How to LEGALLY Pay Zero Taxes (for Business Owners & Real Estate Investors) w/ Barbara Schreihans

Summary

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Action Academy | Millionaire Mentorship for Your Life & Business

"How to LEGALLY Pay Zero Taxes (for Business Owners & Real Estate Investors)"

Guest: Barbara Schreihans | Host: Brian Luebben | July 8, 2025

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Episode Overview

In this engaging and tactical episode, Brian Luebben sits down with Barbara Schreihans—founder of Your Tax Coach—to break down the exact tax strategies that business owners and real estate investors can legally use to pay little to zero taxes. The discussion is packed with practical advice, mindset shifts, insider secrets from Barbara’s experience as a top tax strategist, and actionable steps for entrepreneurs at every stage. They also cover scaling a business, overcoming entrepreneurial fear, the psychology of performance, and how to align your lifestyle with your values.

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Barbara’s Journey: From Corporate Ladder to Tax Boss

[00:00–07:05]

• Corporate Origins & Motivation:
  Barbara describes her ten-year climb in public accounting, aiming for partnership at a tax firm—a dream shaped by her upbringing and family expectations.
  • “One in 100 of you sitting in this room will ever be a partner at a tax firm. And in my mind I was like, I'll be that partner.” (01:16, Barbara)
• Triggering Event:
  After saving a client $3M in taxes (the biggest check in firm history), Barbara received no bonus or gratitude, only an email demanding higher goals for the next year, received on Christmas Day—a breaking point.
  • “You get to do this again next year. Like, you need to get a bigger check for us next year. No thank you, no bonus, no nothing.” (01:43, Barbara)
• Catalyst for Entrepreneurship:
  Encouraged by her husband, she started "Your Tax Coach" in January 2020 as a side gig to pay off remaining student loans, earning $30K her first month.
• Key lesson:
  “If that client was your client, how much would they have paid you?... Why don’t you just start your own business?” (03:08–03:19, Barbara's husband)

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Mindset and Advice for Aspiring Entrepreneurs

[05:08–14:29]

• Understanding Your True Value:
  Both Brian and Barbara emphasize calculating how much value employees deliver to companies versus what they’re paid—a confidence builder for starting your own venture.
  • “If people would just do the math of how much profit their high salary generates the company, they would be way more confident to go build or buy a business of their own.” (05:08, Brian)
• Building a Personal Brand:
  Sharing professional insights on social media, even before owning a business, eased her transition and amplified her early marketing.
• First Steps & Scaling:
  • Flat-fee pricing (no hourly billing), superior communication, and monthly recurring revenue set her firm apart.
  • Early marketing involved extensive networking (BNI, Chamber of Commerce, etc.) and relentless outreach.
  • “The first 18 months were so terrible…20-hour days as a mom, it was like awful.” (09:41, Barbara)
• Balancing Time:
  It’s always about priorities, not time constraints.
  • “Show me your calendar and I'll show you what's important to you.” (09:58, Barbara)
• Hiring & Delegation:
  • Hire slow, fire fast; don’t delay hiring out of fear.
  • Her first full-time hire was an executive assistant, which transformed her bandwidth.
  • Build your team as you’d build personal relationships—intentionally and with clear criteria.
  • “Delegation is so key and I wish I would have done it sooner.” (13:10, Barbara)

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Tax Code Mindset & Essential Real Estate Strategies

[16:04–23:16]

• Tax Code Is for Owners:
  • “The tax code was written for business owners and real estate investors. There’s 7,000 pages…and only 12 of them tell you what to pay in taxes. The other 6,980 tell you how to get out of them.” (16:04, Barbara)
• Step-Up in Basis:
  • Don’t inherit properties as a gift; wait for the step-up in basis for massive tax savings.
  • “Never ever let your parents give you a rental property before they die.” (18:00, Barbara)
• Self-Rental Election:
  • Business owners can buy properties where their business operates, make a ‘self-rental election,’ and use real estate depreciation to offset business income—even without the real estate professional status.
  • “The cost seg on this property...gave me like a $300,000 loss, offset my YTC (Your Tax Coach) income by $300,000. I did not have to be a real estate professional.” (19:50, Barbara)
• Commercial Residential Properties:
  • Buy mixed-use (work/live) spaces in cities you want to visit for dual-purpose leverage and write-offs.

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Advanced Tax Strategies Beyond Real Estate

[23:16–35:40]

• Business vs. Real Estate Investments:
  For those who dislike traditional real estate or want higher returns, other vehicles exist.
• Oil & Gas Write-offs:
  • Upfront deductions as high as 90% of investment, plus potential ongoing cash flow.
  • “You can get 85 to 90% as a deduction in oil and gas the year you do it.” (25:57, Barbara)
• Private Foundations:
  • Fund your own charitable organization for immediate tax deductibility with flexible disbursement over years; invest the remainder through the foundation for compounding growth.
  • “You just have to give 5% a year away to an actual 501c3…The cool thing is now you can invest [the rest] in real estate.” (27:00, Barbara)
• Vehicles and Business Use:
  • Car deductions are available if used 50%+ for business—document mileage, consider >6,000 lb vehicles for best write-offs, lease exotics, and track all business-related trips.
  • “You want to make sure [the vehicle] is 50% or more used for business…The best way to deduct is to buy a car over 6,000 lbs.” (30:28–30:45, Barbara)
• Personal Fulfillment:
  • Material items rarely satisfy long-term; time and experiences matter more.
  • “And then you realize all you want in life is time and experiences, period.” (31:26, Barbara)

