Mark Perlberg:
So, if you haven’t caught on already, there are thousands of ways that we can reduce our clients’ taxes. There are endless strategies and combinations of strategies and variables and factors to consider when doing tax planning with our clients. And as a client makes more money, has more sources of income, and in particular capital gains income, and other different sources, as our income and assets grow, new opportunities arise.
And this was a wonderful conversation that we’re about to introduce with Kyle Candlish who does tax consulting, where we dive into some of the more advanced strategies for high income earners, high net worth individuals, where we’re leveraging and utilizing complex financial vehicles involving charitable deductions, trusts, risk mitigation, and a variety of more advanced procedures where we can save our clients literally millions of dollars in taxes. And as our clients are becoming more and more affluent, and they’re seeing larger and larger capital gains events, and their needs are increasing to reduce their taxes, these are strategies that are becoming more and more popular for us and our clients.
So, stay tuned. You’re going to learn lots of really interesting things. We’re going to touch on lots of different topics like charitable LLCs, easements, and I think we talk about captive insurance companies, and if not, we have another webinar on that. We touched on lots of little things that we’re going to be doing more and more of, and maybe we’ll dive in more specifically. But stay tuned. You’re really going to enjoy learning about all the different areas out there that we are going to be doing and are doing for our high net worth and high income earners, and maybe you can pick up on some things that you may want to take to your current advisor, or maybe if you are a CPA listening, maybe you can do some further research.
So, stay tuned. It’s going to be a great conversation. And if you or anyone you know may need our services, feel free to email info MarkPerlbergCPA.com, and we’re always hiring. Send us some good accountants so we can build our team. Listen up. Take some notes. You’re going to have a great time. Stay tuned.
All right, everybody, welcome, welcome. I’m really excited to have this conversation with Kyle Candlish. We met at a networking event when I was presenting with Yonah Weiss, the man in black, the king of cost seg, and then we did a breakout group and Kyle and I had a geek out session, and I could tell it was going to be the beginning of some very wonderful tax conversations.
So, today we’re going to be talking about some of the more advanced tax strategies that we implement with high income earners, high net worth individuals. We’re going to touch on lots of really cool and exciting stuff that we like to do with our clients. So, Kyle, in 60 seconds or less, tell us a little bit about you and what you do, and then we’ll break out into some conversations.
Kyle Candlish:
So, yeah, I’m a licensed life agent turned tax specialist. Had some interesting events happen to me about five years ago and had to rebrand my business, and so always had a kind of focus on tax. I’ve been called a tax nerd sometimes. I have no problem being called that. And have tried to help find my clients the best possible ways to reduce their taxes. So, it could be in real estate, could be a couple restaurant businesses. Whatever it is, we look for the best avenues that can reduce your tax bill so that you can help build the wealth for your family.
Mark Perlberg:
Very cool, very cool. So, what we’re going to talk about today is some of these advanced tax strategies that are lesser known. You can listen to a lot of my podcasts and webinars and I will talk about 1031s, cost segregation, and all sorts of creative ways and combinations of strategies we can use there.
Now we’re going to talk about some other items that are lesser known and are a little more creative, and can be really impactful for the higher income earners. When I say higher income earners, generally speaking, $750,000 minimum, but typically $1 million and up in income, either from your business or your W-2 income.
And let’s dive in. Let’s first, let’s talk about, here’s one that is really creative and interesting, is the charitable LLC.
Kyle Candlish:
Yeah. A lot of the stuff I do is through charitable partnerships, so that’s one of them that I really enjoy, because it doesn’t matter if you’re a business owner, doesn’t matter if you’re a W-2, charitable deductions gets you tax breaks. So, a lot of CPAs will push donating some form of assets at the end of the year to help reduce your tax bill. Well, this is a way that we can actually reduce your tax bill without having to fully give up a bunch of funds. So, it’s a way that you’re going to get 60% deduction on the income tax side for active, 99% for passive, and you can reduce your capital gains tax, as well.
Mark Perlberg:
Yes. So, that’s one thing. A lot of times, we get a little bit stuck with our clients on how can we reduce their taxes when we’ve exhausted all of the fundamental concepts, right? So, let’s say you don’t have real estate professional tax status, and you have some real estate and you’re looking to reduce your taxes. Or let’s say you didn’t purchase enough real estate to really drive down your taxes. So, one of the things that we’ll look at here, where let’s say you don’t have those passive losses or ability to create non-passive losses to drive down your taxes. We say, okay, if we’re not going to be… Let’s say you don’t even have the capacity to do any more business, right? So, how else can we drive down your taxes if you don’t have the capacity to materially participate in a business?
Well, one of the means here is through charitable… Instruments where you’re donating to charity. And there’s like, there’s literally hundreds of ways you can do this. And some of you guys may be thinking to yourself, “Well, that is great, but I’m just giving my money to charity and deducting it. There’s just cash leading in my pocket.” But when you look at the net effect, the cash or the assets that leave your account, compared to what you can reduce on your taxes, and also you may be able to maintain some residual income on the assets you donate to charity, you’ll find that the net effect of this charitable donation, not only are you giving to a charity, you’re pledging funds to a charity, you’re also going to be dramatically reducing your taxes, and in many instances, generating future income.
Kyle Candlish:
Yeah, and with this strategy, a lot of individuals, especially wealthy people, have their one foundation, nonprofit that they really like to contribute to. And the one thing I always try to tell individuals is, a nonprofit is business as well. Without cash flow, they can’t operate. So, through this strategy, it can actually produce cash flow each year to the nonprofit without giving up a whole bunch of cash from yourself personally. So, we’re able to drive down that deduction, 60% of income, up to 60% of your AGI if that’s what you choose, and then have the cash flow go to the charity from year on through the structure.
Mark Perlberg:
Yeah, and we’re staying a little high level here because there’s just lot to… there would be a lot of pieces to break out here, but at a high level here, you’re putting funds into trusts, the trusts are going to annuities that generate cash flow that are, a portion of this can be borrowed. A portion, I believe, can go back to yourself, and a portion goes to the charity, right?
Kyle Candlish:
Right, and I can break it down real quickly. I know there’s no presentation up, but if people are able to follow real quickly, we’ll just take an individual that’s making a million dollars, right? So, here in California, they’re going to pay upwards, probably about 47% in taxes when you throw in the marginal tax rates.
So, what we’re going to do now is, we want to find the best possible way of deductions. So, through this strategy, we are going to set up a DAF. And most individuals have probably not heard of them, but it’s a donor advisor fund. It’s privately held, owned by the individual. There’s 1% voting interest, 99% non-voting interest. You own both. That’s going to be what creates your charitable deduction.
