THE CRUDE TRUTH Ep 24- We talk with Mark Pearlberg, CPA about the Real Estate Market and the 1031
There is a lot of Crude Truth surrounding Real Estate, Alternative Investments, and the 1031 exchange of sold properties.
I talked with Mark Perlberg, CPA, and Stu Turley, CEO, of Sandstone Group, about what they see in the industry around the market shifting in real estate and the increased taxes looming on the horizon. Investors are moving into investments with tax advantages and passive income.
Please let us know what you see!
Please reach out to Mark Perlberg on his LinkedIn HERE
Check out StatusJet HERE
00:00 – Intro
02:14 – Mark Pearlberg Introduction Talks about 10 31 Exchanges in the Market and the concerns about 10 31
03:27 – What are the current market trends and main concerns in the 1031 exchange marketplace that you have observed?
05:09 – Talks about Capital Gains Planning in 10 31( Multi-Asset 10 31 and Reverse 10 31Exchange )
07:50 – RT`s thoughts about what Mark Pearlberg said about 10:31Exchange
10:19 – OIL and Gas 10 31 Exchange
11:33 – Talks about 10 40
12:30 – Talks about a sample situation about 10 31 and how Mark Pearlberg and he`s team would work on going throughout the year with their taxes for their deductions and the way it would look on a tax revenue statement.
15:45 – Talks about Tax Liabilities on 10 31
18:36 – Talks about California Governor Newsom and the Law he made that they can reach out and grab you even out of state.
19:50 – Talks about New York and California Tax
21:59 – Talks about Leases and Capital Gains
24:13 – Talks about Mark Perlberg and his way on saving taxes
25:18 – Not all Oil and Gas Deals are created equal
28:27 – Talks about Tax Savings in Oil and Gas / Capital Gains and Alternatives
33:13 – What’s Coming around the corner for Mark Perlberg CPA?
35:11 – Where can you Listen to Mark Perlberg and where to find him online
35:32 – RT What are you coming around the corner and seeing on Paco’s operating and The Crude Truth?
37:25 – Outro
THE CRUDE TRUTH Ep 24- We talk with Mark Pearlberg, CPA about the Real Estate Market andthe 1031
Stuart Turley [00:00:44] Hey, Everybody, Welcome we’ve actually got a different kind of podcast today. My Name is Stuart Turley, President, CEO of the Sandstone Group, and I’ve got some fabulous guests here. Let me introduce Rey Trevino he is the podcast host for The Crude Truth. He is an EMP Operator, big dog over there at Pecos Operating. Welcome, RT. How are you?
Rey Trevino [00:01:11] Doing? Well, Stu, thank you very much and exciting to do this little collaboration with you today. Very excited about you bringing all the next guests.
Stuart Turley [00:01:20] Oh Fantastic!
Rey Trevino [00:01:23] All Im saying, you know, without further ado, keep going.
Stuart Turley [00:01:25] Yeah, we’re going to have some fun here we got Mark PearlBerg. We’ve had the pleasure of just starting to get to work with Mark and understanding his CPA licenses. We are getting so many questions about 1031 exchanges.
Stuart Turley [00:01:42] People wanting to get out of real estate, wanting to find out what’s going on. And just as a real quick note, like Occidental Petroleum, last year was the number one on the Fortune S&P 500.
Stuart Turley [00:01:59] So people are really wanting to know what’s going on, what’s eligible in the energy space. And I think we’re going to have a fantastic discussion and Mark, you’re the founder and CEO of your CPA firm.
Mark Perlberg [00:02:14] Right yeah. So I’m a CPA founder and Mark Prober, CPA. The name may have changed by the time you listen to this, but you can you’ll be certified. We specialize in advanced tax reduction strategies for high net worth individuals, real estate investors in entrepreneurs. We also do tax preparation, bookkeeping and all of those things. But our specialization, what makes us unique is we work with clients to create tax savings.
Stuart Turley [00:02:42] I like, you know, Mark, I’m sitting here and for our podcast listeners, I love the way you’re doing it. You’re all I mean, you’re actually getting after it almost like a New Yorker, but you’re now in Atlanta, I believe. And I mean, we all have to talk. RT and I have known each other for quite a while we all talk with our hands.
