The Troubleshooter 9-17-25

Episode Transcript

Speaker 1 (00:00):
Yeah, ripped, you need advice so you don't have the.

Speaker 2 (00:12):
Come.

Speaker 3 (00:13):
Run in just as fast as you can. Shooter's gonna
help coming Man Dix.

Speaker 4 (00:20):
Is the Troubleshooter Show, No, Tom Martine, Hey.

Speaker 5 (00:25):
I'm Tom Martin.

Speaker 2 (00:26):
Know this is the Troubleshooter Show, the consumer show, the
pain in the ass show, the show that examines everything
from what makes you tick to things that tick you off.
I call it media with a purpose. Look at all
these catchphrases I have. You know, after fifty years in broadcasting,

(00:46):
forty five years in Denver, you know, you would think
I got it down right. But every day I learned something.
I strive to learn something every day. So today's theme
is learning stuff. We have our tax experts on. I
love these guys. They keep me straight. They keep me
out of jail. Atlas CPAs and Accounting and Atlas is

(01:10):
a group of accountants, accountant offices, bookkeeping, small business advice,
investment advice, all kinds of stuff. And I've been with
them for so many years and as I said, they
keep me straight. Now we're going to be talking finance today.
I'd like to talk a little bit about bookkeeping. I'm

(01:32):
talking about the fun stuff, the stuff that lands people
in jail. No, the common mistakes people make. And we'll
also talk about taxes. There is another deadline coming up
for those who extend and extend and extend. So let
me just go to Eric right now and ask him
real quick. Eric Reinemer a partner and a semi retired

(01:53):
right now, but I need to know, Eric, what is
the what is the big miss? If you had to
pick a mistake that people.

Speaker 6 (02:03):
Make, what is it procrastination?

Speaker 5 (02:07):
Procrastination?

Speaker 6 (02:09):
Yep?

Speaker 2 (02:10):
People just got mine close to your mouth for bruise,
put that in mine?

Speaker 5 (02:13):
Yes, thanks, man, I'm sorry, go ahead.

Speaker 6 (02:15):
People just wait too long and they wake up and
they realize they owe money and I've ignored their situation.

Speaker 5 (02:21):
This okay.

Speaker 2 (02:23):
I don't know why people do that when they know
they owe and they think ignoring it will make it
go away.

Speaker 6 (02:32):
Everybody's wired differently. Some people want to be ahead of
a deadline to a whole other group of people can
ignore things for years. It's just weirdness of human psychology.

Speaker 2 (02:42):
So if you owe, you always file anyway, right If
you owe on April fourteenth, when you're preparing and you oh,
you're going to file April fifteenth.

Speaker 5 (02:52):
It is filing.

Speaker 2 (02:55):
With owing money better than not filing and owing money.

Speaker 6 (02:59):
No matter what, it's always best to file, even if
you owe money and don't have it, because at least
you avoid laid filing penalties, which are huge.

Speaker 2 (03:07):
Okay, Sherry, you want to talk about taxes, Go ahead, Sherry.
By the way, we're going to talk about everything. We're
not talking about just taxes. But if you have anything
to do with taxes, now is the time or small
business or bookkeeping or accounting or any part of running
a business. I'll also be getting into the marketing and

(03:29):
the competition part. So it's all about business today. But
we'll take you if you bought a car and got
ripped off, where you have another kind of a question,
problem or complaint.

Speaker 5 (03:40):
So right now I want.

Speaker 2 (03:41):
To talk to our caller, Sherry. Go ahead, Sherry.

Speaker 5 (03:46):
Welcome, Hi tom My family.

Speaker 7 (03:49):
And I haven't to you since since the eighties.

Speaker 2 (03:54):
Oh my god, I'm so happy about that, and I'm
happy to still be here. Man. What's going on, Sherry?

Speaker 5 (04:02):
Okay?

Speaker 7 (04:03):
So I file taxes every year, federal and state. Two
days ago I got a letter from the state of
Colorado that says I owe more taxes for the year
of twenty twenty one than what I had originally filed.

Speaker 2 (04:28):
Okay, so is this the only year in question right now?

Speaker 8 (04:35):
Yeah?

Speaker 5 (04:36):
All right?

Speaker 2 (04:37):
And what are they saying for twenty twenty one? How
much do you owe?

Speaker 7 (04:44):
About five hundred.

Speaker 2 (04:46):
That's it, just five hundred bucks correct? Okay, So what's
the big deal? And I mean that, you know, just
to get the conversation going. Do you feel like you
don't owe it? Or what's your big what are you
feeling right now about that?

Speaker 7 (05:04):
Well, in looking at the CDR, it kind of indicates
that they have a certain deadline that they have to
notify me.

Speaker 2 (05:14):
All right, so let's talk about that first. Let's talk
about that first. You know, Eric or Kelly, either one
of you from UH and Kelly is from Atlas too.
And I want to know, guys, what is the rule
taxes don't really go away? Is there a statutet limitations
that the IRS has.

Speaker 5 (05:34):
Let's take that issue.

Speaker 2 (05:35):
First, get really close to the mic for me, anybody,
go ahead?

Speaker 6 (05:40):
Yeah, Well, the statue is technically for the I R
S is they can come after you more than three
If they come after you have three years from when
you filed after three years from the date you filed.
I believe that's the end of it, right, Kelly.

Speaker 2 (05:54):
In this way way, So really it's only so if
they did not catch you at the end of three
years free.

Speaker 5 (06:01):
Yeah, unless it's fraud or something involved with them. Unless
it's fraud.

Speaker 2 (06:05):
See, so if you cheated, then obviously they can come
at what there is no statute limitations on fraud?

Speaker 5 (06:11):
Is there no?

Speaker 6 (06:12):
Or what they call gross negligence, which is understating your
income by more than twenty five percent?

Speaker 2 (06:18):
Okay, so if you understate your income more than twenty
five percent or there's fraud, they can go beyond three years.
But for a normal thing like this, why are they
saying you owe this money? Because she's out of that
three year probablycy it was twenty is it from the
time it's filed its files?

Speaker 6 (06:38):
So it could be that Colorado was getting close to
three year deadline.

Speaker 2 (06:42):
Did you file Sherry that return? When did you file it?

Speaker 7 (06:45):
I I filed before April fifteen of twenty Let's just
say April of twenty twenty, so oh oh oh.

Speaker 2 (06:55):
That's right, twenty two, that's right, So it would be
twenty three, twenty four.

Speaker 5 (07:01):
At April five, would have been up exactly right? So when?

Speaker 2 (07:06):
But if she got the letter before April twenty twenty five.

Speaker 6 (07:10):
When did you get it?

Speaker 5 (07:11):
When? Did you get that letter two days ago?

Speaker 8 (07:14):
Two days ago?

Speaker 5 (07:16):
That's weird?

Speaker 2 (07:16):
They missed their deadline? Would you write a letter telling
them they missed their deadline?

Speaker 5 (07:21):
What would you do? Eric? What would you do? Kelly?

Speaker 6 (07:24):
Sure?

Speaker 9 (07:24):
Did you finally amended twenty twenty one returns?

Speaker 6 (07:27):
Since then?

Speaker 5 (07:30):
I'm sorry?

Speaker 8 (07:30):
Didn't hear that?

Speaker 5 (07:31):
Hear that?

Speaker 2 (07:32):
Did you file any amended returns that would extend the deadline?
Or was it only one and done in twenty twenty two?
When you filed twenty twenty one?

Speaker 5 (07:42):
Right?

Speaker 2 (07:43):
No?

Speaker 7 (07:43):
I only filed one?

Speaker 5 (07:47):
Okay?

Speaker 7 (07:48):
Income tax finally?

Speaker 5 (07:51):
Okay?

Speaker 9 (07:51):
Got it?

Speaker 5 (07:51):
And so if you filed one and done?

Speaker 2 (07:54):
Does the state have the same statute of limitations.

Speaker 5 (07:57):
As the irs?

Speaker 6 (08:01):
I believe it does.

Speaker 2 (08:02):
Okay. So here's what we have. We have a situation
where they went beyond the statute limitations. Does she write
them a letter and gently remind them or does she
ignore it?

Speaker 5 (08:15):
What should she do?

Speaker 6 (08:16):
My first question is, normally they say why you more?
Did they list something specific as the issue?

Speaker 5 (08:25):
Why did they say you owe the money?

Speaker 7 (08:28):
They said that the federal income tax notified them that
my income was high. It is higher, like maybe I
don't know.

Speaker 2 (08:46):
They said your income was what? What did they say
your income was?

Speaker 9 (08:52):
Oh?

Speaker 2 (08:52):
Okay, was it more than twenty five percent higher? Because
that would extend the statute limitations. Did they say that
you were twenty five percent higher?

Speaker 5 (09:01):
How much higher?

Speaker 7 (09:04):
I don't know the percentage it was, I mean just
roughly roughly, Sherry.

Speaker 5 (09:09):
How much more?

Speaker 2 (09:10):
Did they say your income was? Not percentage wise? But
just tell me what did you claim and what did
they say that you you had?

Speaker 7 (09:19):
They said that my income was about ten thousand dollars
higher than why can reported?

Speaker 6 (09:29):
And Colorado taxes at about a five percent rate, So
that makes sense. So what happens is sooner or later
the IRS passes your returns to the state. So I
think the IRS about three years later got the return
to Colorado. Colorado realized you owe. But if it was
if it was me, I might just call him and say,
what's this about? And I think the three years are passed?

Speaker 5 (09:51):
Can we just weigh this?

Speaker 2 (09:52):
Why don't you just call the taxpayer? Is it called
the taxpayer advocate office?

Speaker 6 (09:57):
There could be a number on a letter that you
can call it, just call the numb Sherry, did you.

Speaker 8 (10:01):
Get a federal Yeah, there's a number on there.

Speaker 10 (10:04):
Did you get did you get a federal notice for
twenty twenty one?

Speaker 5 (10:08):
Because they would have also? Yeah, why didn't Why didn't
the IRS catch this?

Speaker 7 (10:14):
I was notified by the IRS? I oh, I believe
it was in twenty twenty two.

Speaker 5 (10:24):
About what.

Speaker 7 (10:25):
That I didn't claim like another ten thousand dollars?

Speaker 2 (10:31):
Wait a minute, so you got a notice. What did
you do with the notice back then that you got?
Did you address it?

Speaker 7 (10:37):
ID? Yes, I amended my federal taxes.

Speaker 2 (10:43):
Okay, but when you amend your federal taxes, you open
yourself up for a new three year statute of limitations
even with the state. Here's what happened, Sherry. You underestimated
your income. The IRS let you know within a very
comfortable time period, within a year.

Speaker 5 (11:04):
They let you know. You then amended your taxes.

Speaker 2 (11:07):
When you amended them, that alerted Colorado to a problem.
Colorado now is within Colorado now is within their three
years to collect on that same ten thousand dollars. So
you should pay it, I mean share, you should pay it.
Jeff's got a question for Atlas. Coming up to Jeff,
just give us a hint of what this is for.

(11:30):
Go ahead, Jeff, what is your tax situation?

Speaker 11 (11:34):
What is the status of the exemptions lifetime and annual
for gift taxes?

Speaker 2 (11:43):
All right, this is the most misunderstood area of law.

Speaker 5 (11:48):
Hang on, we'll talk about it. Coming up.

Speaker 2 (11:50):
It's really important, Jeff. I'm Tom Martine. By the way,
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Speaker 5 (12:06):
This is unheard of.

Speaker 2 (12:09):
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Speaker 5 (12:28):
You don't pay a cent until you're content.

Speaker 2 (12:33):
Time for an insurance check up, free no obligation comparison
call Compass Insurance paying too much your coverage at dozens
of insurance companies find out now three oh three seven
seven to one help. You'll think you're his only customer
when you choose Frank durand the real estate man dot
com to list your home with Remax Alliance three oh
three nine two zero sixteen twenty two. Hi, Tom Martino,

(13:00):
troubleshooter three oh three seven one three talk seven one
three eight two five five. Jeff's got a question, Jeff,
we have atlas epas in accounting with us today, Eric
and uh Kelly, go ahead.

Speaker 5 (13:15):
What is your question.

Speaker 11 (13:17):
Under Trump's Big bad bill? What is the status of
the gift tax exemption annually and the lifetime exemption? And
okay fill portable between spouses?

Speaker 2 (13:31):
Okay, First and foremost, you're the one that you pose
this question properly, which means you probably have a good understanding.
But I must review it, and I'm going to tell
you why, and then we'll answer your question specifically. Not
one month goes by without people writing to me about
a gift tax and they misunderstand it.

Speaker 5 (13:53):
Here's what they believe. Most people believe if you give.

Speaker 2 (13:58):
Away more than a certain amount in a year, it
is taxed. And they say, oh, I got to stay
under the exemption of sixteen thousand dollars.

Speaker 5 (14:08):
I think is sixteen? What it is this year? Guys?
What is it this year? It's nineteen though.

Speaker 2 (14:13):
Nineteen Okay, I got to stay under nineteen thousand dollars, okay,
And if I don't, my kids are going to have
to pay taxes or I'm going to have to pay
taxes and they don't understand it.

Speaker 5 (14:24):
You don't have to stay within that limit.

Speaker 2 (14:27):
If I wanted to, I could gift one million dollars
to my son and not pay a penny of tax,
and he wouldn't pay a penny of tax. This is
money that I've already paid tax on. It's in my
bank account. I can draw out one million dollars and
give it to my son or my daughter and they

(14:49):
pay not a diamond taxes. I can walk up to
a stranger on the street and give them a million
dollars and no one has to pay any taxes.

Speaker 5 (14:58):
So what is this exemption.

Speaker 2 (15:00):
We hear about this nineteen thousand dollars exemption? Well, the
yearly exemption is the amount at which you can give
people before it counts against your lifetime exemption. So guys,
explain what the lifetime exemption is if you would please.

Speaker 10 (15:23):
Yeah, So the lifetime exemption was set to sunset, you know,
this year, but the Big Beautiful Bill extended that.

Speaker 2 (15:29):
Okay, So what is a lifetime exemption for giving money
away in your estate.

Speaker 10 (15:35):
So that's fifteen million. It's going to be for twenty
twenty six. That means you can give away fifteen million
dollars for a single person thirty million for married over
a lifetime life.

Speaker 5 (15:45):
You can do it at death, or you can do
it during your life. That is correct.

Speaker 2 (15:49):
Now that fifteen million, though, and this is what I
think Jeff wants to know.

Speaker 5 (15:55):
That fifteen million.

Speaker 2 (15:57):
You as you give money away at it chisels away
at the fifteen million only if it's above the aerial exemption.
So let's say instead of giving nineteen thousand dollars away,
you give thirty eight thousand dollars away nineteen thousand more.

(16:17):
Let's say that means that the first nineteen thousand is
exempted from your lifetime exemption, and the second nineteen thousand
is subtracted from your lifetime exemption.

Speaker 5 (16:32):
So if you.