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Real Estate Professional Status, Passive Losses & PIGs

[33:16–35:17]

• Passive vs. Active Income:

  • You need to be a real estate professional (or have a spouse who is) to use passive real estate losses against active income. Otherwise, match PALs (Passive Activity Losses) with PIGs (Passive Income Generators, like franchises/many buy-and-hold businesses).
  • “You need PIGs to go with your PALs.” (34:52, Barbara)

• Classification Is Key:

  • How your interests are declared as ‘active’ or ‘passive’ drastically affects your tax offset options. Double-check how your investments are classified on your returns.
  • “It's literally just a checkbox that says that you're active or passive. And I bet they marked you as active.” (34:41, Barbara)

• Qualified Small Business Stock (QSBS) Election:

  • Structure business purchases to utilize QSBS benefits: $10M (per owner) of capital gains excluded upon sale after 5 years if qualified.
  • “Every owner can exclude up to $10 million at sale…as long as we can qualify you from the beginning.” (35:40, Barbara)

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Scaling, Delegating & Building Your Ideal Life

[36:31–38:10]

• Scale with Delegation:
  • Outsource everything below your ‘hourly rate’—whether in business or personal life (house manager, chef, nannies, etc.).
  • Barbara’s hourly rate is $3,000; everything else is delegated.
• Real Estate Professional Life Hack:
  • You or your spouse can be the real estate pro; minor tweaks (e.g., rotating contractors for time tracking) help meet IRS criteria.
  • “You just have to spend more time than they do [on properties]…swap out your subs every 99 hours.” (37:46, Barbara)

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Who Should Work with Your Tax Coach?

[38:10–39:11]

• Ideal Client:
  • Business owners making $250k+/year, serious real estate investors, or anyone seeking aggressive legal tax strategy.
  • “If you're below that, the ‘Right Off Your Life’ course teaches thousands of small business deductions.” (38:21, Barbara)
• Service Menu:
  • Tax strategy, cost segregation studies, real estate, business consulting.

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Notable Quotes & Memorable Moments

• “The tax code was written for business owners and real estate investors. There’s 7,000 pages…and only 12 of them tell you what to pay in taxes. The other 6,980 tell you how to get out of them.”
  — Barbara, 16:04
• “If people would just do the math of how much profit their high salary generates the company, they would be way more confident to go build or buy a business of their own.”
  — Brian, 05:08
• “Never ever let your parents give you a rental property before they die.”
  — Barbara, 18:00
• “You need PIGs to go with your PALs.”
  — Barbara, 34:52
• “And then you realize all you want in life is time and experiences, period.”
  — Barbara, 31:26

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Key Takeaways and Action Steps

• Build and safeguard your personal brand as early as possible.
• Structure your business and real estate investments intentionally for maximum tax benefit—consult a pro.
• Delegate purposefully to gain freedom and scale faster.
• Passive losses require passive income; review your investment classifications annually.
• Tax benefits aren’t just for the ultra-rich—they’re for business owners and investors willing to learn and act.

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How to Work with Barbara Schreihans

• Instagram: @yourtaxcoach
  “That’s the one thing I won’t delegate out is responding to my people.” (38:59, Barbara)
• Offers: Tax strategy consulting, courses for deduction optimization, cost segregation, full-service business and real estate tax planning.

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For further resources, the episode description includes all links mentioned above.

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Transcript

[A]

I had a client where I saved them $3 million in taxes. I was supposed to get a bonus based off of that huge check that the firm got. I got an email from a partner at the firm that said, you get to do this again next year. You need to get a bigger check for us next year. No thank you. No bonus, no nothing. On Christmas freakin Day, of course I'm crying to my husband. He was like, just start a business. You can always get another job.

[B]

You did $30,000 your first month, which is insane.

[A]

The tax code was written owners and real estate investors. There's 7,000 pages in the internal revenue code and only 12 of them tell you what to pay in taxes. You are entitled to these tax benefits.

[B]

I don't feel like I've ever heard anybody talk about that.

[A]

That's just one of like thousands of strategies I have up my sleeve.

[B]

Barbara, welcome to the Action Academy podcast. How are you?

[A]

Good.

[B]

I'm excited to have you. So you are a badass in many different directions. So through real estate, through business, and now through tax. So not only are you really good at making money, but you're really good at keeping, which is the ultimate preservation game. So this was was not always the case. So walk us through. Who was Barbara before in corporate America and how did you kind of plan your escape before building this empire?

[A]

Yeah, I did public accounting for 10 years and I was building the corporate ladder. I was doing all the right things. Even in like my master's program, they told you, okay, you know, after two years you're going to be a senior. After five years you're going to be a manager. You're at 15 years. One in 100 of you sitting in this room will ever be a partner at a tax firm. And in my mind I was like, I'll be that partner. Like there was 100 of us. And I was like, it's me.