Stuart Turley [00:03:01] So, you know, if you’re listening to the Podcast, you know, you got to jump over and watch it on YouTube on that. So, you know, Mark, I’m going to go ahead and throw this over to you to start the dialog and what you’re seeing in the marketplace for the 1031 exchanges or what are you seeing for the main concerns in this market?
Mark Perlberg [00:03:26] So I wouldn’t say that. Okay. Let’s talk about what a 1030. You know, obviously, I’m going to assume here that some of our listeners have a very basic understanding of 1030 ones. So at a high level here, 1031 to avoid and deferred cap gains, right?
Mark Perlberg [00:03:44] When you sell a property, you have 45 days to identify a replacement in 180 days to complete that transaction of a new piece of property it has to be real estate. And now you’re deferring the gains you could save. In instances, we saved tens of thousands, hundreds of thousands of millions of dollars for clients with this strategy.
Mark Perlberg [00:04:03] Now here are the Challenges, you can only exchange real estate for real estate. And a lot of our clients are having capital gains events, you know, such as my client that’s working with you guys.
Mark Perlberg [00:04:17] Now. People are selling their real estate for all different sorts of reasons and a lot of people are are complaining that they can’t find any good deals. The market is overinflated, I’m afraid of an economic collapse, there’s no good deals out there.
Stuart Turley [00:04:34] Right
Mark Perlberg [00:04:34] So that’s that’s one of the challenges is just finding the replacement property. And then if they’re not aware of things, you know, our client did an exchange into mineral rights, which gives them the opportunity to not even do anything and still defer the gains and see cash flow coming their way and you’re deferring the gains indefinitely and potentially forever if you hold on to that land.
Mark Perlberg [00:05:01] Now, here are some solutions so I’m going to go on a little bit off topic, but there are if you know, if you’re working with an advisor who understands capital gains planning in 1030 ones, there are some potential solutions you can do mult-iasset 1031.
Mark Perlberg [00:05:20] So let’s say, your replacement property doesn’t have enough value to replace it. Let me backtrack. You’re replacement property has to be equal or greater than the sale of your property. Well, let’s say you really want to buy something, but your sale is 700,000 and your replacement property is only 400,000. You think you’re out of luck, right? Well, that’s not the case.
Mark Perlberg [00:05:45] You can do a multi-asset. 1031 So let’s say this new rental property or does it not be a rental property because it could be a business, a real estate for your business. It could be it could be self-storage, it could be real farm, just real estate. But let’s say, you know, you still got $300,000 more to deploy. You could put that $300,000 into the mineral rights of this land that you’re going to own. So you do a multi-asset, or maybe you can roll it all into there, or maybe you can structure this with a reverse 1031 exchange, which a lot of people don’t realize.
Mark Perlberg [00:06:22] So when we have a hard time finding the deals and we know we’re going to sell our real estate fast, we know we’re in an appreciated market and we have a hot deal. We’re not too worried about selling the real estate we know it’s going to sell but the hard part is finding your replacement property.
Mark Perlberg [00:06:42] So you can do the Reverse 1031 exchange it’s split. You take your time until you know you’ve solidified your replacement property. So you found the ideal property that you want and now you have 180 days to sell your property, which you know is going to sell.
Mark Perlberg [00:06:59] So now you’re not under all that pressure to identify and sell your replacement property with 180 day time one. You’re not worried about the deal dying as much. You’re more you more are in control of the situation and now you have two cash-flowing properties over the course of 1031 so that’s cool stuff out there.
Stuart Turley [00:07:16] Well, nice and then I like that I was sitting here thinking a Question Mark, and it was kind of like this sort of thing, like a reverse mortgage.
Mark Perlberg [00:07:27] Not, not quite different concepts, but, you know, the ideas are that you’re taking, you’re just switching up the order. You buy the replacement first and then you sell the property.
Stuart Turley [00:07:39] Nice. Well, aren’t you? You know, you’re the EMP operator visiting with them as well, too. But what are your thoughts on what Mark just put out there?