Speaker 2 (16:33):
Give away money every year above the exemption, the money
above the exemption lowers your lifetime exemption. I'm hoping this
is not too confusing, But Jeff, you understand exactly what
I said, right.

Speaker 11 (16:49):
You know, if you give away the annual exemption, you
don't have to file any forms. If you give away
more than the exemption, you got file some forms of
the IRS.

Speaker 5 (17:02):
So they what form do you file? This is a
good point he's bringing up.

Speaker 2 (17:06):
So if somebody gave away twenty five grand, which is
six thousand more than the exemption, what kind of filing
do they do?

Speaker 10 (17:15):
Yeah, they just file a gift Tax Return Forum seven
oh nine, and then that six thousand will get subtracted
against that fifteen million dollars annual or lifetime exemption.

Speaker 2 (17:26):
Right, So, somewhere in the sky, the IRS is keeping
track of this exemption.

Speaker 5 (17:32):
Correct. Is there a way for people to.

Speaker 2 (17:35):
Find out how much they have chiseled away at their
lifetime exemption? Or do they just have to keep a
scratch pad? No, Seriously, it's a great question.

Speaker 6 (17:45):
I've had as state attorneys tell us how difficult it
is to try and even track that down. So why'd
just say you keep your own track record? We've struggled
to find previous records with the IRS.

Speaker 2 (17:58):
Yeah, I wonder, I wonder if the IRS really knows.

Speaker 6 (18:02):
I feel the same way.

Speaker 5 (18:04):
I mean, really, if.

Speaker 2 (18:05):
You if you gave away money and did not file,
would anyone come and chase you down? Anyway, Jeff, what
brings this up today?

Speaker 5 (18:12):
Do you have any money you want to send my
way or what? No.

Speaker 11 (18:15):
I just wanted to know what Trump's Big bad bill did.

Speaker 5 (18:19):
Well.

Speaker 2 (18:19):
It extended the lifetime exemption, which is really good because
if it wasn't extended, then every dime you give away
his tax I agree.

Speaker 5 (18:32):
Thank you very much, Jeff, Thank you, sir.

Speaker 2 (18:36):
Three zero three, seven one three talks seven one three
eight two five five. John, I'm going to take your
call right after this. He's talking about an seven BMW
X three. He's as having an issue with the transaction.
That and more coming up on the Troubleshooter Show. Frank Ran,
the real estate man, by the way, will give you

(18:57):
a price on your home, not what he'll pay for it,
but he'll tell you what you will get on the
market and what you will net from that sale based
on his thirty years experience. So if you're thinking about selling,
but you're thinking first, what will I get for this home?
He takes all of the factors in this squirrely real
estate market and comes up with a figure, and it's

(19:19):
free of charge, with no obligation. Find out what your
home will sell for three oh three nine to zero
sixteen twenty two. Frank durand the Realestateman dot com. Go
with a sure thing Denver's best roofer Excel Roofing dot com.

Speaker 5 (19:37):
You don't pay a cent until you're content.

Speaker 2 (19:43):
Time for an insurance check up free, no obligation comparison
call Compass Insurance paying too much your coverage at dozens
of insurance companies find out now three oh three seven
to seven to one.

Speaker 9 (19:53):
Help.

Speaker 2 (19:53):
You'll think you're his only customer when you choose Frank
durand the real estate Man dot com to list your
home with remat x Alliance three oh three nine two
zero sixteen twenty two. Hi, Tom Martino, your troubleshooter three

(20:13):
O three seven one three talk seven one three A
two five five. So let's uh go back to the
phones and figure out what's going on with this seven
BMW X three. We also have Atlas CPAs and accounting
in the office with us here or in the studio.
And for those streaming, let me know what you think

(20:35):
of this new camera I unveiled. It's my extra wide
shot and I'll go to that one appropriate John, what
is happening? What is happening with your X three. When
did you buy it?

Speaker 12 (20:51):
So I bought it on the fourteenth of last month.

Speaker 2 (20:55):
Okay, so that that would make it August fourteenth.

Speaker 5 (20:59):
And what what's going wrong now?

Speaker 2 (21:02):
So when we.

Speaker 12 (21:03):
First bought it, they were claiming that it had a
dead battery. Well they took it into the shop.

Speaker 2 (21:10):
Now, hold on, why were they Why were they claiming
that did it not start when you went to pick
it up?

Speaker 5 (21:15):
Or when did it?

Speaker 2 (21:16):
When?

Speaker 5 (21:16):
Did this problem surface.

Speaker 12 (21:19):
Right after my test drive when they went there to
fire it up? For it today?

Speaker 5 (21:22):
Okay? Gotcha? All right?

Speaker 12 (21:26):
So they took it into service, and it turns out
it was a bigger, bigger issue than that that one
of the computer systems on it needed replace. Okay, this
wasn't as this wasn't as his vehicle. We paid sixteen
thousand for it.

Speaker 5 (21:45):
Find it out?

Speaker 2 (21:45):
Were these this is a hot This is a technical question, Jeff,
when you bought this? Were the problems discovered after you
already signed your name and bought it or were they
discovered before it.

Speaker 12 (22:01):
Direct like directly after it? Well, while they were well,
my wife was signing papers and they were trying to
prep the car. They were having to jump start.

Speaker 2 (22:10):
It, so didn't that give you a little pause, didn't
you think, Wait a minute, I'm not sure if I
want to buy this, but you already bought it. Correct, Okay,
so you bought it as is, which means you bought
it with those problems unless you have some kind of
an agreement otherwise. I hope those problems aren't serious. What

(22:32):
did it turn out to be?

Speaker 12 (22:35):
It turned out to be a computer system in the vehicle,
and they we ended up having to pay five hundred
dollars to have that pick okay, vehicle for a month.

Speaker 2 (22:50):
Wait, you let them fix it?

Speaker 6 (22:54):
Correct?

Speaker 5 (22:55):
Okay? Okay? Then what happened.

Speaker 12 (23:00):
From there? We picked up the vehicle this past Saturday
evening and I drove it for about two hundred miles.
So I went to work on Monday and then went
to my wife's work to pick her up, and the
vehicle died.

Speaker 2 (23:14):
So is it the same problem after a few days, No,
it's not the same problem.

Speaker 12 (23:22):
They're trying to diagnose what it is. They did offer it.

Speaker 2 (23:24):
But do you understand Listen, let me explain a few things.
I'm going to hit you between the eyes with this
and then we'll try to help you.

Speaker 5 (23:31):
But I need to make this clear you.

Speaker 2 (23:34):
Bought this car as is, you had the freedom to
get this car to before you bought it, over to
Sheridan Auto Tech or another qualified mechanic to go through
it from the grill to the tail lights, from the
hood to the floorboards. I mean, I'm not sure what

(23:58):
you think they should do for you if you bought
it as is. They already charged you five hundred bucks
to fix a preexisting electrical problem. What is this new problem?

Speaker 12 (24:12):
I'm not sure at the moment, literally waiting on the diagnostica.

Speaker 2 (24:16):
And what if it turns out to be a two
thousand dollars repair, they don't have to Are they indicating
they're going to help you with this?

Speaker 12 (24:26):
They indicated that they were going to diagnose it and
then kind of go from there.

Speaker 2 (24:32):
Well, Jeff, first and foremost, I wouldn't let them touch
the car. They're auto brokers, they don't know anything about cars,
and their mechanics obviously didn't go through this car very well.
I'm going to ask the sixty four thousand dollars question,
how many miles were on this.

Speaker 12 (24:49):
Seventy five thousand, five hundred.

Speaker 2 (24:53):
That's not bad, Okay, So what are you calling about today?
It sounds like they're doing I don't know what they're doing.
They're diagnosing a problem for you. If I were you,
i'd want to take it somewhere else to be diagnosed.
And in fact, what I would do, even though it's
after the fact, is I would have Kevin Caulkin at

(25:15):
Shardan Autotech do a complete pre by inspection, even though
you already bought it, just so you know what you're facing.
Then get those problems fixed, period. Get them fixed. If
the dealer will help you, all the better. But I
would not let them look at it because they're not
going to have any incentive to find a bunch of problems. Okay,

(25:41):
so how much how long have they had the car
since the new problem arose?

Speaker 12 (25:49):
Today will be the first day.

Speaker 2 (25:51):
Okay, go get your car and I'll tell you why.
They don't owe you anything and if anything, they're going
to downplay any problem. Jeff, think about it, if it
needed a new engine, what what's the likelihood they would.

Speaker 5 (26:06):
Tell you that. I'm not sure to be honest, Yeah,
they look at right now.

Speaker 2 (26:17):
You're in a weird situation. You bought a car knowing
it had a problem. You even paid for that problem.
Now it has another problem. We don't know what the
problem is. I would get it to Sheridan Auto Tech immediately,
and I say Sheridan because it could be electrical. So Jeff,
please call us and let us know what happens. But

(26:40):
don't let it stay there. There is no reason to
let it stay there unless they can guarantee you a
complete repair free of charge. They're not going to do that.
Threeho three seven one three talks seven one three A
two five five. Jack, what is your question for at
LISS today?

Speaker 5 (27:00):
What's going on with you?

Speaker 13 (27:03):
I've so I am selling my house and.

Speaker 14 (27:09):
Got a big profit, and I'm wondering what I conduct
deduct for home improvements.

Speaker 2 (27:16):
Okay, let's talk about this. How much is the profit?
How much does it appear to be? You bought the
house for?

Speaker 5 (27:24):
How much? Through five and what are you selling it for?

Speaker 9 (27:31):
One million?

Speaker 2 (27:33):
Oh?

Speaker 5 (27:34):
My god? After how long?

Speaker 14 (27:37):
Close to thirty years?

Speaker 5 (27:39):
Oh wow? One million? Wow? Okay, So let's figure this out.

Speaker 2 (27:47):
Coming up, I'm Tom Martine three oh three seven one
three eight two five five. By the way, Kumpass Insurance
will do a free insurance analysis of your situation. We
call it the insurance checkup. Call them see that you're
not paying too much or you're not undercovered. Three oh
three nine nine to six nine thousand. Go with a

(28:10):
sure thing Denver's best roofer Excel Roofing dot com.

Speaker 5 (28:13):
You don't pay a cent until you're content.

Speaker 2 (28:19):
Time for an insurance checkup free, no obligation comparison call
Compass Insurance. Paying too much your coverage at dozens of
insurance companies find out now three oh three seven seven
to one.

Speaker 9 (28:29):
Help.

Speaker 2 (28:29):
You'll think you're his only customer when you choose Frank
durand the real estate Man dot com to list your
home with Remax Alliance three oh three nine two zero
sixteen twenty two. Hi Tom Martino here, Welcome to the show.
All right, we're off to a rock and start. Jack

(28:52):
is selling his house for a million dollars. He bought
it thirty years ago for two hundred and twenty five thousand.
The first question, because there's an exemption on profit of
five hundred thousand dollars for people who file jointly or
two hundred and fifty thousand for single filers.

Speaker 5 (29:14):
What are you?

Speaker 14 (29:16):
I'm a joint filer, all right, So.

Speaker 2 (29:19):
The first five hundred thousand of profit is exempted from taxes.
But what, guys, what does he do to get his
profits down?

Speaker 5 (29:31):
He paid two twenty five years ago.

Speaker 2 (29:33):
You know, over the years he's done improvements. What is
allowed to be added to the basis of that home
to reduce his profit Guys?

Speaker 5 (29:44):
What do you think?

Speaker 10 (29:46):
Well, the first thing, you know, you can deduct the
closing costs, commissions and things like that from right, and
and any renovations capital improvements made.

Speaker 5 (29:54):
Over the years. What about appliances?

Speaker 10 (29:56):
Appliances are I think are going to go under general
maintenance type things that wouldn't be or would be eric.

Speaker 6 (30:04):
What depends will those appliances go with the sale of
the house.

Speaker 2 (30:07):
Like, if it's a microwave, probably not on the counter.
But if it's an oven or a built in refrigerator,
you know, refrigerators, I think they are part of the house,
right or not?

Speaker 6 (30:17):
I would add them myself. You can be as aggressive
as you choose to be looking back over thirty years
to just list out as much as you can, and
you your darketing would.

Speaker 2 (30:27):
Be any kind of home improvements, windows, doors, painting. Yeah,
if you put a new you're landscaping even right, Sure,
how much do you figure you put into your house.

Speaker 14 (30:42):
Oh uh, well, that's what I haven't actually started to
itemize it yet, but you know, I put a back deck,
I put a front porch. You know, I had a
question I've had.

Speaker 5 (30:52):
That's all. That's all part of the basis.

Speaker 6 (30:56):
Yep, so I can.

Speaker 14 (30:58):
So my other question is that two twenty do you
add that on to the five hundred thousand.

Speaker 8 (31:05):
See for the house?

Speaker 5 (31:06):
Correct?

Speaker 2 (31:07):
Yes, yes, okay, So what do you mean by yeah,
that's the basis of his house two twenty five the
purchase price plus any permanent improvements.

Speaker 5 (31:18):
So without permanent improvements.

Speaker 2 (31:20):
You're looking at seven hundred and seventy five thousand in profit.
You would subtract five hundred from that, and you would
pay tax on the difference.

Speaker 5 (31:30):
So what I'm saying is it's not the end of
the world.

Speaker 2 (31:35):
You would be paying taxes on two hundred and seventy
five thousand dollars at approximately twenty percent, right, guys, because
it's long term capital gain.

Speaker 6 (31:45):
Could be only fifteen percent at the federal level depending
on your on the site LESTL four point sixty price.

Speaker 2 (31:53):
So your worst case this is without without taking any
kind of deductions for improvements. The worst case scenario is
fifty five thousand in taxes.

Speaker 5 (32:04):
Okay, all right, and that's not terrible. That's not terrible.

Speaker 2 (32:09):
No.

Speaker 8 (32:11):
All about something like your roof.

Speaker 14 (32:12):
So I've had three roofs, you know, covered by insurance.

Speaker 2 (32:16):
Yeah, you don't get to you don't get to add insurance.
If the insurance paid, it doesn't go to your basis? Oh?

Speaker 5 (32:24):
Or does it? Guys? Does it?

Speaker 2 (32:26):
I mean he pays for the insurance, would he get
the benefit? And really, if you have three roofs, you
can't just keep adding them up, right, I mean obviously
it's only the latest roof. But does he get to
write off a roof if.

Speaker 5 (32:40):
Insurance paid for it?

Speaker 2 (32:42):
Nah?

Speaker 5 (32:42):
I believe he does not.

Speaker 6 (32:44):
Okay, unless he paid out more than he got.

Speaker 5 (32:47):
Reimbursed, right, that's right.

Speaker 2 (32:49):
If you had to pay like a deductible, would he
get to deduct that put that on the basis.

Speaker 6 (32:55):
No, But if you had to pay twenty but only
got reimburse fifteen, you could add the five that You're
ok got it?

