In this episode of the Mailbox Money Show, Bronson and Nate sit down with leading real estate tax strategists Amanda Han and Matt MacFarland to unpack the most effective tax strategies for real estate investors today.
Amanda is a CPA and real estate investor with a degree from UNLV, over two decades of tax planning experience, and national features in outlets like CNBC, Money Magazine, and Google Talks. Matt is a CPA with an accounting degree from UCLA and a Masters in Taxation from USC, specializing in tax strategies for real estate investors and high-net-worth clients for over 20 years.
Together, Amanda and Matt explain why taxes are the greatest lever for growing wealth, how proactive planning can dramatically reduce tax burdens, and why most investors miss the biggest deductions available to them. They break down how high-income earners can use real estate to offset taxes, why timing matters in tax planning, and the common misconceptions that hold investors back.
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Full Transcript:
Bronson Hill: Alright, welcome to the Mailbox Money Show. I’m your host, Bronson Hill. I’m super excited to be here.
We’ve got a couple amazing guests with us today, and we’re going to get into their bio here in just a minute about tax strategy. And I have my amazing co-host here from all the way from Dallas, Texas. I have Nate Hambrick in the house.
Nate, are you crushing your kryptonite today?
Nate Hambrick: Every single day, you already know it.
Bronson Hill: I love it. Nate’s the author of the best-selling book, How to Crush Your Kryptonite, so doing the hard thing, right? What’s the hard thing that you’re doing lately?
Nate Hambrick: Well, it’s the end of the year, so I’ve got to crush my taxes. Last year, I only paid 2.65% in federal tax.
Bronson Hill: I think you was going to say 2.65 million, and I was like, dude, you’re a baller.
Yeah, that’s amazing. And you’ve got a problem. We’ve got to fix that.
Nate Hambrick: That’s the problem when I pay 2.6 million in tax, but anyway, we’re coming to the end of the year. And I need to lower my taxable basis, and so anyway, this is going to be an awesome chat. I’m excited.
Bronson Hill: Yeah, well, we love talking tax strategy here. A lot of people that we speak with, we’ve raised in our business over $50 million from high net worth investors, just like you, our listener. And one big issue is a lot of people are paying a lot in taxes.
I talk to people that are regularly paying hundreds or thousands or millions of dollars per year in taxes, or they sell a business and they have a big event, and this is something a lot of people don’t realize exists. They think that their CPA is a tax strategist simply because they’re a CPA. And it’s just not the case. Very few.
About 2% of CPAs actually are tax strategists. We do some tax strategies in our firm. It’s not, like tax advice or CPA.
We have investments that provide, tax benefits and other things. But we love referring people to CPAs that are tax strategists. Because they can create a plan. And create a really creative plan for people that can really help them to reduce their taxable basis. So, in the house today for the interview, we’ve got Amanda Hahn and Matt McFarland. Guys really excited to see you again.
It’s been a few years since we’ve connected, but you guys are very well connected. You know everyone. We know all the same people, and you’re doing an amazing job in tax strategy.
And you guys are both CPAs. Before we get started, did you guys meet it like when you were setting for a CPA? Was that like a…
Matt MacFarland: In the library? Yeah, in the library.
Bronson Hill: I think I didn’t talk to you.
Matt MacFarland: You were studying for the CPA.
Bronson Hill: These numbers are looking better already. The more time I spend around you, right? That’s awesome.
Well, guys, really good to have you here. Let’s just, yeah, talk a little bit about kind of what got you excited.
A lot of people don’t get excited about taxes because it can be kind of tedious and stressful, especially this time of year. They’re like, oh my gosh, I’m having to pay taxes. Because if you had the extension, a lot of people with the extension just finished.
And I had a situation where I had a little bit more taxable basis than I wanted. I wasn’t expecting it. And so, I guess, talk a little bit about how you got interested in doing what you’re doing.
