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.

Now with Donna’s system you learn how you can take these notes,
flip them for huge profits, or even how you can create new notes, or how to buy notes.

Now more than ever, it’s time to put the explosive potential of
note buying and selling to work for you!

www.JackBosch.com/thenotebuyer

Don’t risk doing Seller-Financing Without It!

• Create Notes that you can Turn to CASH!
• Sell Properties FAST!
• Buy Properties without Bank Financing!

Whether you want FAST CASH by turning properties,
Or, you want to build a real estate empire —
You’ll have everything you need to Buy and Sell Real Estate
in today’s fast paced market without ever going to the bank!

Jack Bosch
P.S. This Video replay will only be up for 72 hours (over the weekend)
Once you miss out you MISS OUT!
www.JackBosch.com/thenotebuyer

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This is a publication of: www.CREcafe.com | Creative Real Estate Investing

Secrets revealed on how to make Land Cash flow in this market – Buying and Flipping Notes with Donna Bauer

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!!

So how can you make this already valuable deduction save you even more money? Componentize!

Componentizing (or Cost Segregation Analysis) is something that I have been using for over 25 years to dramatically increase my cash flow (and wealth) via tax savings from much larger depreciation deductions.

Reason: With componentizing, you break out components, from the property cost, that allow you to use shorter recovery periods with the result of much larger deductions and savings. For example there are many items that can qualify for personal property and be rapidly written off over 5 years (double-accelerated) instead of slower building depreciation of 27-1/2 or 39 years straight-line (or 6 times faster than the building). There are land components that too can be rapidly written off over 15 years (accelerated) instead of 27-1/2 or 39 years straight-line (or 2 to 3 times faster than the building).

Moreover, with my Renaissance Goldmine system of componentizing, you can justify a low or no land value for even more deductions and savings.

Furthermore, you can also fully deduct the remaining basis of components that are replaced. For example, if you replace existing property components with a remaining componentized cost basis of $30,000, you can claim the entire $30,000 as a full ordinary deduction. In a 30% bracket this puts $9,000 of savings in your pocket, yet you did not have to expend cash for the deduction!

So how much extra did you pay in taxes not using componentizing because your tax advisor did not know about this incredible legal strategy?

According to the follow quote from one of my students, probably a lot!

“Al, your component depreciation method saved me almost $20,000 dollars in income taxes. It helped me financially having four girls in College at the same time.” …Angelo D. Guerra, Investor, Broker/Owner, ERA Platinum Realtors, Conshohocken, PA.

By the way, that’s $20,000 a year, which if invested at 10% a year for the next 10 years would accumulate to over $318,000! But with real estate the returns are even greater; so if at 20% for the next 10 years, the savings would accumulate to over half-million dollars, which is what you are really losing without this great wealth system!!

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The above are excerpts from The Renaissance Goldmine of Goldmine of Brilliant Tax Strategies Real Estate Investor’s, A Tax Reduction Software System by Alt Aiello. For more info go to http://www.crecafe.com/al-aiello/#bio.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

That Awesome Deduction That You Do Not Have To Pay Cash For…Yet It Generates Cash Flow In Your Pocket!

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.

What Should An Effective OA Should Contain… Specifically For Real Estate Investments.

__Be very comprehensive for its intended business purpose (real estate investing) containing all of the essential provisions relating to legal, tax, accounting, including the administration and regulation of the LLC’s affairs and the members’ rights and powers.

__Document that your LLC is a separate entity where the LLC affairs are separate from the affairs of the members. Following its provisions will give its members limited liability protection, therefore making it difficult for any court to pierce its entity veil.

__Related to the above, give the best defense against an attack on the use of a state statutory business entity by always treating the LLC as a separate entity. As long as it can be clearly shown that the members respected the entity separateness, the LLC existence should not be disregarded by the courts. It is not the size of the entity, but rather the existence of complete LLC documents (especially this OA) which provides the protection from liability for the members of the LLC. It is crucial to recognize this vital element in operating an LLC.

__Some of the more specific provisions that can help accomplish the above limited liability protection are those that cover: LLC declaration of being separate and apart from its members; specific business purpose of LLC; member capitalization of the LLC in accordance with membership percentage ownership; prohibited unilateral acts of members; indemnification of members; transfers of member interests (right of first refusal with buy-sell provision); arbitration of member disputes; specific duties of members accomplishing the LLC business purpose (including what duties certain members should not be doing).