Rey Trevino [00:07:50] Well, first of all, you know, any entrepreneur or any high level individual, I definitely recommend first and foremost to get a CPA like Mark that does these advanced tax reductions. I mean, there’s there’s a difference between the I don’t even want to compare those guys, but there’s a difference between somebody that got a degree in accounting. And then there’s a difference between those guys that do this and what Mark and his team do.
Rey Trevino [00:08:19] They really go in they work with a lot of people that are high-dollar entrepreneurs that are always looking for ways because who we could even the former president said it best. He spends millions of dollars a year to save millions of dollars a year on his taxes. So Mark and his group there at the Mark Wahlberg CPA are really a great place to be.
Rey Trevino [00:08:41] But no, you know, as an MP guy, exploration of production, operating the oil and gas industry, you know, there are several ways in the way that we started out in the business was by drilling oil wells for the tax deductions.
Rey Trevino [00:08:54] However, as we’ve gotten bigger and our assets have grown there I speak, those baskets have always expanded. Right now, the real estate market is not the hot topic that it was six months ago. And, you know, like Mark said, people are still buying but a savvy investors having a hard place to go put their money after they sell. So a 1031 exchange into any form of an oil and gas asset has really turned into a great place to park their money until the next project comes around.
Mark Perlberg [00:09:29] Yeah. I mean, the cool thing is that there’s lots of these opportunities available. You don’t have to worry as much about a deal dying in a lot of people. What I have found is, you know, when we had our former president was a real estate investor, we had 100% bonus depreciation it was just a really easy time to make money and cut your taxes the bonus depreciation is phasing out.
Mark Perlberg [00:09:52] And a lot of people are finding that is getting harder and harder to find good deals that are cash flowing, especially in the short term rental space where we see a lot of clients. So and then the like, a lot of finding the heat, being landlords.
Mark Perlberg [00:10:07] So a lot of that, you know, I thought theirs was passive income people are calling me. Well, because there’s thinking toaster is broken.
Rey Trevino [00:10:14] Yeah. Yeah.
Mark Perlberg [00:10:15] So this is more of a legitimate passive investment vehicle.
Rey Trevino [00:10:19] You know, Mark, what I call it is because, you know, we’ve had several rental properties and we’ve transitioned into 1031 exchange and some minerals and income producing properties. And what I call it is that there’s no TNT involved, no toilets and no tenants.
Rey Trevino [00:10:34] And it’s it’s the epitome of, you know, of what that real phrase mailbox money is, your not worried about, You know, again, like you said, it’s a toaster broke? Is a light out? Is the AC out there in the summers and heater out during the winter? No, because guess what? Oil and gas is working 24/7 and, you know, that’s one of the best things Warren Buffett has ever said you need to make money while you sleep.
Rey Trevino [00:10:59] And so with this, with an investment in and oil and gas in 31 exchange, you truly do not have those headaches, so to speak, because also you have Fortune 500 companies like Occidental, like the Exxon that are operating some of these leases. So they know what they’re going to do and they have to keep their investors happy. So guess what? That means that they’re actually working, quote unquote, for their tenants, if you will, to make sure that everything stays just right.
Mark Perlberg [00:11:32] Yeah. Yeah. I mean, and I think it’s a really cool idea when you look at how all of this comes together on the 10 40. Yeah. Because real estate investing is a passive activity vehicle and you have a lot of our clients who are investing in real estate if they don’t have real estate professional tax, that is, they’re not even using their losses most of the time.
Mark Perlberg [00:11:54] And they have all these deductions they’re just sitting on this on their 10 40 it being pushed for and pushed forward and not even being used? And then when you have a passive investment vehicle that is going to generate positive passive income, you’re finally going to have the opportunity to activate these passive losses to offset the cash flow from these other these other activities that what I call pig passive income generators.
Rey Trevino [00:12:26] You know, if I may march, let’s say, you know, let’s talk about let’s give some examples, if you don’t mind. Somebody has a property, we’re going to give them a hell of a deal here. Somebody buys a property for 500,000 back in 2008, and now it’s worth four easy numbers. It’s worth $1,000,000, and they just can’t find that next property.
