Epic Real Estate Investing - Trump's Tax Plan and What It Means for Real Estate Investors | 320

Episode Date: December 12, 2017

Did you know that up to 50% of your lifetime income will be wiped out by taxes? What if you could stop this? What if you had a level playing field with the wealthiest 1%? Now you can! Tim Berry shares current tax strategies that anyone can implement to hack the tax code, protect your assets, and keep what’s rightfully yours. It’s time for Tax Hacker Tuesday! ______   The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? • E.ducation • P.roperties • I.ncome • C.oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Did you know that up to 50% of your lifetime income will be wiped out by taxes? What if you could stop this madness? Isn't it about time you play on a level playing field with the wealthiest 1%? Now you can. Tim Berry, attorney at law, shares here each and every week current tactics and strategies that anyone can implement to hack the tax code. Protect your assets and keep what's rightfully yours.

It's time. for Tax Hacker Tuesday. So welcome to Tax Hacker Tuesday. This is our first episode of a special weekly episode that we're going to be conducting. I am Matt Terrio of epic real estate investing. We've been on the air for almost eight or nine years now, showing people how to make money. And I thought it would be really important to insert some additional information

and share this information with you on how to actually keep it. and I've asked my attorney to join me on this show each and every week. His name is Tim Barry. Tim, say hello. Hello. Very good. Thanks for having me, Matt. Appreciate it.

You bet. You bet. Well, this is probably going to be your day mostly, but I'm here to help you kick it off. And whenever we need to connect, we will. But this is your area of expertise as when I'm giving out financial advice and giving some sort of direction and guidance. I always have to use the disclaimer of, I am not a written attorney. Please confirm this with your own legal counsel, but now we have somebody who isn't actually attorney. So how does that work as far as people taking information from here, Tim? Well, how does that work?

They get to listen to my pearly voice, talk about all sorts of ways they can save taxes and build up more money. That's all. Okay. Perfect. Perfect. So let's just get started. Tim, if you can just share a little bit about your background and how you've come to be where you are today. Gosh, background and where I came to be. Background is started off in the world doing financial stuff. Used to be a stock broker, commodities, broker financial planner, all that good stuff. Somebody gave a presentation about a trust one time in one of the sales meetings. I thought, well, that is some really cool stuff, what you can do with the trust and taxes. So based upon that, I went to law school, learned all sorts of neat stuff about tax.

taxes and then have, gosh, graduated law school in 97 and been doing the tax thing ever since. So I'd like to think my forte is being able to apply a combination of the tax planning, the asset protection planning, but also having to understanding the financial matters that drive it. Probably the most important thing for people to understand from a tax perspective is a financial concept called the time value of money, and yet few people really do. So that's a long-winded way of saying where I started and where I'm at now. Just a tax planner, a fancy tax planner. Super.

Great. So the theme of this show is Tax Hacker Tuesday. And I know it has a good ring to it. But can you kind of explain a little bit? I mean, if you just watch the media, you think that the rich and the wealthy have an unfair advantage in some regard to how the tax code works. but the tax code really applies to all U.S. citizens equally, doesn't it? Well, yeah, it applies to all U.S. citizens equally.

But let's go back to that rich have an unfair advantage. They have the unfair advantage in that they have access to the people who have the ability to inform them and educate them about all the various ways they can save on taxes. So now with this Tax Hacker Tuesday, and we haven't even talked about this, Matt, now your listeners are pretty much getting that unfair advantage too, because they're going to have access to all that wonderful information. Super, super. So we're essentially leveling the playing field here for everyone that's listening.

No, we're going to make it tilted on the benefit of your listeners. Perfect. Even better. All right. So let's see. I think a great topic for us to dive in and kick off this series with or this show with is what's going on in the world of our president, Donald Trump and how his new tax bill that he's moving forward.

I know that there's been some progress in that. I don't really watch the news all that much other than just sound bites and headlines. But there was a question that came inside of the Epic Pro Academy Private Facebook group. And actually two or three of them. So I thought we just go there and then you tell us what to pay attention to and what doesn't need to be paid attention to yet or how we can maneuver our own business and our own lives around it. Sure, sure. So you want to just dive in or what were the questions? Let's do that.

Sure, perfect. So this comes from Anita, and she says that now that this tax bill is going through, what are your thoughts on how this will affect the real estate market? First off, hi, Anita. I think I know who Anita is. So nice having you asked the questions, Anita. What are my thoughts on this tax bill? More than likely, this tax bill is going to be a blessing for people who flip real estate. it's probably going to be an absolute blessing for flippers. For buy and hold people, it's probably neutral. It might be a little bit negative, but it's probably neutral for the buy and hold people.

The super big challenge right now, and as we're recording this, right now, they're about to go to something called the Joint Committee for the tax code. It hasn't been set in stone as of yet. It certainly hasn't been voted upon. So anything we talk about right now is pure conjecture, But if we look at both the Senate bill and the House bill, once again, broken record. If you're a flipper, you're probably going to be able to cut your taxes in half.

