like, okay, I got to do this stuff. So anyway, yeah, it was funny. Right after we stopped recording, they out, I remember was Brandon or Amanda asked. So do we bill you guys for this time?

We're like, yeah, just bill us for every hour of every single listener of the show, you know? Yeah, so 150,000 hours or so. Yeah, you know, something like that. That's good, that's good timing. They'll make some good money off of that bill. It'll be great if they actually send us a bill just to be funny. That would be really funny. No, what's funny, though, is that Amanda and Brandon are both practicing CPAs, yes,

who have real clients and also invest in real estate. But they give out so much great information and perspective on this subject, like, just like in the format they did today, on our blog and through the content that they create. So definitely go check out their stuff on the BiggerPockets, R.E. NewsBog. That's BiggerPockets.com slash R.E. News blog. And you can see them on the right-hand side if you scroll down and click on them and go to their profiles. Do I want a little quick tip here, Trench? Do you know we have a redirect setup?

You can just say biggerpockets.com slash blog goes to the same place. Fancy, huh? I'm learning things every day. Look at this. I know. Why do you say? I mean, it takes 20 minutes to say R.E. News blog. Okay, maybe not 20.

Go to biggerpockets.com slash blog. There you go. That makes way more sense. Doesn't it? I don't, Josh set up R.E. News blog back in like, you know, 1912. And, you know, since then, you know, we've cleaned up the site a little bit. Anyway, well, now, now you. now you know the more you know it's like that NBC logo thing insert here anyway all right we got to get out of here

well last thing you will have there's a lot of things that a lot of resources that were discussed today on the podcast we will be linking to those things uh in the show notes of this episode which you can find at biggerpockets.com slash show 269 all right and remember oh go ahead what I was going to say that is a sensible URL that makes that is very easy to say it is that's much easier to say than like r a news blogs I showed. Actually, that's just a redirect as well. But anyway, and a reminder from the quick tip this earlier on the episode, the tax book, the book on tax strategies for savvy real estate investors is on sale right now, 20% off on BiggerPockets.com. So get it there and you get a bunch of cool bonuses, including an entire conversation

about how solo 401Ks work, which I really wanted to talk about that today. We did not get time. So definitely check that out. That hour-long video I did with Amanda is unbelievable. You're going to be blown away at how cool solo 401ks are. They're super cool. Anyway, check it out. And with that, Scott, go get in your 9 degree weather and go get some lunch or something.

Yes, I'm very hungry. All right. All right, guys, thanks so much for being a part of BiggerPockets. And we will see you around. Make sure you leave us ratings, reviews, tell your friends, and, you know, be awesome. So thanks for being a part of BP today. For BiggerPockets.com. My name is Brandon.

My name is Scott. Signing off. You're listening to Bigger Pockets Radio. Simplifying Real Estate for Investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate podcast.

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