Year End Tax Strategies for   Real Estate Investors        www.LermanLaw.com        www.uDirectIRA.com       www.KeyStoneC...
David Campbell            developer / broker / syndicator           Former high school & college band director           P...
Begin with end in mindHelping other people live more abundant lives by giving knowledge and support for our others to   in...
WHAT THIS IS !This IS an educationalservice to our existingclientsThis IS a job interview
Real Estate Investor Tax Advantages•Tax Rate Reduction   • Capital Gains versus Ordinary Income•Taxable Income Reduction  ...
Tax Rate Reduction                       10% Profit Pay 25%                      Ordinary Income Taxes   10% Profit Pay 15...
Taxable Income ReductionGross Income    (Gross Income   X Rate       less Deductions TAX OWED      less Depreciation)     ...
Tax Deferral   Arbitrage Bank                          Arbitrage IRS         Invest at 10%                          Invest...
Tax Deferral              10% Profit but Pay Taxes   10% Profit with Tax Deferral                   2012   $              ...
Tax Avoidance             10% Profit but Pay Taxes   10% Profit with NO TAX EVER                   2012   $              1...
“Quarter-Back” of                                      your Investing Team”                                         NEW HO...
2011 YEAR-END                  TAX PLANNING                  STRATEGIES                      Presented By      KEYSTONE CP...
Current Tax RatesFederal Income Taxes @ 35%State Income Taxes @ 11%Payroll Taxes @ 15%Capital Gains Taxes @ 15%Estate Taxe...
Brand New TaxesUnearned Income MedicareContributions Tax                       ….Wow, that’s a mouthful!-Brand New Tax on ...
Redirect Tax Dollars to Your Retirement Accounts                         • Pay Yourself Rather than                       ...
2011 TAX REDUCTION STRATEGIES            Income Deferral(877) 975-0975       www.KeystoneCPA.com
2011 TAX REDUCTION STRATEGIES        Accelerate Expenses                         S                     NSE                ...
2011 Bonus Depreciation               2011(877) 975-0975      www.KeystoneCPA.com
For Real Estate Investors(877) 975-0975         www.KeystoneCPA.com
Contact Us  KEYSTONE CPA, INC.         Maximizing Profits & Increasing Wealth                 www.KeystoneCPA.com         ...
FREE! Downloadable eBook                                                                                           Present...
Essential Resourcescashcash flow                     LIMITEDcreditequitytime                      LIMITED and INFINITEtale...
TAX DEFERRAL    cash              Traditional IRA    cashflow         Self-Directed IRA    credit (other people’s)    equi...
How to Self-Direct Your Retirement Savings uDirect IRA Services, LLC is not a fiduciary and does not render tax, legal, ac...
What’s the Difference?          Typical IRA         Self-Directed IRA•   Stocks              •   Rental Property•   Bonds ...
What Are The Limits?A Self-Directed IRA can invest in anything EXCEPT1. Life Insurance Policies2. Collectibles  1.   Artwo...
What if your funds are with your current employer?Your plan will probably NOT allow you to self-direct  Must wait until yo...
Prohibited Transactions(IRS Publication 590)•   Borrowing money from the IRA•   Selling property to it.•   Using it as sec...
Disqualified Person• Disqualified persons include your fiduciary and  members of your family (spouse, ancestor, lineal  de...
Qualified Persons• Aunts & Uncles• Cousins• Brothers & Sisters• Unrelated friends• Nieces & Nephews
Prohibited Transactions• Neither you nor any disqualified people  may benefit from IRA• Cannot buy, sell or exchange prope...
Self-Directed IRA - Structure• You• Your IRA• TPA• Custodian
Buying Real Estate With Your IRAPros1.   Capital gains are tax free2.   Positive cash flow is tax free3.   No time limit f...
Buying Real Estate With Your IRACons1. No tax advantages of owning real estate2. No deduction for capital losses3. You are...
Buying Real Estate - The Process•   Open a self-directed account•   Shop for a property•   Remember, it’s the IRA that is ...
IRA-Owned LLC          “Checkbook IRA”• IRA purchases shares of a newly-formed  LLC formed for this purpose• LLC receives ...
3 Types of Plans• IRAs  – Individual Retirement Accounts  – What you are doing for your own retirement• Qualified Plans  –...
Types Of Self-Directed Plans    IRAs       Qualified Plans    Other Plans Traditional   401K/ 457/ 403b     Coverdell     ...
How Do I Self-Direct?1. Complete an application  1. Provide copy of driver’s license  2. Copy of statement2. Fund your acc...
Kaaren Hall, PresidentuDirect IRA Services, LLC(866) 538-3539KHall@uDirectIRA.com                              uDirect IRA...
Tax Avoidance Through                         Estate Planning                    Michelle C. Lerman                 Lerman...
Michelle C. Lerman                   Lerman Law Partners, LLP  • Certified Specialist in Estate Planning, Trust and Probat...
DisclaimerThis seminar is offered with theunderstanding that neither MichelleC. Lerman, nor Lerman LawPartners LLP is enga...
IRS Circular 230 DisclosureNothing contained in these presentationmaterials was intended or written to beused, can be used...
CRITICAL END-OF-YEAR     ESTATE PLANNINGCopyright 2010-11 @ Lerman Law Partners All Rights Reserved
CRITICAL PROVISIONS OF    THE 2010 TAX ACT1. $5M BASIC EXCLUSION2. 35% FLAT RATE FOR ESTATE  AND GST TAX3. SUNSET AT END O...
THE “GIFT TAX BONANZA”       An Extra $8 Million!!Copyright 2010-11 @ Lerman Law Partners All RightsReserved
LEVERAGE THE GIFT!•     INSTALLMENT SALE•     QPRT•     LIFE INSURANCE TRUST
ANNUAL EXCLUSION        GIFTS• BY DECEMBER 31• AGAIN IN JANUARY 2012
PAYMENTS FOR TUITIONAND MEDICAL EXPENSES• UNLIMITED AMOUNT• PAY DIRECT
Michelle C. LermanLerman Law Partners, LLP• Los Angeles• San Francisco• San Mateo• San Rafael(310) 295-1951(415) 454-0455w...
Jeffrey H. Lerman, Esq.                       T                           M       www.RealEstateInvestorLaw.com
jeff@lermanlaw.com    800-553-7626   800-5-LERMAN
Year End Tax Strategies for     Real Estate InvestorsWhite List: David@HasslefreeCashflowInvesting.com               FREE ...
Yead End Tax Strategies for Real Estate Investors
Yead End Tax Strategies for Real Estate Investors
Yead End Tax Strategies for Real Estate Investors
Yead End Tax Strategies for Real Estate Investors
Yead End Tax Strategies for Real Estate Investors
Yead End Tax Strategies for Real Estate Investors
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Yead End Tax Strategies for Real Estate Investors

