Like all things in this world, it helps to know a few of the rules. Toby Mathis and Jeff Webb of Anderson Advisors are here to help. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

What rate am I taxed at for my LLC? It depends; you choose how it will be taxed on SS-4

Can I buy personal items or pay off personal bills with my business credit card? Yes, but the entity type dictates how it’s taxed

What investment opportunities can be considered that have no tax liability, minimum risk, and at least a 10% annual return? Doesn’t exist; try investment real estate, IUL insurance

Can I deduct real estate education expenses, even though I don’t have any profits? Yes, it’s not necessarily about profits, but how long you’ve been in the business

Can my LLC create its own self-directed IRA? No, vice versa; self-directed IRA would create LLC, or it’s a prohibited transaction

What constitutes being a real estate professional? 750 hours of professional time in real estate and material participation in real estate activities

Do you have to be a real estate professional to do a cost segregation at tax time? No, but if you have losses in excess of your real estate income, then be a real estate professional to offset your other income and pay less in taxes

If I were to have an online health coaching business where people can complete purchase transactions through an automated Website, how will the income produced be taxed? It’s not always ordinary income; depends on what you’re selling

How old does a child have to be before putting the business in their name? 18 years old

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Resources

SS-4

Schedule K-1

25 CFR 162-2

Index Universal Life (IUL) Insurance

Opportunity Zones FAQ

Opportunity Zone Heat Map

TransUnion

Equifax

Experian

26 USC 183

529 Plan

Section 199A

Home Office Deduction

Uniform Gift to Minors Act (UGMA)

1031 Exchange

Form 5695 for Solar Tax Credit

Form 4562 - Depreciation and Amortization

MileIQ

Toby Mathis

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