392 | Save On Your Taxes With Real Estate: A 2024 Tax Season Primer w/ Brian Reyes

Taxes are due in a week, and we all love finding ways to save on them, but the average accountant might not know all the ways your rental properties can reduce your tax burden.

That's why we tapped JWB's CPA, Brian Reyes, to answer some of the biggest questions you may have this tax season on the next Not Your Average Investor Show!

He's getting with JWB co-founder, Gregg Cohen, and show host, Pablo Gonzalez, to answer:

- What questions should you ask your CPA to know if they are right for you as a passive rental property investor?
- What are the most effective deductions and expenses you can claim for your rental properties to minimize taxable rental income?  
- Are there any often-overlooked deductions or expenses specific to rental property ownership that you should be aware of?
- Are there any recent changes in tax laws or regulations that might impact your real estate investments? 
- and more!

The average CPA is too busy to handle new requests right now so come tap into the brain of ours!

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Transcript

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Today we've got a special one. It's, April 9th, which means that, within a week, the bill is due. We've got to pay our taxes. One of the obligations of being an American citizen or resident, we happily pay our fair share. But as real estate investors, we also know that we have massive advantages. So we're going to talk about a little last minute primer for tax season, in case you were wondering. Waiting to last minute. Greg, do you have your taxes done? I have a great CPA firm that's working on that. I got my taxes done. Not to brag. Welcome, welcome, welcome everybody to the weekly, not your average investor show. How about that? Yeah. All right. I'm your host, Pablo Gonzalez with me as always, a man that I affectionately like to call GC because of his genius concepts because he knows how to generate cash flow because he's a great host. I guess his name is Greg Cohen. Welcome back, Greg. Say hello. Well, Thank you, buddy. It's great to be here. And it's great to be with all of you. I feel like I'm yelling right now because I'm so excited. Yes, you are. I just love, I just love being in studio. Now that we get to do it once a week, it makes it even more special today. I'm happy to have you here. I got a nice run this morning. I mean, it feels like things are just in the zone right now. We are. We are in the zone. And you know who else is in the zone? Who's that? The people that are here for the roll call, baby! Well done. You like that? Not, not, not that you're yelling much today, but no. All right. We got our lead off hitter. We got the Fairy Godmother checking in. Miss Jen Filson. We got the MVP, you may have heard of him. Mr. Lee Bishop. We got Christopher Lee from Fernandina Beach. What's up, buddy? We got the Mystery Man. Mr. Denny Davies. Talk about how amazing the Eclipse was. That was pretty cool. That was pretty cool. Did you watch it? I did. Yeah, alright, not bad. Not bad. Billy Green we got a shout out for the mountain. I absolutely need to say thank you to the mountain man. Mountain man. so what happened was my daughter, Bella, um, made bracelets as many of you donated to, and to support JWB cares, which we're going to be talking about something about JWB cares here in a little bit. But unless I digress, the mountain man supported JWB cares by buying a bracelet. And, my daughter sent out the bracelet with a nice little thank you note. And the mountain man was so kind. He went and he wrote a note back to my daughter and just encouraged her. he also contributed more and, the money that He contributed was incredible. but I just sat down with bell and I said, can you believe the positive impacts that you're making on the world by being brave and getting up there and sharing your story? and that is just, an incredible thing. And I think it is representative of the type of community that we have. So mountain man, Billy green. Want to say thank you for sending that note to my daughter. It absolutely made. Everybody's day in the Cohen household. Very, very cool. We got our, our, one of our favorite Seattleers, Pamela Myers. Yes. No, not yet. Not yet. Star of the show. Don't don't count your chickens, man. Future star of the show. Pamela Myers. Who else we got? We got Our buddy, you're the number one Steeler fan in the fan base here from Rockland, California. Stairway to seven, Steelers to the Superbowl, me and Louis Sudnow. We got the Ironman, the man of steel. Are you okay here today? I'm, uh, you know, I'm a little out of practice. I'm with a lot of friends. Oh, Vincent Barberette. We got the ringmaster. He puts it into his Zoom signal. I think he's getting a tattoo. I meant that. We got the early bird in the house. Early bird, epic. Eclipse picture. Actually. So did Denny Davis. Epic Eclipse pictures into the WhatsApp chat. Very cool. Very, very cool. Well, so we got Lita Song, a beautiful investor from Minnesota. Absolutely. Good to have you, Lita. We got the shaman, Nadeem Shah. We got Leo Faragana. Faragana. Faragana. Faragana. Faragana. Faragana. Faragana. Faragana. Faragana. Faragana. Faragana. we got? Charity Sackey Graham saying hello. Charity's making a habit out of it. We got Big Papa in the house. We love it when he calls in Big Papa. How are you, my man? The co founder of The Co Founder. We got Mark Noman from SoCal. He's, he's Mark Norman. Not Noman, Norman. You know, you're, you're close on names. We'll give it to you. My lips are not catching up. What's your favorite name to pronounce? Aaron O'Neill. Into the lines. Good to have you, Aaron. Good to have you back. We got Kevin O'Brien past star of the show, of course, from Rhode Island, world famous new Englander, Eddie Harris from hot Atlanta. We got the patron Santorio. So the community, Michael Santorio, Virginia. Good to have you in here. Andrew Harden from Fort mill, South Carolina. Is that a new name? Welcome to the show. Welcome to the party. Good to have you. I hope you're making stuff at home here. I'm going to keep talking like this. All right. We got Zenobia Lewis from Georgia. Is that a new name? That's definitely a new name. New name, Zenobia. Welcome, welcome. Welcome to the show. Luis Olivares. My friend from Miami. 100%. Good to have you, Luis. We got our regulars, Gary and Rosalind Riley from Marietta, California. We regard you. Oh my goodness. Is this your first time? I'm on the struggle bus today. You know what it is, is that I played pickleball yesterday and I'm really sore. I've heard about this. We got the first family in the house. The Patriarch. Ken, the Maytruck, Carolyn, and Duchess Karen, and her husband, Ed. What is the, the male, the husband of a duchess, the ducher, dutch, the dutch man? I don't know. And congratulations for marrying into a great family. We salute you. We got the mama bear in the house. Miss Cody Adams. All right, let's get this. Oh, Kristen Sullivan from Wisconsin. All right. Good to have you. Oh, Andrew Hardin saying, thanks guys. Future client. Oh, I love that noise. I love that noise. There you go. I like that snickering. Yeah, okay. Yeah, Lee is making fun of me already because I'm weak from pickleball. It's true. I am out of shape. I'm aging in my skin and you know what? I'm comfortable with it. So anyways, GC, we got a, we got a, we got a really cool format today for you because You know, it's hard to get a, a world class CPA on the phone right now. Yeah, I tried doing that on April 9th, right? Poor, poor CPAs out there, crunching numbers away. But! The JWB network is strong. It is. And what we have is JWB CPA, Brian Reyes, right? Well, you want to give a shout out to his CPA firm? Pivot CPA Pivot CPA group here in Jacksonville. I also have a location in Gainesville, been a part of our organization, a part of our team. For as long as I can remember and I would say, you know, one of the most important teammates you can find as a rental property investor is somebody who truly gets the tax perspective from a rental property investor mindset. And Brian and his team have done a fantastic job. Awesome. So Brian really wanted to be on the show today, but he was just. It's getting destroyed right now, but it's tax season. So we came up with an innovative idea. We got, we sent him a little video prompt and he sent us a video of four, five different answers to