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You can watch a free video recording of this event at: http://www.hasslefreecashflowinvesting.com/tax-planning-2011/

It's not about how much you earn. It's about how much you keep! Learning how to legally avoid or defer the payment of income taxes is essential to your financial success. Our world class faculty show experienced and novice real estate investors how to legally earn more while paying less in taxes.

You will learn:

1) Urgent year-end tax moves every real estate investor must be aware of
2) How to take advantage of special 2011 tax deductions before they expire
3) How to get the IRS and your tenants to pay for a healthier retirement than you thought possible
4) Ways to ensure your self-directed IRA stays tax deferred
5) Which investments you should own personally and which investments you should own inside an IRA to optimize your tax advantages
6) How to identify and use your eight essential resources to legally earn more and pay less in taxes
7) Strategies to produce cash flowing real estate profits without the hassle and without the tax
8) Time sensitive legal considerations that could have a huge impact on your taxes

In this 90 minute FREE webinar, you'll hear from professional investor David Campbell, self-directed IRA company president Kaaren Hall, tax strategist Amanda Han, CPA, real estate attorney Jeff Lerman, and estate planning attorney Michell Lerman.

This webinar is appropriate for both new and well seasoned investors. While this webinar will be recorded, you'll get the most out of the experience by attending live so you can ask questions.

MEET OUR WORLD CLASS FACULTY

DAVID CAMPBELL - professional investor / developer
www.HasslefreeCashflowInvesting.com

KAAREN HALL - president of uDirect IRA Services
www.uDirectIRA.com

AMANDA HAN, CPA - tax strategist with Keystone CPA
www.KeystoneCPA.com

JEFFREY H. LERMAN - real estate attorney
www.realestateinvestorlaw.com

MICHELLE C. LERMAN - estate planning attorney
www.realestateinvestorlaw.com

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Yead End Tax Strategies for Real Estate Investors

