Episode #75: The Biden Proposal to Raise Long Term Capital Gains Rates & Eliminate the Step Up In Basis

President Joe Biden’s new proposal for tax reforms has been getting lots of media attention in the past week. It contains provisions to substantially raise the tax rates on long-term capital gains and eliminate the step up in basis. This substantially limits some of the tax planning opportunities investors and business owners have enjoyed for a long time. In today’s episode, Grant reviews the new changes President Biden has proposed, what they mean for investors, and some of the planning opportunities that come with the new updates.

Show Notes

[01:26] New Tax Plan – Grant reviews some of the key goals of President Biden’s new tax plan and what they mean for the general public and investors.

[05:32] Long-term Capital Gains – How long-term capital gains work, how they’re different from their short-term counterparts, and how taxation comes into play.

[08:53] Proposed Rates – Grant reviews the new tax rates proposed in President Biden’s tax plan and new planning opportunities that come with the new changes.

[13:48] Selling a Business – Selling a business is one of the instances where a business owner can end up paying substantial amounts in tax according to the proposed tax rates. Grant shares his take on How business owners can work around this.

[18:30] Step Up in Basis – Step up in basis is a tool widely used by financial planners to minimize the tax impact, and President Biden’s new proposal substantially limits this opportunity. Grant shares his thoughts on how we can adapt to these proposed changes.

[25:47] Estate Planning – How the elimination of step up in basis affects estate planning and how to minimize the tax impact for people who inherit assets.

Resources

Reviewing the Biden Tax Plan
www.abovethecanopy.us/reviewing-the-biden-tax-plan/

Episode #74: Animal Spirits & Consumer Confidence

“Animal spirits” is a term coined by the celebrated economist John Maynard Keynes, which describes the financial decision-making behaviors of people in times of uncertainty. The behavior of animal spirits has a clear relationship with consumer confidence. In today’s episode, Grant dives into how we can measure animal spirits and consumer confidence and what these concepts mean for the financial markets, our lifestyles, and portfolios. 

Show Notes

[01:03] Background – Grant reviews how the term “animal spirits” was coined, the historical background of it, and what constitutes the concept of animal spirits.

[05:19] Consumer Confidence Index – How consumer confidence can be quantified with an index, how it reflects the economic impact of global events, and what it can tell us about the status of the economy.

[10:00] Mergers & Acquisitions – In the last few months, there’s been a big surge in mergers and acquisitions. Grant shares his thoughts on the reason for this surge and how this trend relates to animal spirits.

[15:52] Other Examples – Grant reviews some of the other trends in the economy that relates to animal spirits, such as non-fungible tokens and cryptocurrencies.

[18:15] Consumer Confidence and Predictions – High consumer confidence is a clear indicator of good economic growth. Grant shares his thoughts on what the current status of consumer confidence tells us about the next few months.

[22:22] Negative Possibilities – Grant shares his take on what challenges we may have to face if the economic rebound does not go as expected.

Resources

Understanding the Consumer Confidence Index:
investopedia.com/insights/understanding-consumer-confidence-index

Animal Spirits:
investopedia.com/terms/a/animal-spirits.asp

Episode #73: The Few Circumstances Where Variable Annuities Make a Lot of Sense

Variable annuities are a set of commonly offered insurance products that promise consumers a consistent income stream. In general, these products tend to become more beneficial to insurance companies and representatives who sell these products rather than consumers buying them. However, in recent years insurance companies have started to offer products that may be more consumer friendly. Throughout today’s episode, we dive deep into what variable annuities are, how they’re structured, and some of the scenarios where you might want to consider them.

Show Notes

[01:07] Background – How professionals in the financial planning and insurance industries view variable annuities and why there are different perspectives on the integrity of the insurance-based investment solutions.

[05:23] Annuities – Different configurations of annuities and how the returns vary according to the type of investment.

[11:23] Understanding Variable Annuities – Grant reviews what variable annuities are, how they work, and why Grant isn’t a big fan of variable annuities.

[16:45] Features and Fees – Over the years, Grant has reviewed lots of annuity policies. He dives into the most common types of fees insurance companies charge their customers in exchange for various features in the policies and some of the issues associated with the fees and commissions.

[22:13] New Developments – In recent years insurance companies have started making adjustments and improvements to their products. Grant talks about some of these updates and how they address the issues from older policies.

[25:36] Reasonable Options – Grant dives into some of the scenarios where obtaining a variable annuities policy may make sense to a consumer.