If you're a buy and hold person, depending upon your income from other sources, it's just a wash. Got it. So how does that work cutting their taxes in half of their flipper? Well, if they're a flipper, I mean, you got this, the corporations for a C corporation, they're looking to drop C corporation taxes down to 20%. woohoo. Now people can start flipping inside of a C corporation, only pay taxes on 20%. That's the same thing as long-term capital gains right now for the higher income people. And they can keep excess income inside that C corporation too. I mean, that's that's massive. It's probably better than

retirement plan. If they go through an S-corpor, go through an LLC, there's all sorts of weird formulas right now about how that's going to be taxed. But let's say that's going to be taxed at 25%. That could be even better than the C corporation. And then if we really want to have fun, we can do that Reese's peanut butter cup thing where we combine the peanut butter and the chocolate. And what we do is we add the C corp and S corporate pass-through. And so we can throw our excess income inside the C corporation

where it's only taxed at 20%. And the pass-through is it whatever. So that was a long-winded, complicated way of saying, there's some really cool stuff that people are going to be able to do to effectively, I don't want to say wipe out, but slash their taxes in half if they're flipping real estate. Got it, got it. So the way that this question was posed and kind of what you said,

Anita shares says that now that this tax bill is going through, you say it hasn't gone through yet. What would be the time frame that we would expect when people actually want to start, you know, making some moves and maybe, you know, making modifications to their entity structures? Oh, boy. Good one, Matt.

And good one, Anita. I don't have a good answer for you there. I've got a number of cases and I'm probably irritating a lot of people by not getting back. But the reason I'm holding back is what dance moves we do right now are going to have ramifications for next year. And right now next year is just a big black void question mark. We don't know exactly how it's going to pan out. So when's going to be the right time to be starting to make the moves? Once the final vote is taken on the tax bill. Once the final vote is taken on the tax bill and it passes, we'll know exactly what to do then. But also, let's keep in mind, there's still all sorts of neat moves you can do from an

asset protection viewpoint. So tax code right now, question mark. Asset protection, yeah, no question mark. That's black and white. Got it. Another thing she wrote here, actually, she continued this in the comments below. It says the bill removes the second home mortgage tax deduction. And I invest in a market that's 75% second homes, wondering if I should make some moves with my properties. What is your insight on that? Or what would be your thought? Well, I don't fully understand that question. And so let me be a politician and answer my question as opposed to her question, or my version of her question. You know, there's some really cool stuff what you can do with people's primary residences.

And I have a lot of real estate investors that are going out and buying people's primary residence that has some challenges. And as I'm sure most people know, if you live in a property for two years out of five, you can sell it and you don't have to pay any taxes on that. Well, there's some neat ways that you, the real estate investor, can utilize the seller's tax benefit. of living there two years out of five and being able to sell it and not pay taxes. Effectively, you can get that benefit as well. So I'm not sure what I needed meant by there's a lot of second homes, is that the sellers, is that the buyers, I'm not sure with the second home aspect tied into, but there's always neat things that you can do with the tax code.

There's always going to. And let me throw out another thing too. There's a lot of people saying, oh, this is tax reform. No, this has nothing to do with tax reform whatsoever. this is just a bunch of band-aids applied to the current tax code. Current tax code has a ton, a ton of amazing things you can do. And a lot of those aren't affected by this in the slightest. So there's going to be plenty of things that can be done no matter what happens with this latest vote.

Okay. So maybe that answers my next question because I was going to wrap this up with. Is this good news or bad news for real estate investors? You know, to be a little bit snide or persnipity, this is great news for informed real estate investors. This is bad news for the people who aren't informed. And that kind of goes back to, on a serious note, we're not going to level the playing field for your listeners, Matt. We're going to give them, you know, we're going to tilt the playing field in their benefit. Because once again, there's always, always going to be loopholes within the tax code.

Everyone's seen the pictures of how big this stuff is. is if you don't know what you're doing, you're going to lose a lot of money. If you do know what you're doing, you're going to be able to save a lot of money. Got it. Got it. Perfect. All right. So there's always something that you can do.

They move the target around, but we just got to move our barrel. Move our aim. Very good. All right. So, yeah, with that said, you know, I guess this is someplace where people are going to want to stay tuned to get that type of insight and stay up to date. with what's going on and how it impacts them in their real estate investing endeavors. So if you have a question for right now, since this is such a new show, we'll probably have

a more formal place to post your questions very, very soon. But in the meantime, inside of the private Facebook group for the Epic Pro Academy, the members area, go ahead and post your questions there and we'll get those answered. And then hopefully we'll be able to make an announcement in the next week or two of where that we can do that in a more formal area or a more constant that's specific to tax hacker. All righty. Well, Tim, I think we're off to a good start. You dropped some golden nuggets.

I think you certainly laid the groundwork for people wanting to hear more. But give us the specific questions and we'll address those specifically. All righty. Any final words there, Tim? No, I'm Matt. Just want to say thank you very much for having me and look forward to work with you on this. Likewise. That's it for today as we dream of a tax system that works just for you.

But until then, you have Tim Berry. See you next Tuesday for another episode of Tax Hacker Tuesday. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.