Speaker 2 (33:02):
If you were out of pocket on any of those roofs,
you could add it. In looking back, what's the biggest
thing you've done, what's the biggest thing you've done over
thirty years. Probably a new kitchen, okay, and that cost
you about one hundred grand, didn't it?

Speaker 12 (33:23):
Well?

Speaker 8 (33:23):
Probably I think it was forty.

Speaker 5 (33:25):
But how aggressive if he said he did seventy.

Speaker 2 (33:28):
I'm not encouraging people to lie, but how aggressive does
the IRS get?

Speaker 5 (33:33):
I don't think they ever audit these damn things, do they.

Speaker 6 (33:36):
Frankly, we've never seen one looked at, not even looked
at it. In ten fifteen years. I can recall the
irs ever looking at it. And if you think about
it selling your own home, it's like mom and apple pie.
It just seems odd that they haven't raised that deductible
in twenty years. So I was just being as aggressive

(33:57):
as you choose to be with that worksheet, which is
simply stays with you. You don't give it to the irs.
It's just in your back pocket.

Speaker 2 (34:05):
So really there's no form to file at all except
you do file that you sold it right, yes, and
it asks for your gain, and that's it. And he's
as there. Everyone is saying, people are texting me saying
that they've done this over and over and the IRS
never looks at it. So good luck to you. Again,

(34:27):
I'm not encouraging lying, but you got to make sure
not to undersell yourself either. I'm Tom Martine Moore coming
up on the Troubleshooter Show. Go with a sure thing
Denver's Best roofer Excel Roofing dot com.

Speaker 5 (34:41):
You don't pay a cent until you're content.

Speaker 2 (34:46):
Time for an insurance checkup free, no obligation comparison call
Compass Insurance paying too much your coverage at dozens of
insurance companies find out now three oh three seven to
seven one help. You'll think you're his only customer when
you choose Fright durand the real estate Man dot com
to list your home with Remax Alliance three oh three
nine two zero sixteen twenty two.

Speaker 1 (35:07):
Yea ripped up. You didn't need advice, so you don't have.

Speaker 5 (35:19):
Come running.

Speaker 3 (35:20):
Just as fast as we can show Shooter's gonna help.

Speaker 4 (35:25):
Come Man six is the Troubleshooter Show.

Speaker 5 (35:29):
No Tom Martino.

Speaker 2 (35:33):
Hello, Hello, Hello, I'm Tom Martino, your troubleshooter three O
three seven one three Talk is our number? Or three
oh three Martino three O three six two seven eight
four sixty six.

Speaker 5 (35:45):
Very busy morning.

Speaker 2 (35:46):
We've had our we have our experts on from Atlas,
CPAs and accounting our atlasfirms dot Com. Uh, when they're
not here, atlasfirms dot Com will talk.

Speaker 5 (35:56):
They do.

Speaker 2 (35:57):
They've been doing my taxes for years, both business and personal,
and we have deadlines looming here.

Speaker 5 (36:05):
That's why we're having them on.

Speaker 2 (36:06):
Although in general it's good if you're in business to
get a business check up, see if you're doing things right,
could you be doing things better and all of that. So, Eric,
we had questions about exemptions on a personal residence and
the exemptions have to do with profits, and we talked

(36:30):
about how the IRS never really looks at these What
is the actual form you file when you sell a home?
What do you actually file? What does it ask for?

Speaker 6 (36:42):
All that that form asks for on your personal return
is when you bought the house and how much you
paid for it, and what your basis in the property is.

Speaker 2 (36:53):
So it doesn't make you delineate, no, it it just
says what are your improvements or what?

Speaker 5 (37:00):
How does it word it?

Speaker 6 (37:01):
It might have one line for the original costs and
another one for the additional costs and closing costs all
lumped together.

Speaker 2 (37:10):
Okay, so you just put a figure in there and
come up with profit. So again, I never encourage lying
or anything like that. But you know, don't undersell yourself either.
A lot of people don't keep proper track over the years.

Speaker 5 (37:24):
And also the IRS isn't looking at them.

Speaker 2 (37:30):
They're not looking at them, which is really weird.

Speaker 5 (37:34):
So I have an interesting situation too with me.

Speaker 2 (37:38):
I was late filing a Form fifty five hundred for
a retirement plan, because when you have a retirement plan,
your plan administrator does this for you. But since it's
my own company, when I stopped having an administrator and
I took over all this stuff myself, I didn't see

(38:00):
any reason for an administrator anymore. It was an established
for a one K and I just contribute to it.
I contribute as an individual and I contribute as a company.
But I want people to hear this how But because
it was a single member for.

Speaker 5 (38:18):
A one k a solo do they call it a
solo for a one k?

Speaker 2 (38:22):
And because it was under a certain dollar amount, filing
was not required the fifty five hundred you're exempted from
filing a fifty five hundred. So I was fined for
not filing a fifty five hundred forty five thousand dollars.
They'd taken it I don't know how they come up

(38:43):
with a fine so much per day. And I said
to them, this was not required. It was done voluntarily.
I actually did it by mistake. But because I did
it afterwards, they said it was late, So I said
it was late, but it was never required to begin with.

(39:05):
I asked that you waive the penalty. They are saying
that when I chose to file, I have to play
by the rules. Now, mind you, this is not even
required by me, not even required that I file this form.

(39:28):
But the fact that I voluntarily filed it, and by
the way, other people do that voluntarily why, I don't know,
because it goes on this big if you look it
up online, you file it because they keep track of
all the filings and it's like a record.

Speaker 5 (39:44):
It's just I don't know. They do it for the
hell of it. They don't have to.

Speaker 2 (39:48):
But their reasoning was, this was under the old administration.
When you chose to file, you play by the rules.
But they didn't say that, but that's basically what they meant,
meaning you file of late. Even though it wasn't required,
you filed late. So now we're finding you. The new
administration said they don't care. I mean, it's not a fine.

(40:13):
But isn't that weird how different administrations can look at
different things. I mean, you would think a tax code
is a tax code, and I'd venture to say, there
is no way you can be fined for stuff that's
not required.

Speaker 5 (40:28):
I mean, that's just my own opinion. What do you
guys think?

Speaker 6 (40:31):
Well, my first question for you, Tom is I understood
that fifty five hundreds were required if it was over
a certain dollars of like two hundred thousand fifty.

Speaker 5 (40:42):
And this was one of my This was one of
my smaller plans. Okay, I know what you're saying. You're
saying it's more than two fifty.

Speaker 2 (40:50):
That was my other my pensions and stuff, those are separate.

Speaker 5 (40:53):
This was a small, little, orphan, single plan. I have
my solo for a one K plan.

Speaker 2 (40:59):
And another reason it was it was less as I
did in service distributions to other iras. So the amount
of the four to one K actually is always below
two fifty. Okay, But they're saying, yes, it's below two fifty. Well,
the first administration said, yes, it's below two fifty. And yes,

(41:23):
you're correct. You did not have to file the form.
But once you chose to file the form you brought
on everything that comes with filing the form.

Speaker 5 (41:33):
Do you agree with that reasoning?

Speaker 6 (41:34):
That seems odd and strange. I would not agree with.

Speaker 5 (41:38):
That right right, and no judge would either.

Speaker 2 (41:40):
And the new administration again I say new and old administration.
The only thing that changed was the administration and the
IRS reasoning was completely different. So I'm asking you do
you find with different administrations over the years that enforcement
actions change?

Speaker 5 (42:00):
Do you guys find that?

Speaker 2 (42:01):
Or is the IRS relatively consistent in how they handle things?
Like I hear there are way less audits now than
there were under Biden.

Speaker 6 (42:14):
There are a lot of less audits, but that's largely
due to the fact that the staff has been reduced
to where the horse power is simply not there to bother.
So the percentage of people being audited is shrinking because
there's less staff to even go after it.

Speaker 2 (42:31):
Okay, if somebody texted me, by the way, you guys
can also text me and it is at seven four
seven nine fifty two eighty, that's seven four seven nine
nine nine fifty two eighty. Or the iHeart short code
five seven seven three nine that's five seven seven thirty nine.
Tom can your guests list red flags.

Speaker 5 (42:55):
That would come up? Okay?

Speaker 2 (42:58):
Uh? Well, first of all, one of them is asking
about what would what triggers audits if anything, or what
are red flags that the IRS looks at? Then another
one asks for red flags on how you can tell
if people are cheating you. Let's take the first one.
What it triggers red flags for the irs? It used
to be like a home office deduction or something like that.

(43:21):
What are some of the red flags if any, that
the IRS say they go whoa, and they take closer
looks anything, Guys, I.

Speaker 10 (43:32):
Would say a lot of big schedule see losses where
self employed people are taking big deductions like travel and
things like that. We've seen na heavily scrutinized over the years.

Speaker 5 (43:41):
That's a red flag.

Speaker 2 (43:42):
So schedule C is when you have a business of
your own and you take it on a schedule C
as an individual, right?

Speaker 5 (43:52):
Correct?

Speaker 2 (43:53):
If you have a sub chapter S and you have
or an LLC, you don't use schedule C. Is that correct?

Speaker 5 (44:03):
Correct? Just? Okay?

Speaker 2 (44:05):
Even okay somebody okay, So now somebody else asks, can
your guess list red flags that your account or investment
person might be stealing from you, what are some red flags. Well,
I know one because I've I had a situation they
weren't exactly stealing, but they were not doing things right.

(44:25):
That's one reason I started my wealth advisement company is
because I wanted.

Speaker 5 (44:30):
To have more direct control.

Speaker 2 (44:33):
But I'd say one red flag is when your statements
from the custodian. Now, a custodian is where your money
is held. Okay, even though you might have an investment
advisor or an accountant, they're not literally holding your money.

Speaker 5 (44:51):
It's at Schwab or somewhere else.

Speaker 2 (44:54):
Schwab is one of the biggest custodians in the world,
so that means that the account sits at Schwab and
it's from that account they make investments and they do
things with your money, presumably to help you make more money.
And Schwab is called the custodian. Custodians issue statements. If

(45:20):
your financial advisor or account or whoever you're using, if
they also issue statements, I would say this, never let
their statement take the place of the custodial statement. Get
both of them and compare them. And what you need

(45:42):
to compare are the deposits and withdrawals and account balances
those three things.

Speaker 5 (45:51):
If they don't agree, there's a problem, correct.

Speaker 2 (45:55):
And what we have found is when there is cheating
going on, most of the time, when the cheating goes on,
it's because the consumer is letting the advisor. I'm not
saying that it'll happen every time, but they're letting the
advisor give them statements on the status of their accounts

(46:19):
and they're not double checking them with SCHWAB. For example,
if you made an investment in something and you throw money,
it should show up both on your advisement statement and
on SCHWAB that withdrawal or that transferred to another account.
So I think a lot of people have this blind

(46:40):
trust with accountants and financial advisors. That's why Don Eiley
was able to get away with what he got away with.
He would report and if they had checked with the
IRS as well as his own accounts, so he would
report to the IRS that there were no employees, but

(47:02):
he would report to the employer, you have to pay
this much tax for your employees. So he would collect
money from the employer that came from both the employer
and from the employees. They're withholdings, right. We all have
withholding taxes. Those withholding taxes are supposed to be forwarded

(47:22):
to the IRS.

Speaker 5 (47:24):
Right yep.

Speaker 2 (47:25):
He was collecting the money from the employers, and the
employers got it from the workers and then they matched
it and instead of filing it with the IRS, he
would file with the IRS that there were no.

Speaker 5 (47:40):
Employees at that place.

Speaker 2 (47:42):
So the IRS was not exe the form nor the payment.
So this payment that he got, he put into his
own foreign accounts and got very rich, millions and millions of.

Speaker 5 (47:56):
Dollars until he was busted by us.

Speaker 2 (47:59):
And when we caught wind of it, we blew the
whistle and he was put He was sent to prison.
And the way it happened was really amazing. An employer
came to us and said, I am told that we
have no employees. They by mistake got one of the
statements from the IRS that showed zero due on what

(48:23):
what do you call those taxes on payroll with holding
to nine nine forty ones.

Speaker 5 (48:29):
There were no nine forty ones due and they found
that odd.

Speaker 2 (48:32):
So they started looking into it, saying, why do we
not have any withholdings that we have to send to
the government. And that's where they found the discrepancy. And
when we started looking into it. We found that virtually
every client he had had no employees according to the IRS,
but according to the employers, they've been paying hundreds of

(48:56):
thousands of dollars over the years.

Speaker 5 (48:58):
It went on for years. Why because the employer.

Speaker 2 (49:05):
Was not double checking both statements, both the IRS and
Don Eiley.

Speaker 5 (49:12):
So, if you have a.

Speaker 2 (49:13):
Financial advisor and trust me, I have a company I
know Wave eight Wealth Management.

Speaker 5 (49:20):
When we send you a statement, it's.

Speaker 2 (49:22):
Wonderful, but you should also we also provide you with
a statement or not a statement, but a log in
and online access to your Schwab account because we keep
the money at Schwab. You should always check both with everyone, okay,
all the time? Three zho three seven one three eight
two five five Go with a sure thing Denver's best

(49:49):
roofer Excel roofing dot com.

Speaker 5 (49:51):
You don't pay a cent until your content.

Speaker 2 (49:56):
Time for an insurance checkup free, no obligation in comparison
and call Compass Insurance paying too much your coverage at
dozens of insurance companies find out now three all three
seven seven to one help. You'll think you're his only
customer When you choose Frank durand the real estate man
dot com to list your home with Remax Alliance three
all three nine two zero sixteen twenty two. Hi tom

(50:23):
Archino here, welcome three O three seven one three talks
seven one three eight two five five. So we talked
about deadlines. What deadlines are coming up for taxes for
those who are very very late or maybe thought they
weren't going to file and they should.

Speaker 5 (50:39):
So what are those deadlines?

Speaker 10 (50:42):
So September thirtieth we got deadline for estates and trusts
that need to be filed. Estates and trust yeah, file
in form ten forty ones okay. And then October fifteenth
we have ten forties that are doing. Eleven twenties for
individuals yes, and eleven twenty sea corporations.

Speaker 5 (50:59):
Okay.

Speaker 2 (51:00):
How many people percentage wise put that off from April
to October? Do a lot of people do it? In
your practice? What would you say percentage wise?

Speaker 5 (51:09):
I'd say maybe ten percent or so, okay, so not many.

Speaker 2 (51:12):
They usually file and even if you do file late,
you still have to pay.

Speaker 6 (51:17):
But I think that our office might be closer to
twenty percent. We're really busy in September October with the procrastinators.
I bet it's twenty percent what is.

Speaker 5 (51:27):
The usual reason for procrastination.

Speaker 10 (51:31):
Well, people that owe taxes a lot of times they
don't want to deal with it at the time, so
they just wait to file.

Speaker 2 (51:37):
They but I thought, you still have to pay an
estimated amount even if you're supposed to do.

Speaker 5 (51:41):
Yes, you're supposed to do a lot of people don't.
And what are the penalties on that?

