Episode 40:Trump Taxes, Why Amazon Pays No Fed Tax, Need to Know if You Have Startup Equity / Shares

Pleased to have my good friend Will Geeslin, CPA of the Geeslin Group on the 40th Episode of The Real Takk Podcast. Will was our first corporate accountant at Compass, formally known as Urban Compass. Will & I connected in the summer of 2014 back at our Union Square West office when there were only 25/30 brokers, and just a few dozen staff members. Prior to joining forces, Will worked at E&Y for 2 years honing his skills as a number cruncher. Hailing form Atlanta Georgia Will was an ex-resident of the warren house condo in Murray Hill, has ran the NYC Marathon, & is a proud alumnus of Auburn & the Auburn Tigers Football program. (Go Jason Campbell)

FWIW: This is not a Pro-Trump or Pro Biden pod. We’re here to discuss the birds-eye view of accounting practices that are common for real estate developers, owners, & operators as well as common misconceptions that people who earn a salary may NOT be aware of when media blasts companies like Amazon for “not paying federal taxes” (subjective look vs objective look)

The Topics We Cover: Trump's Taxes

-“As a RE Developer, Trump paying $750 shown on his income tax? There is a reasonable explanation of how he got there”

-Why does Trump have one of the more complicated tax returns of any President?

-The beautify of real estate is that you get a huge non-cash deduction for what is called “depreciation”

- What is the media not talking about when it comes to Trump paying just $750 in taxes?

-If a business owner doesn’t want to sell a business, the goal is to show as little income as possible.

-Bulk of developers & landlords earns schedule E, real estate related income, but taxable income for developers does not correlate to wealth.

Tax evasion is bad, Tax avoidance is good: Amazon & Other Successful Tech Giants

Amazon pays no federal income tax. Many politicians blast the fact that it’s not fair that a multi-billion dollar company pays “NO TAXES”. It’s easy for media outlets to blast any company in tech that they ‘pay no taxes” in 280 characters via Twitter or on social, but if you think about it, does amazon really pay no taxes? AOC & other politicians blasted them for planning hq2 in NYC b/c they don’t pay any taxes, but do these politicians really understand corporate accounting laws? So what’s really happening here?

(Talking points)

-Amazon never made money. If you spend more money than you make, you won’t have taxable income.

-In short summary: “People get hung up on MNC's / Conglomerates. These organizations do not live & die by our rules. “

Real Estate Brokers & How They Should Pay / Manage Taxes

#1 thing, no matter what stage you are in your career, the challenge is recording keeping. You get to the EOY and you run your biz, you get that big fat 1099 at the EOY, you spent all this money in marketing, transport, meals, etc. IC people get in trouble at EOY trying to find their expenses. You are going to make really aggressive and take deductions that you didn’t take deductions, or you don’t have enough records and you PAY MORE TAXES than you need to.

It’s that first year you owe taxes, everybody has that one year you get punched in the face.

Good CPA is part of your team. They need to be there to help brokers with tax planning. Taxes are like healthcare, you can be reactive, or be proactive.

Part 5: Startup Equity:

Startup equity: We talk briefly about equity that is given out by tech firms. (public or private) Qualified VS Non-qualified stock options, their tax implications, exercising your equity, and what you should know as far as your tax obligations may be based on your strike price, etc.

You may follow will on IG at @Wgeeslin & his company website at https://www.geeslingroup.com/