We had an amazing webinar on Wednesday and because it was so well received

We have decided to give you a replay for his weekend right here.

Let’s face it:

Banks have almost stopped lending money.

So it’s time to find another way to get deals done.

www.JackBosch.com/thenotebuyer

And as thousands of successful investors have discovered,
Donna Bauer’s approach to real estate investing is brilliantly
suited to today’s market and the shift toward alternative forms of financing.

Particularly if you are doing deals the landforpennies way
where you buy properties for pennies on the dollar and often sell
them with seller financing and create a highly profitable note. (more…)

Albert Aiello, CPA, MS Taxation, RE Investor

I am talking about the most powerful deduction for the real estate investor – Depreciation — which is an annual tax write-off of the cost basis of assets held for rental or business-use, such as real estate.

Why This “NO-Cash-Out; Yet Cash-IN” phenomena? The first part, “NO cash out” is because the determination of depreciation is based on the entire cost of the property, regardless of how the property is financed. So you can do what is so frequently done, put little or no money down on a property and still take depreciation on the entire cost of the depreciable property. That is, you do not have to spend any cash for valuable depreciation deductions.

The second part, “cash IN” is because of the tax savings generated by depreciation, especially with componentizing (discussed later). That is you pocket the tax savings, while the property is appreciating. For example, a $20,000 depreciation deduction reduces your ordinary income. In a 30% bracket this will save you $6,000 in taxes. This is like found money because you did not have to spend any additional cash to get the deduction. The $6,000 as a 10% down payment can allow you to buy an additional $60,000 worth of real estate, which, at a 20% yearly return, would be $12,000 more income every year. Plus, like money in the bank, you get the deduction and tax savings every year (for the recovery period of the property). Yet, when you sell, you can have no recapture and thus not have to pay any of these tax savings back by selling the property, tax free, via the powerful 1031 Exchange or other tax-free selling strategies. You still continue to pocket the tax savings from depreciation! You get the best of all worlds! Get the picture? Money makes money but saving taxes (every year) makes a whole lot more money, so you can get richer, faster!! (more…)

Al Aiello. CPA and Bill Noll, CPA/Attorney

A Nuclear Private Document. The most important LLC document is the Operating Agreement (OA). It is the nuclear, governing instrument…mandating LLC business operations. Simply put, it is the heart of the LLC.

The OA Versus The Articles. The articles of organization, which is necessary for the filing of the LLC formation, is not a substitute for an OA by which the members govern the LLC business and their financial interest in the LLC. Moreover, the articles of organization is a public document, while an OA is private document. Therefore using the articles of organization as a substitute for an OA would surrender a great deal of privacy which is an essential part of total asset protection. Because the LLC’s articles of organization are available to the public, any provisions that are not required to be in the articles should not be, but can be in the OA, because it is not a public document, it’s private. However, any provision that the OA contains should not be in conflict with the formation state’s articles of organization. A properly designed OA would do this. Also, if there is a choice by state statute between amending the OA or the articles of organization, when such amendment is required, amend the OA not the articles, again for reason of privacy. (more…)

Al Aiello. CPA and Bill Noll, CPA/Attorney

In small businesses, owners often take a casual approach to paying bills – they view their pocketbook and the company’s as one and the same. Tax-wise, this can be risky, as demonstrated by some recent cases.

Here is the tax impact of an owner paying the business-related bills…

CORPORATIONS. With corporations, a shareholder who is required to pay business-related expenses without reimbursement from the corporation can deduct these costs only as a miscellaneous itemized deduction. This means that an amount equal to the first 2% of AGI becomes nondeductible. And, if the shareholder is subject to the alternative minimum tax, they lose any tax benefit from the write-off.

Tax Trap: A corporate resolution requiring a shareholder to pay certain expenses of or for the benefit of the corporation clearly establishes that they are the shareholder’s obligation. (That is, the expenses are deductible only on the shareholder’s personal tax return as a miscellaneous itemized deduction.) The shareholder cannot circumvent this rule by claiming a deduction on Schedule C of IRS Form 1040. As the Tax Court has now reinforced, the shareholder is not a sole proprietor, but rather a shareholder-employee whose un-reimbursed employee business expenses can only be claimed on Schedule A of Form 1040. (more…)

Albert Aiello, CPA, MS Taxation, RE Investor

Despite making it clear the significant tax disadvantages of S-corporations for real estate, I still get emails from my wonderful students about using an S-corp, erroneously recommended by their CPA, or their attorney or some asset protection person on the lecture circuit.