The OA should also…

__Support and helps to document numerous tax saving strategies and elections to be an effective defense in the event of an IRS audit, as this statutory LLC entity (separate from its members) via this legal document (the OA), formally authorizes these tax saving strategies and elections. This is powerful! You will feel much more assured and comfortable that your tax strategies are legally supported by this legal entity (LLC) via this legal document (OA). (See prior January 2010 article – Real Estate Investors…Can An LLC Create And Support Tax Deductions?)

To sum up, use an effective comprehensive OA to protect you; support tax-saving strategies; defend you against the IRS; and more… protecting your family wealth.

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The above are excerpts from The LLC Master Machine – The complete LLC system for real estate investors (including a comprehensive 121 page RE OA) by Al Aiello and Wm. Noll, Esquire. For more info go to http://www.crecafe.com/al-aiello/#bio.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

Why Is The LLC Operating Agreement So Important?

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.

If there is no corporate resolution requiring the shareholder to cover these expenses, then the shareholder’s voluntary payment is treated either as a contribution to the capital of the corporation (which increases the shareholder’s basis in his stock) or as a loan to the corporation. For an S- corp shareholder, loans to the corporation increase basis in debt – the measurement for deducting losses that pass through from the corporation to the shareholder. Only the corporation can claim a deduction for these expenses.

Best Way: The corporation should create an accountable plan under IRS Regulation 1.62-2(c) to reimburse shareholders for their payment of corporate expenses. In this way, the shareholders have no income from the reimbursements (they are simply made whole) – the corporation deducts the expenses that the shareholders have paid on its behalf.

PARTNERSHIPS. In contrast to corporations, when a partner is required-as written into the partnership agreement (or by another written agreement between the partners-to pay partnership expenses), the partner can deduct the amounts they paid. The deduction is claimed on Schedule E of form 1040, so the partners get the full benefit of the write-off.

NOTE – LLC’S: The same treatment would apply to Limited Liability Companies that are taxed as partnerships.

The above are excerpts from The Ultimate Tax Bible For Self-Employed Entrepreneurs, A Tax Reduction System for Business Owners by Al Aiello (with different strategies than the Goldmine). For more info go to http://www.crecafe.com/al-aiello/#bio, click to “Tax Savings Business Owners”

Amass A Fortune In Your IRA By Flipping Commercial Properties For Big Tax-Free Profits

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Albert Aiello, CPA, MS Taxation, RE Investor

Houses v. Commercial Property. The way you flip houses, you can also quickly sell larger commercial property. The main difference is that the profits will be bigger, in many cases much bigger, and more so tax-free in a self-directed IRA (SDIRA). One method of quick flipping is called wholesaling which is selling the property “as is”. Many times the entrepreneur never goes to settlement and will just assign (or “flip”) the agreement of sale to their buyer for a profit. (For this to work in a SDIRA, any initial deposits must come from the SDIRA, not the investor; and the purchase and sales agreements should have the SDIRA as the buyer and seller, respectively, either directly on the agreements or as assignee to such agreements.)

Wholesaling in your self-directed IRA (SDIRA) is a great way to save on taxes and a quick way to build up your IRA wealth. Because it usually requires little or no cash, wholesaling is ideal for self-directed plans especially for those who are just starting to fund their plans. Wholesaling frequently only requires a modest earnest money deposit such as $100 to $1,000, or even nothing. You can start an IRA (preferably a Roth) with just $5,000 ($6,000 if age 50 or over) and begin your wholesaling investing to amass thousands, even millions in relatively short periods of time.

If this is a self-directed Roth IRA, your tax-free profits will never be taxed and can be withdrawn from the Roth IRA totally and permanently tax-free! (Once you meet the age and holding requirements).

Flipping Options in your SDIRA. Here you flip an assignable option. An option is an excellent way to control property with minimum cash, minimum risk and high return. For example, a $500,000 property may normally require a $50,000 to $150,000 down payment. However a much lower option deposit (such as $5000 or even less or even nothing) could control the property for the buyer\optionee, while the risk & responsibility of the property remain with the owner (the seller\optionor). Options can be bought and sold just like real estate. Flipping options can be a HIGLY profitable TAX-FREE business in an SDIRA.