Speaker 10 (51:46):
All the penalty start accruing back interest in penalty starts
accruing back in April fifteenth till now, and I think
it's around a half a percent of the tax.

Speaker 2 (51:54):
Let's do each month is the penalty that's pretty hefty.

Speaker 6 (51:58):
And if you don't file an extension is five percent
per month, so we can go up to twenty five
percent if you don't file the extension. That's what's critical.

Speaker 2 (52:07):
Okay, somebody wants to know about SUVs. They were told
that it goes by weight the deductibility explain that, so
if somebody wants to deduct an suv, first and foremost,
it has to be used for business. And again that's
not often checked by the way. But the weight limit isn't.

Speaker 5 (52:30):
It six six thousand pounds?

Speaker 9 (52:32):
You know?

Speaker 10 (52:32):
And one hundred percent bonus appreciations coming back in with
a big, beautiful bill this year, so it's going to
be a big change. It was set to go to
forty percent, but now we're back to one hundred.

Speaker 2 (52:42):
So that would explain what that means. Then, if I
buy a vehicle that is six thousand pounds, what do
I enjoy a complete one hundred percent deduction of the amount?

Speaker 5 (52:53):
Correct?

Speaker 2 (52:53):
If it's one hundred percent business use Yeah? And okay,
and who checks that right now? Let's just let's just
go through this then, So what does this mean for
someone in business? If they buy a six thousand pound
vehicle or more for one hundred thousand dollars, they get

(53:14):
one hundred thousand dollars deduction. Yes, if they get a
one hundred thousand dollars deduction and they're in the what's
the highest tax bracket.

Speaker 5 (53:24):
Right now? Just roughly thirty seven are so? Okay? So
thirty seven percent? Does that mean that?

Speaker 2 (53:30):
How do you figure how much in tax it saves
you a deduction? You take the amount of the deduction
and multiply it by your tax bracket.

Speaker 5 (53:39):
Is that right?

Speaker 6 (53:40):
Yep?

Speaker 2 (53:41):
So with a one hundred thousand dollars vehicle, you literally
can save thirty seven thousand dollars in taxes plus.

Speaker 6 (53:49):
Four or five percent for Colorado.

Speaker 10 (53:52):
So that's if Colorado goes with the BBB provisions because
they're thinking, you know, Colorado's budgets, I'll whack this. So
they may not accept some of these BBB provisions that
are out there.

Speaker 5 (54:03):
And BBB stands for big Beautiful bill.

Speaker 10 (54:06):
Okay, so they may not accept one hundred percent bonus appreciation.

Speaker 5 (54:10):
They may make us add back for that.

Speaker 2 (54:12):
We're not Now what else do you get bonus depreciation on?

Speaker 10 (54:16):
That's pretty much any thing with an asset life of
fifteen years or less. So you got fifteen year property,
seven year, five years.

Speaker 2 (54:24):
So if you buy stuff for your business, this is
a good year to buy it. Yeah, definitely, and then
it will be deducted for this year when you do
your taxes before April of next year. Yes, okay, So
that's how you figure out what you're saving, folks. You
take the full depreciation, multiply it by your tax rate,
and that's how much comes off your tax bill. But

(54:46):
somebody wants to know, what if I did this already,
do I only get to do it once? For example,
if you bought a vehicle. Let's say two years ago,
and you took the depreciation. What happens when you buy
an vehicle, do you like, how does that work?

Speaker 10 (55:05):
Well, if you trade it in, you've got to pick
up whatever you trade the trade in value that becomes
income in the current year.

Speaker 2 (55:11):
And so okay, So if you trade in the one
you deducted and you get fifty for it, that's fifty
thousand of income, correct, which will lower the amount of
your deduction on the new car, right or it doesn't.

Speaker 5 (55:24):
It just offsets. Yeah, that effect correct, Yeah, it'll upset.

Speaker 2 (55:28):
So really, eventually you can kind of work out of
the benefit.

Speaker 10 (55:34):
Yes, yep, if you trade like every two years, you
might get almost full value, you know for some of
those trade ins.

Speaker 5 (55:40):
If depends on what kind of vehicle it is. Okay, okay.

Speaker 2 (55:43):
So the idea of this bonus depreciation is to encourage
people to buy stuff for their business.

Speaker 5 (55:50):
Yes, okay.

Speaker 2 (55:52):
And as far as buying stuff for your business that
would not be considered business, I mean, obviously there's a
lot of it has to be used for business. I mean,
that's that's just the test. It has to be used
for business. And so if someone if someone takes a
bonus depreciation. Whatever they sell that vehicle for in the

(56:16):
future is income no matter what, even if they don't
trade it in. If they sold it for ten thousand dollars,
that's ten thousand in income.

Speaker 5 (56:24):
Yes, correct, But.

Speaker 2 (56:25):
They what if they kept that vehicle but bought another one,
Do they still get bonus depreciation on the second one.

Speaker 5 (56:31):
Yeah, as long as it's another vehicle for business use.

Speaker 2 (56:35):
So in some cases, in some cases, it would behoove
them in some cases to keep it if the new
depreciation is big enough, yes, and then find another use
for it.

Speaker 5 (56:48):
I mean another business use.

Speaker 6 (56:51):
Right. That would imply you've got two vehicles being used
by the business at the same time.

Speaker 2 (56:56):
Okay, three zho three seven one three eight two five five.
We got a lot to talk about. I'll go over
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Speaker 5 (57:50):
You don't pay a cent until you're content.

Speaker 2 (57:55):
Time for an insurance check up free no obligation comparison
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of insurance companies find out Now three o three seven
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when you choose Frank durand the real estate Man dot
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three nine two zero sixteen twenty two. Hi Tom Martino here,

(58:23):
so we have our tax guys in. Karen has a
question on inheriting property or is it? Oh, I'm sorry, Carrot,
the name is Carrot. Tell me you didn't get jokes
on that one, Carrot? What is happening?

Speaker 13 (58:40):
Well, I just stubbled in the state and the family
trust and each of us inherited property. I have tanakers.
It's commercial.

Speaker 5 (58:53):
When did you inherit it? Karen?

Speaker 2 (58:55):
When did you inherit it? It was February of tree
and it was how many acres?

Speaker 13 (59:04):
Ten acres?

Speaker 5 (59:06):
Ten acres?

Speaker 2 (59:07):
Okay, you inherited ten acres in twenty twenty three.

Speaker 5 (59:11):
What's your question?

Speaker 13 (59:14):
I it was purchased for one hundred and seventy seven
thousand dollars in nineteen ninety four. I believe I dud
a date of death appraisal which came in a one
point sixty ninety five million.

Speaker 5 (59:26):
That's good.

Speaker 13 (59:27):
First offer that I had on it was two point
sixty nine five million.

Speaker 5 (59:32):
Wow, So what is your question?

Speaker 13 (59:36):
Well, I have several offers for five hundred and fifty
thousand per acre. So I'm trying to decide if if
I split it up. Okay, the capital games and I.

Speaker 2 (59:54):
No, I hear what you're saying, How do I think?
This is what I think? I'm going to take a
little amateur stab at that if you have ten acres
that was purchased for one seventy seven that doesn't matter
to you. Your date of death. Your date of death
appraisal was how much.

Speaker 13 (01:00:14):
One point six million?

Speaker 2 (01:00:16):
That was?

Speaker 5 (01:00:17):
Okay? One?

Speaker 2 (01:00:18):
So that is now your basis one point six nine five,
And how much total would you sell it for if
you at that increased price?

Speaker 5 (01:00:28):
What was the offer again?

Speaker 13 (01:00:33):
Two point six five and it's currently listed for two
point nine million.

Speaker 2 (01:00:39):
Okay, so if you took two point six no, Okay, go.

Speaker 5 (01:00:43):
Ahead, keep going.

Speaker 13 (01:00:46):
I have. I can either sell it as one chunk
and I'm trying you decide whether it be better to
sell it persal by parcel. Okay, well, then sell the
whole thing and possibly face a million dollar Capabian Why carrot?

Speaker 2 (01:00:59):
The way I remember it When I was developing land
and had basis they made They.

Speaker 5 (01:01:07):
Didn't not let you trick them like that. They made you.

Speaker 2 (01:01:11):
They made you allocate a basis to each chunk that
you're and you're going to have the same amount of gain,
just separated. You're not going to get out of the gain.
In other words, it'll be exactly the same. It'll just
be that you don't pay it all in that year.

Speaker 13 (01:01:30):
Okay, so it'll be a portioned.

Speaker 5 (01:01:33):
Accordingly.

Speaker 2 (01:01:36):
But what is about But wait, I remember developing land
years ago, Eric, and they didn't apportion it.

Speaker 5 (01:01:44):
They made me pay.

Speaker 2 (01:01:45):
The gain as I sold the lots. The first number
I did a subdivision, and I had a basis, and
there were two ways of doing it. One time I
was able to apportion a basis to each lot, and
when I sold the lot, I paid tax on that portion.
Right then there was another time they didn't let me

(01:02:07):
do that, and I had to pay all the taxes
on the first several sales. Why is that?

Speaker 5 (01:02:14):
Did they ever do that anymore? Or do they apportion it?

Speaker 2 (01:02:18):
Usually it's a portion, but hold on, go ahead, sorry,
go ahead.

Speaker 6 (01:02:22):
Usually you can allocate it by portion in your case.
But in this case, when it's inherited, it's all one
lump property with the same date of acquisition of the
date of death. So I don't think that would apply
for care.

Speaker 2 (01:02:37):
So if Karen divided it in two, can she pay
just half of the tax on the sale of the
first one and half?

Speaker 6 (01:02:46):
Correct, it's allocated as a partial sale.

Speaker 2 (01:02:48):
So if the whole thing okay in her case one
point six let's just call it one point seven million
date of death okay.

Speaker 5 (01:02:57):
If she had a one point seven million.

Speaker 2 (01:03:00):
Date of death appraisal and she sells half of it,
she would have a seven hundred thousand dollars basis on.

Speaker 6 (01:03:08):
That half, right, One half of the one point seven
seven or whatever it is.

Speaker 5 (01:03:15):
Yeah, I'm sorry, eight fifty, I'm sorry fIF she would
have half of it.

Speaker 2 (01:03:19):
So then, yeah, I guess the answer, Carrot is you can.
You can divide it up and sell it, but you
have to apportion your basis accordingly.

Speaker 5 (01:03:29):
You can't leave the taxes to the end. That makes sense.

Speaker 13 (01:03:36):
I sell two acres this year, you know, and deduct
from evaluation, and then seven acres next year.

Speaker 2 (01:03:45):
Well, it's very easy in your case. It's very easy.
In your case. You you would take you would take
your ten acres and you would give it a basis
based on one point six ninety five.

Speaker 5 (01:03:57):
Do the division.

Speaker 2 (01:04:00):
So if it's one million, and I'm going to use
just seven hundred thousand to.

Speaker 5 (01:04:05):
Make it easy, and if you so, if you have.

Speaker 2 (01:04:07):
One million, seven hundred thousand divided by ten, well that's easy.
Each one of your lots has a basis of one seventy,
so every acre you sell above one seventy you pay
a gain.

Speaker 9 (01:04:22):
Mm hm.

Speaker 13 (01:04:24):
That makes sense.

Speaker 5 (01:04:26):
Yeah, so yeah, you can.

Speaker 2 (01:04:28):
You can divide it up and sell it and spread
out to tax burden.

Speaker 13 (01:04:34):
But yeah, it's hard to pass up a two point
six ninth five offer.

Speaker 5 (01:04:40):
Well, I wouldn't pass it up.

Speaker 2 (01:04:41):
I you know, you know there's nothing better than paying
taxes on gain. It means you're making money, you know,
I mean you know it's it's inherited money. That is
a good offer.

Speaker 5 (01:04:53):
Are you going to.

Speaker 2 (01:04:54):
Take the whole thing all at once or are you
going to split it up?

Speaker 13 (01:04:59):
I'm trying to decide that right now. I'm not sure.
It seems like those things are a little bit unpredictable,
and so I'm tempted to just unload it. It's never
been my residents, never lived there, never kind of living there.
I put about thirty thousand into this all.

Speaker 5 (01:05:20):
Yeah, if I if it was me, I'm not telling
you what to do.

Speaker 2 (01:05:23):
I don't know your financial situation, but Karen or Carrots,
taxes will never be lower. Okay, we know that they're
never going to be lower. It doesn't mean that they're low,
but they're never going.

Speaker 5 (01:05:35):
To be lower. And the longer you way make higher,
that's right. So if I were you, what I would
do is I would.

Speaker 2 (01:05:43):
Sell it, take the gain, pay the taxes, and then
put that money into something safe.

Speaker 5 (01:05:49):
How old are you twenty five? Okay?

Speaker 2 (01:05:55):
I would put that into something safe, you can even
do something income producing. I would not at your age
buy an annuity. There will be a lot of annuity
salesman trying to sell you an annuity for the profit.

Speaker 5 (01:06:07):
I would not do that. Again, I have my own
reasons for that.

Speaker 2 (01:06:11):
I think annuities are when you approach retirement or getting
close to retirement, and you absolutely are risk adverse and
you want to give up a lot of upside potential
and you don't care about that. All you want is
safety and income, then you can go and do an annuity.
I think you're much too young for that. That profit
that you make could be put into even interest free

(01:06:35):
income with certain bonds. There are so many things you
can do with the money rather than let it set,
because as.

Speaker 5 (01:06:43):
The property increases.

Speaker 2 (01:06:45):
In value, you will have more profits to deal with
at higher taxes in the future.

Speaker 5 (01:06:51):
Okay, so it's really it's really up to you.

Speaker 2 (01:06:55):
But I always have questioned people who sit on gain
in an effort to delay taxes.

Speaker 5 (01:07:05):
Now, does she have the.

Speaker 2 (01:07:06):
Option of doing a ten thirty one into something if
she wanted to a tax free exchange with inherited property
like that, I think she does right or not? See
have you ever thought like, if there's something you wanted
to buy, let's say an apartment house or something big,
something big somewhere, there is a possibility you can trade

(01:07:32):
and do a tax free exchange and put all of
your gain into the new property.

Speaker 5 (01:07:39):
I think she can do a ten thirty one. Why
wouldn't she?

Speaker 2 (01:07:42):
She owns it, she has a basis, and she has profit.
She can defer that in a ten thirty one. What
would stop her from doing that?

Speaker 6 (01:07:51):
Only at the fact that it's never been a business
property before, it's been a personal asset. Ohn that I
think could make a difference.

Speaker 2 (01:07:59):
Okay, so a personal asset cannot be ten thirty one.

Speaker 6 (01:08:04):
Country ones are for business business?

Speaker 5 (01:08:06):
What is this zone? This property?

Speaker 2 (01:08:14):
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Speaker 5 (01:08:18):
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Speaker 2 (01:08:23):
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Speaker 5 (01:08:34):
You'll think you're his only customer.