First off, when you evaluate any form of ownership or entity, you use the 3-prong approach which are the three sides of an entity –

TAX, IRS, LEGAL – instead of just one side such as the legal. Generally most of the monetary benefits or detriments will come from the TAX and IRS sides. (more…)

Albert Aiello, CPA, MS Taxation, RE Investor

A number of my students use a good bookkeeper who can do the following well and at much lower fees than a CPA:

__Use Quicken or even better QuickBooks to summarize your receipts, deposits and expenses from your checkbook and bank statements.

__Set up rental property expense categories according to the deduction line items on the IRS rental property schedules such as Schedule E, or on the highly preferred lesser audited partnership form 1065 (along with backup form 8825).

__Assist you with recordkeeping & management systems that pertain to real estate. There are a number of excellent recordkeeping programs that are specifically targeted for real estate recordkeeping and save a lot of time and accounting fees. Once set up these programs are fairly easy to use for you or your bookkeeper. See next for recommendations. (more…)

Albert Aiello, CPA, MS Taxation, RE Investor

Here is a quick overview…

AVOID IRS, LIKE THE BUBONIC PLAGUE! There are over 30 ways to reduce your chances of audit. One great way is staying off heavily audited schedules such as Schedule’s C or E and file as a partnership, form 1065, which is much less audited. Also refer to my Special Report, Powerful Insider Secrets To Avoid IRS Audits. Go to http://www.crecafe.com/al-aiello/#bio, scroll down to “MONEY-SAVING Reports”, down to the 5th report.

AVOID INEPT CPA’S, LIKE THE CURSE OF HELL! Bad tax advisors cause more investors to pay more taxes than the IRS can ever dream of. Ask your follow investors for some good prospective CPA’s who specialize in real estate. Get references and carefully screen them out. NO CPA? Like a bad tenant…having NO CPA is a heavenly dream next to having a bad one. Many of my students do not have a CPA or use one on a very limited basis. Instead they use a good home study course on real estate tax reduction along with tax preparation software (such as TurboTax). and perhaps with a good bookkeeper. They rave about how they legally save more money than they did previously with a CPA, but without the high fees. Now this is not for everyone. But if you do use a CPA, make sure that you have at least a general understanding of real estate tax law and that the CPA is working for you; because no one cares more about your money than YOU! Also refer to my Special Report, “80-15-5” – How To Determine The Competence Or Incompetence Of A Tax Advisor, Including Your Own. Go to http://www.crecafe.com/al-aiello/#bio, scroll down to “MONEY-SAVING Reports”, down to the 1st report. (more…)

Albert Aiello, CPA, MS Taxation, RE Investor

What Is “Wholesaling”? Wholesaling is quickly selling a property “as is” with little or no fix-up. Many times the entrepreneur never goes to settlement and will just assign (or “flip”) the agreement of sale to their buyer for a quick profit. Wholesaling can be a lucrative cash-profit business, with some really great people teaching it out there, such as Than Merrill.

But Will It Make You A “dealer”? That all depends, but first some background. The IRS and even more so, unknowledgeable CPA’s, will allege you are a dealer when you get into real estate “selling” activities such as wholesale flips, rehab flips, lease-options, sub divisions, condo conversions or just selling investment property.

Being tagged as a dealer could be a financial disaster. Reason: unlike an “investor”, you are subject to the highest ordinary income tax rates, plus Social Security taxes, other employment taxes and possibly alternative minimum taxes. Thus, 50%, 60% or more of your hard earned profits could be drained by all kinds of taxes. Moreover, dealer profits (whether by cash or paper) are immediately taxed in full and cannot be tax-deferred in any way including not being able to use a 1031 exchange, seller financing/installment sale reporting, a self-directed IRA, certain trusts or any other tax deferral strategy. Being tagged as a dealer could wipe you out! It’s like being condemned to hell!! On the other hand, if you demonstrate status as an “investor” you can be “saved” and avoid these expensive pitfalls of being a dealer. (more…)

Jack Bosch here with an important announcement.

You know that the vast majority of my sales of my 3197 land deals happened via Wholesaling.

My first property I bought for $400 and sold for $4,000
The second I bought for $500 (40 Acres) and sold for $9,500

Now this can be automated thanks to my buddy Zach Childress
and his brand new “Automated Wholesaling System” (AWS).

Zach and I are hosting a webinar tomorrow for the
Launch of his brand new limited edition

“Automated Wholesaling System”

http://events.jackbosch.com

I have seen it; I am one of the first to get it And you should to.
Because you can Wholesale land just as easy as you wholesale Houses.

But before, get all the details on what it does for you Here

http://events.jackbosch.com

And then act, because I am throwing in over $8,000 in bonuses
You have to buy through my link though!!!! (more…)