In this episode of The Passive Income Attorney Podcast, Seth discusses with CPA, certified tax coach and real estate investor, Mark Perlberg, how to keep Uncle Sam out of your pockets by implementing the most effective tax saving strategies. If you’re a high-income earning professional, and you’d like to know how to keep more of your hard-earned dollars, Mark will share everything you need to know to get started. Enjoy!
“Business ownership is a lot less risky because you have various sources of income, that will hedge you against any risk from any individual source.”
HIGHLIGHTS:
3:12 – Mark talks about his background.
4:38 – Mark shares why he specializes in tax savings for real estate investors.
7:17 – Mark explains how real estate can create tax-free passive income.
8:23- Mark explains depreciation.
9:37- Mark explains how cost segregation works.
11:13 – Seth asks Mark about the potential tax changes forthcoming from the new presidential administration.
15:26 – Seth asks about becoming a “real estate professional” and its requirements.
19:26 – Mark talks about entity structure and real estate deconstruction.
25:10 – Seth asks Mark about alternative strategies to a 1031 exchange.
27:15 – Seth asks Mark how he achieved financial freedom.
33:13 – It’s time for the Freedom 4.
33: 20 – What’s the best thing you do to keep your mind and body healthy?
34:59 – In an alternative universe where you weren’t involved in real estate, what would you be doing?
35:31 – Where were you at five years ago and where do you see yourself five years from now?
37:26 – How has passive income made your life better?
FIND | MARK PERLBERG:
Website: https://www.markperlbergcpa.com/
FULL TRANSCRIPTION:
Seth:
Well hello, Law Nation what is going on? Welcome to a new episode. Hope you’re having a great day, I want to invite you to go to escapethebillable.com and snag our free passive investing guide. It’s absolutely free and has some incredible insider content that I know you will find valuable as attorneys or other high income earning professionals. Most of us are in high tax brackets and share more than our fair share of tax burdens. We just get absolutely crushed. I mean, imagine if you could walk away with all the money that you earn from spending your hard earned time without Uncle Sam and your pockets? Well, there’s strategies which we have discussed on this show to pay zero income taxes. However, for most of us and a lot of us, that’s just not possible in a legal manner. However, we can do things such as diversifying our portfolio into alternative assets, such as real estate and commodities, as well as starting our own businesses, in order to creatively reduce our tax burden in a completely legal way. The tax regulations in the United States are written in a way to encourage certain behaviors. those behaviors include things like starting businesses and investing in real estate. It stimulates the economy and encourages the movement of capital and round and round we go. The key is finding a tax expert like our guest today to be in your corner and advise you on how to best implement tax saving strategies. Mark Perlberg, a CPA, certified tax coach and real estate investor with a master’s in accounting is our guest today. And he specializes in accounting solutions and advanced tax reduction strategies for real estate investors and business owners to grow their businesses as efficiently as possible and achieve financial freedom. He invest in real estate and serves clients across the country. Without further ado, here we go!
Seth:
Hey, Mark, welcome to the show, brother.
Mark:
Hey, thanks for having me. Seth.
Seth:
Oh, for sure. Man, for sure. excited to have you on.
Mark:
Yeah, thanks for having me. You know, I always loved meeting new investors and talking about tax strategy and all sorts of different scenarios and people from different backgrounds. So this is gonna be fun.
Seth:
Yeah, I think trying to figure out how to beat Uncle Sam is pretty important to a lot of our listeners. Yeah, it’s gonna be a challenging journey, especially the upcoming years, which we could talk about. Yeah. But yeah, we’ll dive into that for sure. Well, let’s just start off, man, tell us a little bit about yourself. What’s your story?
Mark:
Yeah, absolutely. So my name is Mark Perlberg. I am a CPA. I’m also a certified tax coach. And I run a practice that focuses on advising business owners and real estate investors in creating tax strategies that are proactive and forward looking. So we can bring our tax, minimize our taxes, and achieve financial freedom. So I work with all my clients on how can we best minimize taxes to create capital that can be reinvested into your business and your wealth building devices, so we can achieve that financial freedom.
Seth:
Nice, man. So what are some of your typical clients that they investors? Are they regular people like doctors, lawyers?
