Michael and Linda are growing their wealth, which can be complex and requires thoughtful strategy. They work with us each year to plan for current and future opportunities.
What 3-5 questions did we ask Michael and Linda to better understand what was needed?
During our consultation, we realized they had purchased additional properties prior to meeting with us. We went through the following items with them:
• Would Michael continue to have W-2 wages? Or will he be taking distributions off the rentals? • Who legally owns the properties? Do they individually or does an LLC? Are there any outside investors? • Do they track the income and expenses for each property separately? Or did they need help with this bookkeeping? • How many hours annually did they spend taking care of each rental property? Did they qualify for Rental Real Estate Professional? • Did they have properties in different states? Are there different depreciable lives for the other states?
What solutions did we propose?
Since our initial consultation, we have developed a successful relationship which has combined our tax knowledge and experience to offer help in the following areas:
• Maximizing retirement, itemized deductions and other tax saving measures to lower their overall wage income. • Working with their wealth advisor to make sure their investment strategy was maximizing the aftertax returns. • Confirming their estate plan was properly constructed to reflect the new properties and increasingincome being earned by the family. • Using Single Member Limited Liability companies to hold property titles, limited direct liability to the individuals. • Understanding the need to pay estimated payments when no withholding is involved. • What qualifies a person as a Real Estate Professional.
What does our ongoing relationship with Michael and Linda look like in the present day?
We meet monthly with Michael and Linda, or as questions arise. We have helped them go from a single rental to five rental properties. Michael continues to work at his development firm while building family wealth and passive income through his real estate portfolio. It has been rewarding to see their family grow from a personal and financial standpoint.