What’s the best way to handle the ups and downs of investing and tax consequences? Sit on your hands long enough until everything is okay, again. The hardest thing sometimes is waiting. In the meantime, Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

Does day trading cause a higher tax consequence than long-term investing? Typically, if you have gains, it’s going to have a higher tax consequence, primarily because the day trading is all going to be short-term trades; however, long-term capital gains is subject to that long-term capital gain treatment - usually a much lower tax percentage

If I own a property and I owe back taxes, can the government take it? If you owe back taxes, the government can certainly take your property and put a tax lien on it; then if it’s not paid, the government can sell it to make up for the taxes

Can I rent a house owned by one of my LLCs? You can’t rent to yourself your own house

How does rental income get taxed? Rental income is taxed at ordinary rates, it’s ordinary income; however, it is passive income and passive losses are limited

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Resources:

Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis

http://aba.link/infinitybook

Capital Gains and Losses

https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0

Section 121 - Capital Gains Exclusion

https://www.irs.gov/taxtopics/tc701

Entity Formation

https://andersonadvisors.com/entity_formation/

Self-Employment Tax

https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

Bonus Depreciation

https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act

Depreciation Recapture

https://www.investopedia.com/terms/d/depreciationrecapture.asp

1031 Exchange

https://www.irs.gov/pub/irs-news/fs-08-18.pdf

Cryptocurrency

https://www.investopedia.com/terms/c/cryptocurrency.asp

Nexo - Banking on Crypto

https://nexo.io/

Real Estate Professional Requirements

https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf

Renewable Energy Tax Credits

https://www.energystar.gov/about/federal_tax_credits/renewable_energy_tax_credits

Federal Solar Tax Credit

https://www.energystar.gov/about/federal_tax_credits/renewable_energy_tax_credits

Retirement Plans

https://andersonadvisors.com/retirement_plan/

Wills and Trusts

https://andersonadvisors.com/living_trusts/

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019

https://www.congress.gov/bill/116th-congress/house-bill/1994

Step-Up in Basis

https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.

Section 26 U.S. Code 469

https://www.law.cornell.edu/uscode/text/26/469

Old-Age Survivors and Disability Insurance (OASDI) Tax

https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf

Cost Segregation Authority

https://costsegauthority.com/

26 U.S. Code Section 1256

https://www.law.cornell.edu/uscode/text/26/1256

Form 8283

https://www.irs.gov/forms-pubs/about-form-8283

Form 3115

https://www.irs.gov/forms-pubs/about-form-3115

Toby Mathis

http://tobymathis.com/about-toby-mathis/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors Events

https://andersonadvisors.com/all-events/

Anderson Advisors Tax and Asset Protection Workshop

https://andersonadvisors.com/asset-protection/

Anderson Advisors Tax-Wise Workshop

https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/

Anderson Advisors Infinity Investing Workshop

https://andersonadvi