Rey Trevino [00:12:48] So they roll it into a 1031 exchange, mineral income producing property that’s now on pace to earn about 30% this year alone. You know, how would that work with with you and your team going throughout the year with their taxes for their deductions and the way it would look on a tax revenue statement?
Mark Perlberg [00:13:09] So, okay. So the first thing we would think about here before we even think about 1031 and this is why it’s so important to have a knowledgeable advisor here is just like you wouldn’t just like you wouldn’t want to do your own root canals. You want to do your own tax planning.
Stuart Turley [00:13:24] Yeah.
Mark Perlberg [00:13:25] I love bigger pockets. I love all those sites. But you need to talk with someone who’s done this stuff first. You want to make sure that there’s actually taxes on this capital gains rate, which it looks like there likely is. There might be instances where a 1031 doesn’t make sense because you have suspended losses or you’re in a $0 long term cap gains bracket bracket, or maybe you have stock losses offsetting the cap gains.
Mark Perlberg [00:13:49] But let’s assume here we have taxable. We have we’re avoiding here potential half a million dollars of capital gains tax. Now, if this is long term, cap gains tax is not just taxed at 15%, eventually it’s going to be taxed at that 20% and then you have your 3.8 net investment income tax and then you have state taxes if you do nothing and the state, taxes are usually taxed at the same rate as your regular order and ordinary income tax.
Mark Perlberg [00:14:17] So we’re talking about potentially up to like around a 30% tax liability and if you’re in California, just double all that, just California just they just love to tax you. I’m exaggerating they would double it but the California taxes can get really, really high.
Rey Trevino [00:14:33] Yeah.
Mark Perlberg [00:14:34] So you’re avoiding all of these taxes here when you do the 1031 here and now you have a three, let’s say your cash flowing 30%. We’re talking about $300,000 of passive income that’s taxed at your marginal rate. You’re not paying self-employment tax, You’re not paying that 15.3%. Pike up.
Mark Perlberg [00:14:52] And now, let’s say you have other rentals now, right? So let’s say you go to strategies looking at all your other source of activity here. You can maybe now think, well, I never had I never had rep status there was no purpose in doing cause segregation.
Mark Perlberg [00:15:06] Well, let’s take this rental property, do a cost, say, and create passive losses from the rental activity to also offset the cash flow from the oil and mineral rights as passive or maybe we take some of this profit and we dump it into we want to reduce our taxes we can dump it into oil and gas mining wells, which will reduce your taxes as well.
Mark Perlberg [00:15:28] But overall, you know, and then you’ll what you’re seeing here is at the end of the day, you’re seeing that mailbox money that’s going to be tax advantaged regardless because it’s passive income and you’re going to self-employment taxes.
Rey Trevino [00:15:43] Now, another Question is, Mark, that with you mentioned that you’re going to be taxable for about 30% tax liability. You know, with any type of know only gas investment, you cannot write off up to 15% of the production itself. So that could help out as well. Correct. Against those tax liabilities.
Mark Perlberg [00:16:04] Right. So if you get a key one way or the other or if there are expenses and some of these in some instances and correct me if I’m wrong, but you still have other deductions that could be non-cash deductions like depletion. Yes. Which will there’s no cash. There’s no additional cash leaving the partnership that you have ownership in. But you’re still getting a tax deduction which will reduce the tax to the taxation on your cash flow.
Rey Trevino [00:16:32] So, yes, that’s correct. Yeah, there is definitely the depletion that is involved as well and that is part of the production because it is a good very different you know, it is a depleting asset in some form and that’s how you can do that. So yes, that is correct Mark.
Mark Perlberg [00:16:47] Mark Yeah. And how about this? Let’s say we reduce your taxes so much with this cap gains, the deferral on the 1031 and let’s say you were a full time investor and you’re just offloading all your real estate.
