Tom's Blog

I just finished speaking at Greg Hasbritt's Master Wealth real estate seminar in Calgary, Alberta. Greg had asked me to speak twice to his American students about tax strategies. He also asked that I stay for the entire 5-day program to meet with students. I had previously met several of his students when I spoke at T. Harv Eker's Extreme Wealth seminar in Las Vegas last fall. At Extreme Wealth, my topic was wealth strategies.

Several of the students came up to me during the week to ask me tax, business and wealth questions. One of their most frequent questions was about what ProVision does and how we could help them build their wealth. So, I thought it might be a good idea to write about ProVision and how we see the process of building wealth.

In the most general sense, you could say that ProVision is a company that creates Tax, Business and Wealth strategies for entrepreneurs and investors. But there is so much more to ProVision. We have a very clear vision of how to build Permanent Wealth while maintaining control over your financial success.

We have found that, particularly in today's economy, many people are tired of the old ideas of investing by turning their money and their taxes over to someone else to manage. They want to take back control of their finances and they want to take back their taxes from the government. ProVision is dedicated to empowering entrepreneurs and investors to build their own wealth and to learn enough about tax-saving strategies to permanently reduce their taxes.

So we have built systems to train clients how to take back control of their wealth, including their taxes. These systems allow clients to not only create a tax, business and/or wealth strategy, but provides the systems to implement their strategy so they only need to spend a few hours per week growing their wealth. We can even show business owners how to set up their teams and systems so they only have to spend a few hours each week on their business.

Can you imagine growing your wealth while severly reducing the amount of time you spend on your investing and your business? I know it's possible, because I have done it. I have built my own teams and systems to allow me to spend my most of my time doing what I want to do. At Greg's seminar, several people asked how I could take time out of Tax Season to be at the seminar. The reality is that I don't do or review any tax returns other than my own. I have a team and systems to do that.

So if you are thinking that you would like to take back your taxes and take back control of your financial future, give us a call at 866.467.5809. We would love to learn more about your business and investing goals to see how we can best serve you. Or, visit our website at http://www.ProVisionWealth.com/wealthstrategyu. Remember that your financial future is closer than you think!

Warmest regards,

Tom

Recently, I have been doing interviews on radio stations around the country. With the downturn in the stock market, every radio show host asks me the same question - What should i do about my 401(k)? Should I continue putting money into my 401(k)? What if my employer matches my contributions? Does that make a difference?

I'm going to give you an answer that you may not like. But it's the truth. Stop putting money into your 401(k), EVEN IF your employer matches you 100%! I say this for two reasons - tax savings and leverage.

Let's start with tax savings. Unless you 401(k) is a Roth 401(k), you are merely postponing your taxes to a later year in a 401(k). Now, if your only choices were to pay now or pay later, you would certainly want to pay later. But these aren't your only choices. Of the over 5,600 pages of law in the Internal Revenue Code, less than 400 relate to postponing or deferring income taxes such as with a 401(k) or regular IRA. The remaining 5,200+ pages explain how to permanently reduce your taxes.

So which do you prefer - temporarily postponing your taxes like most people do or permanently reducing your taxes like we teach our clients at ProVision? If you want to permanently reduce your taxes, don't be putting your money into a regulard 401(k). Instead, invest in some good permanent tax planning and get those savings every year without having to pay it back.

I will blog another time about the other reasons I don't like 401(k)'s. In the meantime, if you would like to know more about Permanent Tax Savings, visit our website at http://www.ProVisionWealth.com/wealthstrategyu and sign up for our Wealth Strategy University. It's all free with no obligation.

Warmest regards,

Tom

I just received an email from my friend, Toni, who does short sale negotiations. Her question is as follows:

Q: What are the income tax consequences of selling your residence through a short sale?

A: Let me begin by explaining the basic concept of a short sale. Unfortunately for home owners, short sales are fairly common now. Five years ago, I'll bet most people had never heard the term. A short sale is simply a way to sell a property when the combined loans on the property are greater than the value of the property. The buyer negotiates a deal with the bank to pay off the mortgage(s) for less than face value. Then, the buyer works with the homeowner, gets the paperwork done, and buys the property.

The tax question is what happens to the homeowner if the total of the loans is more than what the homeowner paid for the house? Is there a gain to the homeowner or some other income that has to be recognized?

As with most tax questions, the answer is "it depends." It depends on whether the house is the principal residence of the homeowner. If not, it depends on whether the loan is recourse or nonrecourse and whether the owner is insolvement or bankrupt. Let's take these one at a time.

If this is the homeowner's principal residence and has been for 2 of the past 5 years, then the income from the bank reducing the debt should not be taxable, regardless of whether the debt is recourse or nonrecourse.

If not the homeowner's principal residence and the debt is recourse, the amount of debt reduction by the bank generally will be treated as ordinary income unless the homeowner is bankrupt or insolvent (liabilities greater than assets).

If the debt is nonrecourse, their will be gain to the homeowner as if they sold the house for an amount equal to the debt of the property.

As you might imagine, I'm giving the quick and dirty answer here. There are details I can't cover. So, before you enter into a short sale, I strongly recommend you sit down with your Tax Strategist and determine exactly the effect of your short sale on your tax liability.

Hopefully, this gives you some idea of what to expect. Call us at 866.467.5809 and set up an appointment for more information about a specific situation.

Warmest regards,

Tom

It's mid-February and perhaps time to review the goals and resolutions we made on New Year's Day. It's so easy to forget them and get caught up in our daily life. And if we have broken a resolution, it's easy to discard it and say we will try again next year.

I look at my goals and resolutions every day. This helps to keep me focused on them. (I keep them in the note section of my iPhone so they are with me all the time.) Like most people, I have not been perfect with my resolutions. Of course, you know that, since one of my resolutions was to blog every day and I have been less than perfect in that regard. There's even one of my resolutions that I haven't even started doing yet at all.

But should we discard resolutions just because we aren't perfect? I would say NO! Every day we need to keep after improving ourselves. And isn't that what a resolution is all about? And let's celebrate what success we have had. While I haven't blogged every day, I certainly have blogged more than I did last year and I am determined to make this a daily habit. And I have kept one of my resolutions perfectly. So that's a big win.

My point is that we need to forgive ourselves and move on. If our resolution or goal is to lose weight and we slip and eat cheesecake, rather than beating ourself up about it, just move on and be better the next day (or even the next minute). The same is true for our financial goals and resolutions. If your goal is to create a wealth strategy, it's not too late. Sit down with your wealth coach and do the strategy. If your goal is to get financially educated, resolve again to read something new every day.

Here is what I know for sure. The more we focus on our financial health, the healthier we will get. When I'm focused on my triathlon goal, my weight goes down and my workouts improve. The same will happen with your financial goals. Stay focused and stay positive. And if you need some help, join us in our School of Wealth Strategy at http://www.provisionwealth.com/products. We have a great group now that meets every month by phone to discuss wealth strategies. We would love to have you with us.

Warmest regards,

Tom