Speaker 2 (01:08:36):
When you choose Frank durand the real estate Man dot
com to list your home with Remax Alliance three oh
three nine two zero sixteen twenty two. Hi Tom Artino here,
Welcome to the show. We got some texts I want
to get to and one is here. Okay, if I

(01:08:59):
sell it an investment property using ten thirty one to
buy another investment property, will it eliminate me playing capital
gains taxes? Yes, temporarily right.

Speaker 5 (01:09:14):
They want to know.

Speaker 2 (01:09:15):
If so, how long do I have to keep the
new property before I can sell it without paying capital gains?
You never ever get out of it. You always defer
it's not tax free, right. I can think of no scenario,
guys where you would ten thirty one, ten thirty one,
ten thirty one and eventually not pay tax, can you?

Speaker 6 (01:09:37):
Yes, if you're going to hold it until you die
and pass it on to your kids tax free. We
have clients doing that.

Speaker 2 (01:09:44):
Wait a minute, it's not. Don't they pay when they
sell it? No?

Speaker 6 (01:09:48):
But if you continually ten thirty one and never.

Speaker 5 (01:09:51):
Sell you get the new basis, Yeah.

Speaker 6 (01:09:53):
And you hold it until you die, your kids get
it at the fair market value when we die.

Speaker 5 (01:09:59):
More on coming up.

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Speaker 5 (01:10:06):
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Speaker 2 (01:10:09):
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dozens of insurance companies. Find out now three oh three
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dot com to list your home with Remax Alliance three

(01:10:30):
oh three nine two zero sixteen twenty two.

Speaker 1 (01:10:37):
Rip you need so you don't have to.

Speaker 3 (01:10:45):
Run as fast as you can. Show Shooter's gonna help.

Speaker 4 (01:10:50):
Come Man six is the Troubleshooter Show. No Tom Martinez, Hi.

Speaker 2 (01:10:58):
I'm Tom Martino. You're troubleshow Welcome to the show. Let's
go right to the phones. We have our tax experts
with us from Atlas CPAs and accounting and financial advisors
as well. And Jay wants to comment on Carra's problem.
And Carrott had a problem where I don't call it
a problem.

Speaker 5 (01:11:15):
She had an issue.

Speaker 2 (01:11:15):
She inherited ten acres of commercial land purchased originally for
one seventy seven. Her date of death appraisal for the
inheritance was one point seven. Basically, and she's being off
for two point six and I told her, if it
was me, I would just sell it, pay my tax

(01:11:36):
and put it into something that would make me a
lot of money. And you have a comment on that.
Go ahead, Jay, what is your comment?

Speaker 7 (01:11:45):
Thanks?

Speaker 2 (01:11:46):
Tom?

Speaker 8 (01:11:46):
Oh?

Speaker 9 (01:11:47):
What come?

Speaker 5 (01:11:48):
It sounds like that?

Speaker 9 (01:11:49):
Sounds like that property is making a small punction already.

Speaker 8 (01:11:51):
I'd fell just enough to pay the taxes and keep
it because it's already a great investment.

Speaker 2 (01:11:56):
In Well, when you say sell just enough to pay
the taxes, she's not going to be able to. She'll
have to pay only on what she sells. Oh.

Speaker 9 (01:12:09):
In that case, sounds like a great investment in other.

Speaker 2 (01:12:11):
Words, In other words, if she keeps it, she doesn't
have to pay any taxes. If she just keeps it,
she only has to pay taxes when she sells it.
But so what you're saying is this what I told her,
Take your money, take your profit, and put it into
another investment.

Speaker 5 (01:12:31):
You're saying, how do we.

Speaker 2 (01:12:32):
Know that the property itself isn't the best investment?

Speaker 5 (01:12:36):
Just let it set. It could be.

Speaker 2 (01:12:40):
It could be if it keeps depreciating, it could be
a better investment than if she sold it and took
the profits and invested elsewhere. You're absolutely right, Jay, that
is a consideration. In fact, when people come to Waive
eight Wealth Management and they say they want to sell
something and invest with us, I often ask them how

(01:13:02):
much is the stuff making you now? Because if we
can't make you more money, why would you sell it
and invest with us?

Speaker 5 (01:13:10):
The only, the only.

Speaker 2 (01:13:13):
Reason you would sell and invest profits is if that
investment can make you enough to offset the taxes eventually
and make you a better return than the original property.

Speaker 5 (01:13:30):
Right, it's all in the math. Now.

Speaker 2 (01:13:33):
We did have a question about ten thirty one, so
I want to go back to and it said how
long do I have to keep a ten thirty one
exchange property where I.

Speaker 5 (01:13:41):
Never have to pay tax on it?

Speaker 2 (01:13:43):
Well, technically, if you ten thirty one each time profits
into the next property, you're accruing profits and profits and
profits which you will eventually have to pay tax on
if it.

Speaker 5 (01:13:59):
Is yours or if you sell it.

Speaker 2 (01:14:04):
But these guys at Atlas brought something else up, and
this is something that is often misunderstood, and we need
to talk about it when we talk about date of
death step up in basis.

Speaker 5 (01:14:20):
If property was purchased.

Speaker 2 (01:14:22):
For one hundred dollars and it's worth a thousand dollars.
The person who inherits it gets to do an appraisal
on the date of death, and then they get a
stepped up basis, So instead of being one hundred dollars,

(01:14:44):
that property basis is now one thousand dollars, and presumably
if you sell it there will be less or no tax.
So Eric, in this situation, if you say you've had
clients or people you've known people who keep ten thirty
one ing into their death, explain that, yes, this is.

Speaker 6 (01:15:06):
A long term planning decision for a couple of clients
we have that are decided to keep doing ten thirty
one's for property, and they are planning to hold it
until they die and pass it to their kids at
that huge future value and escape capital gains one hundred percent.

Speaker 5 (01:15:25):
You're right, it's a long time. They keep doing it,
and they amass five million.

Speaker 2 (01:15:30):
Dollars in value when they die, and it's a praise
that five million dollars. Those kids can sell it for
five million and pay zero tax exactly. But if the
previous owner sold it for five million, they would have
to pay the accumulated tax correct or the tax at

(01:15:51):
that time. So yes, keeping things until death you get
a step up in basis. So what happens if you're
married joint property and one of the people dies, then
half of it gets.

Speaker 5 (01:16:08):
A stepped up basis? Is that correct? Correct?

Speaker 2 (01:16:11):
And the whole reason we care about a stepped up
basis is because it presumably eliminates taxes. If you sell right,
then if you keep it for another ten years and
it grows in value, you're still going to pay tax
on the new increase in value, but you have a
higher basis at which to work with. Yes, So no

(01:16:35):
matter what, your tax burden will always be less than
the original owner.

Speaker 6 (01:16:40):
Yes.

Speaker 2 (01:16:41):
And I think where a lot of people Eric we
see get into trouble is where they try to do
a state planning on their own and they think, if
I avoid probate, I'm going to be hunky dory, and
they do stupid things like transfer stocks or real estate
or primary residences while they're still alive and they transfer

(01:17:06):
them to their intended heirs.

Speaker 5 (01:17:08):
What does that do?

Speaker 6 (01:17:10):
Triggers tax? Yeah, that can trigger tax on willingly.

Speaker 5 (01:17:15):
On, Well, it may not do it media tax.

Speaker 2 (01:17:20):
If I gifted someone not gifted, if I if I
sign over a home to someone, my primary residence or
another home or another piece of real estate. They don't
pay tax when I when I sign it over to them, right,
But they inherit my basis.

Speaker 6 (01:17:39):
Yes, Barrett, and basis gets passed to the recipient.

Speaker 5 (01:17:42):
Yeah.

Speaker 2 (01:17:43):
So they have virtually taken a gift, which would be
a step up basis, and thrown it away. So when
you people, I know there are plenty of people listening
right now.

Speaker 5 (01:17:55):
I know it.

Speaker 2 (01:17:55):
They do it all the time. You think I want
to keep my house out of probate, I'm going to
quit claim it to my kids now. It's the dumbest
thing you can ever do. Dumb If you quit claim
your home to someone right now, that someone inherits your
basis and will have extraordinary capital gains to pay if

(01:18:18):
they sell it.

Speaker 5 (01:18:20):
The question is what if.

Speaker 2 (01:18:22):
They want to live there the rest of their lives,
then they don't want to sell it. There's still no
good reason to quit claim your home while you're alive.
You can do a beneficiaries deed that's as good as
a quit claim. A beneficiaries deed says, as soon as
I die, the home is in your name, right, Yes,
But how many times do we see people do things

(01:18:43):
like that? Now, if you sign over stocks to people,
they inherit your basis. If you sign over artwork to people,
they inherit your basis. If you sign over anything to
people while you're still alive, they inherit your basis. It's
better to let them inherit something upon death and then

(01:19:09):
they get a stepped up basis. Is that true in
a trust as well? If I leave stuff in a trust,
does the trust get a stepped up basis? Yes, obviously,
otherwise people wouldn't do trust. I mean, so if you
have a trust, you can put everything into a trust,

(01:19:30):
and on the date of your death, that trust has
a whole new valuation of what things are worth on
the date of your death. Okay, someone wants to know
when you mentioned a nineteen million dollar lifetime exemption, is
that for your estate or is that per individual you

(01:19:53):
give money to, Because we say if you give more
than nineteen thousand in a year, you you have to
claim that against your exemption.

Speaker 5 (01:20:02):
So is that nineteen million per estate?

Speaker 2 (01:20:05):
So if you have ten different people or twenty different people,
you still only have nineteen million you can give away.

Speaker 5 (01:20:11):
Is that correct? Guys?

Speaker 6 (01:20:13):
It's nineteen thousand per year.

Speaker 5 (01:20:15):
That's what I met, nineteen thousand perit.

Speaker 6 (01:20:17):
That nineteen thousand can go to multiple people. You could
give that nineteen thousand to ten different people, and that
all escapes being in your state.

Speaker 5 (01:20:28):
Right.

Speaker 2 (01:20:29):
But the exemption we talked about, the lifetime exemption is
not that's fifteen million.

Speaker 5 (01:20:36):
I thought you said, okay, I said it wrong. It's okay,
I had it wrong.

Speaker 2 (01:20:41):
Is that fifteen million dollar exemption for the entire estate
or per individual? It's for the entire state. It's per person,
so married a couple of years. No, I understand that.
Here's what I'm asking. This person is asking this. Can
I I have a fifteen million dollar exemption before I

(01:21:04):
pay or my heirs pay taxes? Can I give fifteen
million to one child and fifteen million to another child
and fifteen million to another child.

Speaker 5 (01:21:15):
The answer is no.

Speaker 2 (01:21:17):
There's one exemption per a state, So Texter, it's not
per individual, it's per a state.

Speaker 5 (01:21:27):
If the individual gives away.

Speaker 2 (01:21:30):
To ten or twenty people or one person more than
fifteen million, there will be a state taxes. We could
talk about a state taxes a lot.

Speaker 5 (01:21:41):
What are they? What is in a state tax?

Speaker 2 (01:21:44):
In other words I'm going to say. Let's just say
I have I have forty five million dollars. Fifteen million
of it gets exempted. Now I have thirty million dollars.
Who pays that tax?

Speaker 6 (01:22:00):
The estate of the person that past pays it, So
there's a.

Speaker 5 (01:22:04):
Tax return done on the estate.

Speaker 6 (01:22:07):
Yes, I formed seven oh six estate.

Speaker 2 (01:22:09):
And how much We keep talking about estate taxes, but
I've never actually asked how much is a state tax?

Speaker 5 (01:22:17):
Is it twenty percent, thirty forty percent?

Speaker 2 (01:22:20):
How is it figured? How is the state tax figured?
Or is it simply income to the recipient.

Speaker 6 (01:22:25):
It's a tax that's generally in the forty to forty
five percent. It's a very high rate, and very few
individuals will ever pay it because at fifteen million, there's
only maybe a couple thousand people per year that have
estates that need to be filed on because the exemption
is fifteen million.

Speaker 5 (01:22:44):
There no, no, I know not.

Speaker 2 (01:22:45):
What you're saying is not many people die with more
than fifteen million, But let's.

Speaker 5 (01:22:50):
Say they do.

Speaker 2 (01:22:52):
I mean, how do very wealthy people get around paying
that fifty percent tax?

Speaker 5 (01:22:57):
For God's sakes, you're.

Speaker 2 (01:22:59):
Telling me if someone's worth one hundred million, dollars. Then
on eighty five million dollars, they're giving half of it
to the government.

Speaker 6 (01:23:09):
What they will probably do is they will form irrevocable
trusts to get large chunks of assets out of their
personal name into trusts which take them out of your
personal estate.

Speaker 5 (01:23:22):
So are you saying that most do an estate plan
to where they never have to worry about that largely? Yes?

Speaker 2 (01:23:29):
I mean, but if you think about it, I think
it's highway robbery if you really think about the essence
of it. They paid taxes on this money their entire life. Right,
it's not tax free money. It's money people accumulated, not
tax free. When you accumulate income, you pay on income,
you pay on profits, you pay on capital gains. So

(01:23:50):
now they have an estate worth one hundred million, and
the government is saying you only get to exempt fifteen
of it, and we're going to not only did we
tax you your entire life, now we're going to take
half of everything you have left.

Speaker 6 (01:24:06):
Which is why most people worth over fifteen to twenty
million will get attorneys involved to create irrevocable trust right
to push it out, to avoid that issue.

Speaker 5 (01:24:16):
Right, all right, we.

Speaker 2 (01:24:17):
Got more coming up on the Troubleshooter show a lot
of interesting questions we have. Steve has a landlord. He's
a landlord with an eviction. We'll get to you Melissa quickly.
What is your question on real estate? I think I
can squeeze it in. What's your question?

Speaker 5 (01:24:31):
Melissa?

Speaker 15 (01:24:34):
My question is about ten years ago my husband and
I our credit was not good, so my parents purchase
our house for us. The loan is in their name.
We put the deposit down, We've made every single mortgage payment,
and now we're in a position to pay off the
note the banks loan, and we want the house back

(01:24:58):
to us in our name. How can I that without
a huge tax implications from a terns?

Speaker 2 (01:25:04):
All right, hold on, that's a good question. We got
more on that coming right up. Go with a sure
thing Denver's Best rufer excel roofing dot com.

Speaker 5 (01:25:17):
You don't pay a cent until you're content.

Speaker 2 (01:25:23):
Time for an insurance checkup free no obligation comparison call
Compass Insurance paying too much your coverage at dozens of
insurance companies find out now three all three seven to
seven to one help. You'll think you're his only customer
when you choose Frank durand the real estate man dot
com to list your home with Remax Alliance three all
three nine two zero sixteen twenty two.

Speaker 5 (01:25:46):
I'm Tom Martino again.

Speaker 2 (01:25:48):
We have a lot of questions for Atlas, CPAs and accounting,
and Steve.

Speaker 5 (01:25:53):
Has a question as well. But Melissa wanted to know.

