Epic Real Estate Investing - The "Big Beautiful Bill" Just Made Paying Taxes Optional | Tony Hoong

Episode Date: November 7, 2025

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And look, we need to talk about your taxes because if you are a W-2 earner or a small business owner, you are being played for a fool. The government has created a legal, ethical, and on a system for you to pay zero taxes. It's not hidden. It's right there in the tax code, but no one ever told you the rules. This creates two contradictions that are absolutely insane. First, how can someone buy a one-me? million property with $35,000 down and immediately get a $250,000 ride off that wipes out their entire W-2 salary.

And second, how is it that the rich can buy a $15 million private jet and actually make money on the deal while you're scrambling just to deduct your $300 home office? It's like we're all playing monopoly. But the wealthy were secretly given a get out of taxes free card. And my guest today is here to tell you how you can get one too. This is the epic real estate podcast, contrarian takes on money, housing, and policy without the guru nonsense. Let's go, let's go, let's go, let's go, let's go, let's go. Let's go. Our guest today is the co-founder and COO of the CPA dude, a full-service tax strategy firm dedicated to helping real estate investors and business owners keep more of what they earn.

So please help me welcome to the show, Mr. Tony Hume. Tony, welcome to the epic real estate investing show. So, Matt, thanks for having us here, Day, man. So I guess congratulations for an order. You're headlining a tax strategy summit as the keynote speaker this week. Is that right? Yeah, we got it this Saturday right here. So big beautiful bill updates and is dropping tax bombs all day.

Super. Where are you from? Here's San Francisco. You're in San Francisco. Okay. Got it. Yep. So all in the area.

Let's just dive in. Tell me about the big beautiful bill. What do we need to know? Yeah, big beautiful bill. This was, man, this was the fireworks from July 4th here that they signed out. So it passed on July 4th. And the big thing that came in here for real estate investors, if they haven't been sleeping on a rock,

is bonus depreciation. 100% is back now. If it didn't, it was going to be stuck at 40%. So we're talking about the extra 60% benefit now. So now it's 100% back. So it's going to be, it's permanent too.

It wasn't going to be a phase down. Like it was going down 20% every single year. So now it's 100%. So right now it's time to buy. You know, right? It's like, hey, it's actually prime time about quarter left. So get that in.

And bonus depreciation applies, even if you don't buy. You buy the asset at the end of the year. And, you know, for those of the users that don't know bonus depreciation. Yeah, I'm, I'm 12. Yeah, this is the ninth world wonder of the world, I'd say. You know, they're right. You know, what compound interest is the eighth.

This one's the ninth. Can't see, feel, touch it. But this is how the rich don't pay tax. And what it is is that the government gives you a fat right off, even though you don't pay for it. So let's let's say you have a down payment. Buy a million dollar home, FHA it $35,000 down. And, you know, you run, you know, some cost.

segregation studies and you get no $250,000 of bonus depreciation. So you just created a tax write off over a couple hundred thousand dollars, even though you didn't spend a couple hundred thousand dollars. So it's essentially a big right off that the government's going to front load you. There's this depreciation you have to though. So, you know, it's always say if it's too good to be true, it is. Right.

So, but it's a big benefit. And it's just Robin Peter pay poll today. So big deduction that you don't actually pay for. All right. So the normal depreciation, you take the, 27 and a half years thing, right? Okay. Yep, yep.

So this bonus depreed, where does the word bonus come in? The word, so, yeah, depreciation has got three flavors. Mm-hmm. The straight line in 27-half year or 39 year. That's really slow. You got number two accelerated depreciation. So instead of 27.5 and 39, now you got 5, 7, 15, 27.5, 39. And then the cherry on the top is the bonus depreciation.

And what the bonus depreciation is, is that it takes the whole entire five, and seven and 15 year bucket, lights it on fire, accelerates all your expenses, and you get right out off on your taxes if you're, you know, short-term rental operator or real estate professional status. For a normal long-term rental investor out there, not quite, right? All those awesome you still get, but they're going to go into your passive piggyback. You can't use them until you have active, sorry, positive passive income on that side. Okay. So I buy this million dollar house. I use the FHA. Can you do FHA on a million dollars? FHA, oh, that's a good question. We I've been looping some of our lender friends on that.

Maybe we go 10%. Yeah, maybe $100,000 down. Let's do that. All right. Let's do that. So we put 10% down. Yeah. And so now we got a loan of 900, but we own $100,000 or excuse me, a million dollar asset.