Amanda Han: Well, I’m a third generation of real estate investors, so I always kind of grew up around real estate investing. But we actually met at one of the big four public accounting firms. Where I was in the real estate specialty group and Matt was in the high net worth individual group. So, naturally, people who are in real estate are people with high net worth, and that’s how you met.
Bronson Hill: That’s like a match made in heaven there, right? Like real estate investors and high net worth investors.
Amanda Han: Right, right. Yeah, not as cute as the library, but a different story of sorts working together.
Matt MacFarland: Yeah, but I think, kind of to your question, Bronson. It’s like what we learned at the big four is, when you’re dealing with, big companies, right? Fortune 500 companies, too, to some extent. And you see that, like, you can do, you can put strategies in place. But it’s a lot more beneficial and meaningful when you can do it for the everyday investors. The mom and pops, the real estate investors.
They kind of feel it better. They feel it more, right? It’s more rewarding for us.
And so, that’s kind of when we decided to start our own firm. We wanted to focus on real estate investors because we both got exposure to at the big four. And it just was a natural transition for us.
Amanda Han: And I think when we started investing in real estate ourselves was when, it was the first time we realized that regular folks don’t do tax planning. You know, like all of our clients at the big firms, they do tax planning. It’s like a natural thing.
They call their CPA all the time. But regular investors that we met at clubs, real estate clubs and stuff. They don’t know what it is, or they just feel like, you said, just pay my tax. What’s there to talk about?
Bronson Hill: Yeah, yeah, it’s kind of amazing that when you realize, and I think I first heard about this. I think it was some of the Robert Kiyosaki stuff, cash flow quadrant. Some of the Tom Wheelwright, where it’s like, there’s people paying 60% tax because they’re a high earning, self-employed person. And there’s people that are real estate investors that are making millions a year and paying zero taxes.
And it just kind of has to do with how you’re set up and how you’re making your money. Nate, what was the, I know you’ve been an investor. You’ve been a high earner, you’ve been a lot of things. When did like tax strategy really become a thing for you or kind of learned on like, I actually just start doing these, like thinking about how I’m going to invest in regards to taxes as well.
Nate Hambrick: Yeah, I feel so lucky. My father did so many things right raising me. I feel like this is probably a slight exaggeration, but from six years old, my father would sit me down while I was eating Cheerios and tell me two things.
One, your passions are hobbies, not a job. Two, tax avoidance. And I just, and I’m not kidding. Like from so young, very, very young, he taught all of my siblings that.
And even though he didn’t know everything I know today, he gave me such a great foundation for understanding that. Like you said, your tax bill isn’t your tax bill. There are certain things Congress wants you to do for the good of our economy. Or just because they want you to do it for one reason or another. And if you take advantage of all of those, you really do benefit.
And so I’m so grateful, the older I get, the more I realize not everybody had a father that was preaching tax avoidance from the age of six years old. So I feel very, very lucky.
Matt MacFarland: But I have a question. I have a question for you, Nate. Would your dad be upset that you had to pay 2.65% and your federal effective tax rate last year?
I mean, he wants that to be zero, right?
Nate Hambrick: Probably. I don’t know this. I feel confident in saying that’s probably lower than he ever paid himself because he didn’t know a lot of the things that I know now.
But, my floor was the top of the shoulder. I mean, my floor was an amazing place to start. So here’s to next year paying zero.
Matt MacFarland: There we go.
Bronson Hill: So let’s talk about that for a minute. A lot of people here in this are coming in. They might be like, man, I don’t know.
Just my taxes are my taxes. And I found that a lot of CPAs tend to be very conservative when it comes to how they file. A lot of times it’s about things they don’t know because the tax code is very complex.
And so it’s almost like I’m afraid to get audited. I’m afraid to do something wrong. Even when it’s in the text.
Well, I’ve never done that before. I don’t do that. It’s not like a standard practice.
But for tax strategists, you’re really looking at those things and saying. How can we actually do the thing that actually makes the most sense for you. And find a way to zero or to a lower taxable basis when you… So can you talk through kind of the conversation when you work with somebody who’s new to this? How do you kind of get them introduced to the idea of tax strategy?
