March 26, 2025 • 47 mins
Aired: 03/22/25, Recorded 02/08/25
In this compelling retrospective, Mark Rothstein, aka Mr. Money, reflects on the pivotal financial moments of 2024. Explore how cryptocurrency regulations, electric vehicle tax credits, national debt challenges, and emerging AI technologies shaped the economic landscape of that transformative year.
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Episode Transcript
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Unknown (00:00):
The Information and opinions presented are for
(00:01):
general information only, andare not intended to provide
specific advice orrecommendations for any
individual you should contactyour investment professional,
attorney, accountant or taxadvisor regarding your
individual situation. Theopinions of the presenter are
not necessarily those of eventtax wealth management. It's
subsidiaries, officers ordirectors. Mark Rothstein, aka
Mr. Money, is a financialadvisor and the owner of tri
star financial LLC and tri starIncome Tax Services LLC. Mr.
(00:23):
Money is a marketing name onlyand is not intended as anything
other than a marketing name forentertainment purposes.
Securities offered through a vanTech's investment services,
Incorporated Member FINRA SIPCinvestment advisory services
offered through a van Tech'sAdvisor Services, Incorporated
insurance services provided by avan Tex Insurance Agency
incorporated and avantexInsurance Services Incorporated
tax and accounting servicesoffered through tri star the
event. Tax entities are underseparate ownership from any
(00:46):
other named
Mark Rothstein (00:47):
entity. Mr. Money is here. My phone number
is 5805436, again, 5805436, itmust be Saturday. Must be two
o'clock Boise time. Mr. Money ishere to talk about money, like I
do every week. I invite you toclass. Going to be a next hour
(01:08):
of education about money, donein simple English from Mr. Money
Advice you can trust, advice youcan follow to get to the
promised land. Promised land ofnot worrying so much about
money, seems like we alwayswill. But if you got a plan and
you're following it, then youwill absolutely be in a better
(01:29):
place, obviously, than if youhave no plan, looking at your
financial wellness. Veryimportant, a surprising number
of adults in the US lackfinancial proficiency came a new
statistic, and America is therichest country in the world,
and yet only half of the statesin America require high school
(01:50):
students to take a personalfinance class before graduating.
63% of Americans live paycheckto paycheck. 73% of American
adults rank finances as theirprimary stressor in life. That
true for you. Only 25% ofAmerican teens have any
(02:11):
confidence in their personalfinancial knowledge. If that's
you, by all means, dial in.Let's get you educated. Let's
get you knowledgeable in thefinancial and tax world,
5805436, tell you one thing I dofor education. I read USA Today,
money section. Of course, I readmany others. I read the Wall
(02:33):
Street Journal. I read all myfinancial magazines. I like
Kiplinger also, but that moneysection is written very much in
simple English that'sunderstandable. My seminars, I
actually hand out USA Todaymagazine. We actually look at
the money section of USA Today,and I use that as part of my
(02:54):
teaching to just show you thatthe articles there well written,
and can give you good advice tofollow. Again, that is one
source to use, speaking ofthings about the world and
what's out there is this. Liketo start today's show with a big
concern I have, yes, it'swritten up. I just don't hear a
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lot about it in the media. I'veheard some about it, but not a
large amount. And I'd like tosay Dear Mr. President, here's
Mr. Money and the Boisepopulation. Would like to say,
Dear Mr. President. You need toattack the US national debt.
Very clear, our national debtrising deficits, interest costs.
(03:40):
It impedes economic growth. Ifyou're taking all the revenue we
got coming in, or a big, largepercentage of our revenue to pay
debt. To pay debt. TreasurySecretary Scott Bassett is
concerned about America's largeand growing national debt. He
said it, quote, we have neverseen this before when it is not
(04:01):
a recession or a war. This iswhat he said during his
confirmation hearings, by theway, and by the way, he's right.
Our deficit is simplyunsustainably high, and without
any course correction, it willundermine efforts to promote
economic growth and reduceinflation and threaten our
standing as the worldsuperpower. We must get our
(04:24):
deficits in order. Joe Biden,fiscal legacy can be summarized
in one shameful milestone, saysJody Arrington, I'm looking at
the opinion page from her, fromthe Wall Street Journal, the
federal government now spendsmore paying interest on national
debt than it does on defense.Interest spending nearly tripled
(04:49):
during Mr. Biden's term. That'sright, tripled during Mr.
Biden's term. It's a disastrousresult of his reckless spending
spree, which. Loomed the debttriggered rampant inflation and
increased borrowing costs forconsumers and businesses. Yeah,
these last couple years weretough years as Republicans
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prepare to turn the page andexecute on President Trump's
America first agenda, thesurging interest costs represent
a ticking time bomb that must bediffused. Absolutely it must be
diffused. So in my dearPresident section right now, I'm
saying, Dear President, makesure something happens here, Mr.
(05:33):
President. I know the FederalReserve started cutting interest
rates. They already have cutthem a full one percentage point
since last September, I got it,but it ain't enough. The average
interest rate. Just want all mylisteners to know. The average
interest rate that the federalgovernment pays on our national
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debt is 3.3% and that's aboutdouble what it was when Mr.
Trump left office. I shouldn'tsay Mr. Trump. I'll say
President Trump left office backthen. And 2024, last year, net
interest cost accounted for 18%of all federal revenue went to
just paying the loans, theinterest on the loans, and
(06:17):
nearly half of every dollar weborrowed went to finance the
debt. And by the way, this trendis continuing, if it just keeps
going. By the year 2035 interestpayments will suck up almost a
quarter. 25% of everything.Right now it's at 18% it may go
up to 25% of all revenue goingtoward the debt, if it simply
(06:39):
just continues. So again, leftunchecked, this payments are on
track to become the singlelargest item in the federal
budget by the year 2051, I'dlike to think we're going to
attack that this year, Mr.President. So please do that. If
it's the single largest item inthe federal budget, it's going
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to crowd out private investment,other national priorities, like
infrastructure, nationaldefense, all things we need.
Yet, if it's all going to payinterest on debt and pay down
our debt, we're not going to getvery far ahead if interest rates
exceed expectation. That couldhappen. By the way, interest
rates could still go up, andthat make compounds the issue
(07:22):
that Mr. Money is talking aboutright now. Again, higher rates
for federal borrowing lead tohigher borrowing costs for the
businessman, his family, yourmortgage rate. If interest rates
go up, your mortgage rate may goup, car loans going up, all your
small business financing goingup, it will absolutely slow down
(07:42):
the economic movement of growth.It will, it will already you can
see real estate mortgagesslowing down the real estate
market with the high rates. Soagain, it goes up even more,
going to slow down real estate,and it is a major segment of
economic growth in America andacross the whole world. And
again, I a businessman, have toborrow money at a higher
(08:05):
interest rate, or I got to pay ahigher rate. Goes up even higher
on my credit cards. It's alreadyastronomically high. Not good.
It's already putting a strain onhousehold budget. And again,
rising national debt makeseveryone pay more. So again, we
don't want that. It's simplytime to face reality. It simply
(08:26):
is the error of spending withoutlimits or accountability has
reached its breaking point.Remember, there's a lot of money
being spent that's off recordthat you just don't see. It's
not all listed there. So again,get on the record and off the
record. All money's going outand bring it down. Yes, I know,
(08:47):
Mr. President, you have the D OG, E going on. I know about
that. Glad you've got that goingon. D O G, for those who may not
know, refers to the Departmentof government efficiency, where
they're cutting down, but yousimply got to cut it down and
get that loan lower, especiallyif interest rates rise. By the
(09:10):
way, Mr. President, get interestrates lower. I know you've
spoken and simply have said, youwant the Federal Reserve to
continue to drop interest rates.They've held rates as of January
steady, not lowered them, butagain, lower interest rates will
help the economy, but the biggerone is get this debt paid down,
paid off. Time to face reality.This error of spending without
(09:35):
any limits, withoutaccountability, has reached the
breaking point. We must start toreduce the debt, a challenge
that's daunting, but it is notinsurmountable. It is not, Mr.
President, our debt to GDP ratiohovers at 123%
an all time high, excluding theheight of the COVID 19 pandemic.
(09:58):
The numbers are showing it.Simply has to change and stop
and so Mr. Money, the Boisecommunity is here to say, Stop
it, stop it. Stop it. Pay downit is simply perilous. That's a
good word. If the interest costscontinue to spiral out of
control, it will underlineundermine economic stability,
(10:22):
Global Trust in the US dollar torealize the benefits of pro
growth policies that you want todo, Mr. President, your pro
growth policies, I agree withtax reform, regulatory relief,
all that's great. Please do it,but we must root out wasteful,
fraudulent and unnecessaryspending and restore fiscal
(10:45):
health to our country just gotto be done. True, fiscal
discipline is the only pathforward. One last thought,
Washington, it so seems allthese years, has this possible,
possible avenues. Has so manypossible avenues, but a deficit
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in political will is what'smissing. Admit missing. We
simply must have the politicalwill to pay down the debt, Mr.