Resources

How to Analyze a Variable Annuity:
abovethecanopy.us/how-to-analyze-a-variable-annuity

Episode #72: Here’s an Opportunity to Pay Less For Health Insurance

State exchange programs for health insurance are one of the provisions introduced in the Affordable Care Act back in 2010. Under this provision, the federal government may subsidize some of your insurance premiums if your income is low enough. The new stimulus package passed by President Biden extends this provision to allow more people to reduce the amount they pay out of pocket for insurance premiums. In today’s episode, Grant covers how this legislation works, who qualifies for these benefits, how and when to enroll, and things you should consider before switching from your current health insurance plan.

Show Notes

[02:47] The Legislation – Grant reviews the legislation that facilitates this opportunity and the motive behind passing this law.

[04:03] State Exchange – How the state exchange program works, criteria for qualifications, and how taxes come into play when you receive the benefits of this.

[10:02] New Updates – Grant reviews the changes that have been added to this legislation with the most recent stimulus package and some of the planning opportunities that come with the new changes.

[13:43] Breaking Down the Math – Grant explains a couple of examples of the premium subsidies and how much money you might save by utilizing this opportunity.

[16:53] Enrollment – Gant reviews the special window for enrolling in this program that expires on May 15 and why you should consider taking advantage of this opportunity.

[20:46] Deciding Whether to Enroll for Exchange Policies – Grant shares his take on a few things to consider when deciding whether it’s a good idea to obtain a policy under this program based on your current healthcare plan and some other factors.

Resources

Ep # 68 - Dissecting the New Stimulus Checks & Recovery Legislation: The American Rescue Plan Act of 2021:
growmoneybusiness.com/podcast/episode68

Episode #71: Why Robinhood Needs More Oversight

In recent years, the online trading platform Robinhood has been gaining popularity among typically younger and novice investors, mainly because they have no minimums or commissions. However, there are some things about the way Robinhood operates that are not always in the best interests of the users. In this episode, Grant reviews how this brokerage firm is set up, how they make money, and what you should keep in mind if you’re trading on Robinhood.

Show Notes

[01:37] Background – Robinhood’s origin story and how it forced many other brokerage firms to drop commissions to zero.

[04:39] Day Trading Mishaps – Grant reviews one of the horror stories related to day trading on Robinhood, where one investor ended up getting a massive tax bill because they didn’t understand the rules around trading. 

[08:09] Wash-Sale Rule – The IRS has set up a rule related to wash sales that get triggered when you trade frequently. Grant dives into how this rule can lead to massive tax bills for day traders on Robinhood.

[12:24] How Robinhood Makes Money – Grant reviews how Robinhood’s commission-free business model works, how it differs from a traditional brokerage firm, and one revenue source that put Robinhood under scrutiny in the investor community.

[22:56] Unnecessary Trading – Some of Robinhood’s features are designed to encourage users to make more transactions. Grant explains why this practice does not work in the best interests of Robinhood users.

[29:47] Strategies for Robinhood Users – Grant shares his take on some of the strategies Robinhood users could implement to build a robust investment portfolio.  

Resources

Episode #63 - Anatomy of a Short Squeeze: GameStop FAQs:
growmoneybusiness.com/podcast/episode63

Episode #70: Real Estate Syndication With Anthony Scandariato

A real estate syndication is essentially a partnership between a set of limited partners who pool their money together to purchase a piece of real estate they cannot afford on their own. This week on Grow Money Business we have a distinguished guest who has been working on real estate syndications for quite a while. Anthony Scandariato, co-founder and managing principal of Red Knight Properties, joins us today to talk about what you need to know before investing in a real estate syndication. 

Show Notes

[02:42] Introduction – What real estate syndication is, how it differs from property management, and available opportunities for investors.

[07:02] Legal Background – Rules, regulations, limitations, and liabilities associated with real estate syndicates. 

[10:33] Lifecycle of Investment – The process of setting up a real estate syndication and getting into deals with investors.

[14:54] Sourcing Properties – Anthony talks about his process of finding properties, acquiring them, and preparing for business.

[20:35] Managing Properties – Anthony shares his thoughts on the ideal way to manage the properties and working with tenants to make smooth rent adjustments.

[24:02] Communication with Investors – How general partners maintain the relationship with investors in terms of cash flow, reporting, and profit-sharing. 

[27:31] 1031 Exchange – Anthony shares his take on the purpose of the 1031 exchange and why it should not be repealed.