Amanda Han: Well, I mean, fortunately for us most of the time, by the time people come to us. They are coming to us for a strategy. So usually it is after they realize that they’re not getting strategy. Most Americans file tax returns.
And most people think that whoever is filing my tax return is naturally thinking about how I can save on taxes for last year and for this coming year. When in reality, that’s not how things work. By the time you file your tax returns, you’re simply reporting what did or didn’t happen last year, right?
So true tax planning happens during the year before you enter into transactions, before you get a new job, before you get married, before you have kids, before you move to a different state, before you buy real estate. It’s when you are talking with your CPA before all those transactions where the advisor as a CPA can come to you and say, okay, let’s do it this way. Let’s hold it in this kind of entity.
Let’s pay your kids from this business. Document it this way so that then by next April, you are legitimately paying less tax because you did all those right things last year. And I think commonly what we see is as a taxpayer, reading books, watching podcasts like this one or listening to it. And then writing down the strategies and bringing it to their CPA.
All for their CPA, too. Like you said, Bronson, tell them no. You can’t do this. You can’t do that. And then they get frustrated and then they call us and say, there’s got to be a better way, right? That’s kind of how it typically goes.
Bronson Hill: It’s amazing how knowledge is power, right? Just knowing that something’s available. And I think that, and then thought of it this way, that the tax code really is, it’s, thousands of pages of how to reduce your taxable basis, how to, they call it tax avoidance, right?
Tax evasion is illegal. It’s not paying taxes you do or you said you’re going to pay and people go to jail for that. But tax avoidance is basically just finding a way to align really with the incentives of the government, typically on real estate, around agriculture and energy and finding waste.
And there’s also other structures as well. What are some ways that you find for like, let’s say a lot of listeners we have are business owners or maybe they’re selling a business. And I talked to a guy recently who had a $7.5 million exit this year. And so he’s been prepaying taxes and things like that. I was like, well, there are things, there are investments like oil and gas. You can do deferred sales trust, but the fees are high.
What sort of things would you say to someone who has, either is having a big exit this year or is like, I’m thinking about it. How do I plan for that?
Matt MacFarland: Yeah, it’s a great question. I think the way we’d approach it is just sit down and have that in-depth conversation so we can understand what their goals are. What are the moving pieces?
What are you trying to accomplish? Like, what are you planning to do with the money? Are you planning to go on vacation for five years?
Do you want to reinvest the money? You know, those are different conversations, right? And so from there, kind of learning and leaning on some of the different strategies.
I mean, you mentioned oil and gas, deferred sales trust, stoma sales, opportunities on investing. Obviously, a lot of our clients are in the real estate space and so that’s a natural transition for some people getting out of business, wanting to invest in real estate, reinvest their money in there. So lots of different things, but it is going to come down to kind of what the clients are looking for in terms of goals and what the timeframe is for them too.
Amanda Han: I would say like big exits, if you’re talking over $5 million of gain on a big exit like that, usually you want to plan two, three years ahead, right? So that you have your assets lined up on, okay, here are the different things I’m going to do to reduce my taxes. If you had an exit already this year and now we got two months left and you’re saying, how can I offset, $10 million of income?
There’s still strategies, but you’re just very stressed about it because maybe you’re hearing about it for the first time right now. Versus three years ago, looking at it today, we might have 20 different ways you can eliminate taxes, right? Versus here are the five, let’s try to make it fit.
Bronson Hill: Yeah, it gets, it definitely gets tricky. You mentioned something, opportunity zones. I’m actually, that’s something I’m curious on.
I’ve heard some people say. So let’s say this person had a $5 million, $7 million exit, the person I mentioned, and they were able to put it in an opportunity zone fund that was, it was qualified, which is just an area of the country for listeners, the area of the country that has been designated that this is an opportunity zone. It goes into this area.