[B]

Yeah.

[A]

But I always thought I would be a partner at a firm, not ever start my own business. So similar to you, it was my last year of working for someone else and I had a client where I saved them $3 million in taxes and they wrote the biggest check that firm had ever received. The firm had been open since 1969, so like a very long history. And I was supposed to get a bonus based off of that huge check that the firm got. And on Christmas Day 2019, I got an email from a partner at the firm that said, you get to do this again next year. Like, I like, you need to get a bigger check for us. Next year, no thank you, no bonus, no nothing. On Christmas freaking day day 2019. So January 1, 2020, your tax coach started.

[B]

Yeah, it's always out of almost necessity, right? It's just same thing with me. Like, there was no thank you. It was literally, hey, man, your performance is dipping a little bit. The quarter afterwards, like, hey, what's wrong? Like, what's going on? What do you need? I'm like, what? You just took away an $80,000 bonus. What are you talking about, dude? So was this something that you were planning in the background or was this just like a line in the same decision that you were like, no more, I'm doing my own thing.

[A]

Actually, the idea didn't even come from me. I got that email, so then of course I'm crying to my husband. And he was like, well, babe, if that client was your client, how much would they have paid you? And I just sat there like, dang it, he's right. They would have paid me the same that they paid that firm. And he's like, so why don't you just start your own business? And I had never even thought of it because it was like so ingrained. Like one. I grew up with parents that worked for the government, so very much like, you do the thing, like you get a pension and then same with college, like, you do this, this and this, and then maybe you'll go up the corporate ladder. So I never had ever been around anyone that owned a business. So then when my husband was like, then just start a business, you can always get another shitty job. Right. Like Gary Vee says. And so I was still scared, so I kept that job. I didn't quit it yet. It's just I started a side hustle and that bonus that I was supposed to get was going to pay off my master's program. Long story short, like my master's program, you get an internship, it's a paid internship. And that paid internship is supposed to pay for your master so you don't have to get student loans. Well, come to find out, both, well, both my parents are drug addicts. Background. And come to find out my dad was having a five year affair on my mom. And so I gave my mom all of that paid internship money to get out of the house. Then I come back on April 16, right. The day after tax season and my dad's still living in the house, so they spent it all on drugs. So my bonus was supposed to pay off that master's program. So I started your tax coach to pay off the last like, 30 grand of my student loans. And I did that month one of opening the business.

[B]

It's funny, if people would just do the math of how much profit their high salary generates the company, they would be way more confident to go build or buy a business of their own. Because I did the same math that you did. I was making a quarter million dollars and I said, wait a second, I did $5 million of, like, annual revenue for you guys. I make a quarter. I'm like, hold on a second. Like, if I could do that for them, like, can I do that for me? And then even when I had my affiliate business, I was making like 120,000. I think I made 120 to 160,000. That was like 10% cut is a normal, pretty generous affiliate. Yeah, I was like, that's like 1.6 million for somebody else. And so everyone is maybe listening to this or watching this and they're coming up with all these excuses in their head of why they can't be a business owner and why they're just an employee. What's some advice that you could give to them to help them realize their strengths and their skill sets that they already possess today?

[A]

I think you have to have a personal brand. Honestly, like, the thing that worked for me from the very beginning was even when I was in corporate America, I was still documenting on social, like, what I was doing for my clients, even though my clients were really their clients. But I was, you know, this is what I do in a day. This is how I save people money. Hey, I did this tax strategy for someone. Maybe it'll apply to, like, any of my friends listening. I literally had no, like, business owner clients, like, listening. It was all just, like, friends and family. And so when I did transition into having my own business, everyone was already used to me kind of sharing all those things. So then just expanding the personal brand of, like, more social media, more platforms, having a podcast. The marketing piece, I think, is where a lot of people fail. Because if someone doesn't know about your business, how can they ever buy from you?

[B]

I mean, and that's the entire bottleneck between your zero to your first million is literally just nobody knows about you.

[A]

Yeah.

[B]

You have to market. You have to figure out a way. So walk us through the scaling process. You said you did $30,000 your first month, which is insane. So how did you go about scaling? What were some roadblocks and kind of milestones that you hit in between?

[A]

Yeah, when I was thinking about having an accounting firm, I took everything I hated about accounting over the last 10 years that I have been working at. And I was like, okay, I don't want billable hours. Like, I hated billing for my time. It always felt icky to me. And clients also never knew what they were going to be billed. So I was like, flat fee for everything. Communication is going to be amazing. And I'm going to bill based on value. Like, if you pay me 20,000 to save 100,000, would you do it? Yes, anyone would. So those are really like my value propositions. And I also wanted monthly recurring revenue, which is also different for an accounting firm. Like, yes, there's monthly for bookkeeping, but there was never anything for like tax or a tax plan. So I just started billing my clients monthly and doing as much as I could. Like I said for marketing, like going to BNI groups, which like now I would never do that. But. But I think when you're first starting, like BNI really helped and it helps you to like be in front of people if you're not really good at speaking.

[B]

You know, just bni.