Mark:
Yeah, so I have all those things. I have anything all across the spectrum from maybe some of the very beginner people who are just starting to house hack and need to know what they can write off. You can do some mini tax playing there some very simplified things, to some more complex engagements with international hotel chain owners, real estate syndicators, or oftentimes, sometimes people who own various businesses, and we’re looking into how this real estate income and in the passive losses are flowing through how we can do tax planning around that, looking at their financial picture of the as a whole with the business in the real estate investing.
Seth:
Gotcha. So the whole gamut then.
Mark:
Absolutely
Seth:
So I understand that your specialization, though, is in real estate. So how did that come about?
Mark:
So all my clients are real estate investors. I have a few real estate agents that are looking to become real estate investors. And I’ve just always been extremely passionate about real estate. My first real job really out of college was I was a real estate agent in New York City. And that’s where I really cut my teeth and learned my first experience into business ownership. In the real estate world, and I also noticed how the money was really in the ownership and just getting a paycheck every month instead of trying to close commissions here and commissions there. And, you know, I’ve always been more of a numbers guy. So I decided eventually, to go back to school and learn some more technical craft. But Mike, with accounting, getting my master’s in accounting and CPA, but my passion for real estate never left. In fact, I moved to North Carolina from New York City, because that greatly increased my chances of owning real estate investing.
Seth:
Gotcha. Yeah, it makes sense, man. I mean, it’s all about passive income and mailbox money rather than transactional, and just kind of getting that one time check. And then you got to work, work work again, to get the next one.
Mark:
Exactly. I mean, especially when you’re a business owner, it can be stressful when you’re relying on your commissions. You know, obviously, after a while in some of my clients are very successful at this, but we want to create the opportunity where they don’t need their commission. So they have consistent reliable income, in case a deal dies, or whatever happens is a fantastic idea to build this wealth, nest egg at the same time.
Seth:
Yeah, and particularly on this podcast, we try to get people kind of over that hump of, you know, let’s just work really hard at our job and our career, and start investing some other things so that you can actually get some passive income and multiple streams of income, because having one stream of income is what’s really risky, especially nowadays.
Mark:
Exactly, I mean, you have one source of use that source of income, then you’re down from one to zero. Meanwhile, you have multiple properties, generating cash flow from all different sources. If one tenant stops paying, you still have all these other sources of income, people say that business ownership is risky. But if you are strategic and smart about it, business ownership is actually a lot less risky, because you have various sources of income, that will hedge your against any risk from any individual source.
Seth:
Exactly. I couldn’t agree more. So this is going to be a little bit general. But you know, many of our listeners are high income earning professionals are doctors, lawyers, etc. And they just get crushed in taxes, you know, how can owning investment properties or real estate kind of help them out with that tax burden from Uncle Sam?
Mark:
Well, you know, let’s, let’s say that all they have is their w two income, right? So no, there are other things that we can talk about with the real estate, professional tax status and whatnot. If you own real estate, the one of the greatest benefits, you know, is that the depreciation will offset any of your revenues, you know, I’ve looked at hundreds and hundreds of returns for real estate properties, they will almost never result in any tax liability. So at the very least, now we can go into some advanced strategies. So we can actually use cashflow, positive real estate, where you’re profiting, we can actually use that cash flow positive real estate to reduce your overall taxes. But even if we aren’t doing these complex strategies, at the very least, you’re going to have cash flowing assets, you have money going into your pocket, and you’re not going to be paying any taxes on it because of the write offs in the depreciation for those assets.
Seth:
Gotcha. How’s that? Well, let’s go into that. Let’s start from the very bottom. I mean, what is depreciation just to start from square one.
Mark:
Right. So depreciation is the recording as an expense on your records for the wear and tear of an asset. Depreciation is independent of what the value of that property is. But you will write off a certain portion of that property over the life of the asset to account for the assumed wear and tear of that property. Now, think about this with real estate, the wonderful thing is that you are financing real estate. So if you’re putting 20% down on a rental property, even though you were only buying 20% of that cash into the property, you will have that entire depreciable basis to recognize depreciation throughout the life of that the depreciable life of that property.
Seth:
How does that work? I mean, I know it’s a little bit different with residential and commercial. I mean, can you kind of go into that a little bit?