  1. 1. Year End Tax Strategies for Real Estate Investors www.LermanLaw.com www.uDirectIRA.com www.KeyStoneCPA.com www.HasslefreeCashflowInvesting.com
  2. 2. David Campbell developer / broker / syndicator Former high school & college band director Professional investor over $800 million of real estate experience Self-made multi-millionaire Real estate & business advisor Financial mentor Houses, condo-conversion, multi-family, winery, resort, office, retail, medical office, commercial development, home buildingDavid@HasslefreeCashflowInvesting.com
  3. 3. Begin with end in mindHelping other people live more abundant lives by giving knowledge and support for our others to invest profitably and with mental tranquility. NOT a sales pitch NOT investment, legal, or tax advice NOT an investment offering
  4. 4. WHAT THIS IS !This IS an educationalservice to our existingclientsThis IS a job interview
  5. 5. Real Estate Investor Tax Advantages•Tax Rate Reduction • Capital Gains versus Ordinary Income•Taxable Income Reduction • Depreciation / write offs•Tax Deferral •Self-Directed IRA / 1031 exchange / capital gains•Tax Avoidance •Estate planning / 1031 swap till you drop
  6. 6. Tax Rate Reduction 10% Profit Pay 25% Ordinary Income Taxes 10% Profit Pay 15% CAP Gains Tax 2012 $ 100,000 $ 100,000 2014 $ 115,563 $ 119,350 2016 $ 133,547 $ 140,502 2018 $ 154,330 $ 165,402 2020 $ 178,348 $ 194,716 2022 $ 206,103 $ 229,224 2024 $ 238,178 $ 269,848 2026 $ 275,244 $ 317,672 2028 $ 318,079 $ 373,972 2030 $ 367,580 $ 440,249 2032 $ 424,785 $ 518,272 2034 $ 490,892 $ 610,123 2036 $ 567,287 $ 718,252 2038 $ 655,572 $ 845,544 2040 $ 757,595 $ 995,395 2042 $ 875,496 $ 1,171,804 GROSS PROFIT $ 775,496 $ 1,271,408
  7. 7. Taxable Income ReductionGross Income (Gross Income X Rate less Deductions TAX OWED less Depreciation) X Rate TAX OWED
  8. 8. Tax Deferral Arbitrage Bank Arbitrage IRS Invest at 10% Invest at 10% -Borrow from BANK at 5% -Borrow from IRS at 0%------------------------------------ ------------------------------------PROFIT on BANK’s MONEY 5% PROFIT on IRS’s MONEY 10%
  9. 9. Tax Deferral 10% Profit but Pay Taxes 10% Profit with Tax Deferral 2012 $ 100,000 $ 100,000 2014 $ 115,563 $ 121,000 2016 $ 133,547 $ 146,410 2018 $ 154,330 $ 177,156 2020 $ 178,348 $ 214,359 2022 $ 206,103 $ 259,374 2024 $ 238,178 $ 313,843 2026 $ 275,244 $ 379,750 2028 $ 318,079 $ 459,497 2030 $ 367,580 $ 555,992 2032 $ 424,785 $ 672,750 2034 $ 490,892 $ 814,027 2036 $ 567,287 $ 984,973 2038 $ 655,572 $ 1,191,818 2040 $ 757,595 $ 1,442,099 2042 $ 875,496 $ 1,744,940 GROSS PROFIT $ 775,496 $ 1,644,940 Income Tax Owed paid along the way $ 411,235 NET PROFIT $ 775,496 $ 1,233,705
  10. 10. Tax Avoidance 10% Profit but Pay Taxes 10% Profit with NO TAX EVER 2012 $ 100,000 $ 100,000 2014 $ 115,563 $ 121,000 2016 $ 133,547 $ 146,410 2018 $ 154,330 $ 177,156 2020 $ 178,348 $ 214,359 2022 $ 206,103 $ 259,374 2024 $ 238,178 $ 313,843 2026 $ 275,244 $ 379,750 2028 $ 318,079 $ 459,497 2030 $ 367,580 $ 555,992 2032 $ 424,785 $ 672,750 2034 $ 490,892 $ 814,027 2036 $ 567,287 $ 984,973 2038 $ 655,572 $ 1,191,818 2040 $ 757,595 $ 1,442,099 2042 $ 875,496 $ 1,744,940 GROSS PROFIT $ 775,496 $ 1,644,940 ESTATE PLANNING Income Tax Owed paid along the way SWAP TILL YOU DROP NET PROFIT $ 775,496 $ 1,644,940
  11. 11. “Quarter-Back” of your Investing Team” NEW HOUSES PASSIVE SYNDICATIONS David Campbellwww.HasslefreeCashflowInvesting.com COACHING David@HasslefreeCashflowInvesting.com
  12. 12. 2011 YEAR-END TAX PLANNING STRATEGIES Presented By KEYSTONE CPA, INC.(877) 975-0975 www.KeystoneCPA.com
  13. 13. Current Tax RatesFederal Income Taxes @ 35%State Income Taxes @ 11%Payroll Taxes @ 15%Capital Gains Taxes @ 15%Estate Taxes @ 35%(877) 975-0975 www.KeystoneCPA.com
  14. 14. Brand New TaxesUnearned Income MedicareContributions Tax ….Wow, that’s a mouthful!-Brand New Tax on Net Investment Income = Another 3.8%Hospital Insurance Tax ….Another Innovative Brand New Concept-Brand New Tax on Earned Income = Yet Another 0.9%(877) 975-0975 www.KeystoneCPA.com