It has to stay in, I believe, for 10 full years, right? And then do they not pay gains on their gain from selling the business when they go in or the gain on the real estate as well? Is it like a double thing where they can offset off if they stay in 10 years?
Amanda Han: It’s a little bit of both. So opportunity zone, planning on exit actually, like I said, it happens before the exit. It’s determining how is that five, $10 million tax, how much is capital gains, how much of it is ordinary income, right?
So to the extent it’s capital gains, opportunity zone basically allows you to defer your capital gains under current law into 2026. So you have a one-year deferral, and the 10-year rule is if you hold that asset for 10 years, you don’t have to. But if you chose to hold it for 10 years, then there’s tax-free appreciation in that 10-year timeframe. So it’s a deferral on the first piece, right?
You get to defer taxes, and then the separately, the growth within that 10-year could be tax-free. Something interesting is that benefit is actually going away as of the end of this year. But the one big beautiful bill did bring it back starting in 2027.
So you can see we’re talking, you mentioned the first sales trust. How do we time everything so that we can actually get the benefit maybe between 2025 and 2027?nKnowing 26 is sort of like a donor hole where, you don’t get to utilize that strategy.
Nate Hambrick: And that brings up a great question that I had for the two of you. It seems like tax law changes a lot, especially when, political parties change. And so obviously, people should talk with you, duh. But I think there’s also a place where people need to self-educate, so they at least have a working basis of knowledge that whenever they do talk to you, everything’s not completely flying over their head.
Even right now, half of the stuff you said, I don’t understand it. And I don’t know a lot about the tax code, right? And so for you, are there any favorite books, favorite podcasts? Where would you point people to educate themselves on the most up-to-date tax practices?
Matt MacFarland: That’s a good question. I mean, obviously, yes, things change all the time. You know, the one big beautiful bill kind of brought about a lot of changes that I know President Trump wanted for years.
But where people can go, I mean, I think a good website is taxfoundation.org. It’s like a think tank. Now, it’s made for accountants and CPAs, but having said that, it is written in plain English, so it’s actually a site that I think everybody can go to.
Amanda Han: We actually wrote two books. One is called Tax Strategies for the Savvy Real Estate Investor. And the other one is the Advanced Version of that. You can get that on Amazon, Barnes & Nobles, anywhere books are sold.
Obviously, a lot of great content on podcasts and things like that. But I would say that, alongside the fact that there are a lot of information out there, right? With education stuff, there’s also a lot of bad information. And so one thing is to make sure that you are working with a CPA who themselves are being kept up to date on what some of those changes are.
I think a lot of people shy away from doing tax planning or talking about taxes because they feel very intimidated by it. And so it’s more to understand that to save on taxes, you don’t have to become a CPA. You don’t have to know everything about depreciation and all the stuff we just talked about with Opportunity Zone.
Many CPA’s don’t even know what that means or how it works. So true tax planning is simply having the right advisor and your main job as taxpayer is to keep that line of communication open with your CPA. Because when they don’t know what you’re doing, they cannot help you.
And that’s as simple as a pleasant 15-minute conversation.
Bronson Hill: Yeah, it’s great to have a call to figure out if this person can help me. Having these tax strategists like with you guys or other tax strategy groups. Let me ask you a question. On the role of people just talking about ChatGPT. Oh, ChatGPT is going to take a lot of jobs, including drivers and maybe eventually accountants and other things like that.
I know some of the stuff you guys use is very specialized. What’s the role of Chad GBT both as, hey, this can really help me with my tax planning? Maybe as kind of a helper for that with some of those updated things.
Or that eventually they’ll have services that can kind of do some of these things for me or kind of along the way help with the plan. Maybe bring the cost down, because a lot of times just taxes in general, the more complex you get, the more it can be pretty expensive sometimes, depending on all the work that goes into it. So I’d love to hear your thoughts on that.
Amanda Han: We use ChatGPT pretty extensively in our firm. But one of the things that is still a problem for us internally, I mean, we don’t use just ChatGPT. There’s tax-specific software for CPAs that do all the AI research.