these videos. We're going to play these videos for you and then GC and I are going to like over explain it a little bit more. I love it. What do you think? I'm pretty good at that. Yeah, absolutely. You nailed that one. At least you're good at that. So, but before we got a little bit. We got some breaking news, GC. The best type of breaking news. The best type of breaking news. So today is the day that we get to announce the award winner for the JWB raffle. And for those who are not aware, we have been in raffle mode. We have been in money raising mode, especially for the last month, month and a half. And we asked all of you to open up your hearts and open up your wallet so that you could donate money to build a brand new construction home, which is going to. To be gifted to a JWB resident in our mission of finding solutions and solving the home affordability problem. That is a problem across our country and we want to do our part here in Jacksonville. And so, first of all, thank you to everybody who was a part of this. For those who were at Summit and you bought bracelets from my daughter, Bella, thank you for doing this. Let's, let's talk about how much they did. It was 2, 869 tickets sold. Wow. Not too shabby. That means that 12, 395 were raised. Not too shabby. And that means that a lucky winner is walking away with a 50 50. We talked about it. It's worth it out here. I have 6, 197 and 50 cents goes to a lucky winner, which GC been all do lab. Doolaba. Doolaba. Bimal. Bimal. Doolaba. Doolaba. Get paid. Let's go. I took a page out of your book by screwing up the name there. You're welcome. So I apologize, Paul. But congratulations. You just won over 6, 000. Over 6, 000. So we are super excited for you. That is a pretty awesome. That's pretty awesome. Six G's. Pretty awesome that we got a community that bought so many tickets, donated so much money. A lot of that came from folks that watch this show, just like you here joining us today. And you know, 12, 6, 000 bucks that goes a pretty long way to, to building a house, right? What is, uh, give me a building materials. What did that buy? I don't, I don't know off the top of my head. I mean, it cost, you know, a lot to build a house, but. Pitch countertops? Okay, you stop. Let me talk about the big thing here, right? Many people think when you're going to raise over 200, 000 to build a house and donate it, that you have this big money sponsor that comes in to do this. That is not the way that it happens. It is a year. the J. W. B. Team working with our partners and our clients and our network and ourselves to donate and raise money together to do this. So it is a lot of 500 here, 10 here, maybe 1000 here. And so You all are the reason that this thing comes together. There's not some big money sponsor out there, fortune 500 company that donates 200 grand to make this happen. It's all of you. So thank you so much. Congratulations to them all. And we are absolutely on track and excited. To donate this home. It'll be coming up in the coming months. Then we're going to take you right along with that journey as well. 6, 000 bucks is like a good appliances and maybe weather stripping. Sure. All right. All right. Let's get onto, let's go out to show them all. Congrats. Congrats to the community for being part of such a great thing. And Let's start with the first question we asked them. I thought we started off pretty simple, right? Like, Hey, you may or may not have a CPA just on a baseline. We asked Brian, what questions should an investor ask if they're interviewing CPAs, if they're out there trying to hire this person for their team, let's get this thing going right here. And there's Brian Reyes. As a passive rental property investor, a few things, just walking through a fee structure. Most qualified CPA firms are going to sell their time at an hourly. Are they taking on new clients? The industry, I would say over the last couple of years has really changed in that there's lots of people that are retiring from the industry. The state of Florida, as we all know, is growing leaps and bounds. And so there's lots of businesses and lots of activity, but there's not as many. CPA firms come in. So what are they taking on new clients and what that engagement might look like? Lots of new clients, lots of CPA firms, including like our firm, we're taking on new clients. But many times we're telling, Hey, we're probably going to have to extend your return. We only have so many hours, everything's compressed. And then do they work with other taxpayers that have rental properties? Generally, I say most CPAs work with taxpayers that have rental properties. Some work with more than others. If you have just one or two rental properties, usually sometimes you can just do it yourself It's really not that difficult of a return if you have multiple 10 20 and if that's your goal You probably do want to work with a qualified cpa because you can work through things Ask them if they've heard of a cost segregation study get their feedback on that generally cpas don't advise on asset protection, but we know enough to be dangerous and talking to lawyers Just talk to hey, what do you advise on this? Do you set up multiple entities? We try to keep things as simple as possible for our clients. So we don't like Big structures don't make sense. Cause when we're in a position where we're charging all these fees and there's just not a lot of value there, their fee structure, their thought process on what your structure looks like, where you are today and then where you want to go. And I would say to telling them and explaining to them your organization, because it's a two way street working with a CPA, you know, CPAs charge hourly rates. And so if clients are unorganized, if clients wait, That's what's challenging for a CPA firm, frankly, to get things through efficiently. So, walking through them, show them, hey, here's the spreadsheet that I'm keeping. JWB does a really, really good job of organizing the data. And they have management summaries to show the property, the income, all the expenses. There would be expenses many times outside of that management summary. So, talking to CPAs, say, hey, here's what I got. If I have a closing, I'll send you the closing statement so you automatically have that in your folder. I'll try to get you the information at this time. Talk to them about their process. So it's not just, Oh, I'll send you everything in April 2nd and I want you to file by April 15th. It just, it's not, it just won't happen. All right, you see him. what'd you take from that one? I was just here sitting, thinking about the amount of money that Brian Reyes and his team has made us over the years. Yeah. And I was starting to think about, how most people think about CPA or accounting as an expense. But if you have lived, a life in JWB here, you would see that Brian is a part of our team when we leave business planning each year. And there are a few phone calls we make. One of those phone calls is to Brian and we sit down and we explain the exact business plan that we have for next year, the next three years, of course. So he is in every one of those plans because he is an asset. And I don't know how much money he has made JWB over the years, but it's definitely in the hundreds of thousands of dollars. And that's the type of asset. That's the type of teammate that you want on your team. Somebody that you look at this expense, this expense that many people would feel as a accounting and CPA and tax and all that. And you can quickly say, no, no, no, that's not an expense, right? This person is creating income for me. That's what Brian and his team have done. So, I think what Brian is saying, obviously I, I agree with completely, but I just think if I, if I get out of like the blocking and tackling of what I'm looking for, like, This person should be able to demonstrate real value. You should be able to see the amount of taxes that you have saved, or the amount of write offs that you've been able to receive, and that should more than justify their costs. At the end of the day, that's how, that's who I would be looking for here. Makes sense. A couple of things that I took away from there, you know, the obvious stuff. If you're in Florida, it makes sense, right? The population's growing here. The amount of CPAs are not growing at the same rate as population is growing here. So if you're in like this, one of these high growth markets, like Jacksonville is