Mark:
Right. So there’s a commercial property. So that might be an office space. It might be a hotel that will depreciate over 39 years of his residential it will depreciate over 27.5 years.
Seth:
Gotcha. So just a different timeline. And then you can also compress that timeline with cost segregation, which some of our listeners heard of, some of them have not. Maybe you can kind of go into that a little bit.
Mark:
Yeah, absolutely. So cost segregation is when the best way I can describe it is this with an example. So let’s say we buy a rental property, we’re going to keep the number simply a $100,000 rental property, let’s say the precinct the building is worth $100,000. Before a cost segregation, we will depreciate that whole building over the course of 27 point Five years, and we’ll get roughly 30 $600 of depreciation expense right off each year. Not bad, but we can do better. So we do a cost segregation study. And in this instance, with that $100,000 building, we identify $20,000 of property that is, we identify and say this is actually not really part of the building. This is actually personal property. So some of those things might be the land improvements, even the shrubbery, if you have someone good, who can really identify these things, things like ceiling fans and kitchen cabinets. Other things, maybe furniture and fixtures, if any, even if furniture came with the property, these are all things that are going to depreciate faster than 27.5 years. So our goal often is we want to get those write offs as soon as we can. Because think about the time value of money. The sooner we get those write offs, the sooner we can get, we can reduce our taxes and free up more capital. Now, if you do a cost segregation study, in the first year, that property’s placed in service, anything that we identify, depreciating in 20 years or less, and that’s going to be any of that personal property. We can we can depreciate 100% of that in year one with bonus depreciation.
Seth:
Oh, yeah. Wow, is that something that’s gonna go away with the new president?
Mark:
So here’s the thing about the 100% bonus depreciation is that it’s scheduled to sunset and be phased out over time anyways. So starting 2022, we do 100% that is gonna be 80. And then 60. And then 20, Joe Biden, as you know, pledged, in some way to repeal tax cut and job that JOBS Act. But that’s kind of contradiction, because some of his other things are more along the lines of amending the tax cut and JOBS Act. But it is possible that we can see the elimination of bonus depreciation under Biden. It’s going to take a while though, and but what they will we want to consider is, even without Biden, this was planning to sunset anyway. So you want to take advantage of it now, now’s a golden era for tax savings on real estate.
Seth:
Yeah, yeah. It’s cost segregation appropriate for every real estate deal, or do you kind of put $1 amount on it? Or how do you how do you evaluate it?
Mark:
I do lots of cost segregation studies is a really popular approach. But it doesn’t always make sense. It depends on what kind of usage you can make out of those right off. So if those losses are going to be suspended, because he can’t really use them just yet, we may hold off on the cost segregation to wait until maybe two, three years later, when you if you’re going to get that real estate professional tax status in a later year. And those rails will be more valuable. Or maybe you’re going to jump into a higher tax bracket in the later year. So there are all sorts of things. It doesn’t always make sense. But a lot of times it is a really powerful and effective tool.
Seth:
Gotcha. Could you maybe walk through exactly. So let’s say a passive investor invests in a deal, they do a cost tag on it, How do they see those direct benefits? I mean, where do they see them? Okay,
Mark:
so as I was saying earlier, at the very least, you’re going to get distributions for the rental activity from that syndication. And the cost segregation is going to create a ton of write offs to offset any of that any of those distributions as for from your your share in the rental revenue. So that’s, at the very least, you’re going to receive lots of cash, or, you know, whatever your portion of cash is, and you’re not going to see a tax liability because the depreciation rights are going to flow through to you to offset their rental revenue. Now, if you have a carbon tax strategies, there might be some things that you do that can make these passive losses really, really useful. For instance, let’s say we own a business, and you talk to your tax strategist, and he says, Okay, we’re gonna have tons of passive losses coming through your 10/40 What can we do to best make use of this, some of the things that we can think of, maybe create some passive income, maybe you own a business and we can create a spin off entity that you know, materially participate in, and that will be treated as passive and that passive income portion of, of your business will be completely written off. The passive losses from your real estate syndication will offset that passive income activity that you own or maybe you could have your spouse have a passive share ownership in your in your business and possibly we can create passive income that way to create some tax some some income that is going to result in being untaxed because those passive losses will write them off. And obviously, popular strategies you can get you or your spouse to become a real estate professional tax status, might have to do some grouping and you might need some other rental properties to show material participation. But there is an opportunity to keep Simple, I don’t want to take you down too many rabbit hole, which I can do, let me know take me down to planet earth. But if you are your spouse and get that real estate professional tax status, you can use those passive losses potentially, to offset the active income that you have from either your W two job or your business. And that that can be a really powerful way to get some money back that’s coming out of your paycheck.
