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Why You Should Rent to Your Business

By Keith Taxguy / May 24, 2019 / 0 Comments

There are no drawbacks to separating the real estate and business into separate LLCs that I’m aware of. Every attorney I’ve ever spoken with agrees on this. Real estate should never be held inside an S corporation or LLC treated as such. Any tax negatives are easily resolved with elections.

The issues involved with combining real estate and a business under an S corporation are many. Legally you limit your option and put asserts unnecessarily at risk. The tax problems are hard or impossible to resolve without inflicting additional tax pain.

Structured properly your business and assets can enjoy legal protections while basking in the light of lower taxes.

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3 Steps I Took to Reach Financial Independence by Age 32

By Keith Taxguy / May 20, 2019 / 6 Comments

Once I digested that it was only a number I decided to do what I always did. I try lots of things, grow my business and expand my sources of income, much of it passive. 

You see, I learned the most important step of all: It’s the journey that matters, not the destination. And I had the best mate in the world along for the ride.

It was that day when I was a 32 year old man that I learned to live life for the first time. Live, for Real. 

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The Best Rental Property You Can Buy

By Keith Taxguy / May 17, 2019 / 6 Comments

It’s official. I’m back in the real estate business!

Before you get too excited, let me explain. Waaaay back in the day I was a third owner of a real estate partnership with my dad and brother. We bought investment properties of all kinds. We specialized in single-family homes, but owned plenty of multi-unit buildings, storage and rooming houses. 

My partners were more along the lines of the silent kind. I, of course, could bounce ideas off them, but the workload fell on me. I hired maintenance staff and crews and was always interviewing potential property managers. Before we closed shop we had taken an interest in 179 buildings (not all at once). At the peak we had somewhere north of 80 units scattered all over NE Wisconsin.

We sold properties frequently once our inventory grew. We held some properties longer — our first property was one of the last to be sold.

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Hiring a World Class Tax Professional

By Keith Taxguy / May 12, 2019 / 10 Comments

What is the largest expense you’ll have in your life?

Some will say it’s the purchase of their home or their college education. Others, thinking about it a while, feel transportation expenses lead the list of lifetime expenses. You would be justified in thinking medical costs, including medical insurance, are the biggest expense you will face in life.

Yet none of these expenses are close to what you will pay in taxes over a lifetime. 

Taxes will consume over half of what the average American earns over a lifetime. This means no other expense can possibly be larger.

The list of taxes in nearly inexhaustible: federal income taxes, state income taxes, sales taxes, excise taxes, payroll taxes, property taxes and now tariffs are being added to the costs of many goods you buy.

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The Once-in-a-Lifetime IRA Transfer to an HSA

By Keith Taxguy / April 28, 2019 / 9 Comments

The concept is rather simple. The benefits are fairly small, but worth it if your situation dictates. Those facing large RMDs and those seeking to turn a small portion of their tax-deferred tIRA into tax-free growth in an HSA will find the most value.

Now I need to make a confession. When I first saw the question in the private Facebook group I thought the person posting was smoking something. I never heard of such a tax strategy (or it went in this ear and out the other.) I had to look it up to believe.

If you plan on using this strategy don’t get mad at your tax professional if they never heard of this. Just tell them to go to their software’s Special Situations tab on the 1099-R screen. All they need to do is add one simple number (the amount transferred to the HSA up to the contribution limit).

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High Interest Savings Account Few Use

By Keith Taxguy / April 21, 2019 / 18 Comments

Whenever I attend a conference I look for things the crowds miss. The mainstream information is still absorbed, but there always seems to be something most people pass that contains a lot of potential.

Last year at FinCon such an opportunity screamed to me. Several companies were offering 5% on savings with few strings attached. One was geared toward military people, but had some fees and restrictions I felt uncomfortable with.

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Finding Under-Valued Stocks

By Keith Taxguy / April 14, 2019 / 11 Comments

Jack Bogle gave us the index fund. Warren Buffett has said most people should put their money into index funds.Personal finance bloggers—especially in the FIRE* community—spout “index fund” like it’s a nervous tick. And you might have noticed this blog has the same nervous tick.Some are worried about all this index fund investing. The concern is index funds will control so much of the market that it will lose its efficiency. I remember the same concerns in the 1990s when I was a stock broker about mutual funds in general, most of which were actively managed.Index funds will not break the market any more than actively managed mutual funds did. For one, there will still be plenty of people investing in individual stocks. And the hedge fund guys will do their share providing liquidity.

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