EXAMPLE: With the funds in her SDIRA, Edna secures an assignable option for $5,000 to acquire a commercial property for $500,000 that is worth $925,000. Edna finds Bill who really wants the property. Via the SDIRA, Edna assigns (sells) the $5,000 option to Bill for $200,000 or a tax-free profit of $195,000 within her SDIRA. Bill also does well because he will only be paying $700,000 for a $925,000 property ($500,000 original price plus $200,000 option payment). A Win-Win!

EXAMPLE: Here is one that one of my students did. His Roth IRA paid $3,500 to his unrelated roommate for an option to buy a 50% interest in his highly appreciating property in Hawaii sometime in the next 10 years. The option was recorded with the county in Hawaii (good move on my student’s part!). At the time the property was valued at $700,000. The roommate then received an offer to buy the property. The roommate was tired of long-distance landlording (a motivated seller), so he accepted the offer. Since my student’s IRA option clouded the title, he agreed to pay my student’s Roth IRA’s a cancellation fee of $35,000 (which is 10% of the current $350,000 value of my student’s one-half interest in the $700,000 property). The $35,000 option fee is tax-free in the Roth and a 10-fold tax-free increase in the Roth’s original investment. What a tax-free wealth-building bonanza!

Do a master lease on the property for millions of tax-free wealth. A master or sandwich lease is a double-lease or subletting arrangement where the investor master leases (usually on a long term basis) the entire property from the owner and in turn sublets the property to tenants for a higher rental and positive cash flow. With master leases the investor can create an excellent cash flow with little or no cash down. Accordingly they too are ideal for SDIRA’S.

EXAMPLE: Sam (another one of my students) master leased on a long-term basis an unfurnished 30 unit apartment building in a location accessible to the airport, train station and many major highways. The below market annual rent Sam paid was $400 a unit a month or $144,000 a year. Because of its accessible location, Sam knew there was a demand for nicely furnished apartments. So Sam tastefully decorated and furnished the units and eventually sub-leased them for $1,200 a month or $432,000 a year. The operating expenses were $100,000 a year. Consequently, Sam generated a healthy annual positive cash flow of $188,000 ($432,000 – 144,000 – 100,000). A leasehold with this amount of positive cash flow could be sold for at least $1,000,000 or even more. In an SDIRA, the entire annual cash flow of $188,000 along with the $1,000,000 resale profit can be totally tax free within the SDIRA. If the $188,000 within the IRA was invested at 10% annually for 10 years it would grow to over $2,996,000 tax-free. If at the end of 10 years, the sandwich lease is sold for a $1,000,000 (probably be a lot more), the SDIRA would have $3,996,000 ($2,996,000 + $1,000,000). If the $3,996,000 just sat there in the SDIRA at 10% for another 10 years, it would grow to over TEN MILLION DOLLARS, TAX-FREE!!!

Dealer Avoidance. To do these types of selling transactions totally tax-free in an IRA, you must avoid dealer status. Proven dealer-avoidance strategies will be discussed in future articles.

For now, GO FOR IT!

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The above are excerpts from The Renaissance Goldmine of Goldmine of Brilliant Tax Strategies Real Estate Investor’s, A Tax Reduction Software System by Alt Aiello. For more info go to http://www.crecafe.com/al-aiello/#bio.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

The Best Way To Deduct Business’s Expenses

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.

In the book titled “Asset Protection” (by Christopher Riser, Esquire). it is stated that most so called “Asset Protection Guru” know little or nothing about the TAX and IRS side of entity structuring and therefore teach complicated expensive structures without regard to current Tax/IRS considerations. This can be very costly to your financial being.

The fundaments of entity structuring are based on current factual data, not opinion. Yes, you could have an “opinion” about anything including entity structuring. But it’s really the facts that will determine a logical conclusion rather than just a blinded and perhaps costly opinion. The factual data is determined as follows:

TAX side comes from tax law provisions (internal revenue code, regulations, tax court cases)

IRS side comes from published audit statistics as to which forms of ownership are audited more or less

LEGAL side comes from state law (statue or case law).

So based on this 3-prong factual data approach, let’s do an overview evaluation of S-corps for real estate.