President, I see you havingpolitical courage that exceeds
other presidents in the past,and so you up, you risked your
life pursuing solutions toAmerica's problem, from border
(11:28):
insecurity, unfair tradepractices, to our leadership on
the world stage, which iswaning. So I'm asking under your
leadership by cutting spending,controlling the national debt
the US can launch intounparalleled strength and
prosperity. Please do it. Justsimply do it. I have a few more
(11:52):
thoughts on one other item Iwanted to mention from last
week's show I did not get tothat I wanted to mention, which
is called Deep seek news leavesAI rivals in us. Done. It's an
article by Bailey Schultz of theUSA Today. And what was it that
US tech stocks tumbled week plusago when a small Chinese
(12:14):
artificial intelligence startupsaid it can compete with the
likes of chat GPT and other USbased AI models, and they can do
it at a much smaller cost. Soagain, I wanted to mention what
it is, this thing called Deepseek. What is it was founded in
2023 shot to the top of Apple'sAP store free app chart. And it
(12:38):
really is about a AI. What isit? It's an AI Lab. The startup
says it's a I models deep sea v3it's called and deep sea r1 are
on par with most advanced modelsfrom open AI, which is the
company behind chat, G, B, T. Soagain, they're on par, they say,
(13:02):
with chat GBT, which is the openAI. Deep seek says it costs less
than 6 million to train its deepseek v3 model. Open AI, in
comparison, spent more than 100million to train the latest
version of chat GBT. So again,analysts say the technology is
(13:22):
impressive, especially sincedeep sea says it has less
advanced chips to power AImodels, okay, less advanced
chips, but it's doing thebusiness again in the wrong
hands. The Biden administrationwas concerned that AI in the
wrong hands have the potentialto exacerbate significant
(13:44):
national security risks,including enabling the
development of weapons of massdestruction, supporting powerful
offensive cyber operations,aiding human rights abuses such
as mass surveillance. So again,this whole AI as we go into the
future does matter, as you cansee, whether it's defense,
(14:05):
whether it's national security.In some way, the idea of a i
developing is very important.And apparently this deep seek,
this Chinese version, which isso much cheaper, and apparently
as effective, is causing our AIin America, our company, Nvidia,
(14:26):
Facebook, our key companiesdeveloping a bit some worries.
So I thought I'd at leastmention it. Mr. Money is
watching the AI world. Mr. Moneyis watching this deep seek that
came from Chinese startup. Andwe'll see what transpires in the
future. When we come back, it istax season. Mr. Money has tax
(14:46):
advice to give to save you moneyand get a bigger refund all when
we come back, this is Mr. Money.
Unknown (14:57):
Let me tell you how it will be. It. There's one for
you. 19
Mark Rothstein (15:18):
for me, Mr. Tax man's in the house. It is Mr.
Money. And Mr. Money is talkingabout income taxes right now on
a beautiful Boise day, Saturday,two o'clock Boise time. I know
there are many listeners that goto Mr. Money answers.com and
from all around the country andoverseas. Hello to all of you.
(15:38):
But right now, Mr. Money's inthe studio recording. And I want
to talk about taxes here inAmerica at the moment, it is tax
season anxiety inducing time formillions of Americans. They got
to start thinking and doingtheir taxes, and that takes
hours to do, whether it'syourself or with a prepare or
with your spouse, takes hours.And there's so many other things
(16:01):
you'd rather be doing than doingtaxes. What's the good news? The
tax code really didn't changemuch between last year and this
year, so that's very good news.If you understood the tax law
last year, chances are youunderstand this year, and
chances are Congress and thePresident and the Senate will
(16:23):
extend the individual taxprovisions that were under right
now. It came from the tax cutsand Jobs Act back with Trump in
2017 it's still here. It wasvery good for all of us,
reducing taxes and giving uslots of deductions that we could
use. It's set to expire at theend of this year, 2025 Trump has
(16:46):
said, Congress has said we willextend it. So we're hoping that
all comes through. They doextend it, and we keep these low
rates. Nonetheless, here aresome key items for this year
that may not get extended. Howabout that? So here's something
you can use right now on your 24tax return due April 15 or with
(17:09):
extension, October 15. That'sthe EV tax credit, electronic
vehicles tax credit, ever sinceJanuary one of 202, for any
buyers who purchase an eligibleelectronic vehicle been able to
claim a tax credit up to 7500notice, I said credit 7500
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that's $1 for dollar deduction.Excuse me, credit on your tax
return. So if you're getting Xamount back, you're now getting
an X amount plus 7500 extra ontop of that back so it's a
credit and 4000 if it's a usedEV. And again, for many of these
EV purchases, you can get that7500 for a new car or 4000 for a
(17:55):
used one. And at the point ofsale, you can get a rebate
immediately and reduce yourpurchase price when you buy the
car by that amount. Or again,you can not take it then and put
it on your tax return and getthat credit on your tax return
when you file. So again, if youtook advantage of the credit to
lower the cost of the EV whichis great. Most people did,
(18:17):
you'll need to report it whenyou file your tax return. You
don't get to get 7500 from thedealer and then another 7500 on
your tax return. You only getone of those 7500s when you
purchase the EV the dealershould have given you time of
sale report and a documentindicating that the IRS has
accepted it. The report confirmsthat your vehicle was eligible
(18:41):
for the credit list, the amountof credit available for your
specific vehicle that youbought, and shows that the
credit was transferred to thedealer by the IRS. If you didn't
receive a time of sale report oryou lost it, that's been known
to happen to Mr. Money, missing,miss, laying a piece of paper.
Can't find it, you can always goback to your dealer and say, may
(19:03):
I have those papers I'm going toneed so I can get my clean
vehicle credit, my EV credit, soI can file my form. 8936 another
thing to be wary of I'm gettingcalls on this is Bitcoin.
Cryptocurrency. Bitcoininvestors have enjoyed a
spectacular ride since last yearto this year. Yes, Mr. Money
(19:25):
knows it went up over 100,000 invalue back in December. It's
doing well. And again, if youinvested in Bitcoin and then you
took some of your profits offthe table last year, it's
important to understand thatthese gains are taxable. That's
right, if you just own it, nottaxable when you sell it. We can
(19:46):
then determine what you boughtit for, what you sold it for. We
can see if there's a gain and itis taxable. Though many people
refer to Bitcoin as currency,the IRS views it as property.
Money and gains are taxed thesame way as gains from the sale
of stocks or bonds or otherassets, you'll owe taxes on your
(20:07):
gains, even if you used yourBitcoin to buy something. So
it's a simple first procedure.You bought it, you sold it right
there, equals, report it and paytaxes if there's a gain, by the
way, if it's a loss, you canhave a loss on your tax return.
Losses are allowed up to $3,000per year. If you've got excess
losses, they stay on your taxreturn till you have gains, and
(20:31):
then your gain can offset theloss or keep carrying it forward
and take a minus three grandevery year on your tax return to
use up all of your losses. Soagain, three grand loss in the
particular year. It happens, butfirst, take any losses against
any gains in that year, put thetwo together, then move forward.
If you own Bitcoin or othercryptocurrency, again, it's in a
(20:54):
taxable account. Your gains fromselling any that you owed for a
year or less will be taxed atyour ordinary income tax rate
could be anywhere from 10% to37% depends on all your income
and expenses. If you sold cryptoyou own for more than a year,
you owe long term capital gainstaxes, and that can range
(21:17):
anywhere from zero to 20% soagain, when you bought and sold.
If it's less than a year betweenthe two, it is considered short
term. Gain goes on your taxes asordinary if you held it more in
a year, it's going to beanywhere from zero to 20% and
again, when you fill out yourform 1040 the IRS reporting form
1040 you'll be asked whether youreceived, sold, exchanged or
(21:42):
otherwise disposed of digitalassets in the year 2024 Yes.
That is one of the questions onthe tax return. Yes. It applies
to every single person. You needto put a yes or no in that box.