Yep. Okay. We know what that we talk enough about the traditional straight line of depreciation here. Yeah. So the accelerated would mean instead of over 27. A half years, you take it faster like in five or seven years for a residential. Yeah. So that's some of the, you know, because we all know as investors,

The doors, the cabinets, they don't last 27 or a half years. Those things get cost of garbage and trash by tenants. Yeah. So, you know, you're realistically, if you get last five years, now you get a decrease you over five years. So say, you have $100,000 of five-year property and several or 27 a half years, which is barely, you know, a few grand each year. Now you take $20,000 each year with accelerated depreciation over a five-year useful

life. All right. And then the bonus, you get to take all of it at once? Yeah, the whole shebang, my friend, the whole enchilada. stuff of $20,000 for the next five years. You know, now you get the $100,000, all of it. And the key part here is that it only applies to useful light that has 20 years or less. So it's five year, seven year, 15 year.

The stuff that's 27 and a half, like the two by fours and the roof, you can do, you don't get that. So anything under 20 years, you get lighted out of fire the first year. Take the whole thing. Got it. Got it. Okay. So now you said something there earlier. If I close on December 31st, I can't do it with.

the residential long term. I have to wait until it produces a positive cash flow. There's no areas in debate on this. So there's some CPs that say as long as you're placing in service and you listed off for rent and they take those aggressive positions. You know, we don't get that crazy over here. We like to actually see real income come through because you show a fat zero and negative $100,000 on your schedule E. It's not going to be pretty. The IRS might be knocking. So, I mean, if you show $2,000 of rent and you got the lease agreements and everything, that's going to look a lot better. So, you know, maybe get at least, some money in. But if you're, you got to get the gab and you can make it launch and it's

turnkey. Sometimes if you buy turnkey, you got renters inside the eight rent. That could actually work. Got it. Okay. I like it. Now, when you go to sell it 10 years from now, you got to give it all back, right? Yeah, exactly. So that's why I say if it's too good to be true, it is. So you took all the benefit 10 years ago. Now is just like, all right, now you got to either pay it back, But, you know, what most smart real estate investors do and how generation of wealth is built, 1031 exchanges or opportunities hopes, right? So, or you don't even have to do those two. You can add in the third one, the lazy 1031 exchange.

But this is where tax strategy and planning is so big. And that's pretty much, you know, all we yell and preach. I'm a broken record. I'm always say, if you fail a plan, you plan to fail, Ben Franklin, our favorite friend than the $100 bill. So it has some planning strategy in place. And, but yeah, once you sell it. it and you don't do any of that. So let's go worst case scenario, you got depreciation recapture.

So you have to pay back all the benefit that you took. But there's a slight arbitrage here. And that arbitrage is that depreciation recapture is only subject to 25% max tax rate. So if you're a high income earner, you're at 37% federal and you only pay it back at 25%. So it's 10 years ago, you had 37%. Fast forward, you know, you're still at 37%. You're actually arbitrashing the difference with that 12%. So it's not that bad. And then anything in excess of ordinary would just be long-term capital gains rate anyway. So, you know, maximal federal 23.8 and then whatever state you have.

Got it. All right. And I'd imagine that inflation eats this all up too. Oh, yeah. Right? Inflation. But there's the tax world that, you know, me and my team live under a rock on. And we see that.

But unless you come up for fresh air and you really understand what's going on in the market, inflation will kill you. We all know everything has gone up in the past couple of years. here. So, yeah, it's a lot there. No, but I mean, as far as the payback goes, you went on that side, too, because you're paying. Oh, and tax dollar wise, yeah, because you haven't been subject to you protected your money because you took all the money that first year. So, you know, time value money principles, a dollar today or dollar tomorrow, my friend, we always take the one today. So that's why you want to be mindful of how you want to plan out your tax strategy. And that's why

having something in place is better than nothing in place. Right. And that brings us to tax planning. Like, that's everyone's favorite thing. Hey, that's my favorite, I tell you. No, I know. I mean, if you're making money, it is a very exciting thing, right? If you're struggling to get there and get to where you want to be in life financially, then it's not as exciting. But it should be.

You should still plan at that level, right? Always, yeah. I mean, you can, I tell people, you don't even have to make big bucks to tax plan. You can be working W2, $50,000. Your tax plan is 401K, HSA, FSA, and then, hey, you got five bucks. left for traditional IRA, boom, that's a tax plan. You did something than nothing. And I always tell people this. If you save $10,000 a year, say that comes from your tax savings, and you compound that for 30 years at 8%, that's $1.3 million, $300,000 being a tax savings, $1,000 being

the eighth world compound interest. So do some planning. You don't even not to be like filthy rich. You can make $60,000. Actually, this was actually a story for me. InVada House, they're in the crash, you know, just during college, I had nothing, but the house is $40,000, right? And it would have nothing going on with it. And I came out college making $54,000. But the house that year had some bad repairs. And there's the mom and pop deduction. A mom and pop deduction for real estate investors is if you make $100,000 or less and you have losses, you can take $25,000 of losses against your active income without being real estate professional status or short-term rental loophole. So I got, you know, a little refund that time.