[A]

Oh, the Business Network Incorporated or whatever. It's like in your local city, there's one in every city, everywhere. And there's multiple chapters in every city. But there can only be one person per industry. So like if there's a chapter that you find they had to have an accounting seat open. And then for you it'd be like a business coach open or something like that. And so then when you go in, it's required that you refer to each other like that is. Or you're kicked out of the membership, basically.

[B]

Got it. That's intense.

[A]

So it is. And you have to attend every week. If you miss two in a year or a quarter, they kick you out. Like it's very rigid but also really good for business building.

[B]

Yeah.

[A]

And I would go to chamber groups, like I would speak to any group that would listen and slowly got clients that way. So I think in the beginning, like, you just have to have like, kind of no boundaries and like willing to do whatever to get your name out there for people to start knowing who you are.

[B]

You have to embrace the suck.

[A]

Yeah. The first 18 months were so terrible.

[B]

Yeah.

[A]

Like 20 hour days. Like I. And I'm not exaggerating at 20 hour days as a mom, it was like awful.

[B]

What's advice that you would give to somebody that says, I'm too busy to buy or build my own thing. Like, I need to keep working this job. I'm too busy.

[A]

It's just not a Priority for you. Like, period, point blank. Whenever I have a coaching client, I the first thing I do is I say, show me your calendar and I'll show you what's important to you. And so there is enough time in the day. It's like, oh, I don't have time to work out really. Well, you could get up an hour earlier or I have too many kids sports. Well, you could be multitasking when you're at your kids sports. Like, I'm still watching while I'm checking emails and I'm, you know, writing down content ideas. Like, you can do so many things with 24 hours in a day, but what's the most important to you?

[B]

Yeah, and our secret weapon is my community director, Caitlin that we talked about in your podcast, four Kids fifth on the way. And she does more in an hour than most people are doing a week. And so I actually tell people that are in the same boat. I'm like, hey, your constraints, how you're viewing them is that they're the, the barrier of the roadblock to your success. But I'm actually here to tell you, like, it's the, it's the pathway to your success because you with your kids and marriage and all of these obligations, I promise that you are better at building systems than I was out of necessity because I just had my entire calendar wide open and it just absorbed in every single ounce of my attention. But like, people with kids, and I've seen it happen, they go into their businesses and they say, okay, cool, like non negotiable, I'm done by six because I have to be. Yeah, like my kids, I got to go to soccer practice, you know, so I think it's so important. So walk us through. You know, what were some of the stumbling points you had when you were scaling this thing?

[A]

Working 20 hours a day.

[B]

Yep.

[A]

So not only was I scared to quit corporate, so I finally quit six months later after my salary was after I was making 10x my salary. Why I waited so long, I don't know. But like, I needed to feel stable enough to do that in my business, which is fair. Yeah. So finally after 10xing my salary, I quit. But still working the 20 hours a day. And then my next fear was hiring. And it was like, who do I hire first? I had no idea how do I be an employer? Not to mention the legalities of it, but also, do I have enough funding to do it? Never do I ever want to be in a position where I can't pay for my employees family and life Like, I don't ever want to be in that position. So it was really hard for me to make my first hire. I did have contractors at first. Like the first thing I outsourced with social media because it's such a time suck. But I did finally decide to hire one of my contractors full time and it was an executive assistant. And that was like game changing. I'm like, wait, you can book my travel for me and you can schedule podcasts and you can do my scheduling and you can check my emails. Like, I like ripped the delegation band aid off and then it was like, who can I hire next? So then I slowly built out my tax team, then I slowly built out my bookkeeping team and then my operations team and my creative team. So I think delegation is so key and I wish I would have done it sooner.

[B]

Well, yeah, it's like in the beginning, you know, you just don't have the revenue to. And now it's like you get to a point where. And like I'm just now entering this point where I'm now I only view like six figure talent. I'm like, okay, cool. What's that position that can come in that I could pay $100,000 for, which I'm so excited to pay because that hundred thousand is going to yield me millions. Like, that's like employment is like insane. Yeah, it's so much fun. So what's some advice that you can give to somebody that's making their first.

[A]

Hire hire slow and fire fast? When I, when I first started, I hired out of necessity. It was like, I cannot go one more day without some help. And so I hired the wrong people. And then once I did hire them, I kept them on too long when they weren't the right fit because of, you know, fear of having to do their tasks again. Or what is the team going to think if I fire someone else or what have you? But it's like, really take your time to build out who it is exactly that you want to have on your team. Like view it like dating, you know, like have your exact criteria of who you want in a partner. Because it really is like your team are your partners.

[B]

Yeah. So it's higher, slow, fire fast. We just experienced that and to a larger degree. And it feels like shit.

[A]

Yeah.

[B]

And you feel like you're doing something wrong and you feel like you're broken when you're doing it.

[A]

You're like, I hate it every time.

