Truth About Taxes as a Real Estate Investor (LA 1559)
Transcript:
Steven J Butala:
Steve and Jill here.
Jill DeWit:
Hello.
Steven J Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven J Butala.
Jill DeWit:
And I'm Jill DeWit, broadcasting from pretty Phoenix, Arizona.
Steven J Butala:
Today, Jill and I talk about the truth about taxes as a real estate investor.
Jill DeWit:
This is a hot topic often, not just tax time, but that's when it really hurts, but this is a big deal. People come into this, and it's kind of funny, I never thought about this going into this business. I never thought about if I make a lot of money, how am I going to do my taxes? I always let those things work themselves out at the end, but it turns out we have a lot of people, probably smarter than me, that are thinking about this now, so we wanted to talk about it to put everybody at ease and give you some insight and some ways to tackle taxes.
Steven J Butala:
If you love paying taxes-
Jill DeWit:
This is not the show for you.
Steven J Butala:
No, if you love paying taxes, then after these next three or four sentences, you can just turn the episode off, because the rest is for people who don't want to pay taxes or like to legally minimize tax. That's what this is about. If you love to pay taxes, this is what you do. You form an LLC.
Jill DeWit:
We'll save it for the show.
Steven J Butala:
No, this is just for people who love to pay taxes.
Jill DeWit:
So they can get it out of the way now.
Steven J Butala:
Form an LLC, set your W2 paycheck, you and your partner, pay the highest salary as you can, and then you pay a withholding, and then there's nothing left over, because pay yourself so much in all those taxes, so you're all set there.
Jill DeWit:
Oh, thanks.
Steven J Butala:
Before we get into it, let's take a question posted by one of our members on the landinvestors.com online community. It's free. If you're already a member, please join us on Discord.
Jill DeWit:
All right. Hello. I know these two. Erica and Abby wrote, "Hi, Jack and Jill. Just want to give you guys a quick update. My wife and I joined Land Academy a year or so ago, and we just completed 100 deals, 74 cash, 26 on terms." They were at our last live event. I remember. "We feel grateful and want to thank you so much for sharing this business with us. Please keep up the good work. Best Erica and Abby. That's so great. I also see them on social media traveling the world.
Steven J Butala:
Really?
Jill DeWit:
Yeah.
Steven J Butala:
That's great.
Jill DeWit:
So, it's obviously working out just wonderful for them. That's so good. Congratulations. Thanks for sharing that.
Steven J Butala:
Today's topic, the truth about taxes as a real estate investor. This is the meat of the show.
Jill DeWit:
Okay. I wanted to bring this topic up because it's important, number one, and it's often on people's minds, as it should be. We're making all this money. Where's it going to go? How do I account for it? Do I file taxes in every state? Do I get an LLC for every property? Do I get an LLC for every state? Oh my goodness. There's so many ways to do this. Here's my answer. Yes, there are so many ways to do this. This is the point for me, if you don't mind.
Steven J Butala:
Of course.
Jill DeWit:
Then I'm going to let the person with the accounting background give you their professional advice. But my advice is mainly this. People always ask us exactly how we do it, who's our accountant, can we call our guy? Can we copy you? You know what? We've been doing it for so long, and we have certain tax, you'll talk about this too, designations that may not apply to everybody. We're all different ages. We're all in different states. We've been doing things differently. Guess what? It's okay. My main point here today is there are different ways to do this. There's no perfect cookie cutter Land Academy approved roadmap to taxes that says,