Seth:
Yeah, I’d like to dive into that pretty deep, because that’s a really powerful strategy that I do see a lot of people doing, especially if somebody in the couple is highly paid from, you know, a W2 profession, the other spouse gets that real estate professional designation. Could you maybe explain how you get the real estate professional designation? And what are the requirements?
Mark:
so that’s a really powerful, powerful strategy. And, you know, I just did this execute that strategy where the husband was a physician making close to a million and the wife became a rental agent, real estate agent, we reduce their taxes by about $70,000. And so you just need either you or your spouse, one or the other needs to dedicate more than 50% of their time into the real estate trader business, and more than 750 hours into that qualified real estate trader business. And also to see the benefits of your passive losses, you need to materially participate in your overall rental activity or that particular rental property. Now, as I was saying earlier, qualified rental activity, most common one we see is a rental agent is fantastic for if you want to be as it was, stay at home and be flexible, you can be still work from home and be a real estate agent and still work flexible hours and get that and you can also save money on closing commissions for buying more rental properties, other things that have qualifier on the construction and the development of properties as well. So flipping houses, things of that nature.
Seth:
Yeah, I mean, it sounds kind of complicated, I think from someone that hasn’t done it before. But it really just comes down to just counting your hours. I mean, you need to have a record of those hours and a lot of different and you can be pretty lenient within a lot of things. A lot of different types of real estate activities can go into those 750 hours.
Mark:
Yeah, absolutely. 15 hours a week it comes out to and, you know, just have, you know, have that documentation in place. You know, I give out templates to, to, to help simplify the process as well.
Seth:
Yeah, yeah. And again, I mean, it and then when you invest in some of these real estate syndications and get those massive tax paper losses, then you write those of those off against the active income of the W two spouse, and it’s just it saves you 10s of 1000s of dollars in taxes.
Mark:
Yeah, absolutely. But one of the challenges is if you were a limited partner, and that’s your only source of investment income is going to be very tricky to use that to offset your active income, because you have to be materially hard right? In your rental activity. So it’ll help if you have other rentals as well. So a fantastic example, let’s say you have a couple of single family rentals, and you have enough to say you materially participate in your rental activity, you have some cash to park at the end of the year, you don’t have any deals, but you know, a fantastic syndicator such as yourself, you can park your cash and here and now these losses will flow through to you. And you will also see the economic benefits of that rental property.
Seth:
Yep, for sure. Yeah. So you can’t being just the limited partner is not enough to contribute to those 750 hours, you need to have some sort of active real estate activity, whether that’s being an agent or being a property manager or, you know, managing your own properties, whatever it might be.
Mark:
Right, so we want to look at for 750 hours as to hit that real estate professional tax status. And then there’s another test we have to pass to be able to utilize the passive losses, which is the material participation test into your rent into that rental activity.
Seth:
Yep, yep. Any other creative tax strategies that kind of come to mind for you know, our typical listener who might be a high income earning w two person?
Mark:
Yeah, absolutely. So I mean, there, there are tons of things that we can do. And so if you’re a business owner, I think one of the things we want to think about is entity structure, right? So you know, here we want to evaluate and some of the low hanging fruit is the S Corp. As I saw about earlier, if we can maybe find a bona fide business purpose for creating additional entities, maybe one of them can be a C Corp, and you shift some of your income to that C Corp that is right now taxed at 21%. Now we can bring you into lower marginal tax bracket, maybe increase your ability To receive that qualified business income deduction, as as of right now you can only rent write off $10,000 a state taxes, we get that into the C Corp, now we can deduct an unlimited amount of state taxes in that C Corp. Another thing, here’s something that you’re not allowed CPAs will notice is, as we were talking about earlier, the desire to have a real estate professional taxes, which is so powerful for using your passive losses, under some circumstances, with short term rentals, we can actually treat that as active income kind of like a hotel under certain circumstances. And we can still run the cost segregation studies on some of these vacation rentals. And we can create massive refunds against your W two income or business ownership income. And then there are tons of other I mean, I, I’ve implemented hundreds of strategies, some other ones I really like one that I think is really cool is the real estate deconstruction. Real Estate deconstruction is let’s say you have a rehab project, lots of development, instead of just jumping the materials and throwing it out, you find an organization that can actually go in and classify this material and will donate it to charity. And instead of just right, instead of just throwing it out, you can actually write off the materials, and fixtures and lumber and parts to write off the materials at the fair market value as a charitable deduction.