  15. 15. Redirect Tax Dollars to Your Retirement Accounts • Pay Yourself Rather than the IRS • Create Tax Deferred Money to Invest in Real Estate • Start a Bucket of Tax Free Money for Life(877) 975-0975 www.KeystoneCPA.com www.themegallery.com Company Logo
  16. 16. 2011 TAX REDUCTION STRATEGIES Income Deferral(877) 975-0975 www.KeystoneCPA.com
  17. 17. 2011 TAX REDUCTION STRATEGIES Accelerate Expenses S NSE PE EX(877) 975-0975 www.KeystoneCPA.com
  18. 18. 2011 Bonus Depreciation 2011(877) 975-0975 www.KeystoneCPA.com
  19. 19. For Real Estate Investors(877) 975-0975 www.KeystoneCPA.com
  20. 20. Contact Us KEYSTONE CPA, INC. Maximizing Profits & Increasing Wealth www.KeystoneCPA.com (877) 975-0975 N ON: SEEAS www.KeystoneCPA.com (877) 975-0975 Company Logo
  21. 21. FREE! Downloadable eBook Presented By*****Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, (1) for thepurpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency, (2) promoting, marketing, orrecommending to another party any transaction or matter addressed herein. The information contained within is provided for informational purposes only and is notintended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. Before making tax or business decisions, please consult yourprofessional tax advisor. This message (including any attachments) contains confidential information intended for a specific individual and purpose, and is protectedby law. Any disclosure, copying, or distribution of this message, or the taking of any action based on it, is strictly prohibited. *****Copyright © 2011 by KeystoneCPA, Inc. (877) 975-0975
  22. 22. Essential Resourcescashcash flow LIMITEDcreditequitytime LIMITED and INFINITEtalentstrategic relationships INFINITEcontrol of an opportunity
  23. 23. TAX DEFERRAL cash Traditional IRA cashflow Self-Directed IRA credit (other people’s) equity time talent strategic relationships control of an opportunity
  24. 24. How to Self-Direct Your Retirement Savings uDirect IRA Services, LLC is not a fiduciary and does not render tax, legal, accounting, investment, or other professional advice. If tax, legal, accounting, investment, or other similar expert assistance is required, the services of a competent professional should be sought.
  25. 25. What’s the Difference? Typical IRA Self-Directed IRA• Stocks • Rental Property• Bonds • Notes• Mutual Funds • Private Stock• CD’s • LLC’s • Tax Liens • Foreign Property • Raw Land • Etc.
  26. 26. What Are The Limits?A Self-Directed IRA can invest in anything EXCEPT1. Life Insurance Policies2. Collectibles 1. Artworks 2. Coins 3. Collectible Cars 4. Antiques 5. Gems 6. Stamps 7. Rugs
  27. 27. What if your funds are with your current employer?Your plan will probably NOT allow you to self-direct Must wait until you leave the company To rollover retirement plan You can request an “in-service” transfer from your current plan administrator.
  28. 28. Prohibited Transactions(IRS Publication 590)• Borrowing money from the IRA• Selling property to it.• Using it as security for a loan.• Buying property for personal use (present or future) with IRA funds.
  29. 29. Disqualified Person• Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant).
  30. 30. Qualified Persons• Aunts & Uncles• Cousins• Brothers & Sisters• Unrelated friends• Nieces & Nephews
  31. 31. Prohibited Transactions• Neither you nor any disqualified people may benefit from IRA• Cannot buy, sell or exchange property between plan and – Self or – Disqualified people• Cannot provide goods, services or facilities
  32. 32. Self-Directed IRA - Structure• You• Your IRA• TPA• Custodian
  33. 33. Buying Real Estate With Your IRAPros1. Capital gains are tax free2. Positive cash flow is tax free3. No time limit for holding property4. IRA can borrow money – Leverage your investment5. Potential to earn a larger rate of return on invested capital
  34. 34. Buying Real Estate With Your IRACons1. No tax advantages of owning real estate2. No deduction for capital losses3. You are solely responsible for all gains or losses4. You cannot replace losses
