THIS IS THE ADVERTISEMENT I WAS TALKING ABOUT…

?PART I OF II...

?Over two weeks ago, I posted an article entitled, “BE AFRAID, BE VERY AFRAID.” And it was about an advertisement by two Certified Public Accountants that I found on Facebook that said, and I quote: “tax planning can save you AT LEAST $20K on your taxes as a realtor”. And the advertisement refers to their tax planning. How can you make that statement without knowing how much the “client” earns and their legitimate deductions? I cannot figure out how they will save the “client” $20,000 without knowing anything about the “client”!!!? And I said that article was run over two weeks ago, and the advertisement still runs almost every day!!!?

I realize that these two Certified Public Accountants, who could be great CPAs and income tax preparers, should never have said this because it gives the “client” expectations they cannot meet.? I understand that we sometimes say somewhat boastful things to get business; this goes way beyond BOASTFUL, and that’s wrong.?

You are taking a topic, INCOME TAXES, that the public hates to pay and drawing potential “customers” in by making blanket statements like this one.? I put customers in quotes because a customer is someone who comes to you to buy something and may or may not come back.? But a CLIENT is someone with whom you have a relationship and they ALWAYS come back!!!? If and when the Internal Revenue Service questions some of the deductions used to save the client $20K, the taxpayer and customer will be more frightened than you can imagine, and it may cost the client the taxes and PENALTIES and INTEREST and maybe ATTORNEY FEES if the taxpayer is audited, and I did say IF!!!

? ?And now, let’s assume that they tell you when you call that they can only do this for you if you own a piece of Commercial Real Estate, for which you paid a lot of money. They will have a licensed company perform a Cost Segregation Study, which will cost you monies above the fees that they will charge you for preparing your income tax returns and get you tens of thousands of dollars in five-year, seven-year, and 15-year assets and take 100% Bonus Depreciation on it for 2022, which you cannot do in 2023 since Bonus Depreciation is being phased out. For the calendar year 2023, you could only take Bonus Depreciation at 80% of the cost. ?

?You only DEFER income taxes by doing a Cost Segregation Study; you do not save income taxes. It actually works out to be an interest-free loan from the Internal Revenue Service. You SAVE income taxes if you do a Cost Segregation Study when you SELL the property. It allows you to convert ordinary income into Capital Gain income, possibly saving you up to 17%.? But that benefit will not be fruitful between you and me and should only SAVE you INCOME TAXES on small items.

?And please realize something else: I AM NOT LOOKING TO DO YOUR INCOME TAX RETURNS!!!? I stopped being a Certified Public Accountant years ago.? I still take the continuing education classes that CPAs take because I want to be current on present laws and strategies.? My only motivation in writing this article is that I do not want to see you hurt and go through an IRS audit, a very uncomfortable situation, because so many of you are so afraid of the INTERNAL REVENUE SERVICE, and I UNDERSTAND THAT.