Speaker 2 (01:25:56):
I'm gonna go to her because we left off with her.
She wanted to know about her parents buying a home
for her. So, Melissa, ten years ago this home was
purchased you. I have a very basic question. First, your
parents are cooperating.

Speaker 5 (01:26:13):
They're not claiming it's their home, right, No, they know
it's sorry, okay, so they will.

Speaker 2 (01:26:20):
They're not opposed to quit claiming it to you.

Speaker 15 (01:26:25):
No, we're just worried about the tax implications with There are.

Speaker 2 (01:26:30):
No tax implications. In fact, here's what you do. There
are no tax implications. When you sign stuff over to people,
they don't pay tax on it.

Speaker 5 (01:26:41):
You can sign you can sign.

Speaker 2 (01:26:42):
Stocks over to people, houses over to people, cars over
to people, aren't over to people. No one pays taxes
when you sign something over. The only time you pay
tax is when you dispose of it. You pay the tax.
You subtract the basis and pay the tax on the
game now in your case, because it is your home

(01:27:09):
and you've paid everything, and you were in on the
purchase in the beginning, and you picked the house and
all of that, you simply have them quit claim it
to you.

Speaker 5 (01:27:19):
It's that easy.

Speaker 2 (01:27:21):
And then you pay it off and they quit claim it.
It's your home. You have the original basis, which was yours. Anyway,
you're not looking for a stepped up basis. You're simply
looking to get the home in your name.

Speaker 5 (01:27:35):
So, guys, can.

Speaker 2 (01:27:36):
You think of any reason why a simple quick claim
would not work? Usually a quick claim you don't want
because you want to get the stepped up basis when
they die. But since this house was yours from the beginning,
it's what the government calls substance over form. The substance
of the transaction is that it was your house from

(01:27:58):
the beginning. So it is proper that you inherit the
basis from the beginning.

Speaker 5 (01:28:05):
And you do that with a simple deed.

Speaker 2 (01:28:08):
There are no tax implications for anyone.

Speaker 15 (01:28:13):
Wow, I did not know that.

Speaker 5 (01:28:15):
Okay, So when you pay, how much do you owe
on it? Right now?

Speaker 15 (01:28:21):
We owe two hundred and we can we can pay
that off now.

Speaker 2 (01:28:27):
Okay, Then when you pay it off, just make sure
your parents are going to quit claim it to you.
I mean you literally are. I mean, if they're good parents,
that's wonderful. What if you pay it off, they own
a free and clear house with no obligation.

Speaker 5 (01:28:45):
To quit claim it to you?

Speaker 16 (01:28:47):
Right?

Speaker 2 (01:28:50):
You may even want an agreement. Look at I don't
know the relationship. Be happy with their parents, my parents,
it would I would not need anything in writing, But
I don't know. Relationship. People get reared and greedy sometimes.

Speaker 5 (01:29:03):
I don't know.

Speaker 2 (01:29:04):
Does your dad have a gambling debt you don't know about,
or keeping a mistress. Here's what I'm saying. You might
want to scribble a note an agreement that upon paying
off the house.

Speaker 5 (01:29:17):
In the amount of that, they agreed to quit claim
it to you.

Speaker 2 (01:29:21):
And your husband. I mean again, I'm not giving you
legal advice. You may want an attorney to type it up,
but if you totally trust them, you're telling me that
if you pay off the house tomorrow, they will quit
claim it to you with no questions asked.

Speaker 15 (01:29:40):
Yeah, they know it's it's our house. Good, We've paid
everything from the beginning, and they were just trying to
help us out when we couldn't get alone with a
decent mortgage rate at the time.

Speaker 2 (01:29:55):
That's really nice of them. That is really nice. So
what was your house purchased for?

Speaker 5 (01:30:00):
How much?

Speaker 15 (01:30:01):
We purchased it for four hundred thousand. We've had it
for ten years over and it's about eight fifty now wow.

Speaker 2 (01:30:12):
Wow, Okay, okay, So I'm telling you the quit claim
deed is simple and easy. Thank you for calling. Steve
has a question on evictions. Steve, what's going on with you?

Speaker 17 (01:30:29):
Oh goodness, sir. I'm went through the eviction this morning.
So we got everything out of the house, okay, and
then the sheaf was there and everything went in normal,
no no fighting or anything good. A lot of stuff
is on the front yard. So I decided to find

(01:30:50):
out from your your lawyers or something how long this
stuff could be there. I mean, that's going to be
stroying one front yard.

Speaker 2 (01:30:58):
Well technically no one ever really asks that, but that
stays there until it's not there anymore? Are you asking?
And by the way, it shouldn't have been put in
the yard. It should have been put on public property.

Speaker 17 (01:31:13):
The sheriff told me to have put it on the
front yard.

Speaker 2 (01:31:16):
Well, that's kind of weird because now it becomes a
problem for you. There are plenty of times when evictions
are just that, they're evictions, and they're put on public
property and then the municipality immediately issues an order to
clean it up, and when it's not cleaned up, the

(01:31:39):
city sanitation department comes and cleans it up. By you
putting it in your yard, you have just made it
your problem. And the answer is you can't move it.

Speaker 17 (01:31:52):
I can't.

Speaker 5 (01:31:53):
Nope. You know you're going to run into a problem and.

Speaker 2 (01:32:00):
The Sheriff's department shouldn't be giving out legal advice.

Speaker 5 (01:32:03):
Why did they tell you to put it in the yard?

Speaker 17 (01:32:07):
I don't know, I asked him. I said, because a long,
long time ago. I had the same situation about twenty
five years ago, and they told me that to put
it out to the Vitrina sidewalk, and I don't care.
And that's a takeular location that's told only about three feet,
so I won't sit anywhere. I don't know what to

(01:32:28):
do with it.

Speaker 2 (01:32:29):
Stuff, Well, it's there. Think of it as storage right now. Okay,
what do you think they're going to do about the stuff?
Do you think they want their stuff. Is it worth anything?
Tell me about it? What is it worth anything? You
may want to just put it in storage somewhere because
you can't. I mean, if you take it from your

(01:32:51):
yard now and throw it away, let me ask you something,
Why is that?

Speaker 5 (01:32:55):
Okay?

Speaker 2 (01:32:56):
But it wasn't okay to do that when you evicted them.
The answer is you did it the wrong way.

Speaker 17 (01:33:04):
Oh that's still bad. I don't know.

Speaker 2 (01:33:08):
I mean, you just inherited a big mess in your
yard and it's their property.

Speaker 17 (01:33:14):
Yes they are, it's theirs. I don't know what to
do now.

Speaker 18 (01:33:20):
Hey, Tom, what if somebody comes in the middle of
the night and just scooches the stuff over its right
feet onto the sidewalk. Wouldn't that resolve our course problem?

Speaker 2 (01:33:29):
Yes, you're right, some anonymous person could come and actually
clean it all up.

Speaker 17 (01:33:37):
Well, it's a pretty busy street. I haven't surprised if
it's been half of it. Some of us already gone.
I mean, most people can tell that's eviction situation.

Speaker 5 (01:33:49):
Is this in Denver?

Speaker 17 (01:33:52):
No, that's along in the suburb, Okay.

Speaker 2 (01:33:57):
I am looking up the eviction laws here because in Colorado,
let's see, you can't remove the.

Speaker 5 (01:34:06):
Let's see hold on.

Speaker 2 (01:34:07):
Okay, okay it the belongings must listen to this. This
is part of the law. Belongings must be placed on
public property. Okay, okay, but once it is now I'm

(01:34:30):
telling you this, I'm not reading this in the law.

Speaker 5 (01:34:33):
You did it wrong. You put it on your property.

Speaker 2 (01:34:38):
Now you can't self help yourself and move it. You
have just moved their stuff. In fact, they can hold
you liable for the stuff that sheriff's deputy was full
of crap. It was supposed to be put on public property.

Speaker 17 (01:35:00):
That's interesting. That's what I believe too.

Speaker 2 (01:35:04):
But he told me, well, yard, well, what you should
do is not listen to them, because they're not lawyers.
What you should do is this you I'm not insinuating
by the way that they did it intentionally what you
need to do. Because I like law enforcement, I don't
want to I don't want to say like they were

(01:35:25):
trying to hurt you.

Speaker 5 (01:35:26):
They're not.

Speaker 2 (01:35:27):
How let me ask you something. It's in your yard
right now?

Speaker 5 (01:35:31):
Right?

Speaker 6 (01:35:32):
Yes?

Speaker 2 (01:35:33):
Where's public property compared to your yard? Where's the curb?

Speaker 17 (01:35:38):
Uh? Well, I have a four or five will why
the sidewalk and then beyond that is another.

Speaker 2 (01:35:45):
Three foot Okay, let me ask you this, then, when
was this eviction done today? Yes, I would simply move
it to the public property, as if you're.

Speaker 5 (01:35:58):
Continuing the same Dmitri. I don't see why he would
have to hide that to you.

Speaker 18 (01:36:06):
Dmitri's show why. But you know, I can tell you
from personal experience. I invicted somebody who was storing stuff
at my business and the Denver sheriff deputy came out.
He acted like he was the only one in charge,
so he told us exactly where to put the stuff.
And a post caller, I don't know, it might be
safer for him if a person or person's unknown show

(01:36:29):
up in the middle of the night and just scooch
stuff over from the grass into the sidewalk.

Speaker 2 (01:36:35):
Dmitri, When you evicted someone, where did they tell you
to put the property?

Speaker 18 (01:36:40):
Well, they told me to put it on the sidewalk
on the private street where my business was located at
the time. But it was a private sidewalk. They didn't
want it on the on the city property sidewalk just
around the wall.

Speaker 5 (01:36:54):
It's tough.

Speaker 2 (01:36:55):
They may not want it on the city property, but
that's exactly what it's supposed to do.

Speaker 18 (01:36:59):
Oh, I agree, But the sheriff deputy acted like he
was in charge of the whole universe. He didn't want
to hear any lip from me. He says, this is
how it's gonna be done, or we're not gonna do it.

Speaker 2 (01:37:14):
Okay, we got more coming right up, Go with a
sure thing Denver's best roofer Excel Roofing dot com.

Speaker 5 (01:37:26):
You don't pay a cent until you're content.

Speaker 2 (01:37:29):
Please time for an insurance checkup free, no obligation comparison
call Compass Insurance paying too much your coverage at dozens
of insurance companies find out now three o three seven
to seven to one.

Speaker 9 (01:37:41):
Help.

Speaker 2 (01:37:42):
You'll think you're his only customer when you choose Frank
durand the real estate Man dot com to list your
home with Remax Alliance three oh three nine two zero
sixteen twenty two.

Speaker 16 (01:37:54):
Cool.

Speaker 2 (01:37:56):
Hi, Tom Martino, we have a question about trust. We
have Alice with us doing a great job today answering questions. Reggie,
Welcome to the show. Reggie, what's happening?

Speaker 9 (01:38:09):
So I've got I've sort of fallen out of favor
with my trust attorney, and so I was wondering, how did.

Speaker 2 (01:38:16):
You I'm curious, I'm just curious, how did you fall
out of favor?

Speaker 9 (01:38:23):
So I used him to handle the estate of a
relative who died in test fate. We went to the
whole process and the estate has been closed. But during
the process I would get the bills from him on
you know what I owed him as they the estate

(01:38:43):
through probate and so the last check, you know, I said, uh,
he said, okay, this is just an estimate, and of
course you will get a refund, you know, if we
don't hit that number. And so guess what, go and
behold down to the penny. They hit that number, I say,
something is kind of funny here, Yeah, yeah.

Speaker 5 (01:39:06):
I got it.

Speaker 2 (01:39:07):
Okay, So basically you can't What you're saying is you
have an attorney you can't use anymore.

Speaker 9 (01:39:13):
What is your question, Well, should I should I change
the estate now to another attorney?

Speaker 5 (01:39:20):
Or of course you should.

Speaker 2 (01:39:22):
If you're having bad blood with anyone, you should not
put them in charge of anything of yours.

Speaker 5 (01:39:28):
That's just my personal opinion.

Speaker 2 (01:39:31):
I mean, if you can't worry, so listen, if the
trust was done correctly, you're not going to have another
problem with another attorney picking up.

Speaker 5 (01:39:41):
But what function?

Speaker 2 (01:39:43):
This is what I'm confused about the trust was completed when.

Speaker 9 (01:39:49):
Oh, this was probably about seen years ago.

Speaker 2 (01:39:52):
Okay, So what I'm asking is, ten years after the
trust has been filed, what are you still using a
trust attorney?

Speaker 5 (01:40:01):
Four? Forget about this, this, this.

Speaker 2 (01:40:03):
Other matter you had him do. What was he doing
for you before that? What was he doing for you
for the last ten years?

Speaker 5 (01:40:12):
Well?

Speaker 9 (01:40:12):
Nothing, It was just sitting there. We would go. We
went in one time about five years ago and change
one of the Yeah.

Speaker 2 (01:40:19):
Yeah, yeah, So Reggie, Reggie, is he made a trustee
at all? Or is he any part of the trust?

Speaker 9 (01:40:29):
No?

Speaker 2 (01:40:30):
Okay, you really don't have to do anything. He has
nothing to do with your estate. If you died tomorrow,
would he step up and administer the trust?

Speaker 9 (01:40:41):
Well? Uh, that's a good question. No, I don't think.

Speaker 2 (01:40:46):
Well, well you got to read. Okay, this is what
you have to do. I'm going to tell you what
to do. You're going to take your trust and you're
going to get a consultation with Mackenzie Law.

Speaker 5 (01:40:58):
Okay, and you're going to ask Dan.

Speaker 2 (01:41:02):
To read the trust and to find out if you're
beholden to that attorney for anything, and if not, all
well and good.

Speaker 5 (01:41:11):
If you are, then Mackenzie can help.

Speaker 2 (01:41:13):
You transferred out. But my guess is you're not beholden
to that attorney. So there's nothing really you need to do.
If an attorney makes up a will or a trust,
they do not have an ongoing fiduciary responsibility to you
unless it's written into those documents.

Speaker 16 (01:41:32):
Okay, okay, So I would say right now I would
have it reviewed anyway, though, And I'll tell you why
if it's ten years old and it was done by
an attorney and you no longer want to use the attorney,
No matter what, a ten year old trust or will
should be freshened up, at least with a new look.

Speaker 2 (01:41:54):
You would be shocked at how many little things change
over ten years. Here's mackenzie law. Let me give it
to you. It's eight three three A three three two
six seven fifty two sixty seven and that spells eight

(01:42:14):
three three C plans.

Speaker 10 (01:42:22):
Got it?

Speaker 5 (01:42:22):
Okay?

Speaker 2 (01:42:23):
All right, bro, thanks for calling. All right, thank you.
We have a text here, Tom. I keep hearing that
a sub chapter I'm paraphrasing.

Speaker 5 (01:42:33):
It's written really weird. I keep hearing that of sub.

Speaker 2 (01:42:36):
Chapter s flows through to me, What exactly does it mean?
So what does that mean when it flows through? What
does that mean?