Resources

Discovering Multifamily Podcast - Real Estate For Medical Professionals With Grant Bledsoe‪:
podcasts.apple.com/us/podcast/real-estate-for-medical-professionals-with-grant-bledsoe

Connect with Anthony
LinkedIn: linkedin.com/in/anthonymscandariato
Twitter: twitter.com/redknightprop
Website: redknightproperties.com

Episode #69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

The Federal Reserve recently announced that they are going to maintain very low short-term interest rates for bonds over the next couple of years. On the other hand, long-term interest rates seem to be rising in recent weeks. We dedicated this week’s episode to reviewing how a savvy investor may respond to these developments. Throughout the episode, we discuss how bonds work, the risks associated with bonds, interest rates, why bonds are a crucial element of a healthy portfolio, and more. Stay tuned until the end of the episode, where Grant talks about why having non-US-denominated bonds could be beneficial to you.

Show Notes

[01:40] Introduction to Bonds – What bonds are, differences between bonds and stocks, and the role of investment banks in the process of issuing bonds.

[09:56] Risks Associated with Bonds – Grant explains some of the risk factors associated with bonds and why US government bonds are the least risky. 

[13:00] Interest Rates – How the long-term and short-term interest rates work and how the interest rates started to change in the last few weeks.

[17:22] Trends  – Grant shares his take on what contributed to the recent change in interest rates and what the current situation means for investors.

[21:44] Adjusting Bond Holdings – What you should keep in mind when deciding whether it’s a good idea to adjust your bond holdings due to the recent developments.

[24:15] Diversification Effect – Having bonds in your portfolio helps you survive poor market conditions because bonds have a floor on interest rates. Grant shares his take on why this is important for a healthy portfolio.

Resources

Buying Bonds vs. Buying Bond Funds:
abovethecanopy.us/buying-bonds-vs-buying-bond-funds/

7 Ways to Lose Money With Bonds:
abovethecanopy.us/wp-content/uploads/2017/06/7-Ways-to-Lose-Money-With-Bonds.pdf

Episode #60: This Is Why I’m Concerned About Our Rising National Debt:
growmoneybusiness.com/podcast/x9ykf9576e352jd-xs3l5-l355n-pc3nj-4l3tz-fsye7-g9gha-tdcyt-b7r9a-wja6y-ksbz4-9nlgl-559ba-3ncam-2dr43-h4bxz-jnxfw-ae9jc-wl66p-5ss8r-cnaej-4w6y7-pbr3p-dp97g-ar28b-yxwr5-emf3a

Episode #68: Dissecting the New Stimulus Checks & Recovery Legislation: The American Rescue Plan Act of 2021

The American Rescue Plan Act of 2021 was signed into law on March 11 to help the United States recover from the economic impact of the COVID-19 pandemic. This new legislation includes direct financial payments, extended unemployment benefits, expanded child tax credit, and numerous other provisions. Throughout this episode, Grant reviews several key provisions of the American Rescue Plan Act and what they mean for individuals and businesses.

Show Notes

[01:40] Introduction – The purpose of the new $1.9 trillion stimulus package and the main aspects it covers.  

[05:01] Recovery Rebates – The new legislation brings stimulus checks of $1400 per eligible individual. Grant reviews the eligibility criteria for stimulus checks, the amounts available in different scenarios, and how the rules are different from the previously passed CARES Act.

[11:54] Checkpoints – Grant reviews the three checkpoints that are considered when evaluating the eligibility for recovery rebates and some of the tax planning opportunities related to this process.

[19:03] Unemployment Compensation – The new stimulus package contains extended provisions to help those who are unemployed due to the current economic situation. Grant dives into the eligibility criteria for this and how taxation comes into play for qualified individuals.

[22:05] Healthcare – Healthcare-related provisions in the stimulus package and how the new provisions are different from the CARES Act.

[31:27] Child Tax Credit – The new stimulus allocates more tax credit for dependents and also raises the age of eligibility. Grant dives into the new eligibility criteria and other updates related to child tax credits.

[36:48] Student Debt – The American Rescue Plan Act comes with provisions to make any student debts forgiven between 2021 and 2025 tax-free. Grant reviews how this works and who can benefit from this provision. 

Resources

American Rescue Plan:
www.whitehouse.gov/briefing-room/legislation/2021/01/20/president-biden-announces-american-rescue-plan/

H.R.1319 - American Rescue Plan Act of 2021:
www.congress.gov/bill/117th-congress/house-bill/1319/text

Episode #67: How & Why to Employ Your Kids in Your Small Business

This week on Grow Money Business we talk about a powerful long-term tax planning opportunity available to business owners. Employing your kids in your business gives you and your kids numerous benefits in terms of taxation and retirement savings. Throughout this episode, Grant dives into what these benefits are, how you can contribute to your kids’ retirement savings, and some tax planning opportunities related to employing your kids.