  35. 35. Buying Real Estate - The Process• Open a self-directed account• Shop for a property• Remember, it’s the IRA that is the buyer• Custodian to sign “Offer to Purchase”• Submit a Buy Direction Letter for earnest money deposit• Funds wired to closing from your IRA• Fund & Record• Rents are made payable to your IRA
  36. 36. IRA-Owned LLC “Checkbook IRA”• IRA purchases shares of a newly-formed LLC formed for this purpose• LLC receives funds in it’s checking account• LLC follows same rules as IRA for investing
  37. 37. 3 Types of Plans• IRAs – Individual Retirement Accounts – What you are doing for your own retirement• Qualified Plans – ERISA controlled – Typically, what an employer provides you• Other Plans – Education – Health
  38. 38. Types Of Self-Directed Plans IRAs Qualified Plans Other Plans Traditional 401K/ 457/ 403b Coverdell Health Savings Roth Defined Benefit Account SEP Profit Sharing Simple Individual K Spousal
  39. 39. How Do I Self-Direct?1. Complete an application 1. Provide copy of driver’s license 2. Copy of statement2. Fund your account 1. Annual Contribution 2. Transfer 3. Rollover3. Tell us what you want to invest in
  40. 40. Kaaren Hall, PresidentuDirect IRA Services, LLC(866) 538-3539KHall@uDirectIRA.com uDirect IRA Services, LLC 2522 Chambers Road, Ste 100 Tustin, CA 92780
  41. 41. Tax Avoidance Through Estate Planning Michelle C. Lerman Lerman Law Partners, LLPCopyright 2010 -2011@ Lerman Law Partners, LLP All Rights Reserved
  42. 42. Michelle C. Lerman Lerman Law Partners, LLP • Certified Specialist in Estate Planning, Trust and Probate Law by the California State Bar Board of Legal Specialization • Super Lawyers of Northern California for 2009 and 2010 • Marin Estate Planning Council • Co-founder/head Mentor Group, Marin County Bar Association Estate Planning Section • Frequent lecturer • Voted #1 Favorite Lawyer - The “J.” Newspaper Readers’ Poll 2007 Marin and Sonoma Counties • UCLA, BA, magna cum laude 1980, USC- JD 1983Copyright 2010 -2011@ Lerman Law Partners, LLP All Rights Reserved
  43. 43. DisclaimerThis seminar is offered with theunderstanding that neither MichelleC. Lerman, nor Lerman LawPartners LLP is engaged in offeringyou legal or other professionaladvice, and we have no attorney-client relationship with you unlessyou sign an EngagementAgreement. Any actions withregard to the information containedin this seminar should beundertaken only upon the adviceand counsel of competent legal, taxand estate planning professionals.
  44. 44. IRS Circular 230 DisclosureNothing contained in these presentationmaterials was intended or written to beused, can be used or may be relied onfor the purpose of avoiding penaltiesthat may be imposed under the IRC of1986, as amended, and may not be usedto support the promotion or marketingof or to recommend any federal taxtransactions discussed in thispresentation.
  45. 45. CRITICAL END-OF-YEAR ESTATE PLANNINGCopyright 2010-11 @ Lerman Law Partners All Rights Reserved
  46. 46. CRITICAL PROVISIONS OF THE 2010 TAX ACT1. $5M BASIC EXCLUSION2. 35% FLAT RATE FOR ESTATE AND GST TAX3. SUNSET AT END OF 2012
  47. 47. THE “GIFT TAX BONANZA” An Extra $8 Million!!Copyright 2010-11 @ Lerman Law Partners All RightsReserved
  48. 48. LEVERAGE THE GIFT!• INSTALLMENT SALE• QPRT• LIFE INSURANCE TRUST
  49. 49. ANNUAL EXCLUSION GIFTS• BY DECEMBER 31• AGAIN IN JANUARY 2012
  50. 50. PAYMENTS FOR TUITIONAND MEDICAL EXPENSES• UNLIMITED AMOUNT• PAY DIRECT
  51. 51. Michelle C. LermanLerman Law Partners, LLP• Los Angeles• San Francisco• San Mateo• San Rafael(310) 295-1951(415) 454-0455www.lermanlaw.commichelle@lermanlaw.com
  52. 52. Jeffrey H. Lerman, Esq. T M www.RealEstateInvestorLaw.com
  53. 53. jeff@lermanlaw.com 800-553-7626 800-5-LERMAN
  54. 54. Year End Tax Strategies for Real Estate InvestorsWhite List: David@HasslefreeCashflowInvesting.com FREE REPORTS COPY OF SLIDES VIDEO OF PRESENTATION CONTACT INFO FOR ALL PRESENTERS

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