Speaker 5 (01:42:45):
Yeah, so the Kelly from Atlas.

Speaker 10 (01:42:48):
So the income unless the expenses is the net income
flows through on a K one.

Speaker 2 (01:42:53):
Okay, what you can't hear him?

Speaker 5 (01:42:56):
Did you say that? Dragon?

Speaker 2 (01:42:59):
Oh, take a break. I'm sorry, I gotta take a break.
Thanks Dragon, appreciate it more. Coming up, Go with a
sure thing Denver's best roofer Excel Roofing dot com.

Speaker 5 (01:43:12):
You don't pay a cent until you're content.

Speaker 2 (01:43:16):
Wave time for an insurance check up free, no obligation
comparison call Compass Insurance paying too much your coverage at
dozens of insurance companies find out now three oh three
seven seven to one help. You'll think you're his only
customer when you choose Frank durand the real estate Man
dot com to list your home with Remax Alliance three
oh three nine two zero sixteen twenty two.

Speaker 1 (01:43:43):
RiPP you need advice so you don't have.

Speaker 3 (01:43:51):
Come running as fast as we can. Shooter's gonna help come.

Speaker 5 (01:43:58):
This is the Troubleshooter Show.

Speaker 2 (01:44:01):
No Tom Martino, I'm Tom Martino, and this how brought
to you by K ANDH Home Solutions because they now
have painting and I love K and H Painting pros
KH around sixty five years. It's a company you can
trust Khwindows dot Com want to go to the phones.
Tamisha has an issue with an apartment. I also have

(01:44:21):
Atlas with me. At Las CPAs. What's the official.

Speaker 5 (01:44:24):
Name, guy? What's the official name? Eric?

Speaker 2 (01:44:26):
I always say at Las CPAs in accounting. What is
the actual official name of your company?

Speaker 5 (01:44:31):
What is it? Come on, take a stab at it, guys.
It's Atlas Cpias and Advisors.

Speaker 2 (01:44:35):
Okay, Atlas CPAs and Advisors.

Speaker 5 (01:44:39):
That's what I'll use from here on out. Atlas CPAs
and Advisors. Okay. Tamisha, what's going on with your apartment?
Oh no, no, no.

Speaker 2 (01:44:51):
No, okay, we'll take Tamisha back when we get is
that her? We'll get her back. Let's take Lauri right now?
An issue with a flooring working with Dimitri, who's back
at the mothership. So, Laurie, what was going on with
this flooring?

Speaker 5 (01:45:07):
Dmitri? You want to summarize it?

Speaker 9 (01:45:10):
You know?

Speaker 18 (01:45:10):
Uh, I'd like to get Laurie to summarize it because
there's been a few weeks and I can't really remember
all the details right now.

Speaker 2 (01:45:16):
Oh no, that's fine, Laurie, summarize what the original problem
was and where it stands today.

Speaker 19 (01:45:25):
Yeah, thanks for having me. This is Laura. So we
hired a contractor to do a basement remodel and there's
been little issues along the way. This last one was
they were putting self leveler on our basement floor. Oh yes,

(01:45:45):
the installations, yes, and install the LVP first time, then
decided it wasn't right, took it out, installed it again,
And basically they're saying they are done and it is
not correct.

Speaker 5 (01:46:00):
You can walk on it. Did you know?

Speaker 2 (01:46:02):
Did you go out and look at it to meet her?
Did she send us up pics of this.

Speaker 18 (01:46:06):
Thing, Tom, Laura sent me a whole bunch of photos. Uh,
this is a few Well, this is more than a
couple of weeks ago, I'd say about a month ago.

Speaker 5 (01:46:13):
And I agree with her assessment.

Speaker 18 (01:46:15):
The flooring pictures and some other ones I saw really
just showed shoddy workmanship at the time.

Speaker 19 (01:46:22):
And so since then we had had a flooring inspector
out to do a report to make sure that what
we're seeing and feeling is accurate.

Speaker 5 (01:46:35):
Right, And what did the flooring inspector say, Tom?

Speaker 18 (01:46:38):
By the way, I believe that we referred Laura to
Big Bear Flooring.

Speaker 12 (01:46:41):
Laura, is that right?

Speaker 5 (01:46:44):
You did?

Speaker 19 (01:46:44):
And you also referred as to Neil Hollington some legal services.

Speaker 5 (01:46:51):
Big Bear come out was that we.

Speaker 19 (01:46:53):
Could get assolved without the legal services. But oh yeah,
and I'd love to have you say the contractor's name
now that we.

Speaker 2 (01:47:02):
Have no, no, no, I don't mind. I'm trying to
find your damn call. I can't find it. I just
can't find it. Did you use the name Laura?

Speaker 5 (01:47:11):
She did, but it was.

Speaker 18 (01:47:12):
Mark who took the call originally it was one of
the days off.

Speaker 2 (01:47:15):
All right, Okay, fine, I got it.

Speaker 5 (01:47:18):
I found it.

Speaker 2 (01:47:19):
Yeah, So so it was started, Okay, So here's what
I want to know.

Speaker 5 (01:47:24):
I want to know where does it stand today?

Speaker 19 (01:47:28):
So it stands today. We have this you know, floor
inspection that's certified that says it was installed incorrectly, that
trafficking the floor throughout the basement. They can confirm what
kind of floor was it. It's an LVP flooring that
the contractor recommended from a big floor and tile company

(01:47:54):
here in the North Metro area.

Speaker 5 (01:47:56):
Okay, who is the contractor?

Speaker 19 (01:48:00):
It is Ostrander Construction Service Ostrander How do you spell
it os t r a nder?

Speaker 2 (01:48:11):
Okay, just as it sounds ostrander, And they installed it
the wrong way according to your inspector. But Ostrander says
they're done.

Speaker 19 (01:48:21):
So Ostrander now is saying that the floor has been
installed according to manufacture and industry standards. The inspector says
that is incorrect.

Speaker 13 (01:48:34):
So we sent a letter to how.

Speaker 5 (01:48:36):
Much will it cost to fix? How much will it
cost to fix? So in order for.

Speaker 19 (01:48:44):
Us to fix the flooring, we have a estimate of
just a little under four thousand. We had originally purchased
the LVP flooring and the underlayment, so the only thing
that Ostrander did for the floor was, you know, the
installation work. And he is claiming that we owe him

(01:49:07):
ten thousand, four hundred dollars.

Speaker 2 (01:49:10):
Hey, Laura, let's get right to that. Let's just get
right to the meat of the matter.

Speaker 5 (01:49:14):
Okay.

Speaker 2 (01:49:15):
If you have a claim under seven seventy five hundred dollars,
this is excellent for small claims, and you will have
the testimony of a floor inspector independent, which will trump
anything that Ostrander says. So if the floor inspector says
this was done and properly. It doesn't matter what Ostrander says. Well, okay,

(01:49:37):
but and what I want to know is if it
was done properly, what does Ostrander say is wrong with it?
What do they like the way it looks? How does
it look?

Speaker 19 (01:49:50):
It looks and it feels terrible?

Speaker 2 (01:49:54):
Tell me what it looks like. Tell me exactly what
does it look like.

Speaker 19 (01:50:00):
So when someone's walking on it, you can actually see
the planks move up and down, you can fill the
tongue and groove in between the planks because they were
not installed correctly. And then there are still some areas
where they didn't even finish putting planks of the floor.

Speaker 5 (01:50:24):
Is it warping?

Speaker 19 (01:50:28):
Oh, it is definitely moving.

Speaker 12 (01:50:30):
Yeah.

Speaker 19 (01:50:30):
So the floor instructor says, you know, it's trafficking the floor.
So while he was walking on the floor, he could
confirm noticeable high and low points consistent with subfloor preparation deficiencies. Right,
and then he's able to tell that within the basement

(01:50:50):
there's out of flat areas between three sixteenths and one quarter.

Speaker 2 (01:50:56):
Of any we don't have to get for the radio show, Laura, Laura,
we don't have to get this specific. So the inspector
basically confirmed your suspicion and has very specific information on
where Ostrander went wrong. Ostrander said, we did everything correctly
so far.

Speaker 5 (01:51:14):
How much have you paid Ostrander?

Speaker 19 (01:51:17):
So we paid him a little over twenty six thousand.
We've been working from Wait a.

Speaker 2 (01:51:23):
Minute, oh wait, wait, you paid twenty six that So
they did more than the flooring.

Speaker 5 (01:51:27):
They did the whole basement.

Speaker 19 (01:51:30):
Definitely, definitely, and so we have paid him each time
that they have all.

Speaker 2 (01:51:35):
Right now, but to correct the floor will be under
seventy five hundred bucks.

Speaker 13 (01:51:41):
Right to do the floor.

Speaker 5 (01:51:45):
Yes, Okay, that's good news. That's good news. Wait to
get because worse, it gets worse.

Speaker 18 (01:51:51):
Uh oh, Laura, didn't you send me a copy of
a letter announcing their intent to file a lean because
you didn't pay them?

Speaker 5 (01:52:00):
No, no, yeah, we heard that. She said that. She
said he wants another ten grand or so.

Speaker 6 (01:52:04):
Yeah, but no, he's threatening a lead.

Speaker 2 (01:52:06):
Well I know that, so you know that's that's the
way it's gonna be. But here's what I want to
tell you, Laura. With Laura, Laura, we have to separate.
We have to separate the floor from the rest of
the basement.

Speaker 5 (01:52:20):
Here's what I mean by that.

Speaker 2 (01:52:23):
If let's just pick a number, it's going to take
six thousand dollars to fix the floor. Right, So if
he is claiming that you owe money for other parts
of the finish, other like, let's say, what's that?

Speaker 5 (01:52:42):
Okay? But I'm just.

Speaker 19 (01:52:44):
Saying he's claiming money that he has not done, like
he is charging us for.

Speaker 2 (01:52:49):
Laura, I agree, I even if I believe you, let
me finish what I'm saying, because you need to know this, okay,
because it's going to get into more than just the floor. Again, Laura,
this is not a statement of agreement with him. This
is a statement of what's going to happen based on

(01:53:13):
the hundreds of cases I've handled. He is going to say,
he is going to say that you owe him another ten, twelve, fourteen,
whatever it is.

Speaker 5 (01:53:25):
Let's pick ten thousand.

Speaker 2 (01:53:28):
You're going to claim in small claims court that it's
going to take six thousand to fix the floor.

Speaker 5 (01:53:35):
He's going to say, Okay.

Speaker 2 (01:53:38):
Then she only owes me four thousand dollars. He is
going to divert the topic of the floor to other
work because I suspect if he did the entire job,
he is saying you owe him another x amount of dollars,

(01:53:58):
not counting the floor. I think that that's how he's
going to try to cast doubt on your claim so
or to minimize your claim. So I just want you
to be ready to defend yourself because when you claim
it's going to take six grand to fix the floor,

(01:54:20):
or however much it will, he's going to claim you
still owe him money on top of that. What you
need to know is did he in his threat to
file a lean, did he specify what you owe him
for specific things?

Speaker 5 (01:54:42):
No? He just said you owe him how much.

Speaker 19 (01:54:47):
Ten thousand, four hundred, but he didn't say what it's for. Nope,
he hasn't marked ten four hundred and sixty dollars for labor,
materials and services furnished to the above property.

Speaker 2 (01:55:06):
Okay, that's way too general. He is going to have to.
That's why you need to get this into small claims
court very soon, because he can file a lien. It
doesn't take much to file a lien. All you have
to do is make a claim and he can file
a lien and you will have a lien on it.
But if you get to small claims court first, then

(01:55:28):
he can bring that up. But I'm telling you you
need to get whatever.

Speaker 5 (01:55:33):
It's going to take to fix the floor.

Speaker 2 (01:55:35):
Now, in conversations, did he at least hint where you
owe the extra money?

Speaker 19 (01:55:45):
Yeah, so we've been working from an online estimate that
lives in the joint dot com.

Speaker 9 (01:55:53):
I get it.

Speaker 2 (01:55:54):
But does what does he say if you had to guess?
Where is he saying you owe the money? And you're
saying it's for things he didn't do? What are we
talking about?

Speaker 19 (01:56:06):
So the overall project had a total price of thirty
seven thousand and some change.

Speaker 2 (01:56:14):
Okay, that was the contracted amount.

Speaker 19 (01:56:18):
Well, there is no signed, written contract. It's just this
online estimate that we've been working from and we've been
paying as a project has been completed.

Speaker 2 (01:56:31):
And okay, now now here here's what I get it.
I get it completely. Now Now I see why he's saying. You're, oh,
you owe on the original estimate. But that okay. So,
but if you truly do have an estimate that you

(01:56:54):
agreed to somewhere or somehow, what would prevent you Again,
here's what I'm asking. If the floor was fixed, let's
take the floor out of the equation. What would prevent
you from paying the balance of the contract. What excuse
would you have not to pay the balance of the contract.

(01:57:15):
I'm not I'm not challenging you. I'm asking for your reasoning.

Speaker 5 (01:57:19):
What the floor went bad?

Speaker 2 (01:57:22):
But is there are there other things that you shouldn't
pay for?

Speaker 5 (01:57:28):
Well?

Speaker 19 (01:57:29):
So, since the floor has not been installed according to standards,
they can't install the doors, and they can't install the
base trim or the door trim. Okay, okay, install in
vanity I okay.

Speaker 2 (01:57:47):
So you're saying, you're saying that there's a lot of
work that has not been completed that he wants to
be paid on.

Speaker 5 (01:57:55):
But is he saying this is.

Speaker 2 (01:57:57):
What I really need you to be objective about and
just tell me. Is he saying that he will complete
the job? Oh?

Speaker 19 (01:58:08):
I don't think he's saying that at all, because we
don't agree that the floor has been installed.

Speaker 5 (01:58:14):
Correct.

Speaker 19 (01:58:15):
I get that since we're stuck there, he can't install
the trim or the doors.

Speaker 5 (01:58:21):
Got it?

Speaker 2 (01:58:21):
So, But what I'm saying is this, is he expecting
to be paid the ten thousand, four hundred dollars without
completing the job or is he saying once you pay him,
he will complete the job. I mean what's his thought process?

(01:58:42):
D did you talk to him at all?

Speaker 6 (01:58:44):
Yeah?

Speaker 5 (01:58:45):
What's his thought process?

Speaker 18 (01:58:46):
I'm reading the letter and here's how it explains the
ten thousand that's oh yeah.

Speaker 2 (01:58:50):
I got to take this break. I'll come right back
to it. I got to take this break. More coming
right up. Go with a sure thing Denver's Best roofer
Excel Roofing dot com.

Speaker 5 (01:59:04):
You don't pay a cent until you're content.

Speaker 2 (01:59:09):
Time for an insurance checkup free no obligation comparison call
Compass Insurance paying too much your coverage at dozens of
insurance companies find out now three all three seven to
seven to one.

Speaker 9 (01:59:20):
Help.