Again, whether you received,sold, exchanged or otherwise
disposed of a digital asset, gotto check that box and put
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something in that box, and theIRS added that question to the
form for tax year 2020, inresponse to concerns that many
taxpayers simply were notreporting cryptocurrency profits
on their returns. Yes, you needto report it. The IRS is
expected to increase scrutiny. Ishould mention to everybody of
(22:27):
digital currency holdings in theyear of 25 why brokers will be
required in the year 2025 toreport proceeds from the sale of
digital assets on a newlyintroduced form called the 1099
da da digital. That's where theD's from. So again, you got to
(22:50):
report it regardless. But justknow, in the year 2025 those
brokers you work with willabsolutely reporting any sale it
will be on there 1099 da digitalasset, okay, wow, taxpayers who
sell digital currencies andtaxable accounts this year will
receive the form in early 26 sojust know if they wait till the
(23:14):
end of the year and then thesebrokers will send you that 1099
and Again, the reportingrequirement will allow the IRS
to match reports fromcryptocurrency brokers with
information on your tax return.So when that 1099 comes, just
know the IRS got a copy of that1099 da for currency and better
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report it. They're going to belooking for it, or you'll get a
love letter. That's what I callit, a love letter from the
government on where's the saleof your crypto currency, and if
the IRS has their way, all theyreport is the sale. They pretend
you got it for free, at zerocost, and you pay tax on the
entire gain. So you want toreport the sale and remember to
(23:58):
report your cost to buy it. Sothe difference between what it
cost you and what you sold itfor is your gain longer than a
year. Long Term Capital Gainless than a year. It is called
short term capital gain, and itis taxed at ordinary income if
it's that short term. So youwant to stay on the right side
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of the IRS in regard to this,they're going after it because
they think so many crypto peopleare not reporting what needs to
be reported there. So again,something important for you to
know. One other thing I shouldmention here is transactions
that generate a form 10 99k Ijust talked about, you're going
to get a form 1099 da, for thedigital asset. Now there's
(24:43):
another one called the 10, 99k
and that was the American rescueplan act of 2021. Love these
titles, American rescue plan actof 2021. Required payment
processors such as Venmo andPayPal to. Report to the IRS
total payments of 600 or more toa user in any year. Requirement
(25:06):
was delayed after taxprofessionals and advocate
advocates for small businessesargued that it would cause tax
headaches for millions of selfemployed and gig workers for the
year 2023, payment processrequired to file this 10 99k
only for users who received20,000 in payments or had more
(25:27):
than 200 transactions. Butthat's changed everybody. Now if
you've got transactions of 5000or more, you are going to get
the 10 99k from Venmo, PayPal,etc, for these payment
processors when you receive themoney. So know that this year,
(25:47):
that's right, the year 24 theyear we're talking about, you've
got to, got to report thosetransactions. But Mr. Money, it
was a personal transaction. Itwas a peer to peer transfer with
my friends and my family. Itwasn't a taxable business kind
of item. If you get that 10 99kMr. Money's here to say, report
(26:10):
what the 10 99k said is income,then take a deduction on the tax
return for it as it waspersonal. So you come back down
to zero, or you come back downto whatever the proper figure
should be that you made with thebusiness. So again, don't space
it out and choose not to reportit because it was all personal
(26:31):
in nature. If you get that 1099k please report it schedule
one. By the way, please reportit on schedule one of your 1040
it's called additional income.And adjustments to income report
on one line the money coming inon the 1099 case so it matches
the IRS, and remember to take adeduction for it was personal
(26:53):
use. It was not business. Again,the goal of the reporting
requirement is to make it easierfor the IRS to keep tabs on the
self employment. That's whatthey're going after, people that
are self employed, that don'treport their income. IRS wants
you to report it. They're goingafter it and again, better to
(27:14):
report it, better to file it,better to put your schedules of
income and expenses against it,and know that it's very
important. And again, just tomention, the threshold drops to
2500 for the year 2025 and inthe year 2026 it's going down to
600 Whoo. Whole lot of reportinggoing to be happening. Mr.
(27:38):
Money's got pages more overhere. I want to mention to you,
but we're out of time on thistax section. When we come back,
we're changing gears. Mr. Money,going to talk about, I inherited
some property, and I don't wantto pay an income tax. Mr. Money,
is there a way to inheritsomething? It's very profitable.
I inherited it. Can I inherit itand Pay Zero Taxes? Answer, yes,
(28:01):
all when we come back, this isMr. Money.
Unknown (28:08):
Welcome back to the Mr. Money show on K I do talk radio,
1075 FM and 580 AM.
Mark Rothstein (28:16):
Mr. Money is living in America, to be
specific, living here in Boise,Idaho, and I love it here, yes,
I am a transplant from LosAngeles, came a few years ago,
and boy oh boy. I'm glad I came.This is Nirvana, according to
Mr. Money. And just love ithere, speaking of love, want to
make a difference for my lovingclients and for my loving
(28:39):
listeners. And here's a new onethat I get questions on this all
the time, and I'd like tomention it to you. So let's say
your mom passed away, your dadpassed away, you inherited a
home. Mr. Money, what are myoptions? Well, of course, you
could move into the home youjust inherited. You could rent
(28:59):
it out, or you could simply sellit. Okay, we know that those are
options you could do. Want togive you some other options you
can do. There's another lesserknown option called the 1031
exchange IRS Code Section 1031and that allows you to sell the
property and buy a like kind ofsame type of property of more or
(29:24):
equal value. So two things Iwant to mention there. One, so I
inherited a home. The answer isjust like, if you inherit a
home, inherit some stock,inherit some bonds, when you
inherit it, you get what'scalled the stepped up basis. So
in my original example, if mombought the house for 200 grand
(29:45):
and it was worth a million whenshe passed away, and then I
inherited it, my name was not onit. It was under my mom's name.
And then I inherited it, whenshe passed away, I inherited it,
what's called stepped up basis.Yeah, it was worth a million. I
inherited for a million. I canthen sell it for a million and
pay zero income tax. It's calledstepped up basis. Yes, it's true
(30:10):
in Idaho. Yes, it's true on thefederal tax return. All good
there. But let's say Mr. Moneythat I've got a rental property,
and so I've been renting it foryears. It's a business asset.
I've been renting it or Mr.Money just got a vacant piece of
land, and as a result, it's goneup in value. So again, my name's
(30:31):
been on it. It's a rentalproperty or investment property
land. I bought it for 200,000it's worth now a million. Mr.
Money, I'm up the creek. I made800,000 it cost me 200 grand.
I'm now selling it for a millionplus. If it was a rental, I was
depreciating it and getting sometax advantage. When I sell it,
the IRS will be in line to taxme. They will be in line, but
(30:54):
you can skip the line. Whysomething called a 1031
exchange? What a 1031, exchangedoes is, again, when you sell
it, rather than you take themoney, because then you got to
pay income tax when you sell it,the money flows over to an
Accommodator, a real estateperson, an Accommodator who
(31:17):
accommodates you, gets themoney. They hold on to it. You
have 45 days to earmark a newproperty, and 180 days to close
the deal, and then the moneyflows over to the new property.
So, Mr. Money, did you say I cansell it? Pay no taxes on the
gain, because the money nevercame to me. It simply went to an
(31:39):
Accommodator. He touched themoney, he then rolled it over to
some new like kind property, andas a result, I was able to defer
the taxes. I didn't touch it. Idon't have to pay income tax on
it. I rolled it over, deferredit over to another property, or
two properties, or threeproperties, therefore I pay no
(32:00):
income tax. That is correct.That is exactly what a 1031
exchange does, again, thatapplies with its business trade
or investment property. So itcould be a commercial structure.
You went and bought aresidential building. It's still
building for building a rentalbefore and a rental later. It
(32:20):
was like kind so I could evensell a residential rental and
buy a warehouse that's rentedout, or an office building. Sure
you could. It was like kindexchange. And as a result, all
of the money flowed over. So youtherefore deferred on all of it.
My clients love that. They maybe saying, Mr. Money or mark, oh
(32:44):
my goodness, I've done so wellin my rental property. What do I
do now? I don't want to pay allthis income tax on it, and I
don't want to manage it anymore.I'm getting older. What you can
do is a 1031, exchange, sellyour rental property. The
Accommodator gets the money. TheAccommodator rolls it into
another building for you. Youpaid no income tax, and you
(33:08):
don't have to manage it, becauseit was rolled over to a property
where you already have a managerdoing it, and the managers
managing it automatically, andyou're getting your 3% 4% 5%
rent checks to you every singlemonth. So again, you become a
passive investor. You paid noincome tax when you sold it, it
(33:28):
rolled over to some new propertyyou own, and as a result, you're
getting passive income comingin. Isn't that great? No income
tax when you sold it, it's now apassive income stream to you
again when it sells, you got 45days to earmark the new
property, or properties it'sgoing to roll over to, and 180
(33:50):
days to make sure you get themoney into the new property and
close the deal. Those are thetwo little things you need to
know about that. And as aresult, be pretty darn good. And
then what's really good is youcan die with it. When you die
with this 1031, exchange withthis new property, then, as a
result, again, you get a steppedup basis. And it steps up when
(34:13):
you pass away, and it will go toyour beneficiary at that stepped
up number, and then they cansell it and pay no income tax.
So you ended up paying no taxeson any of your rental properties
because you sold them, the moneyrolled over to a new property.
Even if you sold a new propertyfor big gain, you can again,
defer it again into a 1031,exchange, and then, as a result,
(34:37):
you can keep going. And nextthing you know, you may have
multiple properties. When youdie, the kids, or whoever you
name, inherits it, and there isnever, never, never any income
tax on it. If you sell it, thenyou got the income tax. But if
you die with it, and it goesover to your beneficiaries, they
will get it, and they willnever, never pay any income tax
(34:58):
on any of the gains. On any ofthe properties. Pretty darn neat
thing to do. So again, rememberthat stepped up basis available
if you choose to inherit it andthen sell it, you get that
stepped up basis. Little detail.You can pick the value of the
date someone died or six monthslater to value it and then sell
(35:21):
it and pay no gain on it. Mr.Money. What if it was worth a
million? I sold it for 900,000 Ilost money. My mom died. It was
worth a million. I got it for amillion. I ended up selling it
and getting 900,000 What aboutthat? I actually lost 100 grand.
IRS code says you can have aminus on your tax return. So
(35:43):
again, just like you would nothave to report the gain. Oh, if
you had a gain, you got toreport it. If it was worth a
million, you sell it for1,000,002 you got 200,000
profit. Got to report it and paytaxes if you end up selling it
for less than that. Stepped upbasis, yes, you get a minus on
your tax return. Pretty neatlittle thing that people can do.