What we’re going to end up doing is donating cash. Now, we have to discount cash because for some reason they still want it discounted, so it’s about a 10% discount. So, for that 60% we will say you’re going to donate about $650,000 to this debt.
Now, that’s all great, everything’s good. You have the money in the DAF and you could then go contribute that to whatever foundation you want. But you want to know how you can actually get the money out.
So, what we’re going to now do is set up a trust. It’s a grantor’s trust. It’s called a beneficiary defective inheritor trust, or a BDIT. In that trust it’ll be, I’ll use the example, Mark’s going to set up that trust in my name. He’s going to put $5,000 in that trust and that’s going to make the trust operate. No person has giving me a reason why we have to put $5,000 in, but that’s just the number that they want.
That trust is going to start an investment LLC, and that investment LLC is now going to come into a loan agreement with the DAF. So, we are going to take the Fed applicable rate, posted every month, and that’s going to be the interest rate we use. So, we are then going to loan the money from the DAF to the investment LLC. So, right now I’ll say about 4%. It might be a little higher, might be a little lower. That’ll be the number we use.
So, each year on that note, the charity’s going to get about, what is that? Do quick math. That’s going to be about $27,000 a year that’s going to be donated to the charity in interest payments. So, Mark CPA can choose if he actually wants to write that off, because it’s business interest as well, that’s being donated to the do donated back to the DAF. So, you can choose if that wants to be written off. Some CPAs choose it, some don’t. Just depends on the individual. So, that’s our way that we can actually drive those deductions for the individual and still get the cash out to then go reinvest what they would like.
Mark Perlberg:
Very cool. Very cool. And so, here’s some other cool stuff. Now, one of the things that I’m exploring as an alternative to 1031 exchanges for eliminating capital gains on a transaction is charitable remainder trust with appreciated real estate.
Now, I’ve been searching for the right, and if you know the right attorney, but basically to avoid capital gains on a transaction, obviously we’ve heard of 1031 exchanges, Delaware statuary trusts and deferred sales trust. But when you have an appreciated asset, you can basically, in a similar situation, you donate it, you put it into a trust, you get the charity, you pledge that that vehicle will be going to charity at a certain time, and based on your life expectancy, you get an adjustment for fair market value deduction in the year that donation.
And then you still have income that’s generating, that this asset or this trust that’s holding this asset, or even if the asset’s sold, it has cash and you can pretty much receive funds from this trust. Those funds that you can receive may be taxable, but you get this really nice up front deduction and you also are setting up some future cash flow. And again, the net effect, not only are you pledging funds to a charity of your choice, which is great, but you get a really good upfront deduction and you are also setting up some additional income to be coming through to you.
Kyle Candlish:
Yeah, I mean, it’s definitely a good strategy. It’s one that’s used a lot. The one problem that I can say that runs into it is you’re dealing with annuities. That’s what a lot of individuals are going to be using to get that guaranteed cash flow. It’s going to be hard to reinvest the strategy. So, it’s great in terms of setting the annuities up.
Mark Perlberg:
What about unit trust?
Kyle Candlish:
What’s that?
Mark Perlberg:
So, yeah, there’s the CRATs and the CRUTs. So, you have the charity, remain in the annuity trusts. But what about the… Sorry, annuity trust. But what about the unit trusts?
Kyle Candlish:
Those, I’m not very familiar with.
Mark Perlberg:
Not as common, yeah.
Kyle Candlish:
Not as common. The one problem is finding, and I’ve never seen it. I’ve been told that this has happened, that some individuals have made it to where actually that charity is their kids.
Mark Perlberg:
Oh, no.
Kyle Candlish:
I mean, because you have that certain window, in terms of how much income you can receive, what’s longer, either 20 years or when you pass away. So, I’ve heard that some people have set it up to where their kids can be part of the charity, in terms of you set up a charitable actual trust that the kids manage, known, and they end up receiving the proceeds. That’s what I’ve heard. I’ve never seen it. So, it kind of just depends. But finding the actual cash flow is the hardest part. And sometimes with real estate, even if you’re getting, say, 3-4% return annually, you’re probably going to get that appreciation. Where if you’re stuck in the trust, it’s a little difficult to then maybe, to get both.
Mark Perlberg:
Yeah, we typically see, it is much more common with stocks.
Kyle Candlish:
Yeah, exactly.
Mark Perlberg:
Or exit strategies where you sell a business and things of that nature, right?
Kyle Candlish:
Yeah. And I think it’s not a bad option, and I honestly was never a fan of the 1031 exchanges because of the limitations, I felt. I never liked the 45 days, and I didn’t like the basis didn’t restart. So, I want my clients to be as tax efficient as possible, and so I look for certain strategies that create that. And so, it’s obviously an option, and I present it to individuals if they want it, but I don’t actually have a group that does that, believe it or not. It’s one that I present options, but I don’t have a group, unfortunately, for those.
Mark Perlberg:
So, our guy, my resource for 1031s is David Foster, and we did a webinar with him, 1031 strategy stacking. And right now, because a lot of people are running from the hills a little bit with real estate, is a little overpriced. So, it’s hard. So, a lot of clients are less willing… Now, this is being recorded in July of 2022, so this conversation might be a little bit different a few years earlier or later. So, a lot of clients, they don’t want to buy more real estate. They’re like, “It’s all overpriced.” So, they are looking for other vehicles. But some things that we’re doing because of some of those challenges. So, if you’re concerned about the 45-day limitation, which is legitimate, and what if the replacement deal dies, then what, right?
Kyle Candlish:
Yeah.
Mark Perlberg:
What we can do is a reverse 1031, when you buy the replacement property first and then you sell the place that you’re disposing within 180 days, so then you’ve locked in your replacement property. It’s good in a seller’s market in those instances. And then, what I always tell my clients is, when you 1031, when you’re going into something really big, you want to really leverage into a much greater asset so we can use leverage to access more depreciation. Because if you exchange it to something the same price, you’re going to find yourself running out of depreciation.
Kyle Candlish:
Yeah, exactly. And so, it becomes too… Even though, and you can use still that example of the market right now, right? Is even if you reverse 1031 into it, that property could still drop in the next six months to a year, so it’s then going to have to take longer to appreciate up in the value. So, it’s finding… I like to, my whole philosophy is tax flexibility liquidity. I want to create those three scenarios for what you want to do.