Mark Perlberg [00:17:02] We bring you into such a low bracket, you say, Hey, why don’t I take some of this for one K money, put it into a Roth and have the Roth invest in some of these mineral rights, because I’ve used the 1031 and other strategies like cost segregation to drive us so low. Now we grow it tax free in the raw and we eliminate capital gains in the raw.
Rey Trevino [00:17:20] Wow. I that’s even what I’ve actually never really kind of thought about there be a doing some oil or gas or a Roth IRA that would be pretty big right there.
Mark Perlberg [00:17:30] Yeah. Or even things like if you want to get really sophisticated, you can incorporate spendthrift trusts and irrevocable trusts which have more flexibility than a 401k and you could pull the money out before you’re 60. All sorts of really cool things when you get into higher income brackets and have an opportunity to be resourceful and creative with different structures.
Mark Perlberg [00:17:57] And then, you know, again, just looking at the mix here with a qualified adviser, what’s your W2 income? What’s your what’s your business income? What’s your active income? What do you have the opportunity to create spin off entities? If you really have an opportunity to be resourceful, you’re.
Rey Trevino [00:18:16] Right.
Mark Perlberg [00:18:16] How does all this stuff come together in your 1040? Where are you now and where you’re going? And what are some tax planning opportunities and where are the tax implications to really optimize the growth of your success here? And you know, what are you going to do with your cash? You’re getting these distributions. You can invest it into other tax reduction vehicles.
Stuart Turley [00:18:36] You know, Mark and RT, last year when we were talking to our investor clients, when California Governor Newsom, you got to love him, they they put that law out there that they could reach out and grab you even if you left the state.
Rey Trevino [00:18:54] Yeah.
Stuart Turley [00:18:55] So when you left the state, they’re going a you sold something this year so planning ahead with a CPA makes a huge difference to protect you from getting the Governor Newsom to come grab you out of California later on in the year, right?
Rey Trevino [00:19:15] Yeah.
Mark Perlberg [00:19:17] Yeah. I mean, we see a lot of people moving from California to Texas and well, in those instances we consider that in the timing of events. So if you’re going to do, you know, a Roth conversion or certain certain activities where we can change, where we’re going to assign that activity, lots of and these are things a lot of people are going to miss it. They’re not in regular communication with the with the tax.
Rey Trevino [00:19:48] Wow.
Stuart Turley [00:19:49] Now, New York is the same way. I mean, you know, you take a look at New York. Both New York and in California seem to like take pride in who’s got higher taxes and we were just people were going nuts last year when we were talking because they were coming out of making money and actually two years ago when when they were really making money, when the former president was there. Are you are some of your clients that are talking about this, are they from California? Are they from New York?
Mark Perlberg [00:20:26] Yeah. I mean, we have a clients across country, and California is the greatest challenge I’ve seen. Now, believe it or not, there’s some challenges we see in Tennessee with what’s called a franchise and excise tax where you gotta do some additional planning.
Mark Perlberg [00:20:39] But California, I think I, I believe is a 12 and a half or 13% top marginal bracket in California, which is crazy. Yeah. Here’s another crazy thing. California doesn’t recognize the real estate professional tax status. So if you do what you’re doing, a said the bonus depreciation, all that wonderful stuff dropping down your bed. You’re not going to see that benefit on on your state taxes.
Mark Perlberg [00:21:12] Wow. I didn’t know that.
Mark Perlberg [00:21:15] Yeah. That, you know, we found out our clients found out the hard way on that one when they saw the California bill there. And, you know, California will still tax you on on income earned in other states. It’s just it’s a it’s a it is a tough, tough situation there if you’re in a high bracket in California.
Mark Perlberg [00:21:37] Wow. Wow. Why do people even want to live there? I’m blown away. I’m sorry. I mean, look, it’s been why. Wow.
Mark Perlberg [00:21:45] Yeah. I mean, you a lot of work in Hollywood. I get it, you know? Yeah.
Rey Trevino [00:21:50] I get it you know, people say you can you can serve in the morning and ski in the evening, I guess. I mean, that’s what I heard. But now I do want to switch it back, you know, with minerals Mark,.