We’re planning to post another mailbag episode in the next few weeks.  If you have specific questions you’d like Grant to answer in an upcoming episode, visit growmoneybusiness.com, and drop your questions in the Mailbag section.

Show Notes

[01:29] Roth IRAs – Why Roth IRAs are a convenient retirement savings method and how taxation works on Roth IRAs.

[04:59] Saving Early – Why it’s a better idea to guide your children to save for retirement at a young age and the benefits of saving for retirement as early as possible. 

[07:22] The Opportunity – How you can contribute to a Roth IRA on behalf of your children if they’re employed in your business.

[11:44] Tax on Your Child’s Earnings – Grant reviews the taxes that apply to the earnings of a minor and whether a tax return is required depending on your child’s income.

[14:26] Employing a Child in Your Business – Grant dives into the legal requirements for employing a child in your business and some of the interesting parts of a business you can get your child involved in.

[17:36] Setting up a Roth IRA – How to set up a custodial Roth IRA on behalf of your child and the process of handing over control to your child when they reach the age of maturity. 

[19:11] Tax Planning Opportunities – Some of the opportunities you can use to reduce your tax bill.

Episode #66: Yes You Do Need An Estate Plan With Tammi Caress

This week on Grow Money Business we have another distinguished guest: Tammi Caress. Tammi is an estate planning attorney, and the founder of Caress Law, P.C. Throughout the episode, we dive deep into the process of estate planning, why it’s important for any adult to have an estate plan in place, things to consider when selecting what to include in your estate, and what provisions to include in your plan for both while you’re alive and after you pass. Stay tuned until the end of the episode, where Tammy shares some tips & tricks you can use to minimize estate taxes.

Show Notes

[02:22] Tammi’s Background – Tammi has been running her law firm for eight years. She shares with us how she helps her clients with establishing estate plans and other legal matters.

[04:36] Estate Plans – What is included in an estate plan, the process of creating an estate plan, and what benefits you and your loved ones get from having an estate plan.

[11:14] Power of Attorney and Advance Medical Directives – Why parents should guide their children to set up power of attorney and advance medical directives when they turn 18.

[17:47] Trusts – A trust is another method of estate transfer available to us. Tammi dives into how trusts work, how they’re different from a will, the legal process of setting up a trust, and the benefits of having a trust.

[25:40] Estate Tax Minimization – How taxation relates to estate planning and what you can do to minimize your estate tax.

[27:11] Uniform Probate Code – What UPC is, the purpose of it, and how the legal process works in states that have adopted the UPC.

[32:42] Digital Assets – How digital assets such as emails, cloud storage, online accounts, and digital currencies are incorporated into estate planning.

[37:55] Access Without Legal Authority – Tammi explains the risks associated with sharing access to your online assets with someone without having proper legal authority.

[44:56] Mistakes – Tammi talks about some of the biggest mistakes people make in the process of estate planning and how you can avoid them.

[47:33] What to Put Into a Trust – Not all of your assets can be put into a trust, and it’s better not to put certain assets in a trust. Tammi reviews what to put into a trust and what to keep out of a trust. 

[52:23] Choosing People – What you should do to get the right people in place to step in when you’re in need.

Resources

Connect with Tammy:
clientservices@caresslaw.estate
www.caresslaw.estate

Episode #65: My Take on Bitcoin & Cryptocurrency

Last week Bitcoin crossed $58,000 per coin. This extremely volatile digital currency has been becoming increasingly popular and getting more media attention than ever. Despite the scrutiny that comes with popularity, the technologies and concepts involved in Bitcoin are fascinating. We dedicated this episode to diving deep into what cryptocurrencies are, how they work, and whether they could be good investments. Stay tuned until the end of the episode, where Grant explains what you should keep in mind if you have plans to get involved in Bitcoin.  

Show Notes

[01:16] Interest in Bitcoin – How the interest in Bitcoin increased over the recent years and how being radically open-minded to new opportunities can be beneficial to a financial professional.

[04:42] Decentralized Currency – How the blockchain technology paved the way to creating digital currencies that aren’t controlled by any central bank. 

[07:53] How Cryptocurrency Works – Grant dives into how computers and complex mathematical operations are combined to create Bitcoin.

[13:33] General Ledger – The way Bitcoin transactions are recorded is built around a fascinating concept called the “General Ledger.” Grant explains how this process works.

