Question: Should my living trust own my entity? Answer: Generally, a living trust will be the owner of an asset (like an ownership in an entity) instead of you being the owner of the asset. This is because one of the primary purposes of a living trust is to avoid probate. To avoid probate, assets
Question: Do I need an entity before I start my business or investing? Answer: It is recommended to have your entity set up before starting. This allows your entity to be the party named on legal documents and agreements and for your entity to receive money directly and pay its expenses directly. These are all
Question: What investments do you like for an IRA? Answer: Investments that work well in an IRA for tax purposes are those that generate high tax income, such as interest income, short term capital gains and gains from precious metals. Personally, I like tax liens and hard money loans in IRAs – they generate interest
Question: How do I use the per diem option for travel expenses? Answer: Per diem is a standard allowance permissible in lieu of actual expenses. There are no receipts required. The owner of a business is not allowed to use per diem for travel and lodging. However, business owners are allowed to use per diem
Question: Should I rent my home office to my business or take a deduction? Answer: In order to determine which choice is best for you, either taking the home office deduction or renting your home office to your company, you will first want to review your entity structure and determine which business entity will use
Question: In which states does my entity need to register? Answer: Each state has its own laws that set forth the rules as to when an entity (or business) must register to do business in that state. Usually the laws use the terms “transacts business” or “conducts affairs”. Registration is usually required if the entity
Question: Does my entity need a bank account? Answer: Every entity should have its own bank account. Having its own separate bank account allows an entity to pay for its own expenses and collect its own income. This is important when it comes to protecting your entities for asset protection and tax purposes.
Question: When should I add a C Corporation? Answer: If you are not yet in a tax bracket higher than 21% (the current C Corporation tax rate), then you don’t need a C corporation yet. Instead, add the C Corporation when your tax bracket increases. When you do add a C Corporation, keep in mind
Question: How do I handle expenses used by more than one of my businesses? Answer: The expenses should be allocated to the business (or investing) activty. The two keys here are to be reasonable and consistent. Reasonable means that the method you use to determine how much of each expense should be allocated is fair.
Question: Can an IRA invest in real estate? Answer: First, I have to share my thoughts on real estate investing in an IRA. I never ever want to put a tax shelter investment inside another tax shelter. What many people don't realize is that this is exactly what they are doing when they invest in