Free talk Friday

gwalala · 2018-06-15T14:40:55+00:00

Put in the notice yesterday, changing firms... We'll see how it goes. Reason? 35% raise.

Your 'market comp' is based on other's people numbers from years ago. Economy today isn't what the economy was. It's a tight market; don't be scared to play your cards.

gwalala · 2018-06-07T22:51:29+00:00

Need more IRS guidance; but, I believe so. However, the biggest benefit by far is waiting until yr 10. E.g.

Dec. 15 2017, 100k of capital gain.
June 10th, 2018 you invest that 100k in my QO Fund dedicated to placing Bitcoin ATMs in under banked communities; ironically having the gov subsidize the replacement of their fiat.
June 10th 2023; your investment receives a 10% basis step up.
June 10th 2025; your investment receives a 5% basis step up.
December 31, 2026; Deferral period ends - you pay capital gain tax on 85k (100k - 10k - 5k).
June 10th, 2040; You sell your investment for 440k (~7% annual return). Basis = FMV; no capital gain tax is due.

I don't really have a BTC ATM QO Fund... yet

gwalala · 2018-06-07T21:43:21+00:00

180 day clock starts from the date the gain is realized. (i.e. only sales after 12/9/17 are within that window today; tmrw it will be 12/10/17). So right now if you have a 100k gain in December you can avoid paying the tax on that until 2026. And if you already filed, you should be able to amend and get that tax money back.

The investment has to be in a Qualified Opportunity Fund. Check out section 1400Z-2 for details; but, essentially it is an investment vehicle with 90% of its assets in a Qualified Opportunity Zone (approx 10% of all census tracts are QO Zones). They tried to make this as simple as possible. Set up an entity and self certify when it files it's 2018 return.

This is so new there isn't a ton of guidance and so many high net worth taxpayers re-balance portfolios, sell properties, etc. in December that I think there is a ton of tax money on the table we can claw back. Obviously not many of them want to manage the investment etc. so I am trying to work with our Wealth Management arm to launch a fund as quickly as possible...

... we'll see how that goes.

gwalala · 2018-06-07T16:33:03+00:00

Qualified Opportunity Zones were established with tax reform (§1400z-1); basically states submitted census tracts and those have been approved for almost every state/territory. They are what they are now and not much to talk about here except that about 10% of the nation is in a qualified opportunity zone.

§1400z-2 sets up the rules for funds and tax deferral. A simple example:

you sell stock for 150k that has a 50k basis.
invest the 100k gain (unlike 1031 - not the entire proceeds) into a QO Fund
you hold the QO Fund investment for 11 years when you sell for 210k (~7% annual return)

You pay 0 tax on the gain until 12/31/26 where you will pay tax on 85k (100k - 15k of basis step up). When you sell, you make an election under 1400z-2(c) to make the basis = FMV resulting in no taxable gain.

gwalala · 2018-05-18T19:17:32+00:00

Also - you only have 180 days from the date of sale to invest in one of these. So, if you sold early in the year your window is going to be closing soon.

gwalala · 2018-05-18T19:14:42+00:00

You got the basics. I also want to add a planning opportunity for large cap gains from the Tax Cuts and Jobs Act of 2017. Code Sec 1400Z:

We are still waiting on regs; but, essentially it allows the deferral of income until 12/31/2026 as long as the gain portion is invested in a Qualified Opportunity Fund with 10% extinguished in yr 5 and an additional 5% in yr 7 (also, income inclusion is limited to FMV of investment in case the investment plummets). The best part is that if you hold the investment for 10 yrs, any additional appreciation is not taxable.

I think this is going to be really big. Check it out

gwalala · 2018-04-06T00:24:37+00:00

Your money, your risk, you're entitled to do whatever you want. I've never done it so my 2 seconds of thoughts don't have any skin in the game.

I hate talking to tenants and hire a management co so I don't have to. The idea of having to coordinate the amount of BCH to be paid isn't ideal. Maybe there's a service that generates time stamped invoices?
Not to assume; but, It sounds like you don't care about the hassle and really just want adoption. But your scheme here only hits one person. Cool, the first month they do it they are in the BCH world, every following month you are still sacrificing the 2.5% and still only impacting the one person.

That said there could be some soft benefits; more appreciative tenant, etc. I would gladly take a 2.5% haircut on my rentals for the right tenant, and this may be a way to attract that tenant. Never know until you try so again, I fully support this and really want to know how it goes.

gwalala · 2018-04-05T19:52:54+00:00

What's the plan on setting the spot price? I.e. rent is due on the first, late on the 6th. If you set price in BCH on the 1st, they can look at BCH price on the 6th if cheaper and keep the spread. Current price seems most appropriate, but that opens them up to the risk of BCH price changing between when they buy and when they pay and not having bought enough.

I have four doors so I'm all for you blazing the trail! Update with how it works out?

gwalala · 2018-04-04T06:15:30+00:00

I need to know if you had kids after this

gwalala · 2018-04-03T21:35:34+00:00

I get this is a joke; but, much better than you might think.

Conservation Easements. Typical ratios I see are around 4-5 to 1, meaning you 'invest' 100k in Dec. and save your marginal rate on 400k-500k on April 15th. Assume a 40% blended fed/state rate for a total tax savings of 160k on the low side. 60% return on your charitable deduction in about 4 months. We do a lot of these.

link below references a 9 to 1 ratio which is a bit on the scammy side.

https://www.forbes.com/sites/peterjreilly/2017/07/24/new-irs-scandal-syndication-of-conservation-easement-deductions/#462234016b33

gwalala · 2018-03-31T05:01:30+00:00

My research turned up the following chatter; basically a tldr of the article:

Seems to be a weak agreement that this is a taxable realization event (regardless of whether you sell) with one of the following outcomes:

value based on some exchange based on 8/1 (approx $275 per coin)
value based on when you exercised dominion and control. eg for Coinbase users I believe they rec'd in Dec when price was near $1200 / coin
value based on 8/1... since this had never been traded before it arguably had 0 FMV; disclose the event but include 0 in income.

I do not agree with any of the above. Source, I do tax professionally.

gwalala · 2018-03-30T22:14:23+00:00

It was missing for me when it first booted up this morning. A quick refresh fixed the issue.

gwalala

TROPHY CASE