#10: Stop Paying Taxes, Legally! I'm Not Kidding with Vern Schmidt
Jul 03, 2019
Ever hear about the guy who doesn't pay taxes? Well, in today's podcast you get to meet him and learn how he does it legally year in and year out over the last 20 years. Here's the clue, understand the tax laws better than the IRS and have you or your spouse be full-time in real estate. Meet my old friend Vern Schmidt take us through opportunity zones as well as tax planning for real estate investors.
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Stop Paying Taxes, Legally! I'm Not Kidding with Vern Schmidt
Vern had been working at AMC when the company was bought out by Chrysler. In his role, he had 200 people working for him. Because AMC was bought by Chrysler, Vern received new options, but they couldn't be exercised for 5 years. Unbeknownst to Vern, he had encountered phantom income and was ordered to pay $200,000 before he could even exercise his options. This is when Vern, who had been doing taxes for 20 years decided to learn more.
Vern had built his real estate business so that he could get out of the car business. However, his first experience put him on the sidelines for 20 more years. Vern was renting out the home he was going to eventually live in. What comes next is a horror story. The tenants were behind on rent. When they left without paying, they left the backdoor open in the middle of January... in Michigan. If that doesn't get any worse, it was rumored from the next door neighbor that they had a pet monkey!
Due to circumstances within his job, Vern had used his re-location fee to purchase his first property. This is when Vern learned of the advantages of cost segregation and opportunity zones. With opportunity zones, Vern understood that if you wait 10 years, you don't pay any capital gains tax. To this day, Vern owns around 200 doors worth of real estate.
In this episode we also cover:
- Why Vern moved to California
- How Vern hasn't paid taxes in over 20 years
- What are and how to take advantage of opportunity zones
- How to plan your taxes as a real estate investor
- What phantom income and losses are
Connect with Vern:
Email: [email protected]
Phone Number: (419) 356-3022
Links mentioned in the show:
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