[B]

Where did I hate it every time. Where did I mess up? How did I get, how did I get this wrong. How did every single person that did an interview with this person on the team get this wrong? And the ultimate answer is that's never going to go away. Even at like corporate executive level positions, you just don't know what you don't know until you're in the process. That's why that 30, 60, 90 day process exists to where you're doing your 30 day checkpoint, your 60 day checkpoint, your 90 day checkpoint, and then you're like, oh wow, you're stealing money from me and terrible and genuinely a terrible person. And then you can fire them. And then that's actually hiring working. That's the process working. And that's what a mentor helped me understand was he was like, dude, congrats. Fired him within 60 days. Yeah, he's like, good, you caught it. That's the process in motion. So where are we at today with it? So this was back in. Walk me through the timeline. So this is back in like 2020. Yeah.

[A]

So 2020, I started your text coach 21, I hired my first person and now we have 30 full time employees in 16 states.

[B]

Boom. Yeah, that's freaking go. So walk me through tax strategies. Where do people get taxes wrong from a mindset perspective. And then let's get into some strategies that you help your, your high net worth clients get that maybe people haven't heard about before.

[A]

Yeah, I think tax mindset is like the tax code was written for business owners and real estate investors. Like there's 7,000 pages in the internal revenue code and only 12 of them tell you what to pay in taxes. The other 6980 tell you how to get out of them through being a business owner or real estate investor.

[B]

Literally.

[A]

So they like you are entitled to, to these tax benefits.

[B]

Mm. So what are some, what are some strategies that you see people do that are like you guys do for your clients that have seen, that you've seen work the best. What maybe give like some entry level one on one strategies and then going up to some, some crazy, maybe unique ones that we haven't heard of because I think a lot of us have heard like doing the 10:31 exchange or like a cost segregation or accelerated bonus depreciation. Maybe we can still hit on those for people that are brand new and maybe aren't familiar with the terms too.

[A]

So you want them for real estate investors.

[B]

They start with real estate first and then I'm really curious about advice for people that I sold my portfolio, so I'm just eating my taxes right now. Yeah, So I need help too. So first, first we'll help the investors.

[A]

Yeah. So typical ones like you mentioned, 1031 exchanges, right? You can not pay anything in tax on any time you sell an investment property. You can do that forever until you die. And I think this one's really crucial because people do 1031 throughout their life. And then all of us have probably heard of a friend's parents because it's not my parents and probably not your parents that are gonna, you know, retire with a bunch of properties, but maybe our friends parents who are now 70, 75, they're getting too old and they're like, I don't want to deal with this real estate portfolio anymore, so I'm gonna sell it or I'm gonna give it to my kids. Like never ever let your parents give you a rental property before they die.

[B]

Because now you don't have the stepped up basis and now you're going to pay the estate tax.

[A]

Exactly. So that triggers a taxable event when they gift it to you. And like you're saying the property could be worth millions of dollars more than what they purchased it for and you wouldn't get that unless you get it when they pass. So let's say they bought it for a hundred grand and then when they pass away it's worth a million. And well, you would get it for $1 million the day they passed and you could sell it that day for absolutely no tax. So that one's really important. I really like a lot of people talk about 1031s, but I call it like the reverse 1031 or the slow man's 1031 or slow woman's 1031, where like it's not even through a 1031 transaction, it's outside of it, but it's in the same year. Okay, so for example, you mentioned you sold your portfolio. Maybe it was in 25, I hope. And so we have the rest of 2025 to figure out how we're going to lower your taxes. And it's not always real estate that will do that. But let's say we have from now till the end of 25 to find you another real estate portfolio that maybe takes less time from you, makes you more money, but the perk of it is now you bought a new portfolio, you can redepreciate everything. So then you just recast seg that new portfolio and offset your taxes. One that I think you'd really like because you like to buy businesses to go on. This is called the self rental election. And I don't mean like the Augusta rule, but the self rental election means. I'll use this as an example. We're in my podcast studio right now in one of the offices that I own. If you own an office or building or warehouse or whatever, in the same percentage that you own the business that is housing. So let's say for example, this. If I owned your tax coach 100%, I would have to own this building 100%. But for tax purposes, as long as you make this election, the IRS says it's one unit. So the cost egg on this property, which gave me like a $300,000 loss, offset my YTC my year tax coach income by 300,000. I did not have to be a real estate professional.

[B]

Okay, what the hell? Wait, what? All right, walk me back.

[A]

Yeah. So, so let's say you own a H Vac company. Okay, 25%. So you own it a quarter, quarter, quarter, quarter. You have three other partners.

[B]

Got it.

[A]

You guys could buy an office or a building or my favorite's commercial residential like this in places that I like to visit. So Scottsdale is one of them. Miami, New York, California, you can do it all over. Find somewhere you like to travel to and buy a commercial residential. So when you're in those cool places you can also stay. So like upstairs from here I can stay as long as I'm here for business, which I am because we're recording a podcast.

[B]

Okay, stock me on it.

[A]

So you and your three partners of the H Vac company go in in the same percentage on a building or a place like this. And now you can make the self rental election where it's all now one. So say $1 million condo in Miami. You do a cost seg on it, gives you $400,000 of depreciation. That 400k will offset your business income by 400k.

[B]

Damn.

[A]

Okay, and then just keep doing it.

[B]

And just keep buying new offices. New offices?

[A]

Yeah, in places where you can do business. So for you, you have members all over the U.S. probably all over the world. But you know, find hubs where there's a lot of your people. Probably Dallas.