Rey Trevino [00:22:02] I don’t know if you get this question, but, you know, sometimes people ask me, it’s like, you know, Do I make money? And does the value of my leases go up even though I’ve got wells that are producing oil? And I say, absolutely, those go up.
Rey Trevino [00:22:15] So it is a lot like real estate where you know what the value as production goes up, your leases do go up so that if it is something you did want an exit from, you could actually sell that at a capital gains and then roll that into something else. Is that correct?
Mark Perlberg [00:22:32] Yeah. So, you know, if you have a capital gains event you can you could 1030 went into that or maybe you find a an incredible real estate deal you can turn 31 back into real estate investing. You can also defer capital gains inside a qualified opportunity zone fund.
Mark Perlberg [00:22:49] I’ve heard of some qualified opportunity zone funds having oil and gas mining wells and in oil and gas activities, it’s not as common but you’d be surprised occasionally you’ll find instances where qualified opportunities zone funds are not just for urban development, it’s areas where they just want to encourage economic activities.
Mark Perlberg [00:23:12] So and then if you get your funds in a QOZ, there’s like a supercharged raw, you know, you hold that money there for, for ten years and then you don’t have to wait till you’re 60 years old and you’ll never pay taxes on the cap gains there.
Rey Trevino [00:23:27] Wow. I wonder if so some of those small towns that they’re trying to get growth in could qualify as an opportunity zone to go either drill or more importantly, you know, produce oil.
Mark Perlberg [00:23:41] Yeah, I’ve heard of it. It’s is not as common. Yeah, but you’d be surprised at how much of the country is in a qualified opportunities fund. A lot of people say, oh that’s just where where the the, the low income people are. But you actually will find rural areas that they’re trying to encourage development as well.
Rey Trevino [00:24:02] Man. I’m writing down a few notes you’re hitting me with a your dropping some bomb, truth, bombs and knowledge on me today. I appreciated Mark. And again, that just goes wide to all our listeners out there. Why Mark is the guy for if we’re any odds we were out there. I mean these are the type of things that he is looking at on a daily basis for his clients.
Mark Perlberg [00:24:25] Yeah, you know, I’ve been I’ve been dying to talk to people like you because these these types of opportunities are they’re they’re lucrative, profitable, tax advantaged vehicles. You know, you can there’s so many ways that we discuss that you can you can really build wealth and win the tax game.
Mark Perlberg [00:24:44] When you combine this with a bunch of other strategies like real estate investing costs, segregation, both depreciation, qualified opportunities, retirement accounts and, you know, timing and all of these things and it’s it’s exciting to see when, you know, all the unique ways on how this all comes together when you can be resourceful and strategize.
Stuart Turley [00:25:08] Right. You know, Mark and RT, it’s always important to use a professional.
Rey Trevino [00:25:17] Yes
Stuart Turley [00:25:18] In what I have done in in other areas is we have nice resources for double checking deals, not and RT can, you know, back this up, not all oil and gas deals are created equal. And so being able to have the resources to look at the individual play, look at the individual area in the who’s actually the reserves, take a look at how much oil and gas is in there. Be able to take a look at the markets and be able to say, hey, wait a minute, why is oil and gas going to be a good long term play? Why is it going to be here?
Stuart Turley [00:26:01] Because I was visiting with some investors last year and they were sitting there saying, why should I invest in oil and gas? Because the Biden administration is going to kill it. We’re going to need oil and gas for a long time even and when we do go renewables.
Stuart Turley [00:26:17] So you and you need to be able to balance that out with the right experts. So, you know, I rely on very great people in my staff as well as EMP operators that I trust like R.T. and Paco’s operating. And so you really balance that out Mark and we say, Hey, wait a minute, use an expert.
Rey Trevino [00:26:44] Yeah,.
Mark Perlberg [00:26:46] Yeah, I mean, there’s obviously, you know, you want to make a good business decision, it has to be profitable. But with with all the with all the tax saving opportunities, you know, with what you can do with this and with, you know, with intangible drilling rights being tax deductible as well.