LEGAL: Limited liability for shareholders.

IRS: Audits have increased by 145% in recent years.

TAX; Bad & Many. Have over 20 tax disadvantages for real estate. Here are a few of them:

W-2 EARNED INCOME – You must receive a salary from an S-corp because you are an employee of your own corporation (unlike LLC-partnerships, which are flow-thru entities with no salary requirements). Paying salaries means payroll tax withholdings & payroll filings; highly taxed W-2 ordinary earned income along with IRS controversy as to how much salary should be paid (IRS wants a lot paid to you).

LIMITS ON DEDUCTING TAX LOSSES – When the S-corp owns leveraged real estate, there often are limitations on deducting property tax losses against other income, because of S-corp stock basis limits. (Note that this proves that S-corps are not total pass-thru tax entities like LLC’s).

TAXATION OF NORMALLY TAX-FREE BORROWED MONEY – Watch this one! If you (individually or through an LLC) do a cash out refinance and pocket the money, this borrowed money is tax-free. But if a cash out refinance is done through an S-corp which then distributes the funds to you, this could be a taxable distribution. Yes, normally tax-free borrowed money becomes taxable!

DEALER – When used for resale property (“flips”), the S-corp causes you to be a dealer because S-corps are for active (ordinary income) businesses. Thus, using an S-corp for flips is a blatant admission of costly dealer status and impedes total dealer-avoidance planning.

There are MORE!

LOGICAL CONCLUSION: By now hopefully you are convinced that the very logical conclusion is not to use an S-corp for real estate, but instead use the LLC-partnership.

The sole & only purpose of using an S-corp is for small profitable businesses (not involving real estate) to reduce Social Security\employment taxes, again NOT real estate!

The above are excerpts from The Renaissance Goldmine of Goldmine of Brilliant Tax Strategies Real Estate Investor’s, A Tax Reduction Software System by Alt Aiello. For more info go to http://www.crecafe.com/al-aiello/#bio.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

STOP Using S-corps For Your Real Estate!

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.

__Assist you with property management. A good bookkeeper could also be a competent clerical assistant who could help with property management functions such as taking tenant applications, typing leases, work orders and other internal management documents. But it is imperative that they abide by federal & state rules of fair housing which you should inform them including having a management systems manual. There are excellent property management programs out there. For the best – Jeffrey Taylor, www.Mrlandlord.com. Also – Mike Butler www.mikebutler.com.

__Prepare and send 1099’s to independent contractors. There are excellent computer programs that can the bookkeeper can use to do this.

__Assist you with tax preparation using a tax preparation computer program. A lot of the work done by CPA’s is “line-by-line form filing”, but they charge higher “CPA” prices. There are easy-to-use tax-preparation computer programs (such as TurboTax or TaxCut) where your bookkeeper can assist you in the preparation of your taxes. Besides, 1040’s there are tax-preparation computer programs for partnerships and corporations. These programs get better all of the time.

TIP 1: Before having a bookkeeper assist you with tax return preparation, you could first engage a competent CPA to do a one-time set up and preparation of your tax return in accordance with the Renaissance Goldmine strategies. Once set up, it will be much easier for the completion of your tax returns for later years. You then have could have the CPA review the returns every three years. If changes need to made, returns could be amended back 3 years for refunds.

TIP 2: There are also very competent bookkeepers who can do your entire tax return for you, do a great job and save you a bundle of fees. Just make certain they do it in accordance with the Renaissance Goldmine strategies (http://www.crecafe.com/al-aiello/#bio) .

What a Bookkeeper Should Not Do For You — Internal Accounting Controls: In NO way a bookkeeper should handle cash or checks (money). This includes making up of deposit slips, taking deposits to the back, handling cash, signing checks…NO signature stamps!

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The above are excerpts from the special report, “80-15-5” – How To Determine The Competence Or Incompetence Of A Tax Advisor, Including Your Own. For more info go to http://www.crecafe.com/al-aiello/#bio click to “MONEY-SAVING Reports”, scroll down to the 1st report.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

What A Qualified Bookkeeper Can Do To Save You Time And Money!

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.