So, if you want to reverse 1031, it’s great. I mean, you’re going to defer your taxes, and a CPA that I know, met through Yonah, actually, through his meetup, he likes to call it swap ’til you drop. Which is great, right? But at a certain level, you’re going to have to deal with some estate issues if you get high enough when you keep swapping. So, there’s certain things that you might want to find. Does this cover my asset protection? What does this do for my family? Does it help me tax-wise? What exactly… You have to look at the whole big picture, not just the tax. Don’t do anything because of the tax. I like to look at it, does it make money? Now what can I do tax-wise to have it make more money?
Mark Perlberg:
Yeah, and estate planning and succession planning is such a huge, massive and underappreciated topic right now, especially with the baby boomers. I had a really long conversation about that with one of my clients whose father is struggling right now to support himself. It is such a huge financial burden. So, we’re probably going to have a whole other podcast just on tax and financial planning for your parents and for yourself after retirement and into your later years, because this is a huge undervalued topic that people are, that is just going to hit people when they’re not ready for it.
Kyle Candlish:
No, it’s… I can tell you, I don’t think there’s one right answer to how you financial plan, but I think there’s definitely some wrong answers on how you should do it. There’s a couple people that I’ve talked to that they don’t even have a trust. And these are individuals that are worth $40, $50, $60 million. All they have is a living will. I’m like, that’s not… There’s so many things. They don’t have life insurance. I’m like…
Mark Perlberg:
That’s a huge one as well for planning for… Your life insurance can grow at a tax advantage, and it could be used as taking care of yourself in your older age, as well.
Kyle Candlish:
Yeah. And I looked at him like, he’s talking about, “Yeah, I have this legacy project.” I’m like, “It ain’t could be much of a legacy if you pass away, especially if it’s debt funded.” So, I mean, they’re probably going to lose that asset that you have, because they’re going to have to sell it or find some way to come up with the estate tax purposes. So, yeah, it’s definitely a plan. I don’t think there’s one right answer for how he needs to do it, but the answer right now is the wrong answer for what he is doing.
Mark Perlberg:
Well, waiting on, counting on your social security and 401ks is not going to be it. So, if you’re following the masses here and hoping for the best, you might get lucky, but you might not. So, these are going to be lots of crucial conversations we’re going to be talking, having with our clients, and probably pulling in some additional resources for our clients as well, because these baby boomers, and mostly our clients’ parents, because we have a younger demographic, with some older ones as well. This is going to be a huge discussion topic in the upcoming years.
Kyle Candlish:
Yeah, and I mean, the financial planning community is interesting to me. There’s a lot of really good ones out there, but there’s a lot of ones that I look at sometimes and I do get hesitant towards, because it’s all, it’s about the management fees, how much you can get assets under management. And I’m a big life insurance person. I mean, that’s what I started out, that’s what I wanted to do, was help individuals. I like the power of high cash value life insurance companies, the fact that the cash value never drops. I like those strategies where you’re looking at people, some in the market. I know an individual that’s lost $500,000 in his retirement account already, and he could lose more. Where, if it was sitting in life insurance… And I don’t want it all in life insurance, but if he had some form of life insurance, which he doesn’t, he just has term, which is not the greatest to me either, he’s just kind of throwing away some dollars from.
Mark Perlberg:
Yeah. Speaking of charity, we’ll talk a little more about some charity stuff, but here’s a really cool thing that allow people overlook, as far as this is the only strategy, and we promote this to all our clients as soon as we onboard them. It’s the only way I know where you can reduce business expenses and save money on your taxes, and it’s called real estate deconstruction, where instead of throwing out items… Now, this can be on a small scale or a massive scale.
So, on a small scale, let’s say, we’ve had clients doing flips, and maybe the furniture isn’t quite suitable for the flip, or maybe the prior tenants left behind furniture. Instead of just junking it and using all your manpower and hiring people, you call Habitat for Humanity, get them to deduct it. You get the deduction at the fair market value, which is really cool, right? So, you save money. They’ll remove, they’ll drive to your listing and remove it for you for free, and you get a tax deduction, which is amazing.
And then, what we see at the higher level here, like if you’re doing a massive project and you have large sub portions of lumber and materials that can be donated to charity, you may be able to create an even larger deduction here at a larger scale, and you may even be able to pass it on to your partners. Really cool stuff.
Kyle Candlish:
That’s actually, I’ve never thought of it. I’ve heard of individuals kind of taking certain strategies for fix and flips that go in terms of operating costs, right? So, they get the operating costs plus the cost segregation. I’ve never actually heard of that strategy, but that is a brilliant strategy. I mean, it’s a simple way to create deductions, and again, it’s using that charitable part of the tax code that helps create it.
Mark Perlberg:
Yeah, and even if you don’t have rep status or whatever it is, and regardless of, it may be junk to you, you may have tenants that left stuff behind and bailed on you. You can write it off at the fair market value. So, it’s pretty cool there.
Kyle Candlish:
Yeah, and I mean, again, that strategy sounds like someone, even if you’re a W-2 person, you don’t use it because of the charitable… Anybody can use the charitable deduction. So, if you want to buy a house, flip it and fix it up, you can use what’s there to help offset some tax liability.
Mark Perlberg:
Yeah, absolutely. Really cool stuff. So, speaking of instances where you have an item that you can donate to charity and get a deduction for more than you paid for, what are some other examples of when that can happen?
Kyle Candlish:
Some examples of donating to charity and get a deduction, or?
Mark Perlberg:
Where the deduction you get, the charitable deduction is more than the amount of cash that you paid for that item.
Kyle Candlish:
I mean I’ve heard it for rare coins, in terms of you can end up, if you have a relative that kind of gave them to you, you inherited them. They’re normally, depending on their estate part, they’re not going to appraise what that full value of that coin coin is. You could have found it, too. I mean, there’s people that, again, I’m in California, I’m not close to the beach, but there’s people that will go search for stuff that’s washed up, and then they can either sell it, or I mean, yeah, if they have enough money and they just are want to go around searching for rare artifacts that wash up on the beach, they could donate those, as well.
I’ve heard of individuals getting cars and donating them. So, yeah. If you have land, I mean, that’s a big thing. You get some land. There’s actually a CPA that I know of. He put his land in a land conservation easement, and that will drive a substantial amount of deduction. Let’s say you bought that land 20 years ago, and it’s now appreciated 10 times, and then you can take it to where if you develop it, it’s going to even get a larger return. You can actually write off the cost of what you would make on the deduction.
Mark Perlberg:
Yeah, and then there’s the other things which are land conservation easements, which can be, it is a pretty touchy subject right now, and you’ve really got to navigate the tax code and tax law very carefully on this one. It’s what they call in the dirty dozens. But basically what it is, and I’m not telling you guys to go out and do this, and you really got to make sure… I’m not saying you shouldn’t do this or should do this, but you got to make sure you’re working, you know, talk to the right people in this area.