[15:51] Benefits of Cryptocurrency – How cryptocurrencies and blockchain technology solve some of the problems we have with traditional currencies and some of the qualities of cryptocurrencies that make them attractive. 

[25:44] Arguments Against Bitcoin – Disadvantages, limitations of and possible risks of using Bitcoin and other cryptocurrencies.

[32:49] Gold, Dollars and Bitcoin – How the US dollars were once linked to gold reserves, why people weren’t allowed to have large amounts of gold until 1971, and how this story relates to cryptocurrencies.

[36:35] Taxation – IRS has already taken measures to apply tax to cryptocurrencies by treating them as assets. Grant reviews how this affects the usability of Bitcoin and other cryptocurrencies.

[39:32] Does Bitcoin Belong in My Portfolio? – Grant shares his take on whether it’s a good idea to have cryptocurrencies in your portfolio and what you should be concerned about if you’re considering buying Bitcoin.

Resources

IRS - Frequently Asked Questions on Virtual Currency Transactions:
www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

Episode #64: Where to Invest an Extra $50,000 Right Now

With the stock markets going straight up, equities being more expensive, and bonds offering extremely low interest rates, many people seem to be wondering what’s the best way to invest extra cash they have. In today’s episode, Grant dives into some of the best investments you can make at this point, the current status of the market, and whether it’s a good idea to invest in certain asset classes. Stay tuned until the end of the episode, where Grant talks about whether buying Bitcoin is a good idea right now. 

Show Notes

[01:27] Current Situation – Grant reviews the current financial situation in the country.

[04:47] Emergency Funds – Before getting into investments, it’s always a better choice to make sure that your emergency fund is adequate. Grant shares his thoughts on what you should consider when assessing the strength of your emergency fund. 

[09:18] Retirement and Other Savings – Grant talks about how to take advantage of retirement funds and other means of saving once you have an adequate emergency fund.

[11:35] Market Timing – Grant dives into how market timing affects the performance of your investments with data from a study conducted by the Charles Schwab Corporation.

[18:26] Human Behaviour – Financial markets are driven by human emotion and behavior, and as a result of this, it’s impossible to know what’s going to happen in advance. Grant explains how you can make better investment decisions by being mindful of this trait of the financial markets.

[21:08] Asset Allocation – How properly planned asset allocation can help you get the best returns on your investments.

[24:22] Cyptocurrency Investments – Bitcoin and other cryptocurrencies have become a hot topic in recent weeks. Grant shares his take on whether it’s a good idea to get yourself involved in cryptocurrency investments.

[27:39] Final Thoughts – Grant sums up what you should consider when deciding what to do with your extra cash.

Resources

Does Market Timing Work? - A study by Charles Schwab Corporation:
www.schwab.com/resource-center/insights/content/does-market-timing-work

Episode #63: Anatomy of a Short Squeeze: GameStop FAQs

With the GameStop incident further escalating we have been getting more questions about the whole situation. So we dedicated this episode to reviewing some of the specific areas related to short a squeeze. In today’s episode Grant dives into how short squeezes work, the controversy around Robinhood’s decision to suspend trading activities, the impact short selling has on our market, whether short selling should be banned, and more. 

Show Notes

[02:24] The Market in the Last Week – Grant reviews the recent events related to GameStop stocks and how the incident created interest in the investment community about short selling. 

[04:38] Short Squeeze – How short squeezes are created, and why short squeeze situations come with the risk of unlimited loss.

[10:45] Short Selling – How short selling works, the parties involved in short selling, and the role brokers play in short selling. 

[17:40] Lending Shares – How lending shares leads to situations where there could be more shares short than shares exist in the market.

[23:39] Margin – Going on margin allows you to buy stocks worth more than the money you have. But it also can add fuel to the fire in short squeezes. Grant dives into how it happens and what you should keep in mind about going on margin.

[28:05] Robinhood’s Trading Suspension – Amidst the chaos created by the GameStop incident, the stock trading platform Robinhood suspended buying shares. Grant shares his take on the legitimacy of this practice and the purpose of doing it.

[31:28] Should Short Selling be Allowed? – Grant shares his take on the debate around whether we should get rid of short selling. 

