Tax Hacker Tuesday is back to teach you about an EPIC W-2 tax strategy! Tim Berry explains a special strategy for W-2 people to implement in their businesses, how to get the most out of personal property put toward your business, the difference between personal property and real estate, and more. Learn it all with Epic Real Estate and Tim Berry on Tax Hacker Tuesday!
What You Will Learn About an EPIC W-2 Tax Strategy:
- The limit to the amount of personal property you can put into your business
- Why putting personal property into your business is a good idea
- One easy way to put a large amount of personal property into your business (+ financing!)
- How to do your Airbnb “side hustle” right in terms of tax savings
- The difference between personal property and real estate (and how to benefit off each)
- The ideal person to benefit from this tax strategy
- It’s been great meeting you virtually. Would you like to meet in person? Our next live event is right around the corner! Go to EpicIntensive.com for the details.
- Need money? We have secured more than $15,000,000 of funding for the Epic community, people just like you. Get access to fast cash for your real estate investing business with our “one-of-a-kind” credit-based funding program at EpicFastFunding.com
- Need time? Work on your business rather than in your business by leveraging the time of others. Access free information and find real estate-trained virtual assistants to help you free up your time. Learn more at VAsForRealEstate.com.
- Need training? The ultimate training environment for real estate investors: Version 3.0 of The Epic Pro Academy! New look, new lessons & new content – we’ve got everything you need to know to get your first paycheck!
- Need someone to do it all for you? If you’re an Accredited Investor, you can diversify your portfolio by hitching your wagon to our train and share in the profits. Go to EpicWealthFund.com to download the executive summary.
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Speaker 1: This is Theriault 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.
Matt Theriault: All righty. Welcome back to The Epic Real Estate Investing Show. It is Tuesday and we know what that is – that’s Tax Hacker Tuesday, with my attorney and friend, Tim Berry. How it goes it, Tim?
Tim Berry: It is going fantastic, Matt. And yourself?
Matt: Doing wonderfully, and yeah, Mondays here at Epic, we show you new and creative ways, as well as time-honored ways, of making money, using real estate. And then on Tuesdays, Tim chimes in to show you how to keep it. I think it was a couple of weeks ago, a couple of episodes back, we were talking about the free consultations that we were giving out, and we got overwhelmed, so we had to readjust on how are we going to facilitate that, but we’re still making it available to everybody that calls.
But we created some “categories” of who you could help, who you couldn’t help, and one of the people that you suggested you couldn’t help was this W-2 person. Turns out that’s not necessarily the case, ’cause some instances have come up where you’ve actually been able to help them significantly. I don’t know, Tim, you got a phone call, and the way you explained it to me, I think the listener would be better off if you explained it.
‘Cause I’m not an attorney, I’m not going to pretend to be one, especially when there’s one on the line with me.
Tim: I hear you. I was talking with one of your listeners, and they were W-2, they made a ton of money, a lot of money, and they said, “Is there anything we can do to offset our W-2 income?” One of the ideas that’s out there is there’s something called the 179 deduction, and the 179 deduction says that anytime you put personal property into use for your business, if you do things right, you can fully write off that property immediately in the year that you do that.
If you put $500,000 worth of personal property into operation for your business, you can have a $500,000 write-off, and that’s good against your W-2 income, as well. That’s the start of an idea of what we can [crosstalk 00:02:38].
Matt: There’s no limits on that, as far as-
Tim: I think the limits now are a million bucks. You can put a million dollars worth of equipment into operation. They changed it during the Trump thing, and I think it’s a million now. I’m not positive about that.
Matt: Okay, perfect. Okay go. Continue.
Tim: Well, so now the big question mark is, what personal property can you put into operation for your business that’s worth $4 or $500,000? The simple easy one is, why not mobile homes? Mobile homes are considered personal property in most situations. So now if you went out, you bought a bunch of mobile homes, and the cool thing about mobile homes also is financing. You could put $10,000 down, buy yourself a $100,000 mobile home.
Put $40,000 down, you’ve got $400,000 of mobile homes, and $400,000 of tax deductions. That’s kind of cool. We can get leverage-
Matt: So you can put the $40,000 down, but you can take the full $400,000 in tax deductions?
Tim: You get the full $400,000 in tax deductions.
Matt: That’s [crosstalk 00:03:38].
Tim: And by the way, Matt, I know we’re going to get our listeners say, “There’s no financiers for 10% down on a mobile home.” Okay, I’m sorry, but I’m just trying to get the point across. It can be financed, and you can get the tax deduction.
Matt: Right. Totally got it.
Tim: Cool. So now, you put these mobile homes into a business operation, you set up your Airbnb, your VRPO -those things cash flow anyway, so you set ’em up in a nice location by a beach, by a lake, or whatever. You start doing that and at the end of the day, you’ve got the tax deduction for what you paid for those mobile homes.