But basically, what they do is, they have a land, and then what they find is that the value of the land is greater than the purchase price, because it may have certain sort of metals or natural resources or whatnot, and they assess that value based on the best use of the asset, and when they donate to the charity, again, the value of it based on the best usage and based on some calculations is going to be far greater than the purchase. So, there are instances where people will buy their, let’s say they contribute to a partnership $50,000, and they maybe get a $250,000 tax write off, so it’s as though the net effect of your quarter million dollars is as though you have a 20% tax rate instead of a 35, 37.5% tax rate, or whatever your highest tax rate is when you’re listening to this.
Kyle Candlish:
Right. Yeah. And I mean, it’s good. It’ll reduce up to 50% of your AGI because it’s considered a non-cash charitable contribution. And to you what you’re saying is you really want to vet the groups that are syndicating them. I’ve come across one group that’s through a family friend that scared me. I flat out told them, “Do not invest in this group.” Because the syndication is the one that does get audited. It’s not you individually, it’s the syndication that gets audited. But that syndication can’t vouch for any reason why they did something or what they’re doing. They can’t hold up in an audit in court. Then you will, in a sense, have to pay the penalties and fees for it, plus the interest that you would’ve owed on your taxes.
So, it is good. I have a couple groups that I work with that I like. You would want to stray away from the groups that are promising, let’s say, double digits deductions. So, if you donate $50,000, you’re going to get $500,000 in tax deduction. You probably want to stay away from that group, because I don’t know an individual personally that, if that could actually be a 10x, would say, “I’m going to just donate the land and not try and make the income.” I don’t know a single person that would do that.
Mark Perlberg:
Yeah, I don’t understand the logic of that either, and that’s where I always, and a lot of people scratch their head on. I think, did I say $50 and $500,000? Because I generally hear that people will write off four to five times…
Kyle Candlish:
No, no. And that’s what you did. You said $50, and then you said a quarter million in deduction.
Mark Perlberg:
Oh, okay.
Kyle Candlish:
So, it’s 5x. And that would be a group that I would feel comfortable even just looking at, right? When you get groups that talk about 10, 12, 15%…
Mark Perlberg:
There are groups that do that, huh?
Kyle Candlish:
I’ve seen one that has promised that, and I’m just like, no. No person… If you have that much tax liability, you’re going to find a way to reduce your taxes a different way, and you’re going to invest in that deal. You’re not going to donate it. No person’s going to donate it. So, it’s kind of one of those things. I mean, there are certain areas possibly in the OGM area, the oil, gas and minerals area, where individuals might not want to see that ground torn up, or see wells on it for pumping oil and gas out. So, that could potentially, hypothetically have the return. And I do know there are some land syndication easements that do use that. I’ve never seen their returns or what they promised, so I couldn’t vouch for it. But I could see it up there, but I still don’t know. People might find other ways to either mitigate the tax unless, you really, really wanted to see that land conserved, which is great.
Mark Perlberg:
Speaking of oil and gas, if you’re looking to reduce your taxes in a way that is perfectly not controversial, not highly scrutinized, is oil and gas partnerships, here. Investing, if you can be a part of one of these oil and gas businesses, where you invest as a partner, not into a corporation, but as a partner, you get a K-1, you’ll get those tangible and intangible drilling costs. And just like with a syndication, where bonus depreciation will flow through you, the depletion of these rights are going to flow through to you in year one as a form of a loss, and even the following years. And those losses will, even if you don’t do anything at all, so let’s say you don’t have real estate professional status, you don’t materially participate in anything, you’re just a high income earner, you’re still going to get losses flowing through to your K-1 that you can use to reduce your overall taxes. And you’re investing in a business that should cash flow in some from, as well.
Kyle Candlish:
Yeah, and I mean, my understanding is actually too, the first 15% of the revenue is not taxed, either. So, it is a good way. I actually have my parents in a deal where they actually own the land and they’re leasing it out to a company to drill.
Mark Perlberg:
That’s really cool. I’ve also heard about, yeah, I think I’ve heard about people even 1031-ing into land where they have this, as well, which sounds really interesting. I was talking to Dave Foster about it, as well. So, lots of really interesting and endless ways to think about these things.
Kyle Candlish:
Yeah. That same group will actually 1031, will allow you to 1031 into the land deals.
Mark Perlberg:
That’s amazing right there. So, now you’re deferring capital gains, you’re rolling over a large amount of your funds into this, and now it’ll give you access to a lot of write-offs. That’s pretty incredible.
Kyle Candlish:
Yeah, and I mean, some of them right now, they’re cash flowing really well, if you bought it at a good price. So, I mean, with the price of oil having gone up, depending on what you bought it at, they cash flow really, really well.
Mark Perlberg:
Yeah, you might be doing all right. And I mean, Tesla’s cool, electric vehicles are cool, but oil and gas hasn’t really gone out of style just yet, so.
Kyle Candlish:
Yeah, and they still need that oil to make that electric. So, that’s what a lot of people don’t fully realize with the electric stuff, is that they’re still burning oil or coal in certain areas to produce that electric part.
Mark Perlberg:
Yeah. Isn’t that something? So there are, in addition to oil and gas, there are other instances where you can be part of these partnerships as a passive investor, and the tax benefits are going to trickle down to you. So, for instance, I know there’s actually a woman who for us part-time, does some bookkeeping, and what she does is she works for a real estate syndication that does low income housing, and they get low income housing tax credits that will flow through to the partners on their K-1s. Really cool stuff there, as well.
Kyle Candlish:
Yeah, I actually, I know a family office that a lot of their investing is in low income housing. So, there’s two versions. You have your section 8 housing, and then actually, I can’t remember the other section of what it is, but it’s more on a sliding scale. So, they take what the median income in the area is and then they’ll supplement it for what you make. So, again, you’re going to get those credits as a way to help make the project kind of pencil. My understanding is, it’s like a five- or 10-year period, though, that you have to be actually in that real estate.
But there are some groups I know that will sell it off. You get certain tax credits on certain things. You can sell them off, and example, banks aren’t limited to the same rules that individuals are. They don’t have to be that real estate professional to get the full deduction on their income. And I think even just corporations in general don’t have to, so they’ll end up buying carbon tax credits, low income tax credits, historical tax credits, so anything to kind of reduce their tax bill.