Seth:
Interesting, yeah, I’ve never even heard of that before, this is exactly why I need somebody like mark in your corner to have all these different strategies in his back pocket. So you can apply them to you know, your particular situation.
Mark:
Yeah, lots of cool stuff out there. If you look at the full scenario, you know, captive insurance companies, for your entities and your businesses, I mean, just so many things, if you do a deep dive in and you work with someone who is who is somewhat new, who’s really, really knowledgeable about tax planning and tax strategies, and, and can implement and see things from different angles, and plant, how do scenarios play out, we can really do some life changing type of strategies that can really change the outcome of your business.
Seth:
Yeah, absolutely, man. Absolutely. We kind of touched on this a little bit earlier. But you know, what are some of the tax changes that you anticipate with the recent change in presidency? Or what are some of the things that you know, people have talked about that they think are going to get changed? And then they’re really probably not.
Mark:
Okay, so I think that I think is likely that this is my opinion, though. There’s so much information out there. And it’s so hard to really give you any firm answers of what I know what’s going to happen. But what I suspect is we will go back to having that highest 39.6 federal tax bracket, because that’s the way it was before. Under Trump, we had historically low taxes, and we racked up lots of debt and we got to do something to pay back. All this deficit that we’re building up. I honestly think that we should have an additional tax bracket for people making over 5 million and 5 billion because someone making 500,000 it’s paying as much in taxes, high the same rate of someone making 5 million it doesn’t seem right to me and $500,000 in California is not super rich, you know? So, um, so other things, you know, that we are certain that they’re going to try to do is eliminate the 1031 exchange. I don’t really know how, what the likelihood is of that getting through. But uh, you know, I could go I you can check, my YouTube site did a whole thing on speculating on Biden’s tax planning, but I think the big one is that there there’s a lot of discussion on is the treatment of capital gains might get a little bit rough.
Seth:
Yep. Yeah. I’ve heard a lot of discussion about the capital gains, and especially, I mean, I’m sure you’ve heard it too, about the 1031. Because we real estate investors, we use that all the time. So what do you think that’ll affect kind of the real estate market in general, as far as transactions and, and just the flow of money?
Mark:
You know, I think it might, um, the thing about the 1031 that we that we like is it keeps property values up for some of these bigger investors that you have more leverage. If you’re deferring the capital gains tax, you can leverage your more capital leverage into bigger projects, you have more spending power. So I think that is possible with the 1030 ones. I was gonna throw a little nugget there’s something called a reverse 1031 exchange where you actually buy the replacement property first, and then you sell your current property allows you to hold on to the two properties at the same time. You’re not in this much of a rush to find a replacement property. But yeah, you know, a lot of people are saying it will end You know, I think it might have an economic effect. Yeah, really hard to I’m not enough in the communist economy. I say, communist economist, for me a prediction on that.
Seth:
Gotcha, gotcha. Are there any strategies that people can use instead of the 1031? If that happens to go away?
Mark:
Yeah, absolutely. I mean, there’s tons of strategies that we can do to plan for capital gains as simple one. Now, you wouldn’t think this, but we can use capital losses from other sources to offset capital gains. So let’s do we’re anticipating $100,000 of capital gains. But we are also planning to sell our business. So we’re expecting $100,000 capital gains from a rental, and our business is going to be sold at a loss. So we can net those two in the same year and use our losses from other sources, or maybe portfolio capital losses to offset those capital gains. Another thing, and then there’s tons of other strategies like installment sales. So we can do we can push out that capital gains throughout the lifetime of an installment sale where we’re pretty much the bank in you know, if you’re expected to drop into lower tax brackets in later years, that can be really beneficial as well. lease options. So you know, you they know they’re going to buy, but you treat them as a tenant the first few years, as well, it kind of is a great way for them to to reduce their risk of you know, on the property and also self directing. So you own a property in your self directed retirement accounts like your Roth IRA, no tax, no capital gains tax, it’s all tax free, if it’s held in a Roth. And there’s no financing.