SELECT THE RIGHT ENTITY. Start off with the right form of ownership entity that protects you the best, saves you the most taxes and audit-proofs you against the IRS. Generally, for real estate that entity will be an LLC-Partnership. This is one entity – a limited liability company (LLC), that you elect to be taxed as a partnership. (See prior January 2010 article – Real Estate Investors…Can An LLC Create And Support Tax Deductions?)

CREATE VALUABLE “PAPER” DEDUCTIONS. That is “paper” deductions that do not require you to expend cash for, yet creates cash flow in your pocket via tax savings. This paper deduction is – Depreciation. A very profitable depreciation system is componentizing (also called Cost Segregation Analysis). Componentizing is something that I have been using for over 25 years to dramatically increase my cash flow (and wealth) via tax savings from much larger non-cash depreciation deductions. And so have my students. With componentizing, you break out components, from the property cost, that allow you to use shorter recovery periods with the result of much larger deductions and savings. For example there are many items that can qualify for personal property and be rapidly written off over 5 years (double-accelerated) instead of slower building depreciation of 27-1/2 or 39 years straight-line (or 6 times faster than the building). There are land components that too can be rapidly written off over 15 years (accelerated) instead of 27-1/2 or 39 years straight-line (or 2 to 3 times faster than the building). Furthermore, you can fully deduct the remaining basis of property components that are replaced (gutted out).

AVOID PASSIVE LOSS LIMITATIONS – FULL DEDUCTIONS. Except for $25,000 of losses, rental property tax losses are subject to passive loss limitations which means real estate investors can not deduct rental property losses against other ordinary income such as W-2 income, business income, flip profits, IRA distributions, etc. If the investor’s adjusted gross income (AGI) is above $150,000 they will not even be allowed the $25,000 annual “active” exception for deducting such losses. The losses are “suspended” and must be carried forward until the property is sold. To avoid being subject to these limitations there are several steps to take. One important one is that the investor must document that they incur enough hours in the real estate business at a minimum of 751 hours a year.

TOTALLY AVOID THE TAX DRAIN OF BEING A “DEALER”. If you are quickly selling properties the IRS or even more so, unknowledgeable CPA’s will try to tag you as a dealer. Altogether, there are over 30 strategies to avoid the costly consequences of a dealer. My experience indicates that one of the best ones is to demonstrate that the primary purpose of the resale profits is for investment purposes and not sales speculation. For example, the primary purpose (or purposes) of the profits can be for a number of “investment necessities”, such as down payment funds to acquire long-term investment keepers, or working capital for property investment operations including preventive maintenance. Accordingly, as employed here, these flips are non-dealer, investment transactions with solid economic foundation. This is a very powerful defense against any IRS attacks. Consequently, there are numerous cases and scenarios, some of which I have had firsthand experience with, where even a huge number of sales in one year did not cause costly dealer status.

SELL PROPERTIES TAX-FREE – YOU KEEP ALL THE PROFITS. One of the best strategies to avoid all tax liabilities on the sale of investment property is a 1031 exchange. Briefly stated, a Section 1031 exchange (or rollover) is a legal tax provision that allows you to defer taxes on the sale of your investment property by acquiring another investment property within certain IRS requirements. Understand, 1031’s do not just defer taxes, but by having the interest-free and payment-free use of the tax savings, you have more buying power for the replacement property. For example, if you save $20,000 in taxes by doing a 1031, as a 10% down payment, $20,000 empowers you to buy another $200,000 worth of real estate. (Assuming a 10% annual return, you reap $20,000 more income every year, in 5 years, that’s $100,000!). In fact, many times, the 1031 savings, combined with leverage, is the difference that makes the difference in doing the deal. My students like to use the higher untaxed equity from a 1031 exchange to roll over into property they intend to keep so they can reap the cash flow, equity buildup and tax deductions (esp. depreciation) you get with keepers.

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The above are excerpts from The Renaissance Goldmine of Goldmine of Brilliant Tax Strategies Real Estate Investor’s, A Tax Reduction Software System by Al Aiello. For more info go to http://www.crecafe.com/al-aiello/#bio.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

Real Estate Investors… How to Protect Your Wealth from Being Drained by Taxes!

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.

First Off, Just Because You Start To Flip Properties Does Not Mean You Are A Dealer. Based on numerous tax courts cases (including a Supreme Court Case); actual IRS audits; and my extensive research; with planning, even a very large number of flips (in one year) could avoid costly dealer status.