Mark Perlberg:
Yes, and family offices, that’s another strategy for high net worth individuals. Generally from what I’ve heard is, generally what we’ll see is $50 to… at least $50 million of cash that allow you to establish this family home office, where now you have a whole team managing the finances of a family that just has lots of wealth, to really think about how to properly and effectively manage this in a tax efficient way. Now you have all sorts of vehicles, all sorts of trusts, all sorts of charitable instruments, and endless… You’ll need a whole staff just to oversee that. And I hear Bill Gates’ family office has like 50 people just managing his personal finances.
Kyle Candlish:
Yeah. That, I wouldn’t be surprised. I mean, I could ask. I know someone that works for the Gates Foundation, but I’d have to find out. And that’s a whole different story, in terms of for what they’re doing, but I’m sure the Foundation’s kind of intertwined with the family office. But yeah, I mean, family offices, they use an ample amount of tax strategies. I mean, one I know they do use is for captive insurance. I’ve met three family offices that love captive insurance. When you’re owning that much property, self-insuring your properties for liability and property insurance is not a bad way to go. I’m actually working with the group that’s looking at doing that as well, because it comes a point when you sell that property, you’ll still have that insurance that you own, and if you go underwriting a deal, you don’t have to underwrite the insurance part, because you already have it covered yourself.
Mark Perlberg:
Yes, captive insurance is a really interesting and cool idea, where it can be really powerful. So, you create a separate entity that is going to receive, that is going to be your insurance company. It has to have a bonafide business purpose, and you need legitimate reasons to insure and have risk to insure against. And this is another thing that, it is considered a highly scrutinized vehicle, so obviously you want to be with the right people, but if there’s a bonafide business purpose for this insurance company, you get the deduction When you have costs for your insurance. It’s a tax induction on your Schedule E or Schedule C or whatever, your 1120, 1120-S. You write it off, but when the insurance company receives those funds, it is not taxable as income here. So, the only income that they see is in the form of capital gains and dividend income for whatever securities they’re holding here. So, you convert your ordinary income to capital gains and dividend income. And also, where you have the ability now that you have this separate vehicle, this separate financial instrument, all sorts of creative and interesting ways that you could pull funds from the captive, borrowing funds and maybe even setting up fringe benefits from C corporation, and now we can talk about all sorts of ways we can maximize our ways to take funds out tax free and tax advantage from this other entity.
Kyle Candlish:
Yeah. And I mean, the one big thing is, yeah, you mentioned it, it is on the IRS dirty dozen list. It’s heavily scrutinized. The one great thing about captives is you actually audit yourself. There’s an actual form that you have to send in that shows why you did this, what’s the risk, everything, giving your reason to why you actually set up the captive for it, and you file it in. So, as long as you’ve answered those questions right, there’s no reason to even really go through an audit because of that standpoint.
Now, if you maybe push it a little bit, then yeah, sure, you’re going to get audited, and probably rightfully so. But if you actually set up the captive for the reason that it’s there for… An example, there’s some individuals on the Gulf Coast, they can’t… they’re syndicators. They have trouble getting insurance for their property because of the hurricanes. Well, guess what? You can self-insure it. You’re going to have your insurance part, you’re going to get reinsurance from another company, and you’re going to have that in case that moment happens and it affects your property.
Mark Perlberg:
Yeah, and it would be considered… What we want to think about here, this is a legitimate form of protecting ourselves against our risks.
Kyle Candlish:
Yep. Yeah.
Mark Perlberg:
If you’re just doing it to have a sexy financial vehicle that reduces your taxes, you might find yourself in trouble here, right?
Kyle Candlish:
Oh, yeah.
Mark Perlberg:
And there are legitimate risks, especially for our business owners. One of the things I’m considering here is a lot of our clients that are investing in real estate as they grow, they have, not only do they have risks, but they actually use their insurance companies. Because especially short term rental investors, people breaking stuff, stealing stuff all the time, and if they can self-insure, the seamless way by which they can pull from their insurance companies would be so much easier and effective. And you can also, these captives can insure against things that you don’t always see an insurance company. So, we’ve seen them insure against things like not just business interruptions, but leaving, losing a key employee, and all sorts of legitimate things that you may not find in traditional insurance companies.
Kyle Candlish:
Yeah, and for business insurance, the IRS tax code, to actually have an insurable risk, you need a 2% chance of something happening. So, for example, there’s other tax strategies where we can use that, is you can have a chance where, you and I, Mark, our name means something. If someone says, “Oh, that person’s a crook,” or “That person will rob you or hurt you financially,” that could really hurt our businesses. Well, that’s an insurable risk that we can ensure ourselves on. And will it happen? Probably not. Could it happen? Yeah. So, it’s a way to create a deduction in case something happens, because that’s our livelihood. If we can’t do this, then we’re in trouble.
Mark Perlberg:
Yep. And just other things that we see with C corporations and most captives… Captives are generally C corporations. Right now, I mean, there are some ways that you can strategize around this, but you have the SALT cap, state taxes. Once you have more than $10,000 of state taxes, you can’t deduct any more against your federal taxes. But you don’t see that SALT cap for C corporations. So, you do see that advantage, and you see the advantage of the flat 21% corporate tax rate, as well. So, lot of really cool stuff there.
With captives, from what I’ve heard, from my view, is that you want to see at least $2.5 million in revenue to justify setting up a captive insurance company. What have you found?
Kyle Candlish:
So, my groups want about a quarter million dollars in insurance that you are spending. So, if you’re a syndicator and you spend about a quarter million dollars in insurance, that’s a good time to start looking. We’re not going to take it all and put it in a captive. We might take 40% of what we’re going to do, but we’re going to want to get it started, because that’s a good-
Mark Perlberg:
This threshold is generally, it sounds a little bit higher than, it would likely be higher than $2.5 million in revenue, that instance.
Kyle Candlish:
Yeah, in that scenario. And I think it just depends on what you need. I mean, if you’re, depending on certain business insurance, what you want, it really is.
Mark Perlberg:
And the nature of business, as well.
Kyle Candlish:
Yeah, the nature of the business really depends. I mean, for the most part, you can only, I think, fund a captive, I think around $2.5 million a year. Now, could you own multiple captives? Sure. For different areas. Again, we’ll use an example. If you are a syndicator and you own thousands of doors, depending on where you live. Let’s just say you own thousands of doors in California. That’d be kind of crazy, but you do. You could have them under different kind of entities, and because normally each syndication is a different LLC in itself, you could have them cover certain areas. So, that could be your way to work things around. But it’s definitely a powerful, powerful vehicle, depending on how you’re going to use it.