(36:03):
Mr. Money likes doing it,especially from older clients
who say, I don't need the money,but I do like to rent income. So
let's sell it. Let's make thosenice profits. Let's go ahead and
roll the money over to a newproperty, and let's keep that
passive income stream coming tome now I don't have to work it
anymore. One last little item inthere. You've got to watch for
(36:27):
your debt to equity ratio. I'mgetting a little technical, but
your tax person will be able toexplain this. But all I'm saying
is, if when you sell it, you add$100,000 loan when you buy your
new property, they want to see$100,000 loan on the new
property. So again, you debt yougot on the sale of your old
(36:50):
property. They're looking tomake sure you got some debt on
the new property. When all themoney rolls over, that's the
only financial numbers you gotto crunch to make sure it all
works. And by the way, it doeswork. When Mr. Money comes back,
there's a big, big, big, big,big issue all of us face. I've
(37:10):
spoken about it before, and it'stime to bring it up again. It's
about protecting yourself andyour assets and your net worth.
How do you protect it. We'lltalk about it when we come back.
This is Mr. Money.
Unknown (37:24):
Welcome back to the Mr. Money show on K I do talk radio,
1075, FM and 588,
Mark Rothstein (37:42):
Mr. Money is here talking about money issues.
I love all these money issues,but I love money. If you like
money, this would be somethinggood to listen to the Mr. Money
show every Saturday from twoo'clock to three o'clock. Got
another issue in front of me,which I've spoken about in the
past. It simply needs repeating,and it's about protecting
(38:05):
yourself and your assets againstID theft. Yes, it goes on in the
tax return world. People takeyour name and social security
and file tax returns before youdo. You go and file your return,
it's rejected, saying youalready filed. Nope, you didn't
already file. You just gotstolen from but it's also true
(38:25):
in your credit cards, of course.So again, there's been more and
more data breaches, and they'vemade huge headlines. Fact, back
in August, few months ago,National Public Data a consumer
data broker that performsbackground checks confirmed
hackers had obtained and leakedsocial security numbers, email
(38:49):
addresses, phone numbers,mailing addresses to more than
2.9 billion records were stolen,Let me say it again, more than
2.9 billion records were stolen.This is according to the lawsuit
filed against national publicdata. Additionally, again last
(39:10):
year, in July, changehealthcare, which assists with
billing and insurance processingfor many healthcare providers,
for all the providers out there,began mailing out notices to
individuals who were affected bya ransomware attack that
targeted the company's data inFebruary and could cover a
(39:31):
substantial portion of people inAmerica. Was the quote, hackers
extracted data, including yourhealth insurance information,
member identification numbers,personal health information of
yours, such as diagnosis andtest results, your billing and
payment information, your bankaccount information, your credit
(39:52):
card numbers, your socialsecurity numbers. I'm already
depressed just saying it outloud. So these breaches. Are
significant, like, reallysignificant. Yes, I know you get
the letter that says we'll payfor the next year for you to
have a monitoring of yourcredit. Thank you. But I wish
you did not lose all of myinformation. And people who
(40:14):
steal, fraudsters that stealfrom me, may not use my
information for years ahead.It's not like they use it the
next day. So we must be weary.We just must be cautious
immediately and always. Thesebreaches are significant, not
only for the scale, but for thedamage these criminals can do
with your data. A fraudster whohas your social security number
(40:38):
may be able to pose as you toopen credit card or loans. They
could file tax returns, as Imentioned, and get your refunds.
They can apply for SocialSecurity benefits, a whole host
of things they can do with youridentity, with your health
information and identity theft.May get medical care in your
name. It's crazy, a dangerousprospect of his or her own
(41:02):
health information, becausecommingled with yours. Certainly
don't want that. So again, Mr.Money's here to do a public
service. What should you do?Monitor your bank and credit
card statements for unauthorizedcharges. Again, monitor your
bank your credit card statementsfor unauthorized charges, review
(41:25):
insurance explanation of yourbenefits, the EOB explanation of
benefit statements from yourhealth insurance to make sure
they don't list services you didnot receive. Keep an eye on your
credit reports for signs ofidentity theft, such as a new
credit card just happened, or aloan that you don't recognize.
(41:45):
You can check your report. Idon't know if you know this. You
can check your report from eachof the major credit reporting
companies, talking aboutEquifax, I'm talking about
Experian, TransUnion. Did youknow you can do it free once a
week? That's right, free everyweek@www.annualcreditreport.com
(42:07):
By all means, get your reportand review it.
Www.annualcreditreport.com toreport criminals from opening
new to prevent criminals fromopening these new credit card
accounts in your name, considerputting a credit freeze on your
reports. I have so many timestalked about getting a credit
(42:30):
freeze. You're not getting a newcredit card. You're not going
for a car tomorrow. You're notbuying a house tomorrow. Just
freeze your credit simply put.All you got to do is call the
three bureaus and say, I'd liketo freeze my account. When a
freeze is put in place,creditors can't check your
report in response to anapplication for new credit, and
(42:51):
in turn, lenders are unlikely,like never, to grant credit to a
con artist pretending to be you.When you shop for credit, you're
getting something. You cantemporarily lift your freeze to
allow it. But again, all youhave to do is call Equifax
Experian, TransUnion. And again,equifax.com experian.com,
(43:15):
transunion.com, and initiate afreeze. Mr. Money is here to
say, do it very important to do.Got one other thing this last
week I just wanted to mentionwas I got this question, so I
thought I'd answer it. When doyou go get financial help from a
pro? Would you When would youcall Mr. Money? When would you
(43:37):
call your tax man? When wouldyou say, I'm not doing it
myself. You know what? I'm goingto need some help here. Answer
when you're facing a major lifeevent, consult a professional.
When you encounter a lifechange, like you're entering
retirement, have someone helpyou, gaining an inheritance,
making a significant investmentdecision. That guidance can help
(44:00):
you achieve your goals, ensureyou preserve your wealth. How
about when you're expecting achild? Get assistance from an
estate attorney. When you expandyour family, you want to include
them in your will, don't you oryour trust your guardianship
designation, if somethinghappens to you who takes care of
my child or children, make sureit includes all your children.
(44:22):
Want to protect everyone. Howabout you? Need a financial pro
when you're planning forretirement, as I mentioned
earlier, that's like the biggestdecision. They can help you
create a tailored strategy thatconsiders your unique financial
situation, your goals, your risktolerance. A Pro can ensure that
you avoid costly mistakes, youstay on track with your
(44:44):
investments and tax planning,adjust your strategy as needed.
That's a biggie, and I do a lotof that. But again, have someone
assist you in retirement. That'sa big, big area. How about being
ready for health issues that maycome in the future with
retirement? How about whenyou're creating an estate plan.
Estate planning has legalimplications, tax implications.
(45:09):
You don't want to leave theresults to chance. Stakes are
too high. Make sure you gotsomebody helping you, a legal
person helping you. How aboutwhen you're trying to decipher
the fine print, sorting throughinsurance policies and
statements, going through yourbrokerage accounts, your bank
accounts, your mortgage ain'teasy. A fee, only advisor can
(45:30):
give you an objectiveperspective and just help you
once and done, and help you withthat. How about when you're
selling an asset that isappreciated significantly?
Absolutely, talk to a taxprofessional when you're
thinking of selling andappreciated assets, like a
business, a building large gainin stocks. Boy, oh, boy, there
(45:51):
are things a tax person can do,so you can report the sale and
not pay all this income tax onit. How to Get a financial Pro,
ask your friends is one good wayto get them and again, say, Who
do you recommend? That's verygood, by the way. If you're also
looking to do an alternativeinvestment, an alternative I'm
(46:12):
going to do a private equitydeal, I'm going to do a real
estate deal. I'm going to do a1031 exchange and sell my rental
and get a new rental, and I haveto deal with an Accommodator.
Get some advice how to do it anddo it right. So again, it covers
so many things. If there's amajor life change, when there's
children, when you're planningfor retirement, when you're
(46:35):
making sure your estate planningwills and trusts are in order,
you're selling a big asset taxwise, or you've got legal jargon
you don't quite understand, orany alternative, get your person
on your side, get a pro, even ifit's for that one piece of
information you need. Speakingof that, Mr. Money will be back
(46:58):
with a piece of more informationnext Saturday, 2pm Thank you for
listening. This is Mr. Money.The Information and opinions
presented
Unknown (47:04):
are for general information only, and are not
intended to provide specificadvice or recommendations for
any individual you shouldcontact your investment
professional, attorney,accountant or tax advisor
regarding your individualsituation. The opinions of the
presenter are not necessarilythose of event, tax wealth
management, it's subsidiaries,officers or directors. Mark
Rothstein, aka Mr. Money, is afinancial advisor and the owner
of tri star financial LLC andtri star Income Tax Services
(47:27):
LLC. Mr. Money is a marketingname only, and is not intended
as anything other than amarketing name for entertainment
purposes. Securities offeredthrough a van Tex investment
services, Incorporated MemberFINRA SIPC investment advisory
services offered through a vanTex Advisor Services,
Incorporated insurance servicesprovided by avantex Insurance
Agency, Incorporated and avantexInsurance Services Incorporated,
tax and accounting servicesoffered through Tristar the
(47:47):
avantex entities are underseparate ownership from any
other named entity.