Resources

Episode 62 - GameStop, Gamma Vortex, and Confirmation Bias
podcasts.apple.com/lk/podcast/gamestop-gamma-vortex-and-confirmation-bias

My Take On Short Selling:
abovethecanopy.us/my-take-on-short-selling/

Episode #62: GameStop, Gamma Vortex, and Confirmation Bias

In the past couple of weeks, an exciting and dramatic chain of events has been going on around GameStop Corp., where their stock price skyrocketed in a very short time. GameStop is a video game and gaming merchandise retailer. While they have been performing adequately, GameStop hasn’t come up with fascinating and innovative things in the past couple of years as other growth companies do. For that reason, this stock price surge triggered numerous headlines in the news and rumors and stories in the financial community. In today’s episode, Grant dives into what caused this situation, how things escalated, and whether there’s anything illegal going on. Stay tuned until the end of the episode, where Grant talks about what you should do if you’ve made a bunch of money in GameStop shares or options.

Show Notes

[02:04] The Last Two Weeks – Grant reviews the events of the last two weeks regarding the stock price of GameStop and the stories in the news.

[06:42] Reddit and Hedge Funds – How a group of traders who were communicating on Reddit about their trading activities and how some hedge funds got involved in the GameStop stocks situation. 

[10:07] Selling Short – Grant explains a stock trading strategy that allows you to sell stocks without actually owning them, the way it works, and the risks associated with selling short. 

[16:17] A Short Squeeze – How a drastic increase in stock price affects people who utilize the short-selling strategy and how it applies to the GameStop situation.

[21:00] Options – In stock trading, an option is a contract that allows you to buy a particular stock at a specific price for a certain period. This is somewhat an aggressive strategy, and Grant talks about how the demand for options trading added to the complexity and heavily influenced the GameStop stock price surge.

[29:13] Extreme Volatility – Grant shares his thoughts on how this situation was heavily contributed by traders who shared about their trading activities in online forums. 

[31:48] Other Factors – Grant shares his take on what other factors contributed to the massive stock price increase and what they mean for investors. 

[36:47] Restrictions on Trading – Some of the major brokerage firms imposed restrictions on trading  GameStop stocks due to the developing situation. Grant explains the influences behind this and how it’s different from a regular circuit breaker.

[45:20] The Legal Aspect – Grant shares his take on stock trading rules and the legality of actions of different parties involved in the situation.

[49:20] Should You Get Involved? – Grant shares his take on why it’s not a good idea to get in on this trade. 

[55:44] Confirmation Bias – How confirmation bias affects your decision-making process in this type of situation and how to be mindful of market behaviors where luck plays a significant role in the success of an investment.

Resources

Q&A: A basic guide to the GameStop squeeze:
ft.com/content/f2929fcc-cc62-4d20-8397-2040ce3f595e

Stock Purchases and Sales: Long and Short:
www.investor.gov/introduction-investing/investing-basics/how-stock-markets-work

SEC Fast Answers – Options Trading: 
www.sec.gov/fast-answers/answersoptionshtm.html

Episode #61: Tax Gain Harvesting: What, Why, and How

Tax gain harvesting is a strategy of selling investment assets at a gain and paying tax at that point as opposed to waiting and paying the tax later. Depending on your income and how your income may fluctuate in the future, there might be situations where it makes sense to take advantage of tax gain harvesting. Throughout today’s episode, Grant reviews how tax gain harvesting works, when it may be and may not be a good idea, and what you should consider before deciding whether tax gain harvesting might be beneficial in your specific scenario.

Show Notes

[01:20] Introduction – Grant reviews the concept of tax gain harvesting, the purpose of it, and how it works. 

[02:52] Tax Loss Harvesting – What tax loss harvesting is and the wash-sale rule the IRS has surrounding tax loss harvesting.

[04:27] Long-term Capital Gains – How long-term capital gains work and how taxation applies to different types of tax filing.

[07:34] Roth IRA Conversion and Tax Gain Harvesting – Grant compares the benefits of Roth IRA conversions versus long-term capital gain harvesting and how you can save more according to your financial situation.

[13:33] When not to Harvest – Grant reviews a couple of scenarios where harvesting capital gains may not be the most beneficial choice.

[16:37] The Effects of Harvesting on Other Benefits – There are some benefits, tax credits, and other variables that depend on your adjusted gross income, such as Social Security and Medicare premiums. Grant explains why you should be mindful about these things since your adjusted gross income increases due to capital gain harvesting.

[21:10] The Political Aspect – Grant shares his take on how the proposed tax policies of newly elected government officials might affect the investment strategies of people who are in higher tax brackets.