high growth state. You want to get on this stuff early and have expectations in line, right? Like I think that that's really important. So maybe doing it right now, April 9th, if you haven't done it, you know, maybe Set your expectations in that, in that way. The other thing is this idea of, yes, CPAs are generally gonna quote you on an hourly rate. Maybe, maybe you guys, and maybe you guys probably have them on retainer or whatever, right? But like as a, as a, as a small guy, you're going to get this hourly rate. So the more prepared you can be, the better that to me means. make sure that I am giving a call to my portfolio manager at JWB ahead of time. Make sure that I'm asking my portfolio manager, Hey, do I have all the documents that I need in place? Know where that is, right? Like you can get it yourself from the owner's portal where you can have your portfolio manager help you. One of the mistakes that I've made in the past is something that he calls out when you are, when the year that you acquire the property, you also want to have your kind of like the, the, the, the loan documents and that type of stuff. That's not in your owner's portal that you're getting from, from yourself, from the mortgage provider. Right. So like, I've learned to save time by having my mortgage documents in place and having all that stuff beyond what JWB gives me in order to like, make that as fast as possible and reduce my costs. A hundred percent. You can look at it. You can be really sloppy and disorganized and all it is, it's costing you a lot of time. Money in an hourly rate to a very highly trained professional, or you can do some simple things like when you close on the house, keep all of your documentation related to the closing in a file, in an online file, right? You can work with a vertically integrated provider like JWB or there are others that also provide documentation called a Schedule E when it comes to tax time. If you're a JWB client, you get the Schedule E provided to you, you just hand that. To Brian, or you can that to your CPA and that reduces cost for you because it has everything that your CPA will need to be able to do this well for you. Yeah. Pedro Centauri says the HUD one settlement statement. That's, that's the one that they were asking me about that. I wasn't really sure what it was back then. Now I have that stuff. Right. So also chat is in perfect agreement with you, right? Like your longstanding relationships with CPAs, with the folks that you work with. This is an asset on your team, not a liability. You invest in this relationship, they should be able to show you the ROI. And they've had great results as well. Okay. So let's move on to the, what we all really like as real estate investors, the deductions that we can make for rental properties. Let's see what Brian has to say here. Don't ever think this, just be thinking any expenses that are driving your rental income. Those are deductible expenses. So JWB has a good summary of their expenses with their management company. If you have expenses outside of the management company, mortgage interest, real estate taxes, anything that's outside of that, you need to organize, make sure you have some way to provide that, but not just receipts, sending a bunch of receipts to your CPA the first of April, it's just not going to get you a good answer many times. But if you keep a good schedule, JWB does a good job with their piece. And if you keep a good schedule, you're just sending a summary of that to your CPA. We see lots of people that can't do that. They have the summary, and then they forget the other pieces. And then we have to ask and get back and forth. And sometimes that's where stuff gets missed, back and forth. And if you're missing it, then you're maybe overpaying your taxes. A bonus depreciation is a depreciation for generally tangible property in some land improvements, sidewalks, landscaping for residential rental properties that prior to January 1st, 2023, was 100 percent written off. So if you bought a dishwasher for 1, 000. The first year depreciation on that was 1, 000 in 2023. That was 80 percent of that. So be 800 bucks and then it's set to move down to 60 percent 2024. So that's one I wouldn't say it gets forgotten, but sometimes people forget to break out and componentize that stuff called segregation studies. Probably everybody's at least heard the concept of it. We see lots of cost segregation studies. I would say if you're just doing one property that you pay 250, 000 for, doing a cost segregation study is probably not just worth the effort or the time, but if you have 15 properties, if you have multiple duplexes, whatever, then it probably makes sense to go through so you can really speed up that depreciation and reduce down. You're going to want to come down. Keep in mind, depreciation is always timing, always timing. You're going to have to recapture that if and when you sell the property, unless you do a 1031 exchange or something like that. Airbnb folks, be mindful of furniture. There's a lot of spin up costs and just getting the property ready to get somebody in there and make sure you're getting all that stuff. A lot of that is subject to the 80 percent bonus depreciation. You got a lot of furniture that goes into an Airbnb. Lots of people make the case that Airbnb is a trader business. And I've seen that just be mindful. It's good when you have the write offs, but on the back end. You are setting a precedent to the IRS that it's a trader business, which means that the net income going forward could be subject to Social Security and Medicare taxes, which general rental income is not subject to Social Security and Medicare taxes. There's a 20 percent qualified small business deduction. If you can qualify for that, you'll get all kinds of hits on Google if you Google it. Some rental properties can, depending on your time. Similar to passive activity loss rules. You just have to, you have to support that it's a true business. If you're a passive investor and you are a doctor or, you know, a manager of whatever, and that's your daytime job. And then you have some rental properties. It might be hard for you to argue that it's more than anything, but a passive investment. So the 20 percent small business deduction might not, be of use to you, but just be mindful of it. And then just understanding, I would say the concepts of active versus passive in one year, you can be active next year, you'd be passive. So you don't have to be the same every year. So your case, your facts can change. You just got to be mindful of what those rules are. And we do, we are starting to see some more audits around some of that stuff. Just be mindful. Okay. I heard a couple of things there that I, that I think we would do well in clarifying. The first thing is the typical deductions are just don't overthink it. Any costs involved with your rental properties you can deduct. Then he started throwing around. A couple of terms around there that were one was bonus depreciation. Another one is cost segregation. Another one is passive versus active. And I think there was one more in there, but let's start with bonus depreciation. GC, can you explain that a little bit? I can, I'm not a CPA. I'm going to do my best here. So I would just put that out there. You should talk to your CPA rather than taking my word for it. But here's how I think about it. You guys, and if you're friends and part of the show for a long time, you know that I love tax savings. And when I talk about loving tax savings, I love the standard tax savings that we get for rental property investing, which means that the IRS allows you to depreciate the value of your building over 27 and a half years. And so then that comes down, you, figure out all that. It's tax savings in the thousands depending on how long you own the property. So that's what I love because you don't get that in other asset classes. But that's a very simplistic kind of standardized way to go about depreciation. There are much more aggressive or accelerated ways to go about depreciation. There are, that's where this cost segregation study comes into play. So what that means is you'd spend a bunch of money to go and actually look at all the costs that go into your rental property And it's more common on like a commercial building, but let's just say it was your rental property and say, well, the walls actually depreciate over this many years and the windows over this many years