Seth:
Yeah, so we’ve just got to get more creative if that happens to go away. Right.
Mark:
Yeah, this takes a little bit more planning. You know, I would say this, though, you know, you know, if you’re anticipating massive capital gains, and the 1031 would be the way to go, it might be a good time to start talking to your tax advisor.
Seth:
Right, try to get it done sooner rather than later.
Mark:
Yeah. Does that mean that nobody knows what’s going to happen. There’s so much right now.
Seth:
Yeah. Well, look, a lot of our listeners are really interested in trying to create more time and more freedom for themselves. And I know that you’ve done that for yourself. So maybe you can tell a little bit about your story. As far as how you’ve been able to create freedom for yourself. I know, you’re heading on a pretty decent sized trip here coming up pretty soon.
Mark:
Yeah, you know, so I, um, you know, that’s a big focus of my practice is on finding financial freedom for investors and business owners. And also for myself is something that is so important to have to really believe in what you do, and feel free and so, you know, I, I live a very frugal life, I signed a master lease on a building here in Charlotte. So I live in one unit, and I rent out the other unit to other people on Airbnb, and it allows me to live for free. And when I’m going, I’m putting my stuff into storage or renting out the unit I live in. And it’s going to pretty much make it so my traveling is free. Also, when I’m down there, I’m gonna be working from Guatemala this winter, because I just don’t feel like dealing with winters. And I love exploring new cultures. In addition to that, I’m creating a food blog. And I’m going to be documenting and exploring and talking about history and food. And just having fun and talking about something I’m really passionate about which I love talking about food, trying new food, and learning about the history. And that is an ordinary necessary business expense for my new business endeavors. No, I’m creating tax write offs for my travel, doing things that I love.
Seth:
I love that man. I love that. I mean, you’ve got to get creative with it. You’ve got to figure out how to live your life, man and just be free and live life the way that is supposed to be live, not sitting in front of a computer. 24 hours a day, seven days a week, you know.
Mark:
no, believe, I was in public accounting. I know very much about that lifestyle.
Seth:
no doubt about it, man. No doubt about it. Yeah, yeah, especially, you know, people like ourselves and our listeners who are attorneys and CPAs and, and all those types of people. I mean, we’re always just in front of a computer just typing away. And it’s like, you’ve got to figure out a way to change yourself from the desk.
Mark:
Yeah, and you know, if you can live frugal, and even house hack, or you know, you know, swallow your pride for a little bit and shared kitchen with someone, or whatever you can do, just to start building up some rental properties and some spare cash that’ll will allow you the freedom to take on new risks and to start new ventures into go out on your own a lot more easily.
Seth:
Right. Yeah. And we like to call those the golden handcuffs here. I mean, you start buying a really expensive car and a mortgage for a house that you live in. It’s not a duplex. Or something where you have actually income coming in for it. And then you’ve got all these bills that are basically equaling the pay that’s coming in for you and then you’re stuck. And then you don’t have any extra income to invest in something. But if you can live a little bit frugally, or just kind of delay your gratification and invest in cash flowing profit centers, then use that money to spend on the nice things a little bit down the line up.
Mark:
In syndications, you know the returns on some of these syndications are amazing. You know you some of these syndications, they get them for knows, like 10 million, and then they get them reappraise right away for like 13 million is crazy what you can do when you have some good sponsors, who really can look out for you. And that’s a fantastic way to build wealth in a way that you’re out. You’re also saving your time if you’re a passive investor, and you’re working with the right people.
Seth:
Yeah, yep. For sure, man. Let’s wrap it up a little bit. So what’s maybe one last golden nugget for our listeners?