[B]

Yeah. Denver, Dallas, Seattle, probably like Tennessee, Florida and here.

[A]

Yeah. So let's say this year you're like, okay, I want it in Scottsdale and Miami, so just own it. The same percentage. Maybe it's action Academy that you want it. So if it's 100%, you then buy the building and 100. Or if it's 90 10, the other person will have to come in that's the only downside is it has to be the same percentage.

[B]

What if it's phantom equity?

[A]

Well, if it's not on paper, it's.

[B]

Not on paper, so it's phantom. So it'd be just me having a match.

[A]

Your tax returns.

[B]

Okay, cool. So it has to be me. 100%. Got it. So when you say commercial residential, like, did you, like, did you own this unit? Do you own the entire building? Like, how does that work?

[A]

So for this building in particular, I own this unit.

[B]

Okay.

[A]

But it's commercial residential, meaning it's zoned for both. I could live here or work here or both.

[B]

Okay, how does that work? I actually have not heard of that for some reason.

[A]

Commercial residential, there's a lot of them. And now that I say it, you'll probably notice. So an example would be go to Old Town Scottsdale.

[B]

Okay.

[A]

All the businesses are downstairs and there's always a unit upstairs that's commercial residential.

[B]

Okay, yeah, that makes sense. I see that a lot in Europe, but I don't feel like I've ever heard anybody talk about that.

[A]

You're welcome.

[B]

There we go.

[A]

That's just one of, like, thousands of strategies I have up my sleeve.

[B]

Well, keep on going. Thank God we got a podcast because right now I'll, like, be honest with my strategies and like, and you've kind of changed my mind already. But I just don't, I just don't like investing in most real estate. I just don't want to. I talk to all the real estate investors. I like it, it's cool. But it's just from a return perspective. It doesn't wet my whistle because I love buying. Put all my disposable cash back into businesses.

[A]

Yeah.

[B]

Because they make me more cash. But then my accountant and my tax team yelled at me and they're like, hey, you don't need any more cash flow. Like, go buy something else. And I can't mentally bring myself to do that, but I need to make the pivot. So what's some advice for me? Or some business owners that are profitable and multi millions of dollars. And we got to figure out something because it's either I need to go buy the short term rental, which I was in the process of doing last year, and I just said this, like, I don't want to, like, I don't want to go through the process of doing all this stuff. I don't want the freaking short term rental. I just want to focus on my business and, like, grow my business. That's it. And So I didn't do it. But then I paid 37 tax and I don't like that.

[A]

Yeah, the first thing I would ask is, like, what is your time worth?

[B]

And like, that's why I didn't do it, because I'm like, this is a waste of my time.

[A]

Yeah. Sometimes, like you don't do everything for taxes. You know, like at the end of last year, I needed, quote unquote, to buy another piece of property, but I didn't because I was like, it's freaking December, I'm tired, it's the holidays. I'll just write the check. And sometimes that's okay. Like, it's not always going to work out timing wise, but there's still other things you can do. One I would say, are you calculating your ROI correctly on rental properties? Because it's not just the $200 a month in cash flow.

[B]

No, I don't care about that anymore. Like, we have people that are doing all types of commercial. It's just, I don't like. So, for instance, so an example of this would be if I have $500,000 in cash, I'm gonna put that $500,000 into buying cash flowing small businesses because I can get like a 30, 30% minimum cash on cash return on that, like day one. Like I don't have to put that into a syndication or I'm going to get an 8% pref and then a freaking 2x equity multiple in five years. Like that sounds freaking terrible to me. I'm not going to do it.

[A]

Yeah. Then for you, it's like you're, you're out. You're out earning the tax problem anyway. So as long as you're fine with paying the 37%, cool. But also you could invest in other things besides real estate. So you could throw it into oil and gas.

[B]

Yeah. Any more of these? I like this too.

[A]

So you, you can get 85 to 90% as a deduction in oil and gas the year you do it. So let's say that 500k that you have to deploy, you put a hundred thousand of it in oil and gas, you immediately get a $90,000 deduction on your tax return and hopefully it hits oil and you'll also make cash flow as well. So you're getting the big upfront deduction more than typically real estate, because real estate, you're getting like 40% through the cost seg. So oil and gas, you're getting more and hope hopefully you hit gas or oil. And there's oil and gas companies out there where you're only investing and already producing oil rigs anyway. So it's kind of like guaranteed. Nothing's guaranteed, but yeah, better chance of making more money. So oil and gas is one also. I'm a big fan of people having their own charities. Like there's so many ways for you to save money in taxes through charitable deductions through your own private foundations and things like that. So at the end of the year, let's say you have 500k of profit you want to get rid of. You have your own private foundation that you throw it into. You get the $500,000 deduction today and you haven't really donated any of it yet because you haven't figured out what to do with it. And that's okay. The IRS allows you to. You just have to give 5% a year away to an actual 501C3. So let's say in December you throw 500K into your private foundation. You'd have to give 25,000 of it to a charity of yourself. Yeah, yeah. The cool thing with your private foundation is now there's $475,000 in it. You could invest it in real estate. So if you wanted to so that that money is going to grow.