Speaker 2 (01:59:20):
You'll think you're his only customer when you choose Frank
durand the real estate Man dot com to list your
home with Remax Alliance three all three nine two zero
sixteen twenty two. Hey Tom Martino here, welcome. All right, So, Laura,
we have a letter from the contractor that you got,

(01:59:41):
so go ahead. D.

Speaker 5 (01:59:43):
What is he doing? What is he saying to address this?

Speaker 18 (01:59:46):
So you know? This is the ten day notice of
intent to file a Leena says that ten thousand bucks
remains due and unpaid for labor materials and services provided
as in past tense provided under agreement. So unless we
see the actual agreement, we don't really know if this
is wark he already did or if he's simply kind

(02:00:07):
of And I've seen this so many times now, Tom,
contractors tent to kind of try to accelerate the contract
if there's some kind of a problem and they just
want to get paid for the entire amount, whether or
not they actually.

Speaker 5 (02:00:19):
Do the work.

Speaker 18 (02:00:20):
But in this case, we really don't. And as you
probably know, that's that's pretty common based on the cases i've.

Speaker 6 (02:00:25):
Worked here for you.

Speaker 18 (02:00:26):
Yeah, yeah, so I really can't tell he does.

Speaker 2 (02:00:30):
I think what I think the guy is figuring. This
is what I think he's thinking. The hell with her,
she didn't complete the contract. She still owes me now
whether or not. What I'm hoping is this, if they
get to small claim score, they get to negotiate beforehand
and discuss it's mandatory, and then they go to court.
I have a feeling that's when he'll bring up the

(02:00:51):
extra money and she's going to have to say whether
or not she wants him to complete the job, and.

Speaker 5 (02:00:56):
They're going to have to talk it out.

Speaker 2 (02:00:58):
But it starts with small claims, especially because she has
an expert that she paid for, and she's got an
expert saying she's right. Now again, does that mean you
had a right to cancel the rest of the contract
and keep him from completing it? Probably not. That's where

(02:01:20):
the complication comes in. As much as I support your argument, Laura,
and your frustration, technically this floor problem should not have
had you fire him completely unless it was so egregious.

Speaker 5 (02:01:39):
That you didn't trust him to complete the job.

Speaker 2 (02:01:42):
And if you say you didn't trust him this, well,
of course, everyone said everyone, Laura. Everyone says that. Everyone
says when they have a problem, they want to stop
all all all future stuff. But then the question is,
and this is the way you would be asked in
a court, is then what happened? What about the past work?

(02:02:03):
Not the floor, but the other work. Apparently you had
no problem with that work. So why would you think
he couldn't complete the job? Why are you preventing him
from completing the job? That would be the question. Your
answer is going to be, well, he didn't do the
floor right, so I don't think he can do anything right.

Speaker 19 (02:02:21):
No, No, we had problems throughout the project.

Speaker 5 (02:02:24):
Okay, got it?

Speaker 19 (02:02:25):
He tried to install the floor three times.

Speaker 2 (02:02:29):
Okay, So enough said. You're saying you don't want him
to complete it. You're saying you don't want him to
complete the contract based on several problems, not just the floor.

Speaker 5 (02:02:40):
I got it. Stick stick to that argument. It's a
good one.

Speaker 2 (02:02:45):
I would also get an expert to talk about the
rest of his work. If the rest of his work
was up to code, if the rest of his work
was done satisfactorily, you may have a problem with canceling
the contract.

Speaker 5 (02:03:01):
That's all I'm saying.

Speaker 2 (02:03:02):
I'm not saying you will have a problem, but he's
going to bring it up. You have a viable contract,
so you need to be ready for it.

Speaker 5 (02:03:12):
That's all I'm saying. You need to be ready for it.

Speaker 2 (02:03:15):
But it's good that you got the expert, and it's
good that, but please file a small claim immediately. Do
it immediately in the county where you're located. Deputy Bow
has a question for Atlas CPAs go ahead and advisors
go ahead.

Speaker 5 (02:03:34):
Deputy Bow, what is your question? What is your question?

Speaker 8 (02:03:38):
I have two questions. I'm in the market for another accountant,
and I have like fifteen schedule sees. I have a
few properties, so I'd like to get an idea.

Speaker 2 (02:03:50):
Wait a minute, wait a minute. Do you do a
schedule see on each rental property?

Speaker 5 (02:03:55):
Yes?

Speaker 17 (02:03:56):
I do.

Speaker 6 (02:03:59):
It's probably me a schedule E for rental properties.

Speaker 8 (02:04:04):
Okay, maybe it is a need, but.

Speaker 5 (02:04:07):
You have to do one for each property. Yeah, yeah,
you do a separate schedule for each property.

Speaker 2 (02:04:13):
They Okay, got it, keep going, boy, fifteen of them.

Speaker 8 (02:04:17):
I'm looking for a new accountant. So I'd like to
know what is your feed structure. Is it a flat
rate or do you charge? What do you charge to
file and return every year?

Speaker 10 (02:04:28):
Well, we're usually charged by the hour, depending on what
level of person works on it. So I mean our
fee range could be anywhere from somebody working one hundred
and fifty dollars an hour up to three hundred an hour,
just depending on how long it takes.

Speaker 5 (02:04:42):
But let me just explain something to you, bo.

Speaker 2 (02:04:44):
It's not like an attorney where every time they sneeze
your charge. They really do a great job to keep
fees realistic. I'm not saying you know that you don't pay,
but they seem to be very re in the world
of bookkeeping and accounting.

Speaker 8 (02:05:03):
Okay, and then how many employees does Atlas have?

Speaker 5 (02:05:07):
Why does that matter to you? I'm just curious, why
does that matter?

Speaker 8 (02:05:11):
Because the last account I had kind of worked out
of her house and you, oh no.

Speaker 5 (02:05:16):
No, listen, how many?

Speaker 2 (02:05:17):
First of all, let's talk about how many you know, bo,
just so you know they are my accountants, both personally
and professionally. How many offices do you have? Talk about that.
How many Atlas offices are there? Fourteen? We have like
twenty six locations, twenty six offices. So do you want
them to do a headcount for you? I mean it's
like they have dozens. They have dozens and dozens of people.

Speaker 8 (02:05:41):
Okay, I didn't know that. I just on my next account.
I want somebody that's the actual, real company rather than
somebody exactly.

Speaker 5 (02:05:49):
I know where you were going with that, you bo bo.

Speaker 2 (02:05:51):
You don't want someone that's going to have your file
sitting on a desk somewhere and say, oh wait, let
me find it and then move a dirty sock out
of the way.

Speaker 5 (02:06:00):
You want a real company.

Speaker 8 (02:06:01):
I get it and then file it. It end up
filing extensions because they can't get to it, and I
hate that. Right, So I have another important question. My
wife passed away in twenty nineteen. She had this, She
had this lifetime exemption that you were talking about for
the fifteen million. Yes, am I entitled to use that

(02:06:27):
when something happens to me?

Speaker 5 (02:06:30):
What is I don't even understand the question? Am I
not understanding this question?

Speaker 6 (02:06:35):
When she passed, unless you had a trust set up,
all of her assets passed to you, so you can't
double it up again. You just have your own fifteen million,
I think, is what you're asking, right.

Speaker 8 (02:06:47):
I thought we had two due. I thought there were
at least two lifetime exemptles.

Speaker 6 (02:06:52):
You would have had to have used that when she passed.
But when she passed, you already got everything she had
coming into your estate, and then.

Speaker 2 (02:07:02):
He gets fifteen Yeah, so you are getting both when she.

Speaker 6 (02:07:09):
No. But what he passed is if he's got over
a fifteen million, there could be a taxable situation of course, yeah.

Speaker 5 (02:07:15):
On the amount above fifteen million.

Speaker 6 (02:07:17):
Right, yeah, but there's no two fifteen millions.

Speaker 2 (02:07:20):
There's just okay, okay, one for the couple you're saying.

Speaker 6 (02:07:23):
No one for him who remains people he might have
formed a you can, yeah, there's just one.

Speaker 5 (02:07:31):
Okay, does a marry Let me ask you this. Maybe
I'm confused.

Speaker 2 (02:07:34):
Does a married couple get one fifteen million dollar exemption.

Speaker 5 (02:07:37):
For the estate.

Speaker 2 (02:07:39):
No, it'd be thirty million. It'd be thirty million fifteen.
So bo, who were you? I'm sorry I missed. Who
were you asking about? Who's the other person?

Speaker 8 (02:07:48):
Well, it was my wife when she passed away. Am
I entitled to use her sixty million dollar exemption?

Speaker 5 (02:07:54):
Well? She used it? She No, you're not.

Speaker 2 (02:07:58):
In other words, fiftyfteen plus fifteen equals thirty. If she
died and left and and and she never used it,
you don't still get thirty. It died with her. The
the fifteen million dollars died with her.

Speaker 8 (02:08:15):
Okay, I didn't know that. Okay, Okay, we'll be okay,
thank you.

Speaker 2 (02:08:22):
And okay, we got more coming up on the Troubleshooter Show.
Go with a sure Thing Denver's Best Roofer Excel roofing
dot com. You don't pay a cent until you're content.
Time for an insurance checkup free, no obligation. In comparison,
call compass insurance paying too much your coverage at dozens

(02:08:43):
of insurance companies find out now three O three, seven
to seven to one. Help You'll think you're his only
customer when you choose Frank durand the real estate man
dot Com to list your home with Remax Alliance three
oh three nine two zero sixteen twenty two. All right,
Tom Martina here, Okay, got some breathing room. I can

(02:09:04):
go to my texts and we have a lot of.

Speaker 5 (02:09:10):
Hold on.

Speaker 2 (02:09:12):
Okay, on Social Security, I don't know if you guys
know about this, but do you have to work a
full thirty five years? They take your top thirty five
years of earnings. What if you don't have thirty five years?
Do you know anything about Social Security? If you still
get it, if you don't have the quarters worked, I.

Speaker 6 (02:09:34):
Think you get a portion of it. You may not
get the full them out, but I believe you'll still
get something. And anybody can go online to their account
and check it out.

Speaker 2 (02:09:43):
Yeah, they had, that's right, there's online access for that. Okay, Tom.
You talked about a stepped up basis involving inheritance and appraisal,
So a beneficiary deed is not needed if your kids
are inheriting your home, is that right?

Speaker 5 (02:10:02):
Well, a beneficiaries deed is not needed.

Speaker 2 (02:10:05):
You can leave the home in a will or in
a trust or yeah, yeah, so no, you don't need
a beneficiaries deed. What a beneficiaries deed does is it
bypasses a will, and it bypasses the estate. So upon death,
the house is not even in your estate. The estate

(02:10:29):
is without the house because it automatically passed to the beneficiary.
So that's so when I said that you should not
quit claim your house, you should not do your house
transfer before death, and I said a beneficiaries deed would

(02:10:51):
be better, it would be better again because the reason
they were doing to quit claim to begin with was
to try to bypass and a beneficiaries deed bypasses probate.
But you don't need that to leave to your kids.
You don't need a beneficiaries deed. It can be done
through a regular will. And by the way, a little

(02:11:13):
note on this. I cannot believe the conniptions people go
through to try to avoid probate. First of all, probate
is not where did it become this big, giant, scary thing.
Probate is not complicated. Everyone you know, you hear about
people saying, oh, I want to avoid probate, I want

(02:11:34):
to avoid probate. Well, all probate is in fact, it's
not like you even go to court.

Speaker 5 (02:11:40):
You just file a probate.

Speaker 2 (02:11:42):
It is a lawsuit basically, but there's no adversarial relationships
unless someone wants to make a claim on the estate.
But probate is simply a lawsuit that's opened up.

Speaker 5 (02:11:56):
To dispose of the estate.

Speaker 2 (02:12:01):
If the will is in place, a trust is in place,
or there are things like beneficiaries deeds, and all of that,
probate is not complicated.

Speaker 5 (02:12:11):
Go ahead, you made.

Speaker 6 (02:12:12):
A good point, But having a trust in place can help.

Speaker 5 (02:12:16):
So, yes, it can.

Speaker 6 (02:12:17):
I think that's the key point, because that that's another
way just to get it out of the hair.

Speaker 2 (02:12:22):
Yeah, and you can totally bypass probate altogether if everything
is done by trust and by beneficiary deeds. And when
I say beneficiary deeds, homes are not the only thing
you can leave to people outside of probate. You can
do all kinds of beneficiaries deeds. They're not called beneficiary deeds.

(02:12:44):
But you can do all kinds of transfers to people
that take effect on your death. So it doesn't have
to be just real estate. You do that with You
can do that with artwork, you can do that with
any tangible property. You can make an agreement that transfers
it on the date of death.

Speaker 5 (02:13:05):
Just so you know.

Speaker 2 (02:13:06):
Okay, let me go back to my to my texts.
Here I had where Okay, here, Tom, can you explain
bonus depreciation versus regular depreciation. I spent twenty five thousand
dollars to property rehab It goes to my basis.

Speaker 5 (02:13:25):
Do I get bonus depreciation?

Speaker 2 (02:13:27):
I think I think we've been talking about that, not
really explaining it.

Speaker 5 (02:13:31):
Bonus depreciation, guys, Yeah.

Speaker 10 (02:13:34):
So bonus appreciation allows you to write it off all
in the first year, versus having a depreciation and a.

Speaker 5 (02:13:40):
Lump sum and a lump sum. Now didn't they used
to call that section one seventy nine.

Speaker 10 (02:13:44):
Well, Section one seventy nine still applies along with bonus,
but when you have one hundred percent bonus depreciation, there's
really no reason to use section one.

Speaker 5 (02:13:51):
Okay, So let's explain this.

Speaker 2 (02:13:53):
Bonus depreciation does not happen on a house, right, right, Okay,
Bonus depreciation means if you bought a machine for your factory,
Bonus depreciation means normally that you get to write off
one hundred percent of it in the year you bought it, right,
that's it's a bonus because normally you may have to

(02:14:16):
depreciate that one fifth at a time for five years,
or one tenth at a time for ten years. Bonus
means you get to accumulate all that in the first year.
So that's what bonus depreciation means for a.

Speaker 5 (02:14:33):
Lot of people.

Speaker 2 (02:14:35):
It means I can buy a car or a boat
or an aircraft with business use and write it all off.
Are there limits to bonus depreciation? You know, that's a
good question, isn't it.

Speaker 6 (02:14:50):
They are, But it's really huge, like two or three
hundred thousand dollars. Okay a dollar limit?

Speaker 2 (02:14:55):
Then explain then what a section one seventy nine is.
What is that?

Speaker 10 (02:15:00):
That's just another method of taking a depreciation, accelerated depreciation.

Speaker 5 (02:15:06):
In one year, in one year, and how much of
it can you take? There's what's the max want to
look up the maxim But it's a certain amount you
can take.

Speaker 2 (02:15:14):
So if you buy stuff even without bonus depreciation, it
allows you to accumulate it all under one amount.

Speaker 5 (02:15:22):
Correct. Okay, we got more coming up on the Troubleshooter Show.