Mark Perlberg [00:27:07] You know, we have so many people just who don’t you know, all they think about is stock market, real estate, stock market, real estate, which is fine. But this is a this is something that I think a lot of people are are missing the ball on they’re completely overlooking this.
Mark Perlberg [00:27:23] Because I think I think part of the reason why is they don’t understand the tax savings and they also they don’t understand the business. So they’re they’re like, you know, because you’re here, I mean, you flip on the news channel, you’ll hear plane people talking about stocks and stocks going up and down. And there’s something they’re familiar with the real estate as well. But people just don’t understand it enough. And because they’re not connecting with guys like you and they’re missing a lot of opportunities.
Stuart Turley [00:27:54] RT you and I have talked to some other folks in the last even quarter. And when you talk about being able to say, I’ve got one. And Mark, I loved your example of having a deal break out in the multiple kinds of things so you can sell.
Stuart Turley [00:28:13] And I and I’m trying to get my head around how to articulate this and that would be so you sell a property and you make your capital gains, but there may be other gains or other things that you need to write off.
Stuart Turley [00:28:27] And so are are there deals out there where you can combine the tax revenue from a royalty fund within an EMP? Because there’s there’s two different real tax savings for investing in oil and gas. And so when you take a look at the am I making sense where I’m going on this?
Rey Trevino [00:28:50] I think so. And, you know, first of all, you know, there are it’s great to know that you can do a multi asset 1031 exchange. Right? And so there are ways that you can definitely go in to all. Acids of oil and gas investing to actually get the best tax savings that you can while continuing to build your wealth. So, yes, there are ways you can do that Stu.
Rey Trevino [00:29:13] And , you know, one basically can benefit the other and then the other could benefit the one. So there are some really great ways that you can basically, you know, works. Again, part of the reason why we started this was not to pay Uncle Sam. So, you know, there’s a reason why they already get us enough. So you know that there are ways that we can combat that in other ways. So, yes.
Mark Perlberg [00:29:38] Here’s another idea. Let’s say you missed the boat on 31. Didn’t know what it was. Have capital gains you’re worried about here. Have back to the same example. Half a million captains. If you you can if you were to roll the funds into a vehicle where you get the intangible drilling rights at $0.90 per dollar, here we’re talking about a $450,000 tax deduction.
Mark Perlberg [00:30:03] And the tax deduction, when is non passive with intangible drilling rights under certain circumstances may be more favorable and beneficial than the tax deduction. Then then, then the deferral of cap gains in certain instances. So there’s you know, there’s still opportunity and even if you have 180 days to do A to to find your qualify opportunities open, you don’t have to identify the property.
Mark Perlberg [00:30:36] I mean, we have clients who sold their property in December right now it’s March. They still have opportunity to identify QOZ`s which may have in certain instances oil and gas. And then in addition to that, you know, you can still find ways after the fact to maybe free up some cap losses from your stocks. Hmm.
Rey Trevino [00:31:02] No, it’s another great way to defer your capital gains tax and then, you know, through a drilling deal in the oil and gas, you can write up above, you can write off up to 90% of those intangible drilling costs. And with that 15% in depletion or your production, you could partner in I say partner, you know, write off 100% in something like that. You’re absolutely right, Mark.
Rey Trevino [00:31:24] Yeah. I mean, think about this. When you sell that property for half a million and you probably have a principal of a million. So you have $1,000,000 just chillin in your bank account right now. Right, Right. So you can invest not only your capital gains amounts, but some additional amounts into that into your into these oil and gas mining wells here. And not only can you offset the capital gains, but you can use it to offset whatever taxes you’re paying out of your W2 right now.
Rey Trevino [00:31:54] Yeah.
Stuart Turley [00:31:55] Wow. You know what? I’ll tell you what. Mark and Artie, this is absolutely a fascinating discussion. And I got an idea here. I’m going to throw this out here. And I think that we need to have a webinar coming up around the corner for everybody, and we’re going to have it in, schedule it for live questions and everything else. So I think we’re going to get that on the books, guys.
Rey Trevino [00:32:25] I think that would be a great idea.