I wasn't paying not much in taxes, right? But that's just those to show that real estate, it doesn't discriminate 100% on just how much money you make, right? If you can pick up some cheap pulse, especially in the Midwest. I'm originally from Minnesota before I moved out to San Francisco. I was literally walking, reading example of this. I've always said that I've never done the actual math for people. I just say it's a general statement because I know it to be true.

If you're just the median household income in the country and you pick up three, four income, properties. Even if they never cash flow, you essentially will never pay taxes again. Exactly. Right? Exactly. That's that alone gets you out of the tax talk. Legally, honestly, ethically, it's right there in the tax code. And yeah. Exactly. There's no other asset class where you can invest, make money like in your pocket or on your bank and then look poor on paper. Yeah. And not paying taxes, right? Yeah. Even as this city deal with properties, $100 a month, right? That's everyone, right? And $1,200 a year, but you don't have to pay taxes on that $1,200. There's nothing else in the tax code that allows you to make $1,200 of profits and not pay any

taxes. Real estate's that one asset class. You know, people complain about inflation. They complain about taxes. And I say, well, just buy some real estate. And they said, oh, no, the market's going to crash. I'm just like, yeah, that's your hedge against the inflation and taxes. But anyway, it's funny. So what else is in the big, beautiful bill that we need to know about. Yeah, so 100% bonus appreciation was number one. Number two now is going to be the salt cap. And it's not the table salts we're talking about. We're talking about the state and local taxes here. And what this was was that you get the first 10, so this is for home property home owners, right? That's your own primary. You got $10,000 between property taxes and income taxes. And if you had

more than $10,000, and this applies if you're married joint even. So the people that got married got screwed on this in 2018 of the tax code. And if you just say you had, you know, I'm in California, everyone, their house property tax bill loans $10,000. In order to pay that mortgage, you're well-making $100,000. So in that tax loan, you're probably paying $18,000. You only got the first 10 lost out on the other eight. So now for the next four years, this phase is away, though, is that you get up to $40,000.

So it increased Forex on this side. So now you can have big deduction. So the property tax bills won't hurt you or income tax bills won't hurt you. So this is only one, again, that's it said. If it's too good to be true, it is. This is only if you make up to $500,000, they'll give you the first $40,000 of state and local taxes as a deduction. Once you're past $600, you go back to $10,000. In between $500 and $600,000, there's a phase down.

So you get somewhere in between that $10,000 to $40,000. So that was huge for property owners to have huge property tax items and they stay pay income taxes at the same time. So, you know, our folks in Texas, you know, they don't pay the income tax, but, their property tax bills are huge. So this actually could be a huge benefit for them, just because they're stuck at $10,000. Yeah. So that was really good.

And also, if you're on that cusp without $500 to $600 mark, you don't think that you lost the game. You can tax plan, get your income down to $500 or less, and still qualify for this. That's why my broken record always says, you need a tax plan, but I'm like that old nag and mom, he just won't get, hey, you got brush your teeth, you know, like I will always keep on your own tax plan until I die.

So you don't lose out just because, oh, okay, never mind. I make $600. Okay. No, no. You can do something. Reduce that $600 to $500. Now you get the full $40. So that was the second big thing that came up,

a big, beautiful bill here. So all right, cool. So just before we leave the salt tax, so we can take our property taxes and our state income tax. And as long as they don't exceed $40,000, we can deduct that from our federal tax. Yep, exactly. Right.

Yeah, I got to get standard deduction and take the itemized deduction now. So itemized deductions look a lot more attractive now. Got it. All right. So now if you make 600,000, gosh, Tony, I don't want to give $100,000 back just to be at $500,000. How do we show that I make less income? Oh, there's many things, my friends. So, you know, one, you know, the topic here, real estate, right?

Either you got to be real estate professional status, though, or short-term rental loophole, right? That's one of our go-to-and-butter for our real estate investors. So you got to do that. So that can be that. If you don't, you know, now you got to get creative. You better max out your 401Ks. Where's your income coming from, right? 401Ks.

Can you step up, you know, employers or your self-infect should put $70,000 into it? If you're, you know, more on the self-employed side, you know, the government really loves real estate investors and business owners. So the tax code is written for them. And the other part is the defined benefit plans. So it's a, what we call it, a retirement plan on steroids. And you can stash even more money into that. And then the last part of how the tax code's written is for,

charity. And we've had, you know, started diving into this new strategy. We're setting up foundations because a lot more people are purpose driven now versus financially driven, right? What's the purpose behind what they do that helps them with the financial and setting up private family foundations? You don't have to be Bill and the Gates Rich Foundation to have one. You can actually have one now and you can put 30% of your income into it and then carry out the foundation parts. And if you've got your retired mom and dad or, you know, the brother, sister that hasn't really, you know, done too much They're like, you know, that's what happens. Athletes do this all the time.