Mark:
I was thinking about one thing we could talk about. For attorneys, this is a really cool thing I like. So for some of you, young attorneys, you got out of college, you have lots of student loans, a lot of debt, there’s something called a professional loan, it’ll allow you to buy your first property that you’re going to live in with zero money down and zero PMI insurance. So it’s even better than the VA loan and there’s less red tape to walk through. So especially if you guys live in, in places where it’s hard to buy your first property in New York and California, you look into these professional loans, there’s there might be a challenge right now, because of all this economic turmoil, that could be your first property, you live in it for a year, then you move out and turn it into a short term rental to maximize profits. The other one, yeah, another one is, you know, if you are a business owner, or investor, your relationship with your accountant or tax advisor is an investment into your future. If they’re if they’re doing what they should be doing. It is not an administrative expense. If they can create, they should be able to create enough insight in tax savings for you. So we should be able to scrape far greater tax savings and the cost of our fees. So we should look at this as an investment into your wealth instead of just some guy you pay to do something you don’t like to do, which is fill out your taxes.
Seth:
Right, right. Yeah, I mean, that’s the thing you need to also stay in contact with these folks such as yourself just for you know, year round and just let them know what your business dealings are. When something changes, you buy a property you sell a property so you can actively proactively plan for you know, the upcoming tax season make sure you get all your ducks in a row.
Mark:
Yeah, absolutely. If you are if you have an accountant right now who waits until you know February or March to talk to you about your taxes then you know, if you’re a W two earner and you’ll only businesses or investments, that might be okay. But if you are, you know, building a business and you want to implement all the right strategies, right now, I’m working with my clients. We’re planning for 2021 already, we’re talking about 2120 one’s taxes right now. You know, so it because once the books closed, there’s only so much that we can do.
Seth:
Yeah, for sure. For sure. Man, let’s jump into the Freedom Four.
Seth:
So what’s the best thing you do to keep your mind and body healthy and I have to mention that your nickname is no leftover no leftovers, Mark because you mentioned that before the call. So this is the perfect time.
Mark:
Yes, I have a reputation for being able to eat massive, massive quantities. Now, I like to cook so I’m meeting the right kind of foods. Okay, I also love exploiting restaurants, but most of my meals are cooked. So I’m getting nutritious ingredients into my body. Um, you know, and also to be financially healthy because of how much food I consume on a normal day and I’m like an NFL linebacker, I have to cook my own food or else I would be spending hundreds of dollars a day at the restaurants.
Seth:
Well, you don’t look like you overeat so.
Mark:
Yeah, my father’s wait till you’re in your 30s is going to catch up to you with my mom always so and then mentally I think it’s important to sleep I meditate before I go to bed. It helps me rest my mind cleared turn off. I have a kitten we rescued a cat guy. The cat cracks me up and always relaxes me visualization, visualizing who you are and who you want to be and just keeping that positive mindset.
Seth:
That’s interesting that you meditate before bed instead of when you wake up. Most people wait and do when they wake up.
Mark:
Yeah, I see I did that but it just made me go back to bed. So I said do this at night. I listen to is fantastic. We have trouble sleeping to the guy is Sam Harris. I have his part his application puts you right to sleep.
Seth:
Gotcha guy. Yeah. In an alternative universe where you weren’t involved in, you know, helping people with real estate and you weren’t involved in real estate and accounting, what would you be doing?
Mark:
I’d probably be doing some with food because I like all, all my conversations eventually lead back to food. You know, I really passionate about food. I love talking about food. So I’d probably be doing something with food.
Seth:
I can see that man, I’m looking forward to that travel and food blog you’re putting together?
Mark:
Yeah, it’s gonna be a lot of fun, fun little passion project there.
Seth:
Yeah, for sure. Where were you at five years ago? And where do you see yourself five years from now.
Mark:
So five years ago, I was redesigning my life. So like I said, I used to be a real estate agent, my plan. You know, in my past life was to be a teacher, and a real estate agent on the summers. And I was a real estate agent during the Greek, the great recession in New York City, where you had to really scratch and claw just to make a buck. And then as soon as I became certified as a teacher, they had a hiring freeze, they weren’t even allowed to hire me after doing a year of unpaid student teaching. So then I started my life’s from scratch. And by that point, I was at this point five years ago, I was about to graduate with my Master’s in had maybe half the CPA passed, and was just trying to make it to build up.
Seth:
Yeah, what about five years from now.