Mark Perlberg:
We have a lot of clients right now who are growing rapidly, and I’m just waiting and waiting for when we find cool opportunities like that. The revenues and income and insurance isn’t quite there yet, but when we see the opportunity, that’ll be a lot of fun, and I think some of our prospective clients that are a little larger that we’re working on right now may see those opportunities. So, that would be really, really fun stuff.
Kyle Candlish:
Yeah, and one thing to add, I do know a group that deals a lot with dentists, in terms of setting up the captives.
Mark Perlberg:
Oh, yeah, lots of malpractice insurance.
Kyle Candlish:
And it’s not even just that. They want to ensure their dental work. They find about 20% of the time they have to redo the dental work. Now, you can either redo it for free, because you did something wrong, or you can actually have the insurance, or the insurance is now going to pay for the work that you did. So, just depending on how much work you’re doing, you could fund it, say, $30-40,000 if you really wanted to. Now, with some groups, it kind of depends on the fee. They’ll charge you, say, some will charge you $5,000 to set up, okay? And then they’ll sometimes charge you a management fee. So, you have to find, weigh the facts of how much am I really going to save versus how much is it really going to benefit?
Mark Perlberg:
Yeah. And similar to a captive, what we try to look for larger organizations is if there’s an opportunity to create a spinoff entity and activity. So, for instance, maybe you have a business that performs multiple services and activities, and if we could break something out and treat it as a different activity and entity, there might be some tax saving opportunities. For instance, let’s say one of the things that we’re going to be doing is advanced college financial planning for our clients, and if we have the ability to eventually realize, if I can get someone else to oversee the whole process, taking myself out of that, create a separate spinoff entity for that, now we have the opportunity not only to minimize, to create an additional LLC to reduce our risk exposure in the LLC, but now we can also say that we don’t materially participate in this source of income and it’s passive income.
Kyle Candlish:
Yep.
Mark Perlberg:
And now, as I’ve talked for hours on end, it’s very easy to get passive losses. Get a rental property, run cost seg, invest in a syndication, and use that to offset this passive income. Or sometimes you hear about people creating spinoff entities and having C-corps manage other businesses and entities, and then you can take advantage of all the tax saving opportunities with that C corporation, and also increase your risk. I mean, minimize your risk exposure by creating additional entities.
Kyle Candlish:
Yeah, and I mean, going back to what we talked about earlier with the charitable LLC, it’s a way you can now reduce, instead of 60% of your active income, you can now reduce 99% of your passive income. So, you can then use that to reinvest into other businesses if you want, real estate. Again, get as much passive losses as you want. In talks about how you structure a business, I’ve even had some conversations with the tax attorney firm that implements these S corps, that you know have your distributions that are paid out end of the year. Well, those could potentially, depending on how you look at it, be deemed passive, because of the standpoint that those were not what you expected. You were the employee, you got your compensation for what is deemed, what that job costs, and then you have the extra benefits that come in, and so you could possibly deem it… You have to look at those scenarios. But we’ve talked a little bit about that kind of scenario, where if you’re an S corp, you get those distributions, you don’t fully pay yourself, and then you have them as passive income.
Mark Perlberg:
So, I just talked to the chat, but if you guys have questions along what the way, put them in the chat and we’ll answer them as best we can, at the end of our, throughout and also at the end of our conversation.
Now, as you were talking to, I think one of the most missed opportunities and things that a lot of tax preparers forget to realize, or never really learned, because I’ve found that the bar can be low for a lot of tax professionals, is understanding material participation and the difference between active and passive activities. And so, one of the opportunities I found, we had a client who had passive ownership of a tech startup. He was involved but really just behind the scenes, only a few hours per year, and received a K-1 of a sizable amount. And the prior accountant was treating this as active income, so it was subject to self-employment tax and taxes at his marginal rate. And he had a long-term rental.
And so, we evaluated this and realized that this was actually passive income, here. So, what we did was, when we classified it as passive income, not only do we eliminate the self-employment tax, but we also were able to do cost saving on that long-term rental, create some passive losses to offset the profits from the K-1, now. So, we reduced… we eliminated all the taxes from that K-1, reduced his taxable income by maybe $1,500, $1,000 dollars.
Kyle Candlish:
Yeah, and it’s funny, I actually came across an individual at a conference once, and I think he sat on eight or 10 boards. And so, wasn’t spending a lot of time with it, and he basically flipped all of his income from passive to active. And I looked at him like, what was the purpose of it? I didn’t even think he was a real estate professional. So, I’m just going, well ,why wouldn’t you do that? You can invest in real estate. You could get losses there. There’s certain other ways we can get you those deductions. And I don’t know, maybe he got different advising from a CPA that he called?
Mark Perlberg:
Most people don’t realize what the material participation test is.
Kyle Candlish:
Yeah!
Mark Perlberg:
Yeah.
Kyle Candlish:
I actually, I had a call with an individual a few weeks ago, that they were dealing with capital gains tax, and they were having trouble finding a 1031 exchange. And so, we start talking, and the CPA, they actually, they had a bunch of losses, capital losses from stock. And the CPA told them that they couldn’t use those losses on their gains for the real estate. And I just flat out, I was dumbfounded when I heard that. This is an individual making quite a bit of income a year for her and her husband. And I was just like, “No.” I mean, because I utilize other… some of the tax strategies I utilize is for getting negative K-1s. So, I know you can. I just don’t know why your CPA would tell you that you can’t.
Mark Perlberg:
Yeah. I think you saw my video on that. So, right now when people are unwilling to do 1031s, they don’t want to buy back into real estate. Well, the stocks would, a lot of people have stock losses that they can create because the stock market has dropped. So, why don’t you free up some of your losses and activate those to offset your cap gains in your real estate? Or you can use cost segregation. And then, let’s say you don’t have rep status and never had a reason. Well, you can do a cost segregation study on one of those properties to offset the capital gains, as well.
Kyle Candlish:
Yeah. Yeah, exactly. Those are, I mean, those are simple ways.
Mark Perlberg:
There are hundreds of ways that we strategize for capital.
Kyle Candlish:
Exactly, and those are the simple, easy ways that are kind of almost, in a sense, no-brainers, depending on how complex your tax liability gets.
Mark Perlberg:
So, what was I going to talk about regarding the… I know we were talking about when it comes to that and capital gains planning, and we have people here who, they don’t really know what to do yet. One of the cool things of that we like to see with the flexibility here is you have things such as your cost segregation, which you can do after year end. Qualified opportunity zones. You have 180 days from the year end to plan for your cap gain. So, ideally you’re going to talk to your advisor before the event occurs to maximize your options. But even if it’s afterwards, there are still things that we can do, either before year end or even after year end, as long as you are resourceful in considering all these things.