The Information and opinions presented are for
(00:01):
general information only, andare not intended to provide
specific advice orrecommendations for any
individual you should contactyour investment professional,
attorney, accountant or taxadvisor regarding your
individual situation. Theopinions of the presenter are
not necessarily those of eventtax wealth management. It's
subsidiaries, officers ordirectors. Mark Rothstein, aka
Mr. Money, is a financialadvisor and the owner of tri
star financial LLC and tri starIncome Tax Services LLC. Mr.
(00:23):
Money is a marketing name onlyand is not intended as anything
other than a marketing name forentertainment purposes.
Securities offered through a vanTech's investment services,
Incorporated Member FINRA SIPCinvestment advisory services
offered through a van Tech'sAdvisor Services, Incorporated
insurance services provided by avan Tex Insurance Agency
incorporated and avantexInsurance Services Incorporated
tax and accounting servicesoffered through tri star the
event. Tax entities are underseparate ownership from any
(00:46):
other named
Mark Rothstein (00:47):
entity. Mr. Money is here. My phone number
is 5805436, again, 5805436, itmust be Saturday. Must be two
o'clock Boise time. Mr. Money ishere to talk about money, like I
do every week. I invite you toclass. Going to be a next hour
(01:08):
of education about money, donein simple English from Mr. Money
Advice you can trust, advice youcan follow to get to the
promised land. Promised land ofnot worrying so much about
money, seems like we alwayswill. But if you got a plan and
you're following it, then youwill absolutely be in a better
(01:29):
place, obviously, than if youhave no plan, looking at your
financial wellness. Veryimportant, a surprising number
of adults in the US lackfinancial proficiency came a new
statistic, and America is therichest country in the world,
and yet only half of the statesin America require high school
(01:50):
students to take a personalfinance class before graduating.
63% of Americans live paycheckto paycheck. 73% of American
adults rank finances as theirprimary stressor in life. That
true for you. Only 25% ofAmerican teens have any
(02:11):
confidence in their personalfinancial knowledge. If that's
you, by all means, dial in.Let's get you educated. Let's
get you knowledgeable in thefinancial and tax world,
5805436, tell you one thing I dofor education. I read USA Today,
money section. Of course, I readmany others. I read the Wall
(02:33):
Street Journal. I read all myfinancial magazines. I like
Kiplinger also, but that moneysection is written very much in
simple English that'sunderstandable. My seminars, I
actually hand out USA Todaymagazine. We actually look at
the money section of USA Today,and I use that as part of my
(02:54):
teaching to just show you thatthe articles there well written,
and can give you good advice tofollow. Again, that is one
source to use, speaking ofthings about the world and
what's out there is this. Liketo start today's show with a big
concern I have, yes, it'swritten up. I just don't hear a
(03:15):
lot about it in the media. I'veheard some about it, but not a
large amount. And I'd like tosay Dear Mr. President, here's
Mr. Money and the Boisepopulation. Would like to say,
Dear Mr. President. You need toattack the US national debt.
Very clear, our national debtrising deficits, interest costs.
(03:40):
It impedes economic growth. Ifyou're taking all the revenue we
got coming in, or a big, largepercentage of our revenue to pay
debt. To pay debt. TreasurySecretary Scott Bassett is
concerned about America's largeand growing national debt. He
said it, quote, we have neverseen this before when it is not
(04:01):
a recession or a war. This iswhat he said during his
confirmation hearings, by theway, and by the way, he's right.
Our deficit is simplyunsustainably high, and without
any course correction, it willundermine efforts to promote
economic growth and reduceinflation and threaten our
standing as the worldsuperpower. We must get our
(04:24):
deficits in order. Joe Biden,fiscal legacy can be summarized
in one shameful milestone, saysJody Arrington, I'm looking at
the opinion page from her, fromthe Wall Street Journal, the
federal government now spendsmore paying interest on national
debt than it does on defense.Interest spending nearly tripled
(04:49):
during Mr. Biden's term. That'sright, tripled during Mr.
Biden's term. It's a disastrousresult of his reckless spending
spree, which. Loomed the debttriggered rampant inflation and
increased borrowing costs forconsumers and businesses. Yeah,
these last couple years weretough years as Republicans
(05:11):
prepare to turn the page andexecute on President Trump's
America first agenda, thesurging interest costs represent
a ticking time bomb that must bediffused. Absolutely it must be
diffused. So in my dearPresident section right now, I'm
saying, Dear President, makesure something happens here, Mr.
(05:33):
President. I know the FederalReserve started cutting interest
rates. They already have cutthem a full one percentage point
since last September, I got it,but it ain't enough. The average
interest rate. Just want all mylisteners to know. The average
interest rate that the federalgovernment pays on our national
(05:53):
debt is 3.3% and that's aboutdouble what it was when Mr.
Trump left office. I shouldn'tsay Mr. Trump. I'll say
President Trump left office backthen. And 2024, last year, net
interest cost accounted for 18%of all federal revenue went to
just paying the loans, theinterest on the loans, and
(06:17):
nearly half of every dollar weborrowed went to finance the
debt. And by the way, this trendis continuing, if it just keeps
going. By the year 2035 interestpayments will suck up almost a
quarter. 25% of everything.Right now it's at 18% it may go
up to 25% of all revenue goingtoward the debt, if it simply
(06:39):
just continues. So again, leftunchecked, this payments are on
track to become the singlelargest item in the federal
budget by the year 2051, I'dlike to think we're going to
attack that this year, Mr.President. So please do that. If
it's the single largest item inthe federal budget, it's going
(07:00):
to crowd out private investment,other national priorities, like
infrastructure, nationaldefense, all things we need.
Yet, if it's all going to payinterest on debt and pay down
our debt, we're not going to getvery far ahead if interest rates
exceed expectation. That couldhappen. By the way, interest
rates could still go up, andthat make compounds the issue
(07:22):
that Mr. Money is talking aboutright now. Again, higher rates
for federal borrowing lead tohigher borrowing costs for the
businessman, his family, yourmortgage rate. If interest rates
go up, your mortgage rate may goup, car loans going up, all your
small business financing goingup, it will absolutely slow down
(07:42):
the economic movement of growth.It will, it will already you can
see real estate mortgagesslowing down the real estate
market with the high rates. Soagain, it goes up even more,
going to slow down real estate,and it is a major segment of
economic growth in America andacross the whole world. And
again, I a businessman, have toborrow money at a higher
(08:05):
interest rate, or I got to pay ahigher rate. Goes up even higher
on my credit cards. It's alreadyastronomically high. Not good.
It's already putting a strain onhousehold budget. And again,
rising national debt makeseveryone pay more. So again, we
don't want that. It's simplytime to face reality. It simply
(08:26):
is the error of spending withoutlimits or accountability has
reached its breaking point.Remember, there's a lot of money
being spent that's off recordthat you just don't see. It's
not all listed there. So again,get on the record and off the
record. All money's going outand bring it down. Yes, I know,
(08:47):
Mr. President, you have the D OG, E going on. I know about
that. Glad you've got that goingon. D O G, for those who may not
know, refers to the Departmentof government efficiency, where
they're cutting down, but yousimply got to cut it down and
get that loan lower, especiallyif interest rates rise. By the
(09:10):
way, Mr. President, get interestrates lower. I know you've
spoken and simply have said, youwant the Federal Reserve to
continue to drop interest rates.They've held rates as of January
steady, not lowered them, butagain, lower interest rates will
help the economy, but the biggerone is get this debt paid down,
paid off. Time to face reality.This error of spending without
(09:35):
any limits, withoutaccountability, has reached the
breaking point. We must start toreduce the debt, a challenge
that's daunting, but it is notinsurmountable. It is not, Mr.
President, our debt to GDP ratiohovers at 123%
an all time high, excluding theheight of the COVID 19 pandemic.
(09:58):
The numbers are showing it.Simply has to change and stop
and so Mr. Money, the Boisecommunity is here to say, Stop
it, stop it. Stop it. Pay downit is simply perilous. That's a
good word. If the interest costscontinue to spiral out of
control, it will underlineundermine economic stability,
(10:22):
Global Trust in the US dollar torealize the benefits of pro
growth policies that you want todo, Mr. President, your pro
growth policies, I agree withtax reform, regulatory relief,
all that's great. Please do it,but we must root out wasteful,
fraudulent and unnecessaryspending and restore fiscal
(10:45):
health to our country just gotto be done. True, fiscal
discipline is the only pathforward. One last thought,
Washington, it so seems allthese years, has this possible,
possible avenues. Has so manypossible avenues, but a deficit
(11:05):
in political will is what'smissing. Admit missing. We
simply must have the politicalwill to pay down the debt, Mr.