and the floor over this many years and the lighting and all of that stuff. And the intention there is to say, well, it's not just standard over 27 and a half years, the, I don't know what the depreciation is over lighting or whatnot, but it might be, you know, five years. or lighting. I'm just making that up. Don't take that for, for actually what it is, but you're trying to reduce that depreciation schedule or an air conditioner. We think really only last 15 years. Yeah, exactly. So like you're trying to reduce the schedule. And by doing that, you're able to take a bigger write off by doing that less years means bigger write off, which means more tax savings for you. Now, that's just the standard of, like, what you do before bonus depreciation. So that's not bonus depreciation. That's cost segregation studies to try to accelerate. Okay. Now, in 2017, as a part of the JOBS Act, this bonus depreciation became a thing. And what this means is that for certain elements and certain investments, the government allows you, the IRS allows you to depreciate it in a much more accelerated standard. Technically, you don't even have to do a cost segregation study for some investments, but it's just standard. So like, if you want to know why Like, private jets were selling at such a high rate over the last few years. Private jets were looked at as a business expense and you could fully write off the value of the private jet in year one. Jesus. Yeah. Okay. So just insane out there. so it wasn't a tax opportunity that became available. Now what was happening is for a certain number of years, you could write off these eligible expenses over. A hundred percent of it in year one. And then as Brian was talking about, it gets phased down, so the value of it is decreasing over years. Okay. In 2023, it's 80 percent of the value of an eligible expense. And 2024 60 percent and so on and so forth. So how are we doing so far? That's pretty good. So if I was to, let's say, put in like 20, 000 worth of landscaping, right? Like I wanted to create a freaking Oasis in my Airbnb or my back, you know, my rental property backyard, right? Like whether or not that's a good investment or not, let's leave that outside of this thing. But I put in 20, 000 of. Of like, you know, really sick landscaping. I put a putting green in there. that bonus depreciation says I can deduct 80 percent of that in year one. Is that kind of like what we're talking about here? I'm not sure if a putting green would qualify. So I'll watch my words there. But just generally speaking, there's tangible properties. improvements that have, that would be eligible for bonus depreciation. You don't even have to do a cost segregation study. There's some like appliances, like he was talking about landscaping. It's basically those, it's a very small section of it that would be eligible for regular property owners. And so, bringing back to what CPA you should find. You should find a CPA who knows that and is able to save you tax dollars by being a part of, or by taking advantage of bonus depreciation for elements like that. Cool. Got it. All right. So then that covers cost segregation studies. I feel like we have that question often. Right. I've heard you answer. Should I do cost segregation? Should I not do cost segregation? Essentially saying that when it comes to single family rental properties, even having a ton of them doesn't always make sense to do cost segregation. You kind of want to do it in multifamilies where it's like a cookie cutter over and over kind of thing, or else the dollars don't end up making sense. Exactly. So JWB does not do cost segregation studies on the rental properties we own. And it comes down to a return on investment, the amount that we would have to spend. And you know, at the volume that we operate, so we could get a great deal on 300, right? Yeah. And, and we manage 6, 000. So if we, if we saw value here, we could get great economies of scale and get the price down for cost segregation, but we still can't get it down low enough to where our owners, our clients would benefit or us as the owner of those rental properties we own, the cost of doing that cost segregation study on one individual. Single family rental property is higher than the tax savings we would receive from getting the information from the cost segregation study. So where it really comes in is on the commercial buildings that we own. We do cost segregation studies on the commercial buildings we own. Because now the value of the tax savings exceeds what the cost of the cost segregation study is. And so generally speaking, you're probably not going to do a cost segregation study on one single family rental home and probably not even a small number of them. We don't even do it for 300. So, there you go. And then the final thing that he was talking about was active. So Jamila saying cost segregation, you want to just kind of like explain cost segregation real quick in under a minute? It's breaking down the components of the house and assigning a depreciation schedule for each component rather than just taking the standard depreciation schedule of 27 and a half years for the entire building. Got it. So instead of like, Hey, this house depreciates for 27 and a half years, Jamila, you're saying, Oh the AC depreciates for 15, the roof depreciates for 20, the windows depreciate for 10, the, or right, like whatever. Right. But like the drywall for X, the studs for this, the flooring for that. And they're able to do that. Right. So that's what a cost segregation study is. And again, it, it makes sense when you have a bunch of like, the same over and over in one building so that the person doing the study isn't spending so much time going back and forth and looking at different components and looking up what each one does or whatever. Right. Exactly. Okay. So we talked about active versus passive. The way I understand this idea of active versus passive is if you are an active real estate investor, it means that you need to dedicate. X percentage of your like working hours to real estate itself. And if you do that, now you can claim the income from it into your active income. But as a passive real estate investor, you can only deduct passive to passive income. So I can't take my JWB properties because they are 100 percent passive for me and deduct that against whatever my business did this year. Exactly. Okay, right. It would be great if you could take the deductions that you get for your rental property and write those off against the active income that you receive from your work or your business. It just, that's not real for most JWB clients because we serve a very passive investor base. So whenever we're talking about the tax savings that I'm talking about with you, it's assuming you're a passive investor. If by chance, and we do have a number of clients that are active in their own market, maybe flipping houses in their own market, And they use JWB as their passive investments. Well, they may meet that threshold of being an active investor. And so it can only get better if you're an active investor in terms of the tax savings. Because you may qualify to take the passive losses. the deductions and apply those to your active gains and really start to, you know, maximize the tax savings component. But we don't assume that because that's not generally the clientele that we serve. And because there's a number of hoops that you have to jump through. So if you do happen to be an active investor and you meet those requirements then it only gets better for you. That's right. Patrick Centorious puts in the chat 750 hours is the, is the, is the limit. And I've also, I also understand you do not want to mess with that, right? Like I've heard Brian said it at the end, there is a, there's an uptick in audits that are happening. I know that I did this with, Daniel Wren, like you've been on his show, right? We had somebody that like has helped people through these audits, they will look at your calendar. Like, they will look at your, like, these auditors are not idiots, right? Like, they are very curious people that are trained to do this. They will look at your calendar and make sure that what you are doing is it. Real estate. So, if you're not really legitimately doing this thing, don't, don't mess around. Right? I would agree. I agree. Got it. Funny story. I just want to add in one funny story because I was starting to think about when I started, what I was doing and