Kyle Candlish:
Yeah, yeah. There’s a couple strategies. One group I work with, they always say, “I would prefer you letting us know before there’s going to be a transaction,” but they have it covered for other strategies, with other strategies, in terms of there’s certain things we can do. You mentioned cost segregation. Most of the strategies that we do utilize create a negative K-1. We have a group, we can actually get active capital losses from the group, and you end up getting a partnership into that group to help offset your taxes on the capital gains. But that’s going to be an after the fact thing if you couldn’t get some planning done ahead of.
Mark Perlberg:
Yeah, and when we think about active and passive income, there’s so many ways that we can look at this equation, and you got to think about this year and future years, and there are instances where we can group together passive income and convert it into active income. Maybe we want to do that, maybe we don’t want to do that, depending on the nature of the income.
There are also ways where we can convert passive income to active income where, and this is another opportunity for high net worth people who aren’t getting enough tax deductions from their cost segs, from their real estate. So, what we’re proposing for some of our clients who are in a high income tax bracket is to create S corp management companies or C corp management companies to manage their real estate, and then you pay them to manage their real estate, and now you were generating losses from your portfolio and creating active income. And that sounds maybe not so good, but a lot of these clients have already paid out their social security taxes, and then we could put a couple hundred thousand dollars into a pension plan and really drive down their taxes.
This is really great for people who have high W-2s and also are creating real estate losses. So, we’re driving down their taxes through these other vehicles, and then we can time the release and the timing of when we’re actually going to be paying taxes on that in the future when they’re towards retirement, living on depreciable assets and driving them down into the $0 tax bracket.
Kyle Candlish:
Yeah, and actually, that one strategy that I was just mentioning too, I’m talking with a couple individuals that have some really well-funded pension plans, and tax issue has come around, like how do I get it out? And so, we can actually alleviate that tax bill for them on getting it out of the pension plan and then kind of reinvesting it how they would like. Could possibly put into some real estate and not have to worry about using your retirement account with the real estate. You just have the cash there, get it leveraged and get your returns that way. Or you can invest in to some other areas. Just find a good stock deal, you can do it. And then, obviously you have to restart, but I mean, there’s certain ways that could happen.
If you have you and your wife, and you’re over 50, you could start supplementing an after-tax 401k if you want to, and you’ll be able to put about $128,000 in there, maybe a little more, and let that appreciate, and then we could just start over with the same way. Once that appreciates, we could do the same exact thing.
Mark Perlberg:
Yeah. I had a good conversation with David Podell. He was on one of our webinar podcasts, and we talked all about those strategies, and that’s a way where we can… Solo 401ks are nice, and traditional Roths, but you can really generate tons and tons of additional write-offs with these cash balance and pension plans. And again, if you strategize with the right professionals on the timing of these things and what you do with the funds, the timing of when you recognize income and distributions, you can really do some powerful stuff to help build wealth.
Kyle Candlish:
Yeah. Yeah.
Mark Perlberg:
So, I think, I hope that our audience… I think, our audience is either, I’m looking here, is either, we have some financial planners that are catching on to what we’re saying here, because I think that a lot of our topics, we’ve now gone down some rabbit holes. You are going to probably need a decent background to digest some of our conversations. But we do have some questions here.
Kyle Candlish:
Yeah.
Mark Perlberg:
Okay, so, one of the questions here, is there any reading resources you would recommend?
Kyle Candlish:
Oh, man. I’ve always said this. I am personally not a book person, because it comes from a biased point of view, and you could be reading 200, 300 pages on a biased point of view. I’d rather be read six, seven, eight, nine articles if I can find them. They could all be on the same bias point of view, but it’s going to be coming from a different person. So, I always like that.
But for reading resources, one example that I actually, and I tell individuals when we’re looking at possibly implementing a charitable LLC, is go look up Mike Myers, Florida. You can also type in “charitable LLC, Mike Myers.” He’s the reason why that strategy has a bad connotation. There’s certain ways, Mark and I kind of discussed it a little bit through today, of ways you can get yourself in trouble. His, he thought it was a way not to… He thought he wasn’t probably going to get in trouble, and it was not a good way of how he structured his strategy.
And I always like to point out the negative parts because of the standpoint, there can be some downside. The groups that I work with, they have not lost an audit. So, that’s why I work with them, because their livelihood would not work if they lost it. But I like to show individuals what can happen if you find the wrong group. And as we mentioned with the historical land conservation easements, if you find the wrong group, it can really hurt you.
Mark Perlberg:
Another good book, if you’re looking for a book, there’s a book called The Power of Zero that is a good explanation of life insurance vehicles as a way to create tax-free retirement, that is popular. I’ve heard good things about that. And Look before you LIRP, which stands for Life Insurance Retirement Plan. And that’s a whole other conversation that we can have on infinite banking and using finance premium life insurance. Such an incredibly powerful tool to build tax advantage wealth, tax-free wealth, and using leverage to finance your retirement, and also to potentially finance other expenditures.
Kyle Candlish:
Yeah, and to touch on that, I see a question. I think, I’m guessing when they say UILs, they mean ULIs or IULs for the appropriate strategy. I am personally, I don’t think there’s a wrong time to implement that strategy because of the standpoint. There’s certain riders that can be put in place. They’ll cost you money. They can. So, you-
Mark Perlberg:
Can you explain what UILs are? I mean, ULIs.
Kyle Candlish:
I said IULs.
Mark Perlberg:
Yeah, I know.
Kyle Candlish:
So, index universal life. I personally think, even just for the everyday in individual they’re good, because the one example, we talked about retirement accounts and individuals like to put their money in Roths. Well, you don’t get any tax deduction with Roths, but when you get your distributions, they’re not taxed, right? Well, that’s going to work the same way with life insurance, because through policy loans, they’re not taxed.
The one big difference is, everyone has a life event that something happens to them before they are 60. I’m just saying 60 instead of 59 and half. Well, with IULs, you can do policy loans to help pay for that. An example, you might need a new car, right? Well, let’s just say you have… I mean, I know cars have gone up. So, let’s just say you have $40,000 in your IUL that you can do a policy loan on. You do that policy loan. You now put cash straight down on that car. You can now then make your own interest payments to yourself on the policy to pay for the car, instead of paying the bank.
You’ve now become your own bank. You can charge whatever interest you want to help pay it back. Not to mention, while that $40,000 has been used to pay for the car, it still can earn money in whatever strategy you have to help then make other purchases. You can use it possibly for a down payment on a house. I mean, with an FHA loan, you only need 3%. So, that can be a way to help have your liquidity.