President, I see you havingpolitical courage that exceeds
other presidents in the past,and so you up, you risked your
life pursuing solutions toAmerica's problem, from border
(11:28):
insecurity, unfair tradepractices, to our leadership on
the world stage, which iswaning. So I'm asking under your
leadership by cutting spending,controlling the national debt
the US can launch intounparalleled strength and
prosperity. Please do it. Justsimply do it. I have a few more
(11:52):
thoughts on one other item Iwanted to mention from last
week's show I did not get tothat I wanted to mention, which
is called Deep seek news leavesAI rivals in us. Done. It's an
article by Bailey Schultz of theUSA Today. And what was it that
US tech stocks tumbled week plusago when a small Chinese
(12:14):
artificial intelligence startupsaid it can compete with the
likes of chat GPT and other USbased AI models, and they can do
it at a much smaller cost. Soagain, I wanted to mention what
it is, this thing called Deepseek. What is it was founded in
2023 shot to the top of Apple'sAP store free app chart. And it
(12:38):
really is about a AI. What isit? It's an AI Lab. The startup
says it's a I models deep sea v3it's called and deep sea r1 are
on par with most advanced modelsfrom open AI, which is the
company behind chat, G, B, T. Soagain, they're on par, they say,
(13:02):
with chat GBT, which is the openAI. Deep seek says it costs less
than 6 million to train its deepseek v3 model. Open AI, in
comparison, spent more than 100million to train the latest
version of chat GBT. So again,analysts say the technology is
(13:22):
impressive, especially sincedeep sea says it has less
advanced chips to power AImodels, okay, less advanced
chips, but it's doing thebusiness again in the wrong
hands. The Biden administrationwas concerned that AI in the
wrong hands have the potentialto exacerbate significant
(13:44):
national security risks,including enabling the
development of weapons of massdestruction, supporting powerful
offensive cyber operations,aiding human rights abuses such
as mass surveillance. So again,this whole AI as we go into the
future does matter, as you cansee, whether it's defense,
(14:05):
whether it's national security.In some way, the idea of a i
developing is very important.And apparently this deep seek,
this Chinese version, which isso much cheaper, and apparently
as effective, is causing our AIin America, our company, Nvidia,
(14:26):
Facebook, our key companiesdeveloping a bit some worries.
So I thought I'd at leastmention it. Mr. Money is
watching the AI world. Mr. Moneyis watching this deep seek that
came from Chinese startup. Andwe'll see what transpires in the
future. When we come back, it istax season. Mr. Money has tax
(14:46):
advice to give to save you moneyand get a bigger refund all when
we come back, this is Mr. Money.
Unknown (14:57):
Let me tell you how it will be. It. There's one for
you. 19
Mark Rothstein (15:18):
for me, Mr. Tax man's in the house. It is Mr.
Money. And Mr. Money is talkingabout income taxes right now on
a beautiful Boise day, Saturday,two o'clock Boise time. I know
there are many listeners that goto Mr. Money answers.com and
from all around the country andoverseas. Hello to all of you.
(15:38):
But right now, Mr. Money's inthe studio recording. And I want
to talk about taxes here inAmerica at the moment, it is tax
season anxiety inducing time formillions of Americans. They got
to start thinking and doingtheir taxes, and that takes
hours to do, whether it'syourself or with a prepare or
with your spouse, takes hours.And there's so many other things
(16:01):
you'd rather be doing than doingtaxes. What's the good news? The
tax code really didn't changemuch between last year and this
year, so that's very good news.If you understood the tax law
last year, chances are youunderstand this year, and
chances are Congress and thePresident and the Senate will
(16:23):
extend the individual taxprovisions that were under right
now. It came from the tax cutsand Jobs Act back with Trump in
2017 it's still here. It wasvery good for all of us,
reducing taxes and giving uslots of deductions that we could
use. It's set to expire at theend of this year, 2025 Trump has
(16:46):
said, Congress has said we willextend it. So we're hoping that
all comes through. They doextend it, and we keep these low
rates. Nonetheless, here aresome key items for this year
that may not get extended. Howabout that? So here's something
you can use right now on your 24tax return due April 15 or with
(17:09):
extension, October 15. That'sthe EV tax credit, electronic
vehicles tax credit, ever sinceJanuary one of 202, for any
buyers who purchase an eligibleelectronic vehicle been able to
claim a tax credit up to 7500notice, I said credit 7500
(17:31):
that's $1 for dollar deduction.Excuse me, credit on your tax
return. So if you're getting Xamount back, you're now getting
an X amount plus 7500 extra ontop of that back so it's a
credit and 4000 if it's a usedEV. And again, for many of these
EV purchases, you can get that7500 for a new car or 4000 for a
(17:55):
used one. And at the point ofsale, you can get a rebate
immediately and reduce yourpurchase price when you buy the
car by that amount. Or again,you can not take it then and put
it on your tax return and getthat credit on your tax return
when you file. So again, if youtook advantage of the credit to
lower the cost of the EV whichis great. Most people did,
(18:17):
you'll need to report it whenyou file your tax return. You
don't get to get 7500 from thedealer and then another 7500 on
your tax return. You only getone of those 7500s when you
purchase the EV the dealershould have given you time of
sale report and a documentindicating that the IRS has
accepted it. The report confirmsthat your vehicle was eligible
(18:41):
for the credit list, the amountof credit available for your
specific vehicle that youbought, and shows that the
credit was transferred to thedealer by the IRS. If you didn't
receive a time of sale report oryou lost it, that's been known
to happen to Mr. Money, missing,miss, laying a piece of paper.
Can't find it, you can always goback to your dealer and say, may
(19:03):
I have those papers I'm going toneed so I can get my clean
vehicle credit, my EV credit, soI can file my form. 8936 another
thing to be wary of I'm gettingcalls on this is Bitcoin.
Cryptocurrency. Bitcoininvestors have enjoyed a
spectacular ride since last yearto this year. Yes, Mr. Money
(19:25):
knows it went up over 100,000 invalue back in December. It's
doing well. And again, if youinvested in Bitcoin and then you
took some of your profits offthe table last year, it's
important to understand thatthese gains are taxable. That's
right, if you just own it, nottaxable when you sell it. We can
(19:46):
then determine what you boughtit for, what you sold it for. We
can see if there's a gain and itis taxable. Though many people
refer to Bitcoin as currency,the IRS views it as property.
Money and gains are taxed thesame way as gains from the sale
of stocks or bonds or otherassets, you'll owe taxes on your
(20:07):
gains, even if you used yourBitcoin to buy something. So
it's a simple first procedure.You bought it, you sold it right
there, equals, report it and paytaxes if there's a gain, by the
way, if it's a loss, you canhave a loss on your tax return.
Losses are allowed up to $3,000per year. If you've got excess
losses, they stay on your taxreturn till you have gains, and
(20:31):
then your gain can offset theloss or keep carrying it forward
and take a minus three grandevery year on your tax return to
use up all of your losses. Soagain, three grand loss in the
particular year. It happens, butfirst, take any losses against
any gains in that year, put thetwo together, then move forward.
If you own Bitcoin or othercryptocurrency, again, it's in a
(20:54):
taxable account. Your gains fromselling any that you owed for a
year or less will be taxed atyour ordinary income tax rate
could be anywhere from 10% to37% depends on all your income
and expenses. If you sold cryptoyou own for more than a year,
you owe long term capital gainstaxes, and that can range
(21:17):
anywhere from zero to 20% soagain, when you bought and sold.
If it's less than a year betweenthe two, it is considered short
term. Gain goes on your taxes asordinary if you held it more in
a year, it's going to beanywhere from zero to 20% and
again, when you fill out yourform 1040 the IRS reporting form
1040 you'll be asked whether youreceived, sold, exchanged or
(21:42):
otherwise disposed of digitalassets in the year 2024 Yes.
That is one of the questions onthe tax return. Yes. It applies
to every single person. You needto put a yes or no in that box.