[B]

I'm not anti real estate. I still like real estate. It's just from a time perspective and an attention perspective. Yeah, yeah. So me we'll probably do like some commercial properties is like JVs and then again like I'm partner on development, which is going to be more of the syndication model. But I just like the reason I built my business was so that I could have my attention where I wanted it to be. Like that's the primary reason I did it. And then all of a sudden I found myself playing this tax game where I'm like, wait, hold on a second. Now I'm doing all these things I don't want to do, which was the opposite of the point of me building the business.

[A]

Yeah. So I mean the bummer with taxes is if you want to keep control of any of your money, you'll be taxed on it. If you deploy it into investments.

[B]

Yeah.

[A]

Then you won't be taxed on it. But I'm sure there is somewhere in the US where you would want to visit and have a short term rental. Like for me, my next one I'm trying to find is New York City. I'll be there all of June trying to find my next property and it'll be a short term rental. When I'm not There, which will be most of the time, I'll get the big cost. Seg it. The Airbnb will offset the cost of it. So it's not costing me anything and it's helping me tax wise. And it's in a city I'd want to visit. It's the people that are buying short term rentals in Alabama. No offense to Alabama. I don't want to visit there.

[B]

I don't think anyone does. I don't trust the person that wants to visit Alabama.

[A]

Yeah, so. So maybe they're really into football or something. So my thing is, like, don't buy real estate in places you don't want to go visit yourself.

[B]

That's fair. Yeah. Because we're about to start investing in like some crazy properties to like, host retreats at. So that's what we're looking at right now is like boutique properties, hotels, and then also like resorts, stuff like that. That's going to be our play. I can't buy a vehicle to deduct because we're an online.

[A]

Oh my Atlanta.

[B]

So there's nowhere that you can say in an audit that you're actually driving to in Austin.

[A]

Do you drive to the airport?

[B]

I do.

[A]

That's a business. That's business mileage. Do you drive to go get supplies for your office? Yes. Do you drive to the post office ever? Yes. Like, are you driving to Costco to get your home office snacks? Because you can do that as a business. Yes. Like, you're driving for business.

[B]

Mm. So I can do it. I can deduct it?

[A]

Yes.

[B]

Yeah. I was like, why the fuck am I not able to deduct a car this year? So, like, last year we had all this profit set. I was like, why can't we deduct a car?

[A]

Yeah.

[B]

Like, what are we talking about?

[A]

You totally can. You want to make sure it's 50% or more used for business. So if you're like, well, I drive to the gym. Okay. We'll have a business meeting at the gym. Use the gym's WI FI for business.

[B]

Mm, done. And then you just have to log it, right? Yeah, yeah, Easy. Okay.

[A]

And then make sure the car is over £6,000 is like the best way to deduct it if you want to buy a sports car. Because I saw you in a Ferrari.

[B]

It's a rental, guys.

[A]

Then those you want to lease.

[B]

Yeah, yeah, yeah, yeah. That makes sense because. Yeah. I was trying to see if, like, if I actually was a car guy. I was like, let's. Let's give It a shot.

[A]

I bought the cool cars and like all the cool, like fancy things and like, they don't do anything for me.

[B]

What does it for you?

[A]

Travel.

[B]

Me too. Yeah, I just like, the things just collect us. Like my entire condo complex is all literally just Ferraris with covers on and Lamborghinis because they just leave them there because they're off traveling and doing other stuff.

[A]

But it's so funny because so many people that aspire to hit the next goal or like the next like the 10k months or the million dollar years, it's to like buy the thing that they've always wanted. But then you buy the thing and you're like, that's not really what I wanted. I wanted the time. But then your time has been replaced by your business. So it's like this weird limbo place. And then you realize all you want in life is time and experiences, period.

[B]

Because if you have a yacht, I mean, I've experienced it myself, you know where I was just like. And that's why even like the idea of being the like the single dude, the single multi, multi, multi millionaire in your 40s with no kids, like, that's awful. Like, I want to have kids and like get married and all of that because I've traveled to like the nicest places by myself.

[A]

Yeah.

[B]

I'm like, wow, this sucks. Like I would much rather have somebody with me or like.

[A]

Well. And let me tell you, traveling with kids is like the best. Everyone talks about.

[B]

Hold on, this is, this is a hot take.

[A]

Everyone talks about how hard it is to travel with kids. That's bullshit. It's because you've never traveled with them. So like my kids have always traveled. So now they like, they know airplane etiquette. Like, they know when we're in a new country, like you have to adapt to their culture. Like they know when we're in Paris that you need to say bonjour. When you walk into a place where they.

[B]

Otherwise. Yeah. They're going to punch you in the face.

[A]

Yeah. Like, and so your kids just have to know these things. They need the experience, they need the cultures and they will know how to travel and it'll be so much easier.

[B]

Just from the beginning. Just like, like having them around. Noise.

[A]

Yeah.

[B]

Then they'll just be able to sleep through it. Yeah, that makes sense. Oh my God, that's cool. So what else? So we got. So we. I'm going to get the freaking car, then I'm going to get the oil and gas. What else do we got?