But even then, we find a lot of issues with it where the information is not updated or it’s not correct or it’s not applied to the taxpayer the same way. So I think if we’re talking about an everyday taxpayer, I definitely would not recommend on relying on Chad GPT as your strategist. You can use it for sort of general knowledge, but before implementing anything, always run it by your CPA, because there’s so many different intricacies of that.
But I think we are hopeful that it gets better and better, right? Especially, I think, just coming from the tax-specific AI that the CPAs use and then making that more available to the general public. But we’re just not there yet, unfortunately.
Bronson Hill: Got it. I’ve got another question. So this is specific, but it’s not specific advice.
Obviously, I’m not giving you specific or asking for specific advice. As a real estate professional, I can save a lot on taxes just through depreciation, other types of things I’m rolling forward from prior years, or doing different types of multifamily, other sorts of deals with cost segregation. But we’re getting ready to do a development project on single-family property and developing modular or manufactured homes and bringing them in where the fire areas were here.
And it’s just much, much cheaper and much faster. And I thought about doing a build-to-rent fund because of the tax issue, but the issue is with the loans, just the value is much higher than what the rents are. So when they loan out, it doesn’t really pencil when it comes to, like, when you get a loan, it just doesn’t really cover for cash flow and really make sense.
So the question is, if I can do this for investors or myself in a year, I get this big tax hit, development. If you do a development project in a short amount of time, you get this big tax thing. So the thing that I’m telling you, and I’d love to just hear your thoughts, is that, okay, people can invest if they have other depreciation or other ways they can offset that, if they find, if they use a solo for a 1K or some other thing that doesn’t, subject to UBIT or something like that.
But what are the other options for people like that? If they get this big gain in a year and it’s, let’s say it’s, they get a big return and it’s a development-type project, what are some things that people kind of you find that are non-real estate professionals can do?
Matt MacFarland: Well, I think that would be a great example of somebody that, if they’re investing in your syndication, maybe they’re probably likely investing in other syndications, too. And so maybe they can, if they’re timing it where they’re investing in, like, real estate syndications, that will kick off losses with depreciation, time those in the same year that yours sells and generates the gain. Those would probably likely be passive to both that same person, so that would be a way to offset it without having to be a real estate professional.
Amanda Han: And, the running jokes, too, right, is for high-income folks who invest in real estate only passively, their CPAs always tell them, there is no benefit for you to invest in real estate, right? They say that all the time. And they’re just tunnel vision looking at the fact that it’s not offsetting W-2 income.
And this is a really great example of, okay, maybe I’ve owned real estate passively for the last five years. I have $300,000 of passive losses I’ve accumulated. Well, guess what?
I’ll invest in Bronson’s deal. And the next $300,000 of income I generate, I’m not going to pay taxes on it, because I finally get to use what I’ve built up over the years. So really great ways to do it.
I just wanted to share something. So something new under the One Big Beautiful Bill, I don’t know if you know that, but if you own real estate that is used for manufacturing business, then there is a brand new 100% write-off. So, you know, normally we talk about bonus depreciation where you cost segregate the building.
But this new rule is if your property is used for U.S. manufacturing, then the building itself could just be written off like the whole purchase price. Well, minus the land, I believe. But the building itself would be 100% write-off.
So that’s something super, super significant. As you do with rental real estate, it’s just the fact that what is the building used for? Because obviously the government is trying to incentivize manufacturing.
So manufacturing of modular homes is still manufacturing.
Bronson Hill: Well, yeah, so that’s interesting. So we would be not doing the manufacturing ourselves. We would be buying it from a manufacturer and then placing single.
So it wouldn’t be necessarily qualifying for that. So yeah, that would work. But if I had a warehouse somewhere, I would go be chasing tenant.
I’d be like recruiting them. Hey, I’ll give you a killer deal. I’ll come and do your warehouse, do your manufacturing in my warehouse, because you’d want that, right?
That would be a huge write-off.