Staff on foundations, they hire all the friends, the runout. And you can shave work 30%. So if you're at 600, start your own foundation, put $180,000. All right, we're down to $420,000. Yeah, you're going to buy all your family and friends a check anyway. Yeah, right, huh? Exactly. Got it.

It's like, you know, paying my son's allowance, right? Yeah. I make him an employee and all of a sudden, he's a tax deduction. Exactly. And they got to work and teach his great work ethic on that side. My mom put me to work out. at 11 years old at her Chinese restaurant. So, hey, put them to work.

I think she paid me 400 bucks, but I went to an account I never got to see. So only money I got to see was the tip money on the tables. That's my first job of washing dishes in a Chinese restaurant. Oh, there we go. There we go, my friend. Yeah, you know how it works over there. I did.

$3.10 with minimum wage when I did that. Oh, there. You variety did it through. Yeah. Okay, so let's go back. I don't know if this is changed or not. I haven't looked into it. I haven't really had to. But what constitutes a real estate professional? How do you qualify for that these days? Oh, yeah, real estate professional. This is big for,

you know, generally married folks, right? You got the one person making tons of money. It's always the doctor, software engineer. And then you got the real estate professional at home, aka the home taker, real estate taker, the portfolio manager. 750 hours, at least 750 hours. Hoot number one. Hoop number two now is over 50% of your time in the trades or businesses, real estate, there's 12 of them. More likely than that, the ones that you're going to qualify are property management operations. If you're a real estate agent, that does qualify.

Also, there's bad news from bad CPAs that don't know real estate and say, just get a real estate license. You'll qualify for real estate professional status. Like, no, no, no, no, no, you have to hop through these two hoops. And the last one that gets most people called material participation. This simply, there's seven tests. The easiest one, the meat, is 500 hours and you group all your properties together. And then any one of those.

else can work more than you. So as long as you work 500 hours on that. So of that 750, you pretty much make that and start 750 as operations. Or there's another prong that says 100 hours and no one else works more than you on each property. So there's a couple of tests, but those are the three hoops you got hot towards. But it is more, you know, people do try to claim this, but you guys see those audit logs. They'll poke at it. We have IRS hacks auditors on our team. If they, they said the easiest point where they poke logs is like, hey, where's your time log? They don't have it. You lose an audit. So of those seven tests, how many of those do you have to pass?

Just one. Just one. Okay, got it. So you said that when someone gives you the advice, just had your wife who get a real estate license. Why doesn't that work as advice all by itself? Oh, yeah, exactly. Because you're not doing the material participation, you're not doing the 500 hours operating your property. So you actually have to do material participation in the activity that you're trying to offset against, aka the rentals.

Right. But if they're an agent, if your spouse is an agent, Yep. They have to show their participation in the business is what you're saying, basically. Exactly. To show their participation on managing the rentals. Exactly. Okay.

But I mean, what if she just a agent? She just sells houses. So she'll qualify on that 750 hours, over 50% over time, but will fail on material participation because she's not actively managing the rentals. So you won't get any losses, though. But let's just pretend, though, that her agent business or his agent business loses, you know, $30,000 because they're getting things going. They bought the new car, run a whole bunch of ads.

that $30,000 will offset the spouse's income, though, just because it's an active business. So there's still a thorough linings in all this. Okay, so then I'm sorry to circle back, but now I'm unclear. If your spouse is an agent, you also have to own rentals. Yeah, yeah. Otherwise, because the key part is you want the depreciation, reduce the active income from the working, the working spouse from the other person. Oh, yeah, duh.

So it wouldn't make any sense, though. Okay. Duh. Yeah. Oh, you got it. Now, this is this. Hey, man. I see taxes are the silly.

confusing. And they did that on purpose. And we just, you just got weird nerds like me who love it. No, I've been talking about this for 20 years and I knew that. But then we narrowed it down to just have to pass one of the seven tests. And then that's where my brain went blank. So all right. So that's real estate professional. Tell me about the short term rental loophole. If you've been grinding for deals and coming up empty, you're not alone. That's why we created a way for frustrated investors to finally get cash flowing income property without the hassle. Go to frustrated investor.com. And now, back to the show. I hear about that a lot. Explain to me exactly what that is. Oh, short-term runs a loophole. This is great. You can work W2 and

pretty much paying no taxes. So what it is is that you more or less have an Airbnb, self-manage or whatever. And with the hoops you have to hop through is an average stay of seven days or less throughout the whole year. So total days, divided by total stays, as long as that number equals 7.0. you meet number one. Okay, what's that equation? Hold on. What's that math equation? Oh, yeah. Total days? Total days within a year? Yep, within a year that you rented it out. Okay. And then a total divided by total states. So that would just be so you can have one 30 day rental. Then you have 10, two day rentals. So then we're at a total of 11 stays. And we're at a total of 30 plus 2050. So we're at 50 divided by 11 here. And we're just right under that 7.0 number. So you can actually have some long stays, but you have a crap load of small stays too. That number is to be 7.0 or less.