what I thought about finding a CPA. You know how Brian was saying, Hey, listen, when you are trying to make the most of your relationship with a CPA, don't bring them receipts. Right, like that's not, many people try to do that, but what you need to do is work with a partner that can provide a schedule E for you. That's really what makes the job easier. So I remember when I was first interviewing our very first CPA firm, which was not Brian and his team, I was trying to be so prepared. If there was a podcast or a show like this, I was going to watch it. And I remember I created a folder system and I called it the receipt retention form. And so we just had like folders and folders and folders of like receipts. I would staple the receipt to the receipt retention form. And I brought this all the way to my very first CPA that I was interviewing. And he was half impressed and half just like, What the hell are you doing, man? Like who would actually do that? So, Again, the takeaway there, work, either create your own Schedule E, know how to do it yourself, or work with a vertically integrated provider that can provide that for you. And that's the thing that's going to make this a lot easier for your CPA to create value for you. Beautiful. All right. So up next a couple more advanced. Tax things. We talk about 1031 exchanges on the show. We asked Brian to explain how a 1031 exchange would work when it comes to taxes and to give us an example of somebody doing it from out of state, since we know a lot of you are out of state investors. So here's his answer. Much like we were talking with depreciation, generally a 1031 exchange is a deferral. So it's a tax deferral. If you own a property in Minnesota and you didn't like the Minnesota real estate market anymore, you thought that it had hit its peak and you said, okay, I want to Jacksonville. And you said, okay, my I have a gain in this Minnesota property of 600, 000. You could roll that gain into the property in Jacksonville and not pay taxes on that gain as long as 100 percent of the proceeds went into the new property. So there's this concept that the IRS calls boot. If you receive any boot, which in most cases is cash or the other one, where we see cash There's a little bit of a landmine is if debt is paid off. If debt's paid off and you don't have new debt on the new property, that is deemed boot. So if you had a property with a 200, 000 debt and that was paid off and then you just rolled the net proceeds into a new property, but you got 200, 000 worth of boot cash that was received to you. If you had 200, 000 in the old property of debt and 200, 000 in the new property, then you're fine. So we see lots of 1031 exchanges. It is a tax deferral strategy. You get a carryover basis because it's tax deferred. So the old basis, going back to our Minnesota example, if you had this property in Minnesota that was 100, 000 and you bought a property now in Jacksonville because you had this 600, 000 gain, you have a 700, 000 property you bought in Jacksonville, your basis is what your old basis was. So be mindful of it because you keep rolling this over. Just be mindful of an exit because if, and when you ever go to sell them, I mean, some people we've seen up North, you know, these people have selling these properties, these commercial properties for years and years and years, and you just, you wait until you die and you get stepped up basis on our current tax law. So then you have 10 31, everything, you never pay any gains and then you pass away if you properly plan for the estate taxes, the beneficiaries get a stepped up basis at death, but it's outside the concepts here. So carrier basis tax deferral, make sure very clear that you have a QI qualified intermediary very early in the process. Sometimes people will say, Oh, I just sold my property and I now want to do a 1031 exchange. No way You gotta there are some ways to do Some reverse 1031 exchanges But I would make sure if you have any thought of doing a 1031 exchange make that You select your realtor and then immediately go talk to a qualified intermediary As we talked, dollar for dollar, make sure everything is going through the QI. If you have debt, you're taking on the same amount or more of new debt because anything, any cash that you're receiving, any of the debt payoff that you're receiving cash, it's basically a pro rata gain. So if you had a 600, 000 gain and you received 20 percent of the proceeds, 20 percent of the gain is taxable to you. So we have seen many cases where that debt pay down. Is is not accounted for and then it's a bit of a mess on the tax side You can bring new cash to the deal if going back to minnesota property move this property down and you had to bring new money Into the deal so then you would have the carryover basis plus the new money you put over into the deal But you're always going up in 1031 exchange. You can never go back unless you want a portion of to be taxable Sounds like he was talking straight to lead a song there. That's funny. That's right. That's right. Sweet lead a song from Minnesota. all right, GC. So just to explain 1031 exchanges, if anybody's here, they haven't heard of it. Quick explainer on that. It's a tax deferral strategy. It allows you to sell a property and reinvest it into one or more new properties and to not pay the taxes at the time of sale. So the way I think about this and his example was great is this allows you to put the most assets in your army of income producing assets. Because in that example where Brian was talking about that 600, 000 gain, if you just sold that property and you had to pay capital gains on that property. I mean, taxes at the time of sale. Let's just say when it's all said and done, that comes out to 25%. That's 150, 000 that you have to pay at that time. But if you do a 1031 exchange in this example and you have that 600, 000 gain, now you bring that whole 600, 000 to go and buy your portfolio of properties in Jacksonville with JWB, let's say. And that's the difference between Having three properties in your portfolio or three or four properties in your portfolio or four or five. Because if you paid the tax right off the bat, you give 150, 000 away, you only have 450, 000 of working capital, that's three or four properties. If you keep the, if you do the 1031 exchange, you go and you buy a portfolio of rental properties with JWB, now you have the full 600, 000 and that's probably four to five rental properties. So, this is all about maximizing the amount. of assets you can put in your army of income producing assets. Got it. So if you bought a property for 200, 000 in Southern California, 15 years ago, it's now worth 800, 000. You do a 1031 exchange. That means you can buy 800, 000 worth of properties in Jacksonville, Florida with JWB, which if you are financing, that means you can buy 10 or whatever. Right. As opposed to cashing out and then being able to buy about 600, 000. Exactly. Right. So, easy peasy. Now, what he's talking about, right? So there's a couple of, there's a couple of rules that have to do with 1031 exchanges. You have to do it and identify the property, make sure that you're going to be able to close it within the timeframe that's, that's provided. but he also mentioned something, I don't think we've ever talked about this idea of boot, right? 