[A]

You're going to get some self rentals.

[B]

And it gets made self rentals at Airbnb or two. This year I am going to invest some into some syndications. But here's. I guess here's my, my issue is for me and like all the tax prep we were doing last year, it was like, okay, cool. So I could do, I could take these passive losses, but that's only for passive income. Like, we couldn't take the passive losses onto my active income. So like, how do I do that?

[A]

Because you weren't a real estate professional.

[B]

I wasn't a real estate professional. So it's just basically either stop bitching.

[A]

Or buy real estate or marry a real estate professional. Stay at home mom.

[B]

So dream. That's the dream. Especially if she speaks Spanish.

[A]

Okay, so we're looking for a Spanish speaking stay at home mom or willing to be a stay at home mom.

[B]

That wants to travel the world and.

[A]

Spend 750 hours a year in real estate. And more than anything else, we'll be there. We'll look for that. Yeah. So for the passive losses, you would have to have some kind of other passive income. So we call them pigs, passive income generators. Can you be a passive investor on any of your businesses?

[B]

I'm a passive investor on all the businesses.

[A]

Then they can all offset your passive losses. It just has to be classified as a pig on your tax return.

[B]

How do you classify as a pig?

[A]

It's literally just a checkbox that says that you're active or passive. And I bet they marked you as active.

[B]

Something to think about.

[A]

Show me your tax returns and I'll show you.

[B]

Yeah, sounds good.

[A]

So for a lot of our clients that have passive activity losses, like real estate, those are called pals, passive activity losses. You need pigs to go with your pals. So oftentimes the pigs are going to be franchises. Like a lot of our clients will invest in franchises. Because you're not really like active in there.

[B]

Yeah.

[A]

Or like what you're doing, you're buying up businesses. Not necessarily a franchise, but just any business.

[B]

What about franchises too?

[A]

So, so yeah, all of those can offset. But from the beginning you have to be classified as passive. So for if you've been marked active on those before.

[B]

We'Ll figure it out this year. Yeah, but okay, cool.

[A]

So and then when you're structuring these business buying, like have you heard of the qualified small business stock election?

[B]

I've heard about that. In the context of a founder starting up a company and then exiting it.

[A]

Yeah. So you could structure it you'll need to restructure when you're buying the. The company, whether it's a asset sale or stock sale. But a lot of business owners can qualify for the small business stock election, where every owner can exclude up to $10 million at sale. So if there's five business owners and you sell for 50 million, it would all be tax free. Okay, yeah, as long as we can qualify you from the beginning. We need a five year run. Runway is the biggest thing. So you had to have originally issued stock for five years. So you buy a business today. Yeah, we would need at least five years before you sell.

[B]

Okay, cool. No, that makes sense. Oh, my God. So through all this process, like, so you built this up, scaled this. Like, my honest question is, how the hell do you find time to do the 700 units that you guys have while you're scaling the business? Because I scale my business, and I'm like, there's nothing else I can even remotely attempt to focus on building, let alone, like, anything outside of this business.

[A]

Yeah, keep delegating. So like anything that's less than my hourly rate, which my hourly rate is $3,000. So basically anything is less than my hourly rate. I delegate out. So like a house manager, a chef, nannies, like, any of that to where, like, you can focus on being present with your family, present with your kids, and scaling your business. I outsource all of it. And then in terms of the rentals, like, my husband's my rep. So, yes, you have to marry a real estate professional, Spanish speaking, preferably. And still you can have people that help you in your real estate portfolio. You just have to spend more time than they do. So, like some hacks with that, you know, you're supposed to spend 100 hours a year and more than anything else on your properties is like, when we're remodeling a property, for example, we totally gutted this place and redid it. I tell my contractor, you have to swap out your subs every 99 hours so that I or my husband spends a hundred hours or more. So just little, like, tricks like that.

[B]

See? Yeah. Okay, cool. So I just need to suck it up and do it.

[A]

Delegate more. Delegate more so you have more freedom and time.

[B]

Cool. So who is your target client for what you guys do? Because somebody's maybe listening to this, myself included, and we're like, okay, tell me more about what you offer and, like, who you guys are.

[A]

Yeah. So everyone comes to us for tax strategy. And typically you want to be a business owner, bringing in 250k or. Or more for strategy. But if you're below that, like, everyone knows me for the right after life course. So I literally show you thousands of deductions that you could be taking in your business through the course. And for our real estate investors, obviously we can help you with strategy as well. But also we do cost segs. So if you're needing a cost study on a new property, basically anything and everything for your tax savings.

[B]

Beautiful.

[A]

Got it.

[B]

So if people want to find out more, they want to partner with you, they want to work with you, where can they go?

[A]

Yeah, just DM me on Instagram. It's me on Instagram at your tax coach. That's the one thing I won't delegate out is responding to my people.

[B]

Yeah.

[A]

My community. So if you have a tax question, feel free to reach out.

[B]

Beautiful. So, guys, we're going to have that in the show description and you can go and find out all the information that you need and be sure to follow her on Instagram as well as the show. So, guys, thank you so much. It's been Brian and Barbara with the Action Academy podcast signing off.