Again, whether you received,sold, exchanged or otherwise
disposed of a digital asset, gotto check that box and put
(22:04):
something in that box, and theIRS added that question to the
form for tax year 2020, inresponse to concerns that many
taxpayers simply were notreporting cryptocurrency profits
on their returns. Yes, you needto report it. The IRS is
expected to increase scrutiny. Ishould mention to everybody of
(22:27):
digital currency holdings in theyear of 25 why brokers will be
required in the year 2025 toreport proceeds from the sale of
digital assets on a newlyintroduced form called the 1099
da da digital. That's where theD's from. So again, you got to
(22:50):
report it regardless. But justknow, in the year 2025 those
brokers you work with willabsolutely reporting any sale it
will be on there 1099 da digitalasset, okay, wow, taxpayers who
sell digital currencies andtaxable accounts this year will
receive the form in early 26 sojust know if they wait till the
(23:14):
end of the year and then thesebrokers will send you that 1099
and Again, the reportingrequirement will allow the IRS
to match reports fromcryptocurrency brokers with
information on your tax return.So when that 1099 comes, just
know the IRS got a copy of that1099 da for currency and better
(23:35):
report it. They're going to belooking for it, or you'll get a
love letter. That's what I callit, a love letter from the
government on where's the saleof your crypto currency, and if
the IRS has their way, all theyreport is the sale. They pretend
you got it for free, at zerocost, and you pay tax on the
entire gain. So you want toreport the sale and remember to
(23:58):
report your cost to buy it. Sothe difference between what it
cost you and what you sold itfor is your gain longer than a
year. Long Term Capital Gainless than a year. It is called
short term capital gain, and itis taxed at ordinary income if
it's that short term. So youwant to stay on the right side
(24:19):
of the IRS in regard to this,they're going after it because
they think so many crypto peopleare not reporting what needs to
be reported there. So again,something important for you to
know. One other thing I shouldmention here is transactions
that generate a form 10 99k Ijust talked about, you're going
to get a form 1099 da, for thedigital asset. Now there's
(24:43):
another one called the 10, 99k
and that was the American rescueplan act of 2021. Love these
titles, American rescue plan actof 2021. Required payment
processors such as Venmo andPayPal to. Report to the IRS
total payments of 600 or more toa user in any year. Requirement
(25:06):
was delayed after taxprofessionals and advocate
advocates for small businessesargued that it would cause tax
headaches for millions of selfemployed and gig workers for the
year 2023, payment processrequired to file this 10 99k
only for users who received20,000 in payments or had more
(25:27):
than 200 transactions. Butthat's changed everybody. Now if
you've got transactions of 5000or more, you are going to get
the 10 99k from Venmo, PayPal,etc, for these payment
processors when you receive themoney. So know that this year,
(25:47):
that's right, the year 24 theyear we're talking about, you've
got to, got to report thosetransactions. But Mr. Money, it
was a personal transaction. Itwas a peer to peer transfer with
my friends and my family. Itwasn't a taxable business kind
of item. If you get that 10 99kMr. Money's here to say, report
(26:10):
what the 10 99k said is income,then take a deduction on the tax
return for it as it waspersonal. So you come back down
to zero, or you come back downto whatever the proper figure
should be that you made with thebusiness. So again, don't space
it out and choose not to reportit because it was all personal
(26:31):
in nature. If you get that 1099k please report it schedule
one. By the way, please reportit on schedule one of your 1040
it's called additional income.And adjustments to income report
on one line the money coming inon the 1099 case so it matches
the IRS, and remember to take adeduction for it was personal
(26:53):
use. It was not business. Again,the goal of the reporting
requirement is to make it easierfor the IRS to keep tabs on the
self employment. That's whatthey're going after, people that
are self employed, that don'treport their income. IRS wants
you to report it. They're goingafter it and again, better to
(27:14):
report it, better to file it,better to put your schedules of
income and expenses against it,and know that it's very
important. And again, just tomention, the threshold drops to
2500 for the year 2025 and inthe year 2026 it's going down to
600 Whoo. Whole lot of reportinggoing to be happening. Mr.
(27:38):
Money's got pages more overhere. I want to mention to you,
but we're out of time on thistax section. When we come back,
we're changing gears. Mr. Money,going to talk about, I inherited
some property, and I don't wantto pay an income tax. Mr. Money,
is there a way to inheritsomething? It's very profitable.
I inherited it. Can I inherit itand Pay Zero Taxes? Answer, yes,
(28:01):
all when we come back, this isMr. Money.
Unknown (28:08):
Welcome back to the Mr. Money show on K I do talk radio,
1075 FM and 580 AM.
Mark Rothstein (28:16):
Mr. Money is living in America, to be
specific, living here in Boise,Idaho, and I love it here, yes,
I am a transplant from LosAngeles, came a few years ago,
and boy oh boy. I'm glad I came.This is Nirvana, according to
Mr. Money. And just love ithere, speaking of love, want to
make a difference for my lovingclients and for my loving
(28:39):
listeners. And here's a new onethat I get questions on this all
the time, and I'd like tomention it to you. So let's say
your mom passed away, your dadpassed away, you inherited a
home. Mr. Money, what are myoptions? Well, of course, you
could move into the home youjust inherited. You could rent
(28:59):
it out, or you could simply sellit. Okay, we know that those are
options you could do. Want togive you some other options you
can do. There's another lesserknown option called the 1031
exchange IRS Code Section 1031and that allows you to sell the
property and buy a like kind ofsame type of property of more or
(29:24):
equal value. So two things Iwant to mention there. One, so I
inherited a home. The answer isjust like, if you inherit a
home, inherit some stock,inherit some bonds, when you
inherit it, you get what'scalled the stepped up basis. So
in my original example, if mombought the house for 200 grand
(29:45):
and it was worth a million whenshe passed away, and then I
inherited it, my name was not onit. It was under my mom's name.
And then I inherited it, whenshe passed away, I inherited it,
what's called stepped up basis.Yeah, it was worth a million. I
inherited for a million. I canthen sell it for a million and
pay zero income tax. It's calledstepped up basis. Yes, it's true
(30:10):
in Idaho. Yes, it's true on thefederal tax return. All good
there. But let's say Mr. Moneythat I've got a rental property,
and so I've been renting it foryears. It's a business asset.
I've been renting it or Mr.Money just got a vacant piece of
land, and as a result, it's goneup in value. So again, my name's
(30:31):
been on it. It's a rentalproperty or investment property
land. I bought it for 200,000it's worth now a million. Mr.
Money, I'm up the creek. I made800,000 it cost me 200 grand.
I'm now selling it for a millionplus. If it was a rental, I was
depreciating it and getting sometax advantage. When I sell it,
the IRS will be in line to taxme. They will be in line, but
(30:54):
you can skip the line. Whysomething called a 1031
exchange? What a 1031, exchangedoes is, again, when you sell
it, rather than you take themoney, because then you got to
pay income tax when you sell it,the money flows over to an
Accommodator, a real estateperson, an Accommodator who
(31:17):
accommodates you, gets themoney. They hold on to it. You
have 45 days to earmark a newproperty, and 180 days to close
the deal, and then the moneyflows over to the new property.
So, Mr. Money, did you say I cansell it? Pay no taxes on the
gain, because the money nevercame to me. It simply went to an
(31:39):
Accommodator. He touched themoney, he then rolled it over to
some new like kind property, andas a result, I was able to defer
the taxes. I didn't touch it. Idon't have to pay income tax on
it. I rolled it over, deferredit over to another property, or
two properties, or threeproperties, therefore I pay no
(32:00):
income tax. That is correct.That is exactly what a 1031
exchange does, again, thatapplies with its business trade
or investment property. So itcould be a commercial structure.
You went and bought aresidential building. It's still
building for building a rentalbefore and a rental later. It
(32:20):
was like kind so I could evensell a residential rental and
buy a warehouse that's rentedout, or an office building. Sure
you could. It was like kindexchange. And as a result, all
of the money flowed over. So youtherefore deferred on all of it.
My clients love that. They maybe saying, Mr. Money or mark, oh
(32:44):
my goodness, I've done so wellin my rental property. What do I
do now? I don't want to pay allthis income tax on it, and I
don't want to manage it anymore.I'm getting older. What you can
do is a 1031, exchange, sellyour rental property. The
Accommodator gets the money. TheAccommodator rolls it into
another building for you. Youpaid no income tax, and you
(33:08):
don't have to manage it, becauseit was rolled over to a property
where you already have a managerdoing it, and the managers
managing it automatically, andyou're getting your 3% 4% 5%
rent checks to you every singlemonth. So again, you become a
passive investor. You paid noincome tax when you sold it, it
(33:28):
rolled over to some new propertyyou own, and as a result, you're
getting passive income comingin. Isn't that great? No income
tax when you sold it, it's now apassive income stream to you
again when it sells, you got 45days to earmark the new
property, or properties it'sgoing to roll over to, and 180
(33:50):
days to make sure you get themoney into the new property and
close the deal. Those are thetwo little things you need to
know about that. And as aresult, be pretty darn good. And
then what's really good is youcan die with it. When you die
with this 1031, exchange withthis new property, then, as a
result, again, you get a steppedup basis. And it steps up when
(34:13):
you pass away, and it will go toyour beneficiary at that stepped
up number, and then they cansell it and pay no income tax.
So you ended up paying no taxeson any of your rental properties
because you sold them, the moneyrolled over to a new property.
Even if you sold a new propertyfor big gain, you can again,
defer it again into a 1031,exchange, and then, as a result,
(34:37):
you can keep going. And nextthing you know, you may have
multiple properties. When youdie, the kids, or whoever you
name, inherits it, and there isnever, never, never any income
tax on it. If you sell it, thenyou got the income tax. But if
you die with it, and it goesover to your beneficiaries, they
will get it, and they willnever, never pay any income tax
(34:58):
on any of the gains. On any ofthe properties. Pretty darn neat
thing to do. So again, rememberthat stepped up basis available
if you choose to inherit it andthen sell it, you get that
stepped up basis. Little detail.You can pick the value of the
date someone died or six monthslater to value it and then sell
(35:21):
it and pay no gain on it. Mr.Money. What if it was worth a
million? I sold it for 900,000 Ilost money. My mom died. It was
worth a million. I got it for amillion. I ended up selling it
and getting 900,000 What aboutthat? I actually lost 100 grand.
IRS code says you can have aminus on your tax return. So
(35:43):
again, just like you would nothave to report the gain. Oh, if
you had a gain, you got toreport it. If it was worth a
million, you sell it for1,000,002 you got 200,000
profit. Got to report it and paytaxes if you end up selling it
for less than that. Stepped upbasis, yes, you get a minus on
your tax return. Pretty neatlittle thing that people can do.