Resources

Capital Gains and Losses – 10 Helpful Facts to Know:
www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0

How to Take Advantage of Your Retirement “Gap Years”
www.abovethecanopy.us/how-to-take-advantage-of-your-retirement-gap-years/

Episode #60: This Is Why I'm Concerned About Our Rising National Debt

The national debt level in the United States is an important topic that usually gets quite a bit of attention in the financial and economic news. However, with everything else that's going on in the world, it seems the conversation about the debt level has been getting less attention than it deserves. We dedicated today's episode to talking about the national debt level. Throughout the episode, Grant dives into where we are in the national debt cycle, how much debt we have, at what rate our national debt is growing, and long term economic consequences that might occur as a result of the growing national debt. 

Show Notes

[01:29] Households Vs. Federal Government – Grant brings up an interesting comparison of the finances and debt of a typical household versus a federal government to explain how debt can be beneficial when planned wisely.

[05:44] Growing National Debt – What happens if the national debt keeps growing over a long time and what it means for investors and citizens.

[07:26] Current Level of National Debt – How much national debt we have right now and where the national debt level is relative to the GDP.

[10:00] History of National Debt – Grant reviews the levels of national debt we had over the last few decades relative to the GDP and some patterns that could be seen in world economies over centuries.

[13:04] Role of the US Treasury –  Measures taken by the US Treasury to gain funds and how these measures contribute to the national debt.

[15:46] The Breaking Point – Grant shares his thoughts on at what point a country starts to run into problems with their national debt and what contributes to these problems.

[20:19] Options at the Breaking Point – What options a country is left with when they have too much national debt and the consequences associated with these options. 

[25:07] The Current Trajectory – Where the USA is headed in terms of the national debt, how this forces the federal reserve to print more US dollars, and how it bears the risk of losing the US dollar's status as the world's reserve currency at some point. 

[31:26] Investors and National Debt – What the growing national debt level means for investors, and what measures we can take to ensure the stability of our investments.

[36:29] Highlights – Grant recaps the situation related to the national debt and shares a few tips about diversifying your investments.

Resources

The Changing World Order by Ray Dalio:
linkedin.com/pulse/changing-world-order-ray-dalio-1f/

Episode #59: Everything You Need to Know About Buying & Selling Small Businesses With Greg K Williams

In today's episode, we have another distinguished guest: Greg K Williams. Greg is a certified mergers & acquisitions professional who has years of experience helping business owners and buyers through the process of selling or buying a business. Throughout the episode, Greg shares his wisdom on the process of selling a business from both a seller's and a buyer's perspective, common ways you can boost what you get from a business, and several other things you should know if you're interested in buying or selling a business. 

Show Notes

[01:48] Greg's Background – Greg shares how he helps business owners and buyers as a business brokerage professional. 

[05:44] Transaction Lifecycle – The process of selling a business and how the process differs according to the nature of the business.

[09:59] Valuation – Factors that contribute to the sale price of a business and what you can do to get a better deal.

[13:23] Buyers & Bidders – Greg shares how they connect and communicate with potential buyers and interested parties.

[18:00] Due Diligence & Closing the Deal – What happens after the buyer is ready to continue with the deal and the legal and financial aspects of the transaction.

[27:00] Boosting Value – Greg shares some of the things a business owner can do to increase the value of their business before selling it.

[32:30] Buyer's Perspective – Five questions Greg asks buyers to understand their expectations around buying a business.

[41:44] Impact of COVID – Greg shares how the pandemic and its economic impact have affected his line of work.

[46:24] Final Thoughts – Tips and tricks for people considering buying or selling a business to make a more advantageous deal.

Resources

Connect with Greg: 
greg@gregkwilliams.com
kcapex.com

Episode #58: Top Strategies for Tax-Efficient Charitable Giving

The year 2020 has been an extremely challenging year for lots of people, businesses, and organizations. Therefore, this is also a time when charitable organizations may need help from donors more than ever. We dedicated today’s episode to exploring some of the tax-efficient strategies you can use to give to charity in a way that minimizes your tax impact. Stay tuned until the end of the episode, where Grant shares his favorite methods of charitable giving and some tips to optimize your tax benefits related to charitable donations.

Show Notes

[01:26] The CARES Act – Special provisions in the CARES act that encourage you to give cash gifts to charity.

[07:07] Qualification Criteria – What constitutes a qualified charitable gift and how to identify instances that do not qualify.

[11:04] Charity & Securities – How you can gift stocks or other appreciated assets to qualified charitable organizations and the tax benefits you receive in return. 

[14:31] Roth IRA Conversions – How you can pair a substantially appreciated gift with a Roth IRA conversion to take advantage of some tax planning opportunities.

[17:00] Qualified Charitable Distributions – When you reach the age where you have to take mandatory distributions from your retirement funds, you can divert these distributions to qualified charitable organizations. Grant explains how this works and what benefits you receive in return.