1031 exchange is the fact that you have to, It's a growth strategy, right? So, you're going to have to buy as much or more of what you just took out of the old property in new property, right? This boot concept, if there's, you have to take on at least as much debt as before. Had you ever heard of that before? I get mixed up in exactly what boot means, to be quite honest. I know, I know enough to be dangerous, but what it comes down to is just maximizing the tax savings component. So, that's why you need to work with You heard him talk about a QI, a qualified intermediary, right? This is somebody who is well versed and an expert in setting up your 1031 exchange to make sure that you are maximizing the, tax savings. When you start to throw debt in the mix, there are other things that you have to take into account. It does get kind of hairy and, and that's where boot comes into play. So this I think is the value of the team here, right? Your CPA is a part of this strategy for sure to help guide you here. You're qualified intermediary is the blocking and tackling how to set this 10 31 up exchange exchange up so that. You maximize the tax savings and are not left paying taxes on the boot. Got it. Chad W has a question. How do I capture suspended losses that get carried forward? Are you familiar with that? Yeah, I think we're not talking about a 10 31 right now. I think what we're talking about here is just in your rental property when let's say that you have Thousand. Let's say that you have$2,000 of taxable income. Mm-Hmm. Um, that would be your rent. Mm-Hmm. And you know, the income, the net income that your rental property provides. Mm-Hmm. uh, after deductions. And let's say that you had a write off of$4,000. Mm-Hmm. Well, you wrote off more. You had the ability to write off more than the income that you made. That would be a$2,000 suspended loss. Mm-Hmm. And I think the question is how do you capture that? Well, that just rolls over in single family rental properties. And so the next year you potentially if you had a great income year or if you sold the property in that year, then you would just use that suspended loss that that just carries over the next year. And it's really simple and easy. Got it. And that with JWB you provide that statement as well, right? So if you're doing it on your own. You have to like keep track of that stuff with JWB. You get the statement every year, right? Yeah. I don't know if you had like a terrible year, you know, something bad happened and you lost money that year, the following year that carryover would go. Exactly. You see, you see it on your schedule E every year, you have your own CPA or you are well versed to do your own taxes. You combine both of those and you see how much additional. Depreciation you can write off the next year, which may also include the suspended losses from the previous year. There you go. Our, our, our dude, BJ McKay has a question. What about reverse mortgages on a free and clear 1031 property? That sounds advanced. Yeah. It made my head hurt. yeah, you know, BJ, I'm not, I'm not a hundred percent certain on that. Um, yeah, I don't know. I would ask a CPA, um, or if you have a question, BJ is a current client. Just fire that question and we'll see if we can get that question answered for you. There you go. Shaman says 1031 exchange. If one sells a property, does the whole amount gain has to be invested for one or one can deduct the down payment amount and invest just the profits or the profit and the down payment has to be invested. So it's not taxed. We're talking about the gain on the property. So it's not about the down payment. We're talking about the gain. So if you bought it for a certain amount and now it's worth 200, 000 more, that's the opportunity to save on the taxes there. And so in that case, you had 200, 000 of gains that could be taxed. Then you 1031 exchange. And take that 200, 000 of gains, put that into a new portfolio of rental properties. And that purchase price of those new portfolio, that new portfolio of rental properties has to be 200, 000 or more to maximize the tax savings. If it's less, you can still do it, but you're not maximizing the tax savings. Got it. So you would, if it, you only bought 150, 000 worth of properties with that 200, 000 gain, get taxed on the rest. There you go. Got it. Okay, cool. Good, good question, Nadim. Patron Santoros is saying you can only do reverse mortgages on your primary home. So that wouldn't come into play in a 1031. There we go. There you go. All right. So the next question that we asked Brian Ray is here is what about tax implications of buying real estate? Inside of my retirement account. Since a lot of folks do that here. You can invest through a custodial type IRA or 401k plan. It has to be a qualified custodian. If you go to Wells Fargo and say, Hey, I want to set up a IRA, they're going to put you in stocks and bonds because they don't want to take the risk. And your big wire houses, Wells Fargo, Merrill, they just, they're not a spot to take a risk. They're going to say, yep, stocks and bonds. So interest equity trust. Those are some, there's all types of them out there. JWB I think has a lot of good resources with those guys. And so the fees can be high. You can set one up with. Wells Fargo, it's minimal. Whereas you go set one up with one of these qualified custodians, the fees can just be a lot higher. It just is what it is, but it's the only vehicle that allows you access to invest in kind of non traditional asset classes, real estate, different things. The reporting is the Wild West. I'll just be honest with you. It's gotten a little bit better, but it's still not very good. You know, these, I would say these custodians do the best they can with it, but there's so much that goes on. So if you are, you know, going to do this, you need to make sure you talk through some of the transactions with the CPA, because you do run Into unrelated business taxable income issues if you invest in real estate and there's debt involved in that real estate some of the income and or the gain might be taxable to you and there's a 4990t that has to be filed from your ira or your 401k if you have unrelated business taxable income each year and if you don't file that form the penalties are pretty steep So if you're doing it, I would make sure you're doing, you know, enough of it that would warrant, you know, having a qualified CPA that would look at it and analyze these forms. The unrelated business taxable income rates are much higher than just your normal traditional income tax rates. It. You know, you sell a property and it had debt on it, and sometimes just the underwriting of debt, they're like, you gotta buy a property and you wanna get debt. How do you even get debt through your IR? You can't most times. But if you're investing in a fund that has it, the fund would generally outline the unrelated business taxable consequences of your investment inside that fund, and then that would pass through you on to a Schedule K one. And that might then require your IRA. Uh, or your 401k to file a Form 990 T and pay tax. If you pay tax, it's not the end of the world. It's just close to doing business, right? If the investment's really good, just be very mindful about it. Trade or business income is subject to unrelated business taxable income. So if you're a real estate professional and you flip houses or you lend or whatever, be very careful because if you're doing the same types of things inside your IRA, the IRS could deem it. Your trade or business and the whole thing be taxable to you. What they do is if you have a million dollars in your IRA and you only have one tainted investment, they tax the whole value of that specific IRA. If they were to come in and see a tainted transaction. CPA like me, if I, I'm not a real estate guy, if I did a real estate transaction inside an IRA, I'd be fine because I have a day job of doing accounting services. So someone like me, a professional, you'd be fine. But if you do a lot of real estate transactions already, just be very, very mindful of the unrelated business taxable income issues inside an IRA or 401k. Okay, I heard a couple of things in there the number one thing that sticks out. Well, first of all, he kind of explained this whole idea of you need a reliable custodian, kind of the wild west. I understand that with JWB, you guys have like trusted custodians that you use that you recommend to people. And that kind of mitigates a little bit of that risk. Yeah, absolutely. And when he was talking about the wild west, he wasn't saying that using a custodian is the wild, wild west. He was talking about The reporting is the Wild Wild West working with a custodian. And that's just the nature of the investments you're allowed to invest in. a self directed custodian like, Brian was talking about, like a new view or equity trust or horizon trust. These are some of the ones we've used and seen our clients use. They are going to allow you to invest in non traditional assets. Traditional assets would be stocks and bonds. Really easy to report on stocks and bonds. Non traditional assets would be things like rental properties. And there's a lot more moving parts. So, it gets a lot easier when you work with a vertically integrated provider like JWB to make sure that the reporting is easier to do. Like for example. Every year, like I'm a client of Nubia, and so every year on the investments that I have within my retirement accounts, they ask me for a fair market value. So they need to understand what the fair market value is of my real estate. Well, I'm