(36:03):
Mr. Money likes doing it,especially from older clients
who say, I don't need the money,but I do like to rent income. So
let's sell it. Let's make thosenice profits. Let's go ahead and
roll the money over to a newproperty, and let's keep that
passive income stream coming tome now I don't have to work it
anymore. One last little item inthere. You've got to watch for
(36:27):
your debt to equity ratio. I'mgetting a little technical, but
your tax person will be able toexplain this. But all I'm saying
is, if when you sell it, you add$100,000 loan when you buy your
new property, they want to see$100,000 loan on the new
property. So again, you debt yougot on the sale of your old
(36:50):
property. They're looking tomake sure you got some debt on
the new property. When all themoney rolls over, that's the
only financial numbers you gotto crunch to make sure it all
works. And by the way, it doeswork. When Mr. Money comes back,
there's a big, big, big, big,big issue all of us face. I've
(37:10):
spoken about it before, and it'stime to bring it up again. It's
about protecting yourself andyour assets and your net worth.
How do you protect it. We'lltalk about it when we come back.
This is Mr. Money.
Unknown (37:24):
Welcome back to the Mr. Money show on K I do talk radio,
1075, FM and 588,
Mark Rothstein (37:42):
Mr. Money is here talking about money issues.
I love all these money issues,but I love money. If you like
money, this would be somethinggood to listen to the Mr. Money
show every Saturday from twoo'clock to three o'clock. Got
another issue in front of me,which I've spoken about in the
past. It simply needs repeating,and it's about protecting
(38:05):
yourself and your assets againstID theft. Yes, it goes on in the
tax return world. People takeyour name and social security
and file tax returns before youdo. You go and file your return,
it's rejected, saying youalready filed. Nope, you didn't
already file. You just gotstolen from but it's also true
(38:25):
in your credit cards, of course.So again, there's been more and
more data breaches, and they'vemade huge headlines. Fact, back
in August, few months ago,National Public Data a consumer
data broker that performsbackground checks confirmed
hackers had obtained and leakedsocial security numbers, email
(38:49):
addresses, phone numbers,mailing addresses to more than
2.9 billion records were stolen,Let me say it again, more than
2.9 billion records were stolen.This is according to the lawsuit
filed against national publicdata. Additionally, again last
(39:10):
year, in July, changehealthcare, which assists with
billing and insurance processingfor many healthcare providers,
for all the providers out there,began mailing out notices to
individuals who were affected bya ransomware attack that
targeted the company's data inFebruary and could cover a
(39:31):
substantial portion of people inAmerica. Was the quote, hackers
extracted data, including yourhealth insurance information,
member identification numbers,personal health information of
yours, such as diagnosis andtest results, your billing and
payment information, your bankaccount information, your credit
(39:52):
card numbers, your socialsecurity numbers. I'm already
depressed just saying it outloud. So these breaches. Are
significant, like, reallysignificant. Yes, I know you get
the letter that says we'll payfor the next year for you to
have a monitoring of yourcredit. Thank you. But I wish
you did not lose all of myinformation. And people who
(40:14):
steal, fraudsters that stealfrom me, may not use my
information for years ahead.It's not like they use it the
next day. So we must be weary.We just must be cautious
immediately and always. Thesebreaches are significant, not
only for the scale, but for thedamage these criminals can do
with your data. A fraudster whohas your social security number
(40:38):
may be able to pose as you toopen credit card or loans. They
could file tax returns, as Imentioned, and get your refunds.
They can apply for SocialSecurity benefits, a whole host
of things they can do with youridentity, with your health
information and identity theft.May get medical care in your
name. It's crazy, a dangerousprospect of his or her own
(41:02):
health information, becausecommingled with yours. Certainly
don't want that. So again, Mr.Money's here to do a public
service. What should you do?Monitor your bank and credit
card statements for unauthorizedcharges. Again, monitor your
bank your credit card statementsfor unauthorized charges, review
(41:25):
insurance explanation of yourbenefits, the EOB explanation of
benefit statements from yourhealth insurance to make sure
they don't list services you didnot receive. Keep an eye on your
credit reports for signs ofidentity theft, such as a new
credit card just happened, or aloan that you don't recognize.
(41:45):
You can check your report. Idon't know if you know this. You
can check your report from eachof the major credit reporting
companies, talking aboutEquifax, I'm talking about
Experian, TransUnion. Did youknow you can do it free once a
week? That's right, free everyweek@www.annualcreditreport.com
(42:07):
By all means, get your reportand review it.
Www.annualcreditreport.com toreport criminals from opening
new to prevent criminals fromopening these new credit card
accounts in your name, considerputting a credit freeze on your
reports. I have so many timestalked about getting a credit
(42:30):
freeze. You're not getting a newcredit card. You're not going
for a car tomorrow. You're notbuying a house tomorrow. Just
freeze your credit simply put.All you got to do is call the
three bureaus and say, I'd liketo freeze my account. When a
freeze is put in place,creditors can't check your
report in response to anapplication for new credit, and
(42:51):
in turn, lenders are unlikely,like never, to grant credit to a
con artist pretending to be you.When you shop for credit, you're
getting something. You cantemporarily lift your freeze to
allow it. But again, all youhave to do is call Equifax
Experian, TransUnion. And again,equifax.com experian.com,
(43:15):
transunion.com, and initiate afreeze. Mr. Money is here to
say, do it very important to do.Got one other thing this last
week I just wanted to mentionwas I got this question, so I
thought I'd answer it. When doyou go get financial help from a
pro? Would you When would youcall Mr. Money? When would you
(43:37):
call your tax man? When wouldyou say, I'm not doing it
myself. You know what? I'm goingto need some help here. Answer
when you're facing a major lifeevent, consult a professional.
When you encounter a lifechange, like you're entering
retirement, have someone helpyou, gaining an inheritance,
making a significant investmentdecision. That guidance can help
(44:00):
you achieve your goals, ensureyou preserve your wealth. How
about when you're expecting achild? Get assistance from an
estate attorney. When you expandyour family, you want to include
them in your will, don't you oryour trust your guardianship
designation, if somethinghappens to you who takes care of
my child or children, make sureit includes all your children.
(44:22):
Want to protect everyone. Howabout you? Need a financial pro
when you're planning forretirement, as I mentioned
earlier, that's like the biggestdecision. They can help you
create a tailored strategy thatconsiders your unique financial
situation, your goals, your risktolerance. A Pro can ensure that
you avoid costly mistakes, youstay on track with your
(44:44):
investments and tax planning,adjust your strategy as needed.
That's a biggie, and I do a lotof that. But again, have someone
assist you in retirement. That'sa big, big area. How about being
ready for health issues that maycome in the future with
retirement? How about whenyou're creating an estate plan.
Estate planning has legalimplications, tax implications.
(45:09):
You don't want to leave theresults to chance. Stakes are
too high. Make sure you gotsomebody helping you, a legal
person helping you. How aboutwhen you're trying to decipher
the fine print, sorting throughinsurance policies and
statements, going through yourbrokerage accounts, your bank
accounts, your mortgage ain'teasy. A fee, only advisor can
(45:30):
give you an objectiveperspective and just help you
once and done, and help you withthat. How about when you're
selling an asset that isappreciated significantly?
Absolutely, talk to a taxprofessional when you're
thinking of selling andappreciated assets, like a
business, a building large gainin stocks. Boy, oh, boy, there
(45:51):
are things a tax person can do,so you can report the sale and
not pay all this income tax onit. How to Get a financial Pro,
ask your friends is one good wayto get them and again, say, Who
do you recommend? That's verygood, by the way. If you're also
looking to do an alternativeinvestment, an alternative I'm
(46:12):
going to do a private equitydeal, I'm going to do a real
estate deal. I'm going to do a1031 exchange and sell my rental
and get a new rental, and I haveto deal with an Accommodator.
Get some advice how to do it anddo it right. So again, it covers
so many things. If there's amajor life change, when there's
children, when you're planningfor retirement, when you're
(46:35):
making sure your estate planningwills and trusts are in order,
you're selling a big asset taxwise, or you've got legal jargon
you don't quite understand, orany alternative, get your person
on your side, get a pro, even ifit's for that one piece of
information you need. Speakingof that, Mr. Money will be back
(46:58):
with a piece of more informationnext Saturday, 2pm Thank you for
listening. This is Mr. Money.The Information and opinions
presented
Unknown (47:04):
are for general information only, and are not
intended to provide specificadvice or recommendations for
any individual you shouldcontact your investment
professional, attorney,accountant or tax advisor
regarding your individualsituation. The opinions of the
presenter are not necessarilythose of event, tax wealth
management, it's subsidiaries,officers or directors. Mark
Rothstein, aka Mr. Money, is afinancial advisor and the owner
of tri star financial LLC andtri star Income Tax Services
(47:27):
LLC. Mr. Money is a marketingname only, and is not intended
as anything other than amarketing name for entertainment
purposes. Securities offeredthrough a van Tex investment
services, Incorporated MemberFINRA SIPC investment advisory
services offered through a vanTex Advisor Services,
Incorporated insurance servicesprovided by avantex Insurance
Agency, Incorporated and avantexInsurance Services Incorporated,
tax and accounting servicesoffered through Tristar the
(47:47):
avantex entities are underseparate ownership from any
other named entity.
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