Okay. So the total days is how many days somebody is staying in the property? Right. Yep. Throughout the whole 365 day or 360 days. Okay. And then the stays is like the individual tenant or the individual person. Each stay that they booked on Airbnb.

So say like you had booking for this weekend for two days. Yeah. That's two day one stay. And then next weekend they did three days one stay. So now you have two stays and you have. five days total. Got it. Got it.

All right. So then you add those up and then divide them by each other. And that has to be seven or less. Yep. Exactly. Got it. So what's the minimum? Where does this pass at the minimum here?

Say we just... 11. 0 or less, yep. But say let's just say we did weekends. How many weekends a year would that be? Oh, weekends? I mean, if you just had all weekend stays, you'd be, you can have, you can just have a couple stays for the weekend.

So if you want to buy one, you're listening to this right now and you want to buy a a short-rent rental, you know, close within and launch in, you know, November, just stay a couple weekends and have a couple days and you're good to go. You meet criteria number one. Oh, just one weekend because two divided by one is five. Or be point five. Two weekends. You have five days.

Yeah, two. All right. So you don't have to rent it out once a year then. Yeah, but yeah. I mean, you might lose some money, but yeah. That would qualify. Okay, so then, so you now you qualified for that. What does it actually get you?

Oh, yeah. And then the second one, too, just on here you got your two hoops, material participation, which we talked around already. But generally speaking, the easiest one at meet is 100 hours and no one else works more than you. So then in terms of everything that, what's the whole point of doing this is now, let's see, by that million dollar house. And then you get $250,000 a bonus depreciation. Yep.

And you make $250,000 as a W-2 income earner. Guess what? Zero taxable income, fat refund for all the withholdings you had for that year. So you pay zero taxes this year. So it's dollar for dollar? Almost on the tax, dollar for dollar on a taxable income side, but not for your tax liability. Tax liability, so say if you make a quarter million dollars and between state, you know, on the Fed side about 25% on there. So, you know, you pay that.

And then so it's only one towards 25%. But say if you made $250K as income, $250K of depreciation, that is dollar for dollar. Depreciate dollars, deductions offset dollars earned. Got it. Okay. I understand. Yeah, not taxes, though. Taxes is always towards your effective tax rate.

Got it, got it, got it. Okay, cool. I'm there. All right. So now, let's go to how we're reducing our income. Let's go to the retirement planning you're talking about. You could stash more away in retirement. Yeah, retirement planning is huge.

There's so many flavors of it. But, you know, the big ones that we really can see for real estate investors is whether it's a self-directed IRA, so you can draw back money out to invest. Or if you're a business owner who, needs more money and starts to become real estate investor, the solo 401k or the SEP IRA, I personally like the solo 401k if you own your own company or just a normal 401K, like I said, there's many flavors. But what you can do is you can contribute 23,500 as the employee. And then the employer, you can do a 25% match up to 46,500. So this year, 2025, you can put $70,000

away from Uncle Sam. So sometimes I joke and I call him Uncle Scam, but it's, you got that. And And then if you got a spouse, now you can do $140,000. Okay. Let's go back to our, we make $600,000. We want to get to $500,000. So we have $100,000. So if we put that $100,000 into a retirement account, we don't show that $100,000 as income.

Exactly, my friend. You got it down. Well, that's cool. Oh, yeah. We can go on days on days. We got stretch. Yeah, I'm trying to slow you down so everything can be actionable for anyone that's listening.

So that's good. Oh, yeah. I'm just too excited. just to save people money here. Right? No, I love it. That's when you're passionate about your thing. That's who I like to talk to.

I like you. We've got the Big Beautiful Bill. We got 100% bonus depreciation. We got the salt cap. Is there a third one? Oh, yeah. There's a third one too. There's a ton, actually.

I got this little cheat sheet too. So if anyone wants to just DM me on Instagram, the CPA dude, and this DME BBB, we got an automation setup. And then you will just send you that full guy here for you. There's a ton out big, beautiful bill. But the one that I want to leave us here with today is so, solar is going away, though. So for all our real estate investors or even primary homeowners,

the solar tax credit for the primary ends this year, and then the one for rental properties is going to end next year. But that's 30% discount on your solar panels. So that's going to go away. The new bill was not very eco-friendly. So, and then actually, you know, do you have until the end of September to get the EB tax credit for your car? That's $7500. But going back to the solar panels. So say the solar panels, I see this on tax returns all the time. 40 to 60 grand is the system cost. So let's say it's a $40,000 system. You would get $12,000 as to tax credit.