There Are Avoidance Strategies. Altogether, there are over 30 strategies to avoid the costly consequences of a dealer. My experience indicates that one of the best strategies is investment intent. That is, demonstrate that the primary purpose of the quick sale profits is for investment purposes and not sales speculation. For example, the primary purpose (or purposes) of the quick sale profits can be for a number of “investment necessities”, such as down payment funds to acquire long-term investment keepers, or working capital for property investment operations including preventive maintenance.

Result… Non-Dealer Investment Transactions. With this premise, tax follows economics as opposed to sales speculation with tax avoidance motivation. That is economics first! Therefore, as employed here, these flips are non-dealer, investment transactions with solid economic foundation. This is a very powerful defense against any IRS attacks. Consequently, there are numerous cases and scenarios, some of which I have had first hand experience with, where even a huge number of sales in one year did not cause dealer status.

Plus, There Has Never Been An Issue Of Civil Or Criminal Fraud With The Issue Of Investor Versus Dealer. Entrepreneurs have literally sold hundreds of units in a short time; claimed not to be a dealer without issues of fraud and, with the right planning and documentation, even won their case. Reason: The issue is a very arbitrary question of fact and not of law. Accordingly, asserting any type of fraud (where the burden of proof shifts to the IRS) is very difficult and almost impossible. Therefore, real estate entrepreneurs have everything to gain and little (if any) to lose. They should do so by planning in advance with dealer-avoidance strategies (especially investment intent); avoid inept advisors; and GO for it!

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The above are excerpts from The Renaissance Goldmine of Goldmine of Brilliant Tax Strategies Real Estate Investor’s, A Tax Reduction Software System by Al Aiello. For more info go to http://www.crecafe.com/al-aiello/#bio.

This is a publication of: www.CREcafe.com | Creative Real Estate Investing

Will Wholesaling Make You a Dealer?

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!!!!

Here are the bonuses:

1) 2 Tickets to Land for Pennies Academy (Value $3,994)
This 3 Day live Academy is offered 3-4 times per year.
The next event is in May 20-22 in Washington DC but we do have more coming up later in the year.
Get to see me in action. Meet me, learn all the tricks of getting more land deals done faster and easier.
This is not a pitch fest. I am pretty much the only speaker along with my CPA. So it is 90+% me and you in one room.
Powerful stuff!!!
http://events.jackbosch.com

2) LandProfitFormula – Online Edition (Value $997)
Just like Zach Childress is wholesaling Houses, you can wholesale land.
I personally have wholesaled more than 2000 of the 3197 land deals I have done
using some of the exact same techniques Zach is using in his program

Get access to one of my Flagship programs for free.
This program has made tons of people financially free and you can be the next one.
It gives you all the details on how you can find these properties for 5-25 cents on the dollar
and then Zach’s program teaches you how to wholesale them in a flash.
http://events.jackbosch.com

3) Success Blueprints Course – 4+ Part Course (Value $497)
At the end of the day it’s all in your mind. Have you seen the fall of Tiger Woods?
Did they chop of his arm? No, all that changed is he lost his winner mindset.
Create a winners mindset through this new and groundbreaking program
http://events.jackbosch.com

4) Online Selling Fortunes – 4 Part Course (Value $497)
Jump on this brand new program that is currently happening LIVE.
In the last 3 years I sold over 5 Million dollars worth of stuff online. Land, Houses, Information material, even physical equipment.
And there are simple yet powerful and secret techniques to sell stuff online.
In this program you will learn how you can dominate the Internet Market for whatever you want to sell online
(Land, Commercial, Houses or Anything you can think of)

We only started session 3 so far of a total of at least 5 sessions and people are loving it.
All sessions are recorded and you can have instant access to them as soon as your investment in Zach’s program
through this below link is confirmed by him to us (usually within a week after the purchase)
http://events.jackbosch.com

4) Free Selling Website (Value $2,000)
Get immediately more exposure to your commercial deals using this free selling website and real estate social network.
When Wholesaling you NEED a website and I am giving you one more to use.
you can’t ever have enough of these.
http://events.jackbosch.com

5) Virtual CD of the month – 3 months Free (Value $57)
Get access to my monthly updates on what’s going on in the Land and Real Estate Market,
plus get tips from me on how to better structure your business so you do more deals in less time and enjoy life more.
http://events.jackbosch.com

TOTAL ADDITIONAL BONUS VALUE: $8,042

Make sure you attend the Webinar and be ready to be blown away!!!

http://events.jackbosch.com

Jack

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This is a publication of: www.CREcafe.com | Creative Real Estate Investing

Zach Childress No Money Automated Wholesaling System is better than anything you have seen from Jeff Adams, Than Merrill, Tim Mai, Nathan Jurewicz, or even Ron LeGrand.