Amanda Han: Yeah, I mean, the rule is you’re manufacturing. So we have a client who does construction. And so we’re just randomly talking, like, hey, I don’t even think this applies to you, but a new rule.
And he said, yes, I’ve been thinking about doing manufacturer homes. Like, I would manufacture the homes and sell it to other people. So that’s perfect.
You can write off the building then.
Bronson Hill: That’s amazing. I love it. Love it.
Nate, jump in here as well. I know you probably have some questions.
Nate Hambrick: I was going to ask you for unique things that you can write off or unique ways that you can lower your taxable income. And I’ll give you an example. Bronson and I had a guest on this show a few months back that she buys twin props.
And she gets the debt at like 2%. She puts very little down and then leverages the twin prop for depreciation. That was a possibility that at no point in my mind had entered my consciousness.
And so I’ll kind of leave it open-ended. What are some crazy ways or things that people wouldn’t think of that people can buy, obtain, leverage to lower their taxable income?
Amanda Han: Weird. You’re saying weird things that people don’t know. I mean, it’s hard to say because, yeah, because in real estate, there’s so, we talk about real estate investments.
There’s so many different types, right? There’s short-term rentals, midterm rentals, turning short-term into midterm after you use the short-term rental loophole. Those are probably some of the common ones that we see.
But, yeah, we always have people, also getting into co-living, sober living, all those different aspects of real estate. But regardless of what the income type is within real estate niche. The foundational strategy is typically the same, right? I’m going to buy the property.
I’m going to create value in the property, cash out refi tax-free, use the money to rinse and repeat while building depreciation tax benefit.
Bronson Hill: We have a mutual friend, Kaaren Hall, I think we all know Carin, and she shared this story on Rich Summer’s show recently that she had a client that, she works in the direct IRA, so it’s like retirement accounts. She had somebody who had a Roth IRA and had Super Bowl tickets that they bought in the Roth IRA. And they somehow found a way to compliantly sell or resell those at a major profit and so they were able to keep it in there.
And of course there’s stories of like, is it Peter Thiel or the guy who has a billion dollar Roth account or something. Which now all the politicians seem to be kind of going after these very large retirement accounts as well. It’s like, where’s the low hanging fruit?
Amanda Han: Yeah, I mean we had a client who, I don’t know if it was a joint, one of the car and maybe, but they bought a really dilapidated single family property for very cheap, a couple hundred thousand dollars. And they knew that a hospital was going to come in in the next couple years. So they just kept that building, rented out the single family for a while and ultimately they ended up selling that to a developer who was going to build medical offices.
So I think they got a couple million dollars tax free in their Roth IRA. But just to have that knowledge, right, at the local level to know, oh, that’s coming in. I’m going to buy this property and just sit on it with my Roth money so that I don’t have to pay taxes on it.
Matt MacFarland: And again, whether it’s a huge game like that or not, it’s like we’ve got investors that do it every day because they’d rather use their retirement money to invest in something they can hold and touch and understand versus like stocks, bonds, mutual funds that they don’t know anything about. And so a lot of clients buying, they love buying cashflow real estate inside their retirement accounts. And it provides a steady appreciation in building up that cashflow for their future retirement.
Bronson Hill: Somebody’s interviewing like a tax strategist, what are some questions they should ask to determine kind of that if it’s a good fit or their expertise of their tax strategists?
Matt MacFarland: I think a good one to start with is, I think a lot of people kind of default to maybe like asking, hey, do you work with real estate investors? And 99.9% of the CPAs are going to say yes because they have at least one client who’s a real estate investor, right? But I think a more powerful question is like, well, tell me something, tell me a couple of things that your successful real estate investors are doing.
You know, so it changes the kind of framework. Now they got to think and like be able to talk the talk. And so as long as you have, again, you’re not a CPA, but as long as you have a working knowledge of some of these strategies and kind of the conversation points from meeting other investors, going to meetups and things like that, you’re going to kind of quickly understand whether this person has an idea of working with real estate investors or whatever it is.