not going to go out there and do an appraisal. on the property, right? That would cost hundreds of dollars and, and that's not required. But what JWB does for our clients is we provide that fair market value for you. We're real estate agents. We can do a comparable market analysis for you. And we just provide that for our clients. It makes it easy for a client to take that fair market value, give it right to Newview or whoever they work with. And you take this concept of being the wild, wild west, which it is for most people who invest with a self directed custodian and you really streamline and make it a lot easier. Awesome. Okay, good. Good to know. So, And then the next thing that he talked about, essentially, if I'm doing this and I want to be wary and I want to talk to my CPA about it, I think I've got to bring up the idea of unrelated business taxable income and have a conversation with my CPA about that. You know, he talks a lot about that and it's very good to be aware of unrelated businesses is business interest tax. But let's just clarify here. That is only if you're taking debt on the property in your retirement account. So for most people out there, you're shocked to know that you can even buy real estate in your retirement account. I would say the most people buy real estate in their retirement account now using cash or a combination of cash with some debt in it, but more often than not, it's cash. If you're buying real estate in your retirement account right now, and they're all cash transactions, you don't have to worry about unrelated business income tax. Also, if you set up your retirement account strategy right off the bat, there are vehicles you can use where you can take debt out on the property and you still don't pay unrelated business income tax. It's also known as UBIT. So I'm just gonna call it UBIT. You don't pay UBIT if you use the right vehicle. So one vehicle would be a solo 401k. If you're investing in a solo 401k to invest in rental properties, then you can take out all the debt you want and not pay UBIT. But what Brian's talking about is for those who take on debt and it's not in one of those vehicles like a solo 401k, UBIT can really Bite you and then, you know, what many people do not understand it or aren't aware of it. And so again, it comes back to working with a vertically integrated team. Who's done this, seen this a thousand times or more and can just say, okay, Hey, if we're going to put this portfolio together for you, and it's not going to be in a solo 401k, and we're going to have debt be a part of your retirement account portfolio, then let's talk about what you bid is. So, you know, going in and one thing that Brian also mentioned is like, Hey, If it comes down to paying UBIT, but it's the best thing for your return on investment for you, and for your long term goals, then, hey, it's just another expense. So, a lot of scary things, I think, that we talked about there, that can be made, the risk can be mitigated or the scariness can be mitigated by working with a professional team who's done this a thousand times and can do some simple things to make it easier for you. Good explainer. Okay. Let's move on to the last question here from Brian, where we asked them, are there any changes in tax laws or regulations that could impact real estate investors? Let's see what he has to say there. There's not a lot of changes. I would say we're in an election year. So many times in election year, you don't get changed. I could see maybe some changes going forward. The one big one was the bonus depreciation that went from a hundred to 80 percent and is set to go to 60 percent in 2024 and keep phasing down from there. There's been a lot of talk about, and there is supposedly a bipartisan bill that's passed one chamber. Can't remember which one off the top of my head that would reestablish the bonus depreciation back to a hundred percent effective way back in the 2022. And you're like, the heck I've already filed my return for your, I would say normal investors that have one, five, 10 properties, probably not a big deal, but if you have lots and lots of rental properties, especially in the commercial space, qualified improvement properties, a big one that's subject to bonus depreciation, if you. 1, 000, 000 worth of improvements into a building, you may consider extending your return. Now, that has lots of consequences in talking to the investors and such to see if this bill goes through, because if it goes through, it may be subject to 100 percent bonus depreciation instead of 80, case by case. But just for your kind of normal baseline rental properties, that's really the biggest. I mean, nothing's really changing. There's some, there are some estate planning issues out there that are set to sunset. Right now, if someone passes away, they have an exemption of roughly 13 and a half million dollars of their total wealth can pass and you don't have to pay income tax, estate taxes on that. If nothing changes within our tax laws in 2025, that goes to five million dollars. So, that's a big swing. I think, depending on what happens with our election, I think they're at minimum reach some. middle ground on this, but that's a big one just to be mindful of. I would say just be mindful of estate planning in general for your real estate. You start getting more and more rental properties. They in Jacksonville market, they keep increasing in value, being mindful of, okay, do I have proper insurance? Do I have them titled correctly? What happens if I pass away? If you, especially if you have young kids, it's an asset for your kids, but not a lot of, I wouldn't say on the income tax side, you have your normal. Inflationary increases for IRA contributions 401k contributions and I gotta tell you it's something pretty small But we see lots and lots of people that don't max those things out They say why am I paying so many taxes? First thing I do is I look at their w 2 and Well, you could have put 23, 401k and you did 10. I think people forget about that baseline stuff. They try to focus on the new sexy thing and they forget some of the baseline stuff. You got to start with those baseline things. Maxing out your 401ks. If you have a family, thinking through your health savings accounts, the IRA and the health savings account can do, be done up into the filing. So April 15th, you have SEP IRAs. If you have a business, if you're a realtor, you have a business. Flipping houses, you have a business. If your rental property is a business, that's a stretch, but if it is, there may be retirement plan contribution options, and there are some rules under the secure act that allows you some flexibility when to set those plans up. But just be mindful as you're. Filing your return now. Hey, did I max out my 401k? Because if your cpa says actually you didn't you need to go to your hr right now and say hey I want to make sure I max out my 401k for 2024 people leave lots and lots of money on the table It's just a good thing to to do too if you're trying to save for retirement But right now not a lot on the income tax side I can see depending on what happens with our election Lots of changes maybe this time next year. There'll probably be a probably a hot topic going into say 2025 All right. I heard not a lot of changes and more than anything, not a lot of changes. You can do a lot about, right? Like even if this estate planning thing is going to change from 13. million, it's not like I can be like, Hey, why don't you go ahead? Pass away sooner for me. Right? So like, that doesn't seem like. A lot that you can do about based on these changes. Well, I would say to your point, right? You can't, you can't change anything about the time you pass it away, but with proper estate planning, you can plan in advance. And I'm not an expert there, but I, I'm a part of those conversations. And so I've known that that level was going down, I think it's 13 and a half to five. And there's things that you can do proactively to give more of your money to your You know, to your, to your heirs while you're living to reduce the taxes. So, I thought that, that advice for estate planning is not the purpose of our call today, but that's great advice, right? Again, another part of your investing team that you know, should be there to help with your high level decisions, help with your business plan really is what it is. So, yeah. And then finally, I just heard, You know, it's so sexy to ask what