If it’s 400,000 bucks of those things you bought, let’s just say the business breaks even, it doesn’t do anything in year one, you still have that $400,000 tax deduction you can use against W-2 income. That’s a pretty cool, pretty hefty, pretty fancy, gee whiz tax deduction available for W-2 income.
Matt: Right. Got it. Okay, so your W-2, so you don’t have a business, but now you’re starting a business is basically what it is. On the side.
Tim: Starting a business, yeah.
Matt: It’s the new side hustle.
Tim: Yeah, [crosstalk 00:04:44]. Yeah, your side hustle. Right, yeah.
Matt: The mobile home Airbnb side hustle.
Tim: There it is, there it is.
Matt: I think I should write a book about that one. All right. But wait, there’s more, right?
Tim: There is more. Yeah, you’re right, but wait, there’s more. It slices and dices. This is the cool thing, too. That was personal property. Now, depending upon your location, your estate laws and all that other stuff, but most states say that once you permanently attach something to the ground, it becomes real estate. Just think now, if you remove the wheels underneath that mobile home, you attach it, you stake it to the ground, you put down whatever you’re going to put down to keep it structurally sound, now that mobile home you took a tax deduction on becomes real estate.
Now if you want to sell that thing, you can do your 1031s, you can do your installment sales, blah, blah, blah, blah, blah. That’s a great way how you can get the tax deductions upfront, convert it to real estate, and do all the neat tax differed tax savings ideas whenever you get rid of real estate.
Matt: I like it. Okay, so the ideal person for this would be… Does it have to be someone that makes $400,000 in a year? Or can that be, if they made $200,000, could they carry that forward for subsequent years?
Tim: They could carry it forward, but it probably doesn’t make sense to do that. If they make $200,000, buy $200,000 in mobile homes. Simple little thing, and if they want to go to more of a mobile home empire, okay, maybe loan the money to somebody, the excess cash, and then you take over those properties whenever you need your tax deductions. There’s different ways we can shape and slice that to offset your W-2 income.
Matt: Got it. So don’t buy more than you need, basically.
Tim: There you go, yeah. Simple solution.
Matt: I like it. I like it. It never ceases to amaze me what the… I wonder if our founding forefathers saw this coming.
Tim: Buying mobile homes?
Matt: Yeah, the Airbnb mobile home side hustle.
Tim: Of course they did. I mean, that’s-
Matt: Yeah, they’ve prepared for everything, right? That’s awesome. But there’s obviously, so you’re saying this is all workable if you do this right, right?
Matt: Okay. That means you can do this wrong?
Tim: Oh, absolutely. The thing is, how do I even put this? There’s a lot of people who are going to say, “Oh, you can’t do that,” and in fact, let’s go back to that listener. When I first told her about this, she said, “Oh, I was told by my accountant that mobile homes are not considered personal property. This won’t work in this context.” I said, “Okay, cool.” I sent her a ruling from 1978 and boom, this person hadn’t done the research and wasn’t aware of this ruling back in ’78 saying it’s all allowable.
Once again, kids, don’t try this at home unless you have the proper guidance and all that other stuff is what it’s coming down to, yeah.
Matt: Got it. Yes. Paid professionals will carry out these stunts.
Matt: Or well-trained professionals.
Tim: I wouldn’t call them well-trained.
Matt: Yeah, well-trained, too. All righty. So, yeah, if you want to look into that, if that fits into your little box, or your big box, I guess they’re big mobile home boxes, you can go and you can connect with Tim and consult with Tim and to see if that is going to be a good fit for you. In the meantime, don’t walk away empty-handed. Go to TaxHacker.com, download Tim’s free book, How To Take Advantage Of Five Loopholes And Trump’s New Tax Plan the Mainstream Media Isn’t Sharing With You, nor will they ever share with you, and consequently, that could cost you a small or large fortune.
Grab that book, and right there after you’ve done that, you’ll have the opportunity to schedule some time with Tim, and then either he or one of his team members will get on the phone with you for a short 5 to 10 minute call to assess your situation. If there’s a good fit there, they’ll take the next step and schedule a tax action plan, or something even juicier, like the Airbnb mobile home side hustle plan, and if there’s not a good fit, they’ll go ahead and they’ll share some alternative resources to where a better fit for you can be made.
Either way, Tim and his team are committed that you are better off after the call than you were before. That’s just Tim, that’s what he does. All righty, Tim. Another brilliant demonstration of the inner workings of your mind, and your supreme intelligence over there, and your good looks, ’cause I’m looking at you on video, too.
Tim: It’s getting really thick now.
Matt: Yeah, it is, yes. All righty. So yeah, have a good week, Tim. I’ll see you next Tuesday.
Tim: Okay. You too, Matt. Thanks.
Matt: All righty, you bet. And I will see you next Tuesday as well, as well as Friday, as well as Monday, right here each and every week on The Epic Real Estate Investing Show. We’re about to bump up to four days a week, four days of Epic goodness. Tune in, share it with your friends, and I appreciate you. Let us know if there’s anything that we can do for you. All right, take care.
Speaker 1: 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.