Maybe it’s, you know, you’re a medical professional and you have a medical practice and you want to work with a specialist in that area. Same kind of idea, right?
Bronson Hill: Yeah, love that. That’s great. Now, I think it’s so good to discover new ways that you can grow your wealth.
I mean, I was able to, when I was working at my corporate job, I was making about $250 a year, but I was paying 25 plus percent in taxes and I was able to get down to about 1%. And it just was great to be able to find ways to be able to reduce taxes. And people, it’s funny, you start talking to like medical, like doctors or professionals, and some people think it like, it sounds too good to be true.
They’re like, oh my gosh, I don’t know. It like sounds kind of, you already meet people like that where it’s kind of like, I don’t know, that just sounds kind of crazy. I’ve been paying all this money for so long.
And, or do you get some new clients where they’re like, well, let’s go back the last three or four years and let’s go like change. I think you go back a few years, right? And you can go change and refile.
And they’re like, oh my gosh, you found all this other money that I was like, I could have just filed differently.
Amanda Han: Yeah, we just actually taught at two real estate conferences recently. And as part of getting ready for the presentation, we just did some research into how much do average physicians lose in taxes over their lifetime? And it was the AMA that came out.
They said, if somebody makes on average 350 per year, you lose over $5 million to taxes over your lifetime. And what was really interesting is you look at the numbers, the amount of taxes that the average physician pays every year is more than what people make in a year. You know, like the average household, that’s the taxes being gone.
And so it’s really crazy. But, and that brings us back to the issue of when you hear CPA say to a doctor, for example, like, hey, don’t invest in real estate, don’t invest passively because there is no benefit. And that’s just someone not being strategic, right?
Like, okay, maybe you’re not using it to offset medical income or W2 income today, but if they got another 10, 30, 50,000 cash flow without paying 50% of taxes, that’s absolutely, taxes saved. And there’s always ways to utilize benefits against income. It’s just a matter of how much am I utilizing this year versus next year or five years from now.
Matt MacFarland: Yeah, we actually had a client come to us a couple of years ago, as a medical professional. Same thing we were talking about earlier with like matching K1s, right? He heard about us, he came to us because, I know you guys were real estate investors. I’m gonna be a real estate professional, but he liked being a doctor, he had a successful practice.
But when he looked at his return, he was making over a million dollars of passive income from a like partial interest in a surgery center, dialysis center, whatever it was, right? And it’s like, hey, you don’t have to be a real estate professional. We just need you to buy enough real estate that generates offsets a million dollars.
Amanda Han: You just get a bunch of syndications.
Matt MacFarland: Yeah, I was like, don’t worry about your W2 right now, let’s offset your million dollars. And that was a huge win for him, obviously, because he was not thinking of it holistically. He was looking like, I heard about you.
Amanda Han: Well, it’s the CPA that’s just like, ah, everything’s passive, everything’s active. Everything, medicine is active. Everything, real estate is passive, instead of just looking at everything one by one.
Bronson Hill: Right, right, yeah.
Nate Hambrick: And let me know with that if this is still in place. But I know at one point, a lot of physicians and professional ballplayers, they would have their wives be the, the real estate investor, which at the time, I think it was 750 hours a year, 850 hours a year. And so, if you’re a professional ballplayer, you’re making millions of dollars a year. And your wife takes photography for real estate, or she looks at Zillow for X, Y, and Z hours a year.
As long as you can document that, I know at one point, you could still offset the W-2 income at some level. Is that still the case, or have those laws changed since then?
Amanda Han: Yeah, we call it the real estate marriage tax loophole. So you’re a high income earner, regardless of what you do. And you’re married to someone who, doesn’t have a full-time job and is interested in being hands-on involved in the day-to-day operations of rental real estate.
Then they can qualify as a real estate professional, and the losses offset both of your income. So even though the high income learning person doesn’t do anything, as long as the wife meets the hours, that could be beneficial. And we also have just people doing the short-term rental loophole as well, where you’re both working full-time. But investing in Airbnb so that you can use the losses against W-2 and all types of income.