So then it's $28,000 out of pocket for you. Electricity bill over time, depending on where you're at, it'll pay off pretty fast. You know, five to seven years if you're in the higher part. But if you're, it's cheap electricity, then may take maybe double that. But that's going away at the end of this year for primary homes. And I'm telling a lot of our clients right now, I'm like, if you ever want solar right now is the time to go get it. So you could still get it now and still get the benefit, but after this year, you can't.

Yeah, exactly. That's 30% off. And it won't come on. I don't know if it's going to come back unless the next president, you know, they're more equal friendly on that side. But, yeah, it's 30% gone. And who knows that you're stuck for four years, at least unless they change it. But I would take advantage of it now. So what was the reason for that?

Oh, the reason? My conspiracy theory is when Elon and Trump had their lunch and nannigans together. It was kind of just a kick there. But truly... I think trouble just being vindictive against Elon. That's why he took it away. And that's by conspiracy theory. But what they needed to do was that this bill was very costly in terms of the deficit it was going to create.

So they needed the cut. Okay, that makes sense. Yeah. Yeah, yeah. Yeah, all jokes aside, yeah. I don't know. I got it. I was just trying to figure out like...

Because there's a lot in top right now. I just listen to something this morning on how just the whole... Is it green energy? The global warming. how this is just all kind of like, this is like the biggest, been the biggest scam pulled on the American people and ever, like how the global warming works.

And I was like, huh, anyway, I know that's not your expertise. Oh, yeah. I don't know much about that. Yeah.

But I'm just saying like the solar and the electricity and all that kind is like everyone's kind of like not, they don't really care about that anymore. You know what I mean? Oh, yeah, there's much talk about. Yeah, they're the incentivizing people to go that way right now.

Besides the tax. So that means those guys come knocking on my door, trying to sell me solar panels all the time. They're going to disappear. Oh, they're done already, my friend. I was sorry. They're doing around one. They're done.

They pivoted. I don't know where they're going to be now. So those guys aren't knocking on your doors anymore because there's no more tax credits to sell. It's not lucrative. It's not even a habit. No one walks. I mean knocking on the door selling bonus depreciation is what they're going to do.

There we go. There you go. Now we're talking. Yeah. Uh-huh. There's a business. Super. Yep.

Exactly. All right. All right. So let's see. Let's say someone is just starting a business. And they start their business. to be a real estate investor, they're going to be a landlord. That's going to be their business. They kind of kill two birds with one stone. They get the benefits of both of the real estate and the

business ownership. What's the first thing that they should do when it comes to their tax planning and just thinking of taxes in general? Yeah, first thing they should do is get some tax plan in place. And that tax plan, like I said, it doesn't have to be super crazy. It can be super easy. But, you know, I always say, you know, part of our system and how we do things is first your entity structure, right? number two is going to be your bookkeeping and your FPNA, your financial planning. So is it like, how are you going to do your bookkeeping? Also, what are you forecasting to make this whole year? And then from there, you kind of have some decent foundations.

From there, now we can build up, okay, we're going to make $70,000 this year. All right, how are we going to reduce that on taxes? Pull up the tax toolbox and be like, I'm going to pay my kids. And we're going to put a little bit of money towards charity. Also, I'm going to do that retirement part, put some money in the self-directed IRA, and then buy that property, take bonus depreciation on it. Boom, I'm down to zero. So those are just the initial few steps you want to have to do.

But yeah, just contact a tax strategist and then boom, let's just talk on that side and see if there's a way to help you out. Awesome. Do you know any good ones? Yeah, decent. Some got into CPA, dude. Awesome. Yeah, looking back, I wish I would have hired a bookkeeper much, much earlier than I did. Because it was a pain in the ass to go back and fix all that stuff.

Oh, yeah. Amen. Preach, my friend. Some people, I, I'm always shot by this. When we go to tax filing time and I'm like, hey, can I get the income statement for your property? And I like, I don't have it. I'm like, you told me you just put in $100,000 into investment that you have not monitored for the last year. Like, are we just praying and praying? You're like, if I invested $100,000, I want to see how this is performed on a monthly basis. You can check your stock amounts every day. Why aren't you checking your real estate portfolio at least a monthly basis? Mm-hmm. Yeah, totally. Yeah, it was very expensive to go back and retroactively fix all of my books. Oh, yeah, pro-tip here, yeah. And it doesn't have to be that, not bad at all on our bookkeepers are not that expensive, right? But if you ignore them, they can be very expensive. Exactly. Like, there's one person she had bad bookkeeping. I found $20,000 that she missed. And I was like, I only charge you $150 a month if you're on our membership for it. So I was like, I did pay off my fees for, a long time, a friend. Totally, totally. That's a good close for the CPA guys. My first CPA said that.

He said, I was like, you're too expensive. And he's like, okay, I won't charge you anything if I don't prove to you that I, that I saved you more than what you're going to pay me. I was like, he makes Max. That's why we work too. You come into our world. Mm-hmm. We go see if we can even help you.