Mark:
five years from now? Well, my life goal is to not to work for money and get paid to do nothing. So by that I need not to work for money. So I do this, this is really a labor of love. I love talking to business owners, and finding creative strategies I get to me is really exciting stuff, when you can save someone you know, at $100,000. And also, you know, to have that passive income. So I’m not doing anything I’m delegating and hiring and being efficient and smart, and still receiving enough of an income to live on in while pursuing my passions. Yeah,
Seth:
I like to say practice when you want to not because you have to. It’s not that, you know, maybe five years from now, you won’t be doing what you’re doing now. But you have the choice to not do it if you don’t want to.
Mark:
Yeah, I love that. So no, as opposed to having to clock in, weren’t about you know, getting your hour, your billable hours in and all that stuff, if you can get to the point where you’re excited about this stuff, and you’re taking that initiative because you get the opportunity to do it is a wonderful shift in mindset and lifestyle.
Seth:
For sure. Last question, how has passive income made your life better?
Mark:
You know, so I would say as what I have found is that, no, it allowed me to make all the leaps of faith that I have from leaving my w two income into starting this practice. Because I had sources of rental income myself, I was able to take a pay cut in my first you know, first year of consulting to start this tax strategy business and really dive into the minutiae of the tax code without having to worry about pumping out massive 1040s and being a yes, man, I was able to really invest myself into the into the minutia, and then all the all the really, really get specific and really dive deep into all these strategies I do for my clients.
Seth:
Yeah, interesting. It, it’s amazing how creative you can start to get once you have a little bit of freedom with your time.
Mark:
Oh, absolutely. And that’s a wonderful thing. Because I’ve, you know, when I started first started consulting, because of my passive income, I said, You know, I can survive, just, you know, with the income as though I was working part time, at you know, like Applebee’s, or wherever, like a part time server at a restaurant I could still make enough to get by. So now I empowered me to get creative, and maybe be, you know, have that freedom and really take initiative and have fun with it.
Seth:
Right? Yeah, it’s incredible what you can do when you’re just not billing all these, you know, 60 hours a week, and you have your head down and just trekking away. Just, you know, business ideas, and all these different things just start to come into your into your life. And you’re like, oh, wow, I forgot this part about me.
Mark:
Yeah, so and you know, I’ve had those jobs, some of those soul sucking projects, where you’re just grinding your face off. And honestly, when I look at those times, where I think about the best lesson I got, I really didn’t learn very much at all from the work I was doing. But I think the biggest takeaway was, and luckily, I learned this early in my life is is what you get when you are when you’re doing something you don’t really enjoy, and have no passion. That’s, you know, that’s that feeling of having to do something in and you’re almost punished for it. Because, you know, you’re just reeling your way through your week is is, you know, I learned what I don’t want to do with my life.
Seth:
For sure. Hey, Mark, this has been great man. where can our listeners find out more about you?
Mark:
Absolutely. So I if you’re interested in learning more about some of the stuff I do you Email me mark@markperlbergcpa.com I provide free discovery sessions for people who are interested to see if they are missing out on any tax saving opportunities. We do a free tax assessment and assess the value of a tax plan where we can create immediate savings. Also, email me if you just want to say hi, I’ll put you on my mute anyone who emails me gets on my mailing list. I invite you to all my live webinars. A lot of the stuff that we talked about today I did I have webinars on that we dive a little deeper and then I show you that specific examples, their whole webinar just on depreciation. Another one on Biden’s tax plan. So you know, if you’re interested in that, you know, go there, follow my YouTube channel, I put all the content there. love making this content there live so I can answer your questions in person and just become a part of my community. I’d love to help you out.
Seth:
Great, that was awesome. Mark. Really appreciate you coming on today.
Mark:
Hey, thanks for hosting me, it was a pleasure.
Seth:
For sure.
Mark:
Whoa, powerful stuff served up today by “no leftovers” Mark Perlberg. I’ve had a number of calls now with Mark and I can say with certainty that he really knows his way around the tax world. I’m personally engaging with him now as my personal tax strategist. And I encourage you all to reach out to mark or you know, another CPA that you vibe with, so that you always have a tax expert on your team. Okay, folks, to take your next step in building passive income, please go to passiveincomeattorney.com join the Esquire investing club and download the freedom blueprint that will get you started. And then let’s jump on a call. I would love to help. Until next time, celebrate the journey.