So there’s always a way to do it. It’s just a matter of whether you’re spending the time to strategize on which one makes the most sense in your specific scenario.
Bronson Hill: It’s really interesting. There’s a lot of things like that, that’s just knowledge is power. And you said, the average physician, it was like $5 million over their career.
But then we did a study and looked at, well, what if they had invested that money that they paid into productive real estate? Other things, it was like they get a 10% or 15% return. It was like, I don’t know, $30 million.
It was like something really exponentially higher and people don’t realize, like, they just don’t realize what could happen with that. I should have just calculated over 30 years. Well, this is crazy.
I mean, if you look at kind of growing it into 10s of millions of dollars. And so a lot of us, we just don’t think that, hey, this is something that’s actually even possible. That’s where, like, you talk about the planning and the education.
And that’s why we just love working with the tax strategists like you guys. Well, guys, I really appreciate you being here. I know we’re actually in a fitness challenge together.
We’re getting as many steps and eating protein and doing all things we can together. And so we’ll see you hopefully in Miami in a few months here for the fitness challenge that we’re doing. But I just want to really appreciate and honor you guys, how you’re bringing value to investors and obviously the marriage of real estate and high net worth.
And that’s your story. So that’s what you guys are really bringing to the world. But how can people reach out to you and connect with you and find out what you’re working on?
Amanda Han: Well, our company is called Keystone CPA. So you can go to KeystoneCPA.com if any of the terms we threw around today was sort of new to you. We have a lot of great free educational content.
For daily tax tips, the best place to find me is on Instagram and also on YouTube as Amanda Han CPA.
Bronson Hill: Awesome, awesome guys. Really appreciate you. Just hang tight for a minute.
Nate and I are going to kind of debrief here, just break down this time. So Nate, I love this interview. This was great, man.
I think the more you can, the people, they don’t understand. If I pay a tax strategist $10,000 or $20,000, but I save $100,000, that’s worth it all day. And so a lot of times we don’t think in terms of, like, if I do this, I actually empower myself to keep and save more money.
Why do you think there’s a resistance for that kind of thing, like people to change behavior and that kind of too-good-to-be-true mindset to actually pursue something like this?
Nate Hambrick: I think there’s a lot of danger in thinking you know everything. One of my favorite things to do whenever I’m having a hard day is look at best-selling books with one-star reviews. Or go to TikTok and look at tax people’s advice with, like, negative comments on, like, you see somebody sharing advice on TikTok and then some CPA who makes $60,000 a year types in there. This is all fake.
You can’t, all that kind of stuff. And so I think there’s a big danger in thinking you know things when you don’t know everything. And so this conversation has been really helpful for me because I need to ask a lot more questions from my tax planner.
I know a lot about tax, right? I leverage it fairly well, but there’s always that next level. And if I’m not growing, right, there’s a lot of things that are available today that weren’t available three years ago.
And so anyway, so glad we had this conversation because it reminds me, I need to ask a heck of a lot of more questions to save myself from future embarrassment.
Bronson Hill: Awesome. Yeah. Well, I appreciate it.
Well, thanks so much, Nate. Appreciate those thoughts. And thanks to our audience as well.
Thanks for being here. We really do this for you to really help you make better investment decisions and provide, you know, education in this space because there’s a lot of information out there but sometimes it can just be, like, too much. So how do we distill down really what’s important?
And so if you’re a higher earner, it’s so important that you do get a tax strategy. If you don’t have contact to a tax strategy, reach out to these guys at Keystone. They’re amazing.
And, yeah, we just love, again, providing this education. So love to hear how you’re specifically benefiting from tax strategy in your life. You can shoot us an email, Bronson at Bronson Equity.
We’d love to hear your story. We love the feature and hear about those things and hear what investors just like you are doing. So I appreciate everybody being here.
Thank you for being here at the Mailbox Money Show. We’ll look forward to seeing you on the next episode.
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