Earlier this season, Trump’s tax returns were published by the New York Times. Trump’s Taxes Explained is us doing our part in bringing you a discussion and in depth analysis in how this works for him and other investors. Many people were upset to see all the write-offs President Trump has on his tax report. As a tax firm, we feel that it is our responsibility to talk about the report and show why he gets those write-offs. To best serve our community, Karlton Dennis hosted an hour-long video session with another fellow tax strategist to discuss this tax report. The video can be seen here!
In this video, Karlton talks to his friend Matt, a tax strategist in Las Vegas. He wanted to present two different perspectives from two different tax strategists. As always, Karla Dennis and Associates, Inc. intends to educate and provide information to our readers and followers. If you want to see notes or highlights of the video, continue reading:
Table of Contents
Trump’s Taxes Explained: The W-2 Worker scenario and how taxes work with a W-2 employee
57:06: How W-2 employees get paid and how taxes work. Working for an employer has certain benefits, such as a 401k. The government knows this; therefore, there are little deductions that a W-2 employee can take.
55:30: If you are a contractor, you are in the S-quadrant, meaning you are a small based business owner. These business owners do get to deduct smaller items that perhaps a W-2 worker would not be able to.
54:00: If you have a C-corporation. These federal taxes are at 21%, no matter how much income they are making. They take advantage of these tax rates, such as Donald Trump.
Trump’s Taxes Explained: Why do Donald Trump’s taxes look the way they do?
53:40: Donald Trump knows this strategy and tax code; therefore, all of his businesses are under a C-corp. The primary strategy used by lots of enormous business and business owners are based on losses.
52:13: NOL Carry-back stands for Net Operating Loss Carry-back. What is it? This strategy consists of moving losses from one year into a year in which you pay more taxes and get a refund.
51:15: Example of a client who worked with Karlton and had no taxable income on his tax returns. Example of NOL Carry-back with this client.
47:40: Cost-segregation study. Karlton’s favorite strategy, and also an overview of depreciation.
36:40: Trump does a lot of research and development. This is a business model, and they are creating things for the public. Therefore, they are given a tax credit.
34:44: The wealthy leverage research and development tax credits.
34:04: Capital expenditure. Re-investing into your business, improving your business, and also minimizing taxable income.
30:00: 20% on all net business income. Qualified Business Income Deduction used by Donald Trump.
23:00: How regular folks can use side income, real estate, and tax strategies to get write-offs. Kalton explains good debt on real estate deals.
20:00: Why losses are a good thing with real estate. It gets to offset any other income.
19:23: 1031 exchange
14:45: The wealthy leverage debt!
14:25: You do not have to be on Trump’s scale or other millionaires to do these strategies.
11:27: What about homeownership? A home is not an asset. Depreciation doesn’t work with homeownership. Know what you are getting into if you plan to invest.
6:45: How will Biden change taxes?
We hope you enjoyed the video and used these timestamps to understand this full range of topics better! Karla Dennis and Associates, Inc. wants to educate and inform our followers with real-life strategies and tactics used by those we admire! To see or learn more about other resource we have for you, click here.