Rey Trevino [00:32:27] Yeah, I think that would be so much fun because you guys can show me, you know, what’s the capital contribution into this, what’s the ROI, what’s the cash coming in? And then I’ll talk about the time. How is this taxed? How can we eliminate it? How can we use this to reduce taxes and all sorts of fun ideas on on how to really win the tax game with these investment vehicles.
Stuart Turley [00:32:51] I like that. And we can come up with some really good working examples and numbers and really kind of try to flesh all that out. So, Mark, I’m going to start with you we’ve only got about five more minutes here and then tell me what’s coming around the corner for Mark Perlberg CPA.
Rey Trevino [00:33:13] So we’re eventually changing the name because we have a decent sized team and we’re becoming more of an organization and we we we’re kicking butt during tax season like we’re going to file, you know, maybe 80% on time, which is really good for a firm that does business returns.
Stuart Turley [00:33:31] Right.
Mark Perlberg [00:33:32] And so we’re going to have more time to consult with our clients and collaborate with them instead of just giving them their returns. We really improved their processes. So we’re going to be doing some quarterly consulting we’re exploring some new and more advanced tax strategies, including those involving trusts, life insurance, also some strategies for college planning that are more advantageous and 529ns and allow you not only to reduce to to save a money tax advantage in tax advantage matters, but also to reduce the tuition that your children will be charged by based on how you report your assets.
Mark Perlberg [00:34:12] So a lot of opportunities like that and talking about maybe enhancing some entity structures here. So we’re going to have a lot of fun talking about all these topics and just continuing to make content and connect with as many people as we can.
Stuart Turley [00:34:28] Well, that sounds fantastic, RT. Being a Podcast, all of us being podcast host and trying to go through all this kind of stuff. You know, it’s amazing 3 people that are passionate about each individual’s little area can get actually get a word in edgewise around here. This was almost entertaining from that standpoint that we didn’t step on everybody. But RT, what are you coming around the corner and seeing on Paco’s operating and The Crude Truth?
Rey Trevino [00:34:55] Well, you know, we’ve got some great guests lined up on the crew truth trying to get a new episode out every week. But also want to give Mark just real quick an opportunity for our listeners and viewers out there to check out your podcast. Mark, what was the name of it again?
Mark Perlberg [00:35:11] It is the Mark Wahlberg CPA Podcast spelled PERL BERG. Mark with a K and you can also find me on YouTube and every other social media platform.
Stuart Turley [00:35:25] Can you believe three podcasters actually listen to each other? Wow.
Rey Trevino [00:35:31] You know, heaven forbid we learn something new, right? Heaven forbid. And I know I definitely learned some new things today with the qualifying zones for because I’ve heard about real estate in the back in the lower income areas but as a drilling project, that would be awesome.
Rey Trevino [00:35:46] But no, you know, we’ve got a few reworks that we’re doing a couple completions of Paco’s country operating. We’re also reviewing some new minerals that we’re looking at adding to our portfolio as well.
Rey Trevino [00:35:58] But you can always catch me on LinkedIn or at the Crude Truth show gmail.com or even I think, PC operating at gmail.com And, you know, reach out to us and definitely definitely check us out on all my podcast accrued through and also through podcasts and walk into a bar a little bit more laid back. Talk about oil and gas and energy.
Stuart Turley [00:36:23] So yeah, that’s this is actually the second time three podcasters actually get in and act human to each other.
Rey Trevino [00:36:30] There you go. Exactly.
Stuart Turley [00:36:32] Well, with that, we thank everybody because this is going to go out on the Mark Pearlberg channels, as well as The Crude Truths in the energy news beat. So for all of you guys, thank you very much for stopping by.
Rey Trevino [00:36:45] Thank you.
Mark Perlberg [00:36:46] Thank you so much for hosting me. Really had a great time talking with you guys and really excited to continue learning from you and on all the great stuff you’re doing.
Stuart Turley [00:36:54] Oh, always use an expert. Yeah.
Rey Trevino [00:36:58] Oh, and Build wealth and win the Tax game with Mark Zuckerberg, CPA.
Stuart Turley [00:37:04] There you go.
Rey Trevino [00:37:04] The game.
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