We'll check out a blueprint. We'll refund you in full. We can't. And then, hey, part ways, you know, as an easy business to be in. You can literally see it and prove out in numbers. What's one piece of, say, common tax advice that you hear that you just totally disagree with. The first one was that get a real estate license and you're good to go.

That's one on that one. A second one I would say is buying a car and it's letting the tax tail leg the dog. They'll let the tail leg the dog. So like you're buying stuff you don't need. So like, you know, a lot of our real estate agents, they want to buy fancy nice cars. It's like, I got shell to the house looking real fancy. And I'm like, your car's two years old and it's beautiful. You don't need a new car.

So getting writeoffs that don't have an ROI, I would say. That's really bad advice that I would see out there. And then the three, the third one is everyone does this, not everyone. 80% of the population does this every April. They just file their taxes and don't do any tax planning. Like, literally they just don't do tax planning. I'm just like, would you build a house without a blueprint inch or would you go workout without a workout plan?

Right. I don't think we would file your taxes on a tax plan. So that's the big thing. Like, they didn't even do anything. And like I said, it can be really easy. Just juice out your 401k, my friend. Juice out your HSA. That's going to save you. That's 24,000 times 20%. That's 4k right there that you can save, right? What? Say what are getting towards the end of the year. And you know, you're going to have a big chunk of money down because you had a good year. And you mentioned, you know, just writeoffs with no ROI. But there does come a time where, okay, I could send $100,000 to Uncle Sam or I could use $100,000 for this.

What are some examples of those dollar for dollar things that you'd rather go buy yourself something rather than send it to Uncle Sam? Oh, yeah, for sure. So the big thing that, you know, we really see is for businesses themselves, right, is, you know, any type of business reinvestment. Right. That's from the social media to your media, to your brand, to mentorship, to coaching. that's going to be big. If you're under $25 billion has a business, check out your inventory.

What can you replace and replenish that you know you're going to have to use next? Those are a dollar for dollar on the taxable income side, not the tax liability side. Is there anything on the tax liability side that's dollar for dollar? Tax liability, it would only have to be tax credits. So your tax credits, they're limited on what you can do, the solar tax credit, the EV credit. There's also investment tax credits that you can do.

So the only thing is our dollar for dollar on the tax credit. tax liability side is going to be tax credits. There's 401Ks. They give you tax credit for that for starting one up on that side. Also hiring people that just came out of jail, having a hard time finding a job. There's special credits for hiring those folks. So there's some small credits,

but business reinvestments always big. If you're running ads, that's always big. You'll pay your full annual membership for whatever software. Say you're doing, I don't know, like Google Drive or whatever, paid the whole thing for the whole year. That's going to be big there. And then if it's your end and your real estate professional status or short rental,

that's why you want to take action now and spend and plan now on it. So that would say that's another great area. And then Augusta rule, you know, if you didn't do the Augusta rule yet, you know, do the big Augusta rule. That's like non-cash expenses. You're just moving them around. Yeah. So areas.

And then last, but not least is always this was retirement accounts. You know, that's your last band aid option. And then, you know, really plan D plan up here is this, if you start up that foundation or you want to do charitable contributions, that would be in your next big area of opportunity for you. Don't really have buy funds is very big that we see too. Got it.

Wasn't the, I was under the impression like the, the farm vehicle right off was a dollar for dollar thing. Well, farm vehicle. Oh, that one, we don't have a lot of farmers.

No, but I mean, that's what they called it. But if you bought ASA, a range over over a certain weight. Oh, section 179, yeah. Mm-hmm.

Yeah, yeah, so if you want, actually, when I did grow up in Minnesota, You'd always notice in that fall, when Faroys had a good harvest, they would always have new F-250s. So you could do the Section 179, so you buy a $100,000 truck, and you only put down $10,000 down.

You finance the other $90,000. You still get the full $100,000 as a deduction. So that's reducing taxable income, but not tax liability. Indirectly reduces tax liability. So if you're like me in California and you're paying 50% taxes, that $100,000 truck is actually going to save you $50,000. So it's whatever your spend is times your tax rate. That's how much you save on taxes.

Got it. Okay. I'm going to try and test you right now, okay? I will try. Hopefully I pass. I'm going to fail. I have a buddy and he's done very well for himself and he bought a jet. I think it was 14, 15 million bucks he paid for this jet.

Oh, wow. And he explained to me that he basically had to because of his tax situation. It was either he was going to send all this money to the IRS. or you could own a jet. Okay. And he explained it to me. And I was like, I just didn't want to act like I didn't understand. So I just kind of nodded my head.

