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.Read More
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.Read More
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.Read More
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.Read More
There is a reason the emergency fund — and her close cousins the sinking fund, maintenance account and working capital account — is such a widely held belief. Without the capital needed for extraordinary expenses you risk financial hardship when a large expense arises.
There is another advantage to having these accounts: avoiding the need to borrow at an unexpected times. Business owners understand the advantage of having adequate working capital. They also understand that a financial cushion is more than just a convenience in business. Adequate working capital can remove or eliminate the need to borrow under extreme situations.
The best part of an emergency fund is that you get paid a token amount of interest as you wait for the inevitable versus paying interest because you didn’t plan accordingly. This affects profits.Read More
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.Read More
You might notice the bloggers spouting the same gibberish get picked up by mass media outlets while your favorite blog (that had better be this one!) gets nary a mention. The reason for this is people prefer the familiar to an honest answer that could make a real difference.Read More
The tax profession is aging. Attracting new people to the profession is difficult because it lacks the glamour of other professions. But sit in any public forum and mention you are a tax professional and you will be inundated with tax questions and offers to take them on as new clients. The tax profession is a good field with ample opportunity to do good, but few even consider accounting or tax as a career option.Read More