CPA WITH BUSINESS TAX AND PERSONAL TAX 1.8
So they have a really cool thing called step up and basis. And when you have somebody that passes away, because if you’ve used a trust and you’ve done it properly, there’s this idea that the estate tax is already covered that and there’s an exemption that’s very large. And so for most people, let’s say all you have is a house. Let’s say you had $300,000 with the equity in this house and it’s below the estate limit. So when you pass away, maybe you bought the house for $50,000 when you pass away, it gets what they a step up in basis. It’s now worth $300,000 if it’s in a trust and we know that you died and we do the step up in basis and then it transitions to one of your children and then the chil child sells it. Let’s say they sell it for 300,000 as soon as they get it, they sell it. And accept that same market price. They pay zero tax, zero tax if you do it properly, which is why I say if you have any substantial assets, even if it’s just a house, it’s worth having a trust cause the differences of you paying capital gains on $250,000 with the taxes to use the best Trust Attorney Las Vegas.
Yeah. I just want to reiterate that for those of you who who maybe went over your head the first time, if you gift it to your kids before you die, a gift means that whatever you paid for the house, that’s what their tax basis is. So if you paid 50,000 and you give it to your child, their tax base is 50,000 they turn around and sell it the next day for 300 they have to pay tax on that 250,000 in gain versus if you die and then they get the house and the greatest Trust Attorney Las Vegas, they pay no tax on that 250,000 so it can be a huge difference there. Yes, you’re trying to avoid having to pay the attorney and do all that, but guess what a trust is going to cost you $2,000 tax on $250,000 even if it’s capital gains is going to be more than $2,000 right, Trevor?
Yeah. So just at least talk to an advisor to make sure it makes sense what you’re doing it. The problem is, I think the theme we’re going over and over again is people try to do stuff on their own. They don’t know what’s going on and, and that’s when they get themselves into trouble. You know, you wouldn’t go and operate on your own leg or on your own head. I know it seems like an extreme exaggeration, but it, the theory is the same. You have professionals in a specific industry who know what they’re doing and that’s why we have this podcast. We want you to know who a trusted advisor is when you get Trust Attorney Las Vegas, what they look like, what they sound like, so that you can go talk to somebody so that you don’t get yourself in trouble. Uh, when you do, you know, there’s a lot of do it yourself for is out there, you know, for home improvement.
Sure, that’s fine. You can do it yourself. If you make a big mistake, you know, whatever, it’s not gonna be a big deal. But we’re talking about, you know, taxes and the IRS and the government involved in getting sued and penalties and interest. That can be a huge nightmare that doesn’t affect just now that can affect your credit down the road, your ability to buy a home, to get a job, whatever those things are. So I just really want to emphasize that you really do need to use somebody who knows what they’re doing. You don’t have to use one of us, you know, the podcast is here is education, but we want you to know what kind of things you should be looking for and asking your advisors for. So, um, last question I have for you. You know, a lot of what we’ve talked about is avoiding the audit. But I think people, um, blow the audit out of proportion and think it’s this big scary thing because it’s the IRS and you know, they’re the government entity. But really I think, um, you know, my experience has been if you do get audited for your Trust Attorney Las Vegas, if you’ve had a trusted advisor that did your returns and did them the right way, you really don’t have anything to be scared of because you know, for your clients, you the audit, is that right?
Yes. So what does that look like? Just, you know, very briefly and um, you know, maybe why, why it shouldn’t be a big deal for people to be audited.
So again, using a trusted advisor with the right structure, my clients bring in all their tax support and paperwork. Now they might have a bunch of receipts. They ended up for deduction. I’m not going to charge them to add up the receipts. I will use the totals that they give me. So I’ll take the totals and I’ll do a proper return. But I tell them every time when they’re bringing in, no, I don’t have to add it up. I just want the totals but keep the receipts. Now if we get on it, all I do is take those totals that we worked off of and I say, Hey, please bring me in all that support you originally had. I take all those receipts or those bank statements or check copies, whatever that you had, and I’m bringing down the IRS agent and they go through all the paperwork for your Trust Attorney Las Vegas.
All they really want is paperwork. Most audits that are bad is because there’s no paperwork, and I’ll say most of the time it was because they didn’t actually have real expenses. They estimated a number and now that they’re getting audited, they’re scared. And I will tell you when you get out of it, they specifically ask you to support the number you gave them. It’s not like, Oh, let me see what I got. If you said $3,005 they’re gonna want to see that you have $305 if you can’t show that, they’ll know that you were just guessing numbers to use your Trust Attorney Las Vegas.