Oh, yeah, I get it. I guess I'll just cross that bridge when I get there. But do you know what that means? Like, why it was more beneficial financially for him to buy the jet than not. Yeah. So I'm going to just assume that he had the right business purpose and tent documentation, all that fun stuff. But yeah, let's just say that he had, you know, $15 million in that profit on his business.

and that jet was 15 mil. And then let's say you do 20% down, the bank's going to finance the rest of he did $3 million out, right? Versus having $15 million at 50%. That's $7.5 million. He had to pay him in taxes. Now he's arbitrage, $4.5 million now because he doesn't have, now he's getting a free loan from the government.

He pays down the jet and he's going to save more of his time, make more money. So that's where you can arbitrage. And this is where, you know, Rob Peter Pay Paul is how the tax code works. So essentially that's what he's doing, just arbitrage of money. Okay. Lever bringing money smartly, just like real estate investors. So he put $3 million down.

So he has debt on $12 million. Yep. But he can write off all of that, the whole $15 million against his taxable income. Exactly. So now he's not showing a $15 million profit. Nope. Exactly. He just went down to zero.

And then now if it's $15 million, zero profit, zero taxes. So you pay no taxes. All right. Okay. So that's dollar for dollar then, right? Oh, yeah, yeah, yeah. On the profit side. Yep.

Yeah, yeah, if that's what you mean by dollar for dollar. Is that? Yeah, yeah. Okay, so on the profit, I was like, you're a really big deal. Exactly, order of operations. Like, you start with that and then whatever your taxable income is left, then you times that by your tax rate, but I bet zero at zero. Yeah.

Okay. I'm sorry if I was used that wrong terminology, but now I can, okay. Oh, you're all good, my friend. I'm just a technical CP nerd over here. But that's okay, and you have responsibilities and you have to say the right things over there, too. So, yeah, I just get to pretend to be one on a podcast. Cool.

All right, man. So what's, if you. you're going to make one prediction over the next 12 months that you don't think most people are paying attention to, what would that be? Oh, the biggest thing. Most people are around the number of the 5% of population, but AI wave is here, my friend. They either be left into dust, you're going to be defensible against it or you're going to dominate.

You know, we're headed towards to dominate over here. But the biggest thing is that AI is here to replace many things. I just was recently at AI conference. There's humanoid, robots, literally assembling BMWs right now. FedEx has hired them. So it could be working all the time here. And then same thing from our space, AI is here to do transactions. They can pick up the call, put ship on caliber and go.

We've been testing some tools that help with the tax prep even. They're not there yet, sadly. Like, I wish I could save a ton on labor. But yeah, AI is here to enhance, right? Right. People are like, oh, my God, it's, you know, so scary. It's not. It's an amazing tool.

Harness it and take it bear of it. So that's big on that side. Yeah, that's, I certainly have. I don't even know what my life looked like before AI now. That's how much I use it. Exactly. It's like my phone. And it's like the internet.

Like, I don't remember what my life looked like before. Yeah, I used to have a pager. I really did. But I still don't remember. So what did I do with the rest of my time? I didn't sit there scrolling through my pager all day. But, you know? Cool.

Yeah, there's a trend. You notice this on YouTube every once in a while. like you'll get 20 different creators all creating kind of the same type of video right and one of those videos that trend that's going on right now is the only five jobs that will exist by 2030 oh is that it was that a video yeah a lot of different creators are doing their version of that right now i haven't watched it yet i'm just like okay i'll get to it everyone's going to do it i'll get everyone's different perspective but i am curious as to what those five jobs are going to be so they got my and my curiosity peaked.

It's got to be a roofer, right? That's got to be one of them. That's a hard one, right? Yeah, exactly. I don't know if the robots can get up on the roof and do the shingles. But anyway, it's been a pleasure. Hey, if someone wanted to get in touch with you, Tony, what is the best way for them to do that?

Yeah, best way is just our website, go. The cpedud.com. That's go. dot the cpedu.com. And then Instagram, the CPA dude, or everywhere there. And then if you want to text or call us, 254 CPA dude,

254 CPD dude. So all our social media is the CPA dude. That's awesome. That's good that you got that. It's hard to get those these days. Oh, yeah. Uh-huh. Yeah, we got lucky when we came into the space.

Yeah. Not too many CPA dudes out there. Exactly. A lot of CPA guys. No CPA dudes. Exactly. We're one a few, yeah. Or one of one actually, I think, yeah.

Yep. Well, hey, you got the dot com, so it's you. You're the one. Yep. Exactly. All right, Tony. It's a pleasure. Let's stay in touch, bud.

And I wish you the best. And, yeah, We'll talk again soon. All right. Sounds great, Matt. Thank you for the time here today. You bet. Take care. A lack of capital has killed a lot of dreams, but only for the people who don't know the loophole. If you have a 680 credit score or better and could use up to 150K at 0% to kickstart your next venture,

get approval in 30 seconds or less, and you don't even have to talk to anyone at loophole lending.com. This podcast is a part of the C-suite radio network. For more top business podcasts, visit C-Suit. www.sweetradio.com