Mark Perlberg:
Let’s see here. I think we might have… Oh, how would you make an argument against the high fees for the apprehensive client? I’m not sure I fully understand this. I’m making an argument against the high fees for the apprehensive client? I’m not sure I understand this question entirely, but our fees, when we have clients, we usually argue for appropriate fees for our expertise with clients, and when clients are apprehensive, it’s all about showing the value. We always will create a value in our services that is disproportionately far greater than the cost to invest in our services. That’s the way I look at it. I’m not sure if I fully understand. Maybe this is for the insurance vehicle?
Kyle Candlish:
Yeah, I think it’s for the insurance vehicle, and I mean, I think it’s the conversation you have with the client, what they’re capable of paying. Because when I’m writing life insurance, I’m max funding it to the MEC. I want it to be able to, where that covers, where they can have a certainty of coming close or paying up to that MEC part, so that they can get the returns on their strategies to help cover the costs.
And then, it also varies between companies. There’s companies where the costs are greatly higher from one company to the other. So, it’s finding the right company. There’s one group, they’ve actually done a study on all the eight major high cash value life insurance companies, and they say Minnesota Life is the best in terms of the fees. They’re not really hurting you as much. And so, that’s a way.
If you don’t want to have those riders that necessarily implement you having the same cash value as surrender policy, so you can get the max amount to borrow upon out of your policy right away, then you’re going to have to fund it a little more, because again, the cost of the insurance and the fees. So, there are certain areas, but there’s going to be fees for retirement accounts, too. So, it’s just kind of looking at what you want. And if that retirement account drops with the market, you’re still paying those fees. So, I mean, there’s I guess no real major win either way. It’s just understanding what your risk tolerance is and what you want.
Mark Perlberg:
I could start a whole podcast. I could probably talk every week on life insurance and insurance vehicles as a form of a business, for business need, for your life needs, for succession planning, for so many reasons and never run out of things to talk about. As a financial vehicle, there’s just so much that we could talk about in that area. Maybe one of these days, I was thinking about having someone to be able to do life insurance at our practice, but there’s so much to uncover in that world as well and to discuss with our clients. It’s really great to have experts in that area to help you evaluate all of these variables.
Kyle Candlish:
Yeah, I have three back offices for it, depending on what kind of company I’m using, what I’m using, and for my premium finance as well, which is the bank funded life insurance.
Mark Perlberg:
Good strategy.
Kyle Candlish:
I try and keep up to date, but they’re the ones definitely up to date, and if I have something or something really big changes, like the example of the changes to 7702 last year, where you can now put about, we’re finding about 65-80% more cash into a policy each year. That was a big change, especially for individuals doing premium finance. Massive change.
Mark Perlberg:
Really, yeah. I heard that the Congress, they were looking at making some restrictions and kind of cracking down on some of the tax benefits with finance premium life insurance and other insurance vehicles. But then, some of the proposed legislation didn’t really pass anything or really get much momentum. And I’m guessing part of that’s because a lot of the people in Congress are using it.
Kyle Candlish:
Yeah. I mean, there’s companies that will go down to a million dollars net worth. So, I mean, there’s a good chance that a lot of them are probably using it and the perks of it, so it’s a great way to get a lot of cash in the cash value. Especially right now with the market dropped, you can now reap those returns. I mean, let’s just say it doesn’t return for two more years. Once that year two hits, you’re going to get all those returns, and depending on what companies you’re in, there’s some companies that don’t have caps on what index you’re using. I’m not sure how that works out for them. They have a floor and no cap. But yeah, that’s a whole different story.
Mark Perlberg:
Yeah. Very cool. Well, Kyle, what I would like you to do is to let everybody know where they can find you, and if they want to connect with you, and also, if you have a call to action, anything else that you would like to ask of our audience, now is a good time to just send that out to the live audience and also the recorded audience that will listen to this in the podcast, in our YouTube replay of the webinar.
Kyle Candlish:
Yeah. The best way to reach me is honestly through LinkedIn. If you just type in my name, it’ll pop up. I haven’t found anyone on LinkedIn with the same name as me yet, so that that’s kind of a good thing. And then, just send me a request in a message saying that you heard, you either attended it live or you watched our replay, and I’ll definitely connect with you and we can jump on a call if you have any questions. I’d be more than happy to answer. I do those a lot, because my big goal is education. As I said earlier, I want to give you the negatives, but I’m definitely going to give you the positives. If you listen hard enough, there will be times that you know which strategy I like better than others, because I feel the power of that strategy. But I’m going to give you the negatives, and I’m going to try and my best to give you the positives, too.
Mark Perlberg:
Yeah, and talk to someone before you make crucial decisions.
Kyle Candlish:
Yes. Yeah.
Mark Perlberg:
It’s great that we have bigger pockets and all these other resources out there, but don’t be a part-time tax planner when you’re a full-time dentist. We had a guy who came to us and did a 1031, and the actual 1031 is is actually going to increase his fees, and it is not even going to create any tax savings, because he would’ve been able to free up those losses.
Kyle Candlish:
Yeah.
Mark Perlberg:
You’ve really got to, these are all complex discussion topics, and even if you don’t think there is planning, at least confirm that your assumptions with a professional before you think you can make these decisions on your own.
Kyle Candlish:
Yeah, and even I consult with other CPAs, what they think, what their thoughts, other tax attorneys, other tax professionals, tax strategists like myself. I’ll definitely consult with them. What do you think? I want their opinion, and a lot of times I will have one of them on a call before I fully go through with a strategy. I want to know what their thoughts are. If they don’t like it, then there’s a good chance I’m probably not. I might bring another one on just to see. If that next person doesn’t like it, I say bye.
Mark Perlberg:
Sometimes there’s more than one answer. It’s really an art. There’s an element of creativity, resourcefulness, analysis, expertise. It’s a science. It’s an art. So, these are not easy decisions, especially when you are a high net worth individual, we’re looking at lots of cash, here. There’s so many ways that we can look at solving a problem and planning for the best possible solution.
Kyle Candlish:
Yeah. Definitely. Yeah.
Mark Perlberg:
Well, Kyle, again, thank you so much for joining us in this wonderful conversation. I’m really excited to share this with some of our clients, and I’m glad to have shared this with our audience. Follow the podcast and webinar, and reach out to Kyle to learn more and do some more of this advanced type of planning. You guys stay tuned. We’ll talk soon.
Kyle Candlish:
Thanks very much.
Mark Perlberg:
Absolutely.