are the new things, what are the new tax breaks, when in reality our behavior is not showing that we're even ready to ask about that. We should really be talking about are you maximizing same old boring tax shelters, investing in things that allow you to save on taxes and things like that. Like, boring old single family rental properties. I love that. I mean, I love investing in single family rental properties as well. As, as one of the best tax deferral strategies that there is that open to everybody. But I think the, the even more boring things that everybody needs, you know, if you're able to do that, many people forget to do like Brian talked about. If you have the ability that you earn more than you need to spend, right, make sure you're maxing out your 401k. I think the limit is 23, 000 if Brian said that correctly there. So there's 23, 000 you can write off there. Make, make sure you're, you're maxing out your IRA, right? You can also have an IRA in addition to a 401k. I don't know what the limit is there. It's somewhere around six grand or 6, 500 there. And then an HSA. is also something that you can have, which is an incredible way to prepare for future healthcare costs and also use it as a retirement vehicle. You can invest in rental properties or private lending with an IRA and an HSA. So my dad taught me a long time ago, pay yourself first. And, you know, before when I didn't have any money and that meant one thing, I wasn't able to contribute to my 401k or to my IRA or HSA, you know, at that point, and when I got to that level, it became, okay, make sure I take care of those just kind of standard, call it boring ways to pay yourself first. And, you know, that made making sure that I contributed to those things, 401k, IRA, HSA. So I would encourage everybody to do that. And. Today is a really important day for this call because, as Brian mentioned, you have until April 15th, not just to contribute for this year, right, the 2023 tax year, but also you can contribute for 2024. So, if you didn't contribute for 2023 yet, and you have the ability to do that, you can do that by April 15th, and it will reflect for 2023 taxes. Does that make sense? Yeah, that makes sense. So hopefully that helps somebody listening to this or on this call right now, because if you haven't done your HSA or you haven't done your IRA and you have the ability to do so, you can go defer taxes on that amount of money that might total up to 12, 13, 000 of taxes you don't have to spend. It was in 2023 is your contribution year, but you have until April 15th. That's making me think. So I hadn't really, you know, I hadn't really thought about selling up my 401k till I went my solo 401k as an entrepreneur until I went to the summit and met Jason and Tabitha there. And now I'm thinking, well, I had already done my taxes. Would it make sense for me to like rush and like set up a full solo 401k right now in the next week and put, I don't know, whatever into it in order to reduce my tax burden? I mean, should I be thinking like that? Yeah, you should. Right. Okay. It's cashflow issue first. Make sure that you can afford it. Right. Don't chase tax savings if it's going to put you in a cashflow crunch. Right. So for anybody out there, I think cashflow first, but if you have the means, going and actually contributing for 2023 will result in a large tax savings for you, depends on what your income tax bracket is. I know you're not a CPA, but I'm just thinking out loud here because it's my own personal situation. Maybe other people have this situation, but I know I got to cut like a 42, 000 tax bill that I saved for. Right. That's what it said. If I were to right now go and set up a full solo 401k, would I be, I mean, those things are like, it's tax deductible income, right? So if I were to like, cut that check. I, I just, let's say I put 10, 000 into that. That would not reduce my tax bill by 42, 000. That would reduce my tax bill by the percentage of what I would get taxed on that 10, 000. Right. It wouldn't be one to one. It would not be one to one that whatever you contributed would then you would you would have your federal income tax bracket rate. Okay. And so if you were in the 30 percent tax bracket and you contributed 10, 000, then you would save 3, 000 on taxes. That would be the net. Got reward there, but I'm talking about HSA and Ira, not 401k, not solo. 401k. Okay. Okay. So solo 4 0 1 KII, I'm pretty sure that everything 401k has to be done in the, in the year. So for 401k you can start to contribute now. So for 2024, you're maxing it out. Yeah, but HSA and Ira, I'm a hundred percent certain you can go back. So tax year 2023 and got it, Michael Santoro saying, talk to your CPA. I will. I just wanted to ask questions like that to get people's brains turning on like what considerations you have. Since I thought that I was way ahead of it and now I'm going to be like super behind, but no, I don't think you are. I just, and you can always amend taxes and things of that nature. So even if it screws up the tax plan that you've already done, getting ready to cut the check, you still cut the check, but you know that, you know, when you amend the taxes or next tax year, you can go and get the benefit from what you did. Okay. Good to know. Good stuff. Good show. Thank you for Brian Reyes for putting in his work, man. Like he was, he was slammed. We send them this stuff two weeks ago and he's like, Oh, I'll see if I can get it. And I was like, well, Brian, not just do I need you to get it in. I need you to get in like a week early so I can review this stuff and have it ready. And he really showed up. So Brian. Pivot CPAs really, really appreciate the effort. The 70 plus folks that came with us today, asking great questions, joining us on a weekly basis. This show is great because of the community. If you want to invest in rental income property so that you have all these great tax benefits, like our boy Andrew, who said he's going to become a client here soon. JWB. com. Book a book, a call with the team. It'll start just first talking about what your plan is. Does this fit into your lifestyle before you're looking at properties before they're trying to sell you anything? So it's worth a consultation there. Chat with JWB. com or shoot an email to Cody with a C with a T C O T Y at JWB companies. com or reach out to Cody who's in the chat right now. If you really get, want to get that set up and get that journey going next week. We're talking about, uh, we talk a lot about this idea of vertically integrated companies and like how there's a big benefit and how there's a slight difference between vertically integrated real estate companies and turkey companies and not turnkey companies. We're going to be talking about why there aren't more. vertically integrated real estate companies. I think it's going to be really useful for you. If you haven't, if you've been around, if you're new in the last two years, before we really got loud about explaining what vertically integrated was, this is something that was asked about for my community. I think it might've been Michael Suntory or Mike Foster. It was a mic. Somebody sent it in. Explaining what this deal is with Vertically Integrated, what it means, why there are more so that you can really understand this as a new investor, as a seasoned investor. Moving forward, it's going to be like a reintroduction of this topic for our community. So I look forward to having people there. We know that when we do a show submitted by the community, you show up. So we're looking forward to a big audience there and seeing you all there next week. GC, did I miss anything? I'm, I'm excited about that show next Tuesday specifically because I think there's a lot of fear of like, well, this whole rental property investing thing makes sense, but what if this happens or what if that happens, or how do I know that this is taken care of it? Who do I have to have on my team to be able to solve that problem? And you know, those problems right there are easily solved with vertical integration. So I'm excited to kind of take each one of those elements and say, okay, I get it. I understand why you're, you're concerned here. But let me just show you how this works under the umbrella vertical integration. So I think it's a great show, especially for our newer folks. Into it, man, into it. I'm looking forward to that. Any advice from here to the NGC? Don't be average. See you next Tuesday.