Tax Tuesday with Toby Mathis 12-11-18

Toby Mathis and Jeff Webb of Anderson Advisors help people do the best they can with what they’ve got and keep as much money in their pockets as possible by answering their tax questions. Do you have a tax question? Submit it to taxtuesday@andersonadvisors.

Highlights/Topics:

• We inherited farmland real estate that we rent to tenants per a crop-share agreement. Do we get the 20% write-off? Yes. Rental income is subject to a 20% deduction
• I’m a realtor and make edible baskets for clients. Can I write off these expenses as advertising? Write off $25 per person per year for the baskets
• Are holding companies only for rental LLCs or can they hold an active business LLC? A holding LLC is for LLCs in different states/assets, and to make a single entity for taxation
• What taxes must revocable trust beneficiaries pay upon distribution? Grantor who funded trust owns the assets; income from the trust is taxable to them, not the beneficiary
• Which IRA with checking privileges do you recommend?  IRA Club; if you want check writing privileges in an IRA, it’s better to do a 401(k) and not have a custodian
• If I open an account as a trader in a personal property trust, what’s the LLC’s role? The personal property trust is used because brokerage houses call you a professional trader and charge extra fees; LLC needs to be a partnership to write off expenses
• Are expenses (utilities, insurance, and homeowner’s dues) deductible for a C Corp? Business-related expenses are deductible to a C Corp under an accountable plan
• Can a S Corp shareholder deduct personal health insurance? You can’t reimburse your own health insurance, but you can deduct premiums as income on your W2
• Do most land easement syndications offer three-five deductions? Companies get together, buy a property, and give air rights/restrictions on buildings; you can get three-five times the investment - invest $1, get a $9 deduction, but that’s aggressive
• The standard deduction was basically doubled, will the tax burden lessen by 50%? No, the standard deduction is what you take or itemize; standard deduction went up, and took away all exemptions and exclusions
• I’m on research landscaping. If I’m not being taxed as an S Corp and my kids work for the business, should I issue each of them a 1099? Yes, hire them and give them a 1099
• What’s the benefit of parents doing IRS paperwork to declare a $15,000 annual gift exclusion? Don’t file it; $15,000 and under is what you can give without reporting it
• Clarify an accountable plan that includes corporation directors not taking a salary? Officers are considered employees by being around directors presumed to be employees; do an accountable plan with the director, but identify what they’re doing
• My C Corp didn’t do any business this year. Do I have to file a return? Yes, C and S Corps have to file a return every year of their own existence
• What are the top deductions eliminated for 2018, with the exception of the SALT limitation? Exclusions, personal exemptions, miscellaneous itemized deductions, and entertainment expenses
• What’s the best way to get precious metal holdings into an OJ retirement plan, meaning what entity is needed? Self-directed IRAs or self-directed 401(k) primarily because banks hate hard assets

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Resources

199A

Affordable Care Act (ACA)

IRA Club

Tax Information for Corporations

280A

1244

Rollover Business Startup (ROBS)

Section 179 Deduction

Tax Information for Charities and Other Non-profits

COBRA

Medi-Share

1023 Application

Section 721

1031 Exchange

IRS Tax Schedules

ERISA

Livestream: Anderson Advisors’ Year-end Tax Planning

Toby Mathis

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event