Tax Day for SW
A new feeling--------- See the CPA at your leasure. Not the press to "get r done" by March 1.------- I am sure there is a copyright infringment there--- sorry to the guy coming after me without the shirt sleeves.
The humor event of the year for a guy who lives with numbers and music floating freely in an open space between his ears.
I got three "middle aged" guys who are kind enough to take me along on this trip to see one of the fine products of the Accounting department I graduated from,,, my escorts are an amazing trio of talent and respect. So we managed to enjoy the annual rite of affirmation of the need for expert help.
Our CPA adviser has not goofed off his life and has the gray hair that comes with constant updating of IRS rulings. To top that he still has his sense of humor------a total success story. He deals amazingly with our mixture of personalities and questions--- from " I bought this two years ago and forgot to tell you" to the "I need to amend a return for this little bit of income I forgot about til the IRS reminded me"--------
One discussion that came up is this------------ may not make sense to any one but me ---------------------------
Which do you consider more important to protect, your real estate assets( home, etc ) or your income source ( business model )
and how do you accomplish it in these times of "wealth by litigation"??
Re: Tax Day for SW
Matching personalities with your CPA is crucial, I suppose...the best marriages of opposites attracting. Ours called me weeks ago, and we agreed to delay our traditional early-February meeting this year. I have the files of 1099s and other forms together...just need to re-write my notes today, so someone has a prayer of deciphering them.
The final question has sort of the same answer for us. Our real estate assets ARE our main income streams...farms, forests, mineral deposits, and rental houses. Risk management is my middle name and main occupation, it seems some days. The best reply I can give you follows along Kathy Bates' line from "Fried Green Tomatoes"..."Face it girls...I am older and I have more insurance."
Another strategy we employ, given that hog farming is treated worse than any red-haired stepchild here in North Carolina, is to stash different real assets and investment accounts in various names, of either real people or invented entities. This farm would be our main income -producing asset, as well as our current main living situation, but we don't directly own it as ourselves. Other assets sit in various names, too.
For example, it requires a separate annual filing, a cost of $200, to hold one commercial property adjoining this place, which we felt we needed to buy, just to keep out the riffraff. Our counsel recommended owning it outside our own names, so we just formed a holding company. The hog farm is owned in one LLC, and operated by another. (This is more typical than you might imagine, usually leased by non-owners, the owners having retired or gotten run off by ever more complex regs.).
Others may argue with this organizational strategy; but, it works for us.
I own my home farms in Va, one of which is a surface mineral mine, currently in reclamation, but likely to be mined yet again in the next couple of years. Very complex situation involved, with a family sub-S corp exercising the mineral rights.
Mike's home farm there has three rental houses and a grazing tenant on it, all of it solely in his name. That one is actually numerous
separate tax tracts, paralleling past generation's ownership interests. this works to our advantage in a way, so a complication involving one tenant need not necessarily entangle the entire farm.
One caveat in securing insurance: Make sure the coverage names every insured interest...claims will only be paid against insurable
All of this separation of holdings does complicate our tax picture a bit...one of my main functions in tax prep is dealing the 1099s for each income stream into the right entity's pile. It creates a wall between risk one of us assumes to receive the income, though, and the holdings of another. This gives me greater peace of mind.