[21:04] Donor-advised Fund – How donor-advised funds help you be consistent with your charitable donations while optimizing your tax benefits.

[25:57] Charitable Remainder Trusts & Charitable Lead Trusts – Grant explains how the two types of trusts work, the process of configuring these trusts, benefits you might receive, and how to decide whether these trusts are a good fit for you.

[33:49] Tips & Tricks – Grant shares his wisdom on tips & tricks to optimize your tax benefits related to charitable donations. 

Resources

Donor-Advised Funds:
irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds

6 Ways to Minimize Required Minimum Distributions:
abovethecanopy.us/6-ways-minimize-required-minimum-distributions/

Episode #57: A Breakdown of the New Stimulus Bill, Including PPP 2.0!

A couple of days ago, President Trump signed into law a second stimulus package for COVID relief. This legislation includes $600 stimulus checks, more funding for the Paycheck Protection Program, along with some updates to the rules, changes to the regulations related to loan forgiveness, tax deferrals, healthcare, and more. Throughout the episode, Grant dives into what these new updates are, how they relate to individuals, business owners, employees, and how you can take advantage of the provisions in the new stimulus package.

Show Notes

[02:05] The New Stimulus – What caused the first stimulus to be insufficient in some aspects, and how the political situation in the country has influenced the second stimulus legislation.

[06:22] Highlights – Grant reviews the main aspects relevant to our audience covered by this new piece of legislation.

[09:08] Checks From the Federal Government – Eligibility criteria for direct checks and the amounts available for single filers, joint filers, and households with eligible dependents.

[15:14] Gray Areas – The CARES Act had several loopholes and gray areas that caused controversy around the legislation. Grant shares his take on how these ambiguities may affect the new legislation.

[18:34] Paycheck Protection Program – The new stimulus contains a few major areas that are quite different from the previously passed CARES Act. Grant explains what these changes are and how they may affect business owners.

[29:50] Eligible Expenses – The new stimulus comes with some changes in the eligible expenses for the Paycheck Protection Program. Grant reviews the new categories that have been added to the eligible expenses.

[33:10] Help for Performing Arts Businesses – The new stimulus contains a $15 billion grant program for live venues or arts-related businesses. Grant explains how this program works.

[36:37] Covered Period & Forgiveness – How the forgiveness process works in the new stimulus act and how you can prepare for spending your loan funds in a way that increases the possibility of being eligible for loan forgiveness.

[43:00] Tax Defferals – Updates on payroll tax deferrals that come with the new stimulus bill.

[46:03] More Updates – The new stimulus comes with several other updates related to unemployment benefits, itemized deductions, student loans, healthcare, and more. Grant reviews how you may take advantage of these new provisions.

[53:22] Rolling Out New Provisions – How the provisions in the new legislation might be implemented and what to expect in the next few weeks.

Resources

Consolidated Appropriations Act, 2021:
www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdf

Episode #56: Last Minute Retirement Plan: Tips & Tricks for 2020 Procrastinators

At the end of every year, some business owners face situations where they need to set up retirement plans at the last minute due to numerous reasons. We dedicated this episode to reviewing how business owners may overcome this challenge. Over the years, Grant has come up with some strategies and maneuvers that may help you set up retirement plans and make deductible contributions late in the year. Throughout the episode, Grant shares how to implement these strategies in your business.

Show Notes

[01:35] Introduction – What might cause a business to set up retirement plans late in the year.

[03:33] Taxation – How contributions to retirement saving plans are taxed and some of the opportunities that may help you with your tax bill.

[06:24] SIMPLE IRA – Grants reviews the structure of one of the most common retirement saving types and why you may not be able to use it for last minutes retirement contributions.

[10:55] SEP-IRA – How SEP-IRA works and how it affects employees, self-employed individuals, and business owners in terms of taxation.

[18:01] 401k Plans – Rules and regulations related to 401k plans and things you should consider when making last-minute contributions with 401k plans. 

[22:40] Safe Harbor 401k – Grant reviews the streamlined method for fulfilling the compliance requirements of a 401k plan when you have employees.

[23:28] Conversions – Things to keep in mind if you are interested in a Roth IRA conversion.

Resources

The 17 Biggest Retirement Mistakes:
www.abovethecanopy.us/17-biggest-retirement-mistakes/

The Definitive Small Business Guide to Retirement Planning:
www.abovethecanopy.us/wp-content/uploads/2017/05/The-Definitive-Small-Business-Guide-to-Retirement-Planning.pdf