I have GREAT news and BAD news.

Great news:
3-Pay Available:
Just got word that Bob Diamon’s program on how to wholesale Commercial properties or buy it with no money down without credit or cash, is now available with a 3-pay option.

Bad News:
The program is coming down in just literally less than 2 days (on thursday night)

Therefore It’s action time.
Get it here now:
http://www.xbankattorney.com/a?p=a288&w=pw

Plus I am also making my bonuses only available for the next 7 people who order using this link
http://www.xbankattorney.com/a?p=a288&w=pw
So if you see my bonuses still up here you can still get them,
Get my $8,539 in bonuses now.
http://www.xbankattorney.com/a?p=a288&w=pw

Bob has created a brand new system that involves almost no risk, and it’s a completely new strategy…

And now you can get it here:
http://www.xbankattorney.com/a?p=a288&w=pw

Plus I am giving you a HUGE list of bonuses when you get Bob’s program:

But you have to purchase it through my link!!!!

Here they are:

1) LandProfitFormula – Online Edition (Value $997)

Get access to one of my Flagship programs for free.

This program has made tons of people financially free and you can be the next one. Plus you can work it in conjunction with Bob’s program and get Commercial Land for pennies on the dollar
http://www.xbankattorney.com/a?p=a288&w=pw

2) Virtual CD of the month – 3 months Free (Value $57)

Get access to my monthly updates on what’s going on in the Land and Real Estate Market, plus get tips from me on how to better structure your business so you do more deals in less time and enjoy life more.
http://www.xbankattorney.com/a?p=a288&w=pw

3) Little Houses – Large Profits (Value $497)

Want to learn how to take these commercial properties Bob is teaching you to wholesale and hold on to one, fix it and rent it for long term cash flow. This program teaches you the tricks of buying, fixing and holding property for massive long term cash flow (this is what I use to operate my housing and commercial business)
http://www.xbankattorney.com/a?p=a288&w=pw

4) Free Selling Website (Value $2,000)

Get immediately more exposure to your commercial deals using this free selling website and real estate social network.
http://www.xbankattorney.com/a?p=a288&w=pw

5) 2 TIX – Jack Bosch LIVE April 8-10 PHX (Value $3,994)

Get to see me in action. Meet me, learn all the tricks of getting more land deals done faster and easier.
http://www.xbankattorney.com/a?p=a288&w=pw

6) Success Blueprints – 4 Part Course (Value $497)

At the end of the day it’s all in your mind. Have you seen the fall of Tiger Woods?

Did they chop of his arm? No, all that changed is he lost his winner mindset. Learn how you can get and sustain a winners mindset through this new and groundbreaking program
http://www.xbankattorney.com/a?p=a288&w=pw

7) Online Marketing Fortunes – 4 Part Course (Value $497)

In the last 3 years I sold over 5 Million dollars worth of stuff online. Land, Houses, Information material, even physical equipment. And there are simple yet powerful and secret techniques to sell stuff online. In this program that will start in the next few weeks you will learn how you can dominate the Internet Market for whatever you want to sell online (Land, Commercial, Houses or Anything you can think of)
http://www.xbankattorney.com/a?p=a288&w=pw

TOTAL ADDITIONAL BONUS VALUE: $8,539

Sounds great right?

www.jackbosch.com/commercial

right now and get it now!

To your success,

Jack Bosch

P.S. If you’re the kind of person that’s into getting bang for your buck, you must get it NOW!!
www.jackbosch.com/commercial

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This is a publication of: www.CREcafe.com | Creative Real Estate Investing

Jack Bosch and Bob Diamond show how you can make HUGE Profits In Commercial Real Estate With No Money, No Credit, And Without Ever Needing A Loan