0:05
this correctly. Do you rent a house? Can you do this? You can do as many homes as that as you
0:10
live in for 14 days a year. And not only that, but if you have a direct family member who lives there, it’s also
0:16
qualified as a residence for you. Hold on. Hold on. This is I’ve never heard of this. Nathaniel, welcome to the
0:21
Better World Show. Hey, thanks for having me, Caleb. Really appreciate it. So, what we’re going to talk about is what I believe is going to
0:28
be one of the most thorough, if not the most thorough master class on what is the Augusta rule, how does it work, and
0:34
more importantly, how ordinary people that are watching this uh that are doing maybe extraordinary things can take
0:40
advantage of one of uh the coolest and unique tax tax strategies out there. I
0:46
would also encourage you to buckle up, take good notes um because there’s a pretty good chance you’re doing it wrong. And so, with that, Nathaniel,
0:53
welcome to the show. and I’m I’m excited to be taking notes uh even though I know that um I’m already in good hands. Thank
0:59
you. Well, you teed it up really well for me, Caleb. So, really appreciate it. Um that’s exactly the pinch point that most
1:05
of us have felt if we’ve known about the August rule, you know, attempted the August rule or doing the August rule. Um
1:12
there’s so so much misinformation out there and uh I I’ll get to my own story and and you know how that intersects
1:18
with our conversation how it can help other people but uh you know let’s let’s just dive in you know right away. So if
1:24
you’re a business owner and you’ve never heard of the August rule you should stay on just to learn about it. If you are a business owner
1:30
who’s heard of the Augusta rule then uh chances are you’re not doing it right and you’re not optimizing it. And when I
1:36
say chances are, I have yet to meet a single one single business owner who is doing this correctly. So, please, please
1:45
take our information. We give it all away. Uh, you know, we’ve got some QR codes at the end. You can literally just
1:50
take our program and run with it. So, we give it to you for free. So, stick around. At the very beginning, you
1:55
should know that what’s possible is you can save thousands of on taxes every year. So, annually recurring every year
2:01
thousands of dollars by renting to yourself, which sounds nutty, but is actually true. It’s actually written in
2:07
the tax code, and we’ll get to that, but first, let’s start with all the problems. There is so there are so many
2:13
problems with the August rule implementation. Um, number one, it’s incredibly hard to get right. Um,
2:19
historically, what has taken to apply is you actually need to become a quasi expert in the tax law yourself. Well,
2:26
that takes a ton of time and it distracts you as a business owner from what you’re doing. And if you’re a tax
2:32
filer, a tax professional, you’re trying to explain this to your clients who are not tax professionals. Um, there’s all
2:38
kinds of specific documentation, all kinds of, you know, eligibility requirements. Uh, not to mention
2:44
actually nailing down your rental comparables. And for those who don’t know the rule, this will all sound like like what what are you talking about?
2:50
But for those who do, you’re going to understand there’s a lot of complexity here and it’s really hard and why a lot
Challenges in Implementing the Augusta Rule
2:56
of tax professionals um you know don’t either don’t do this, they just won’t or if they do, they get it wrong and it’s
3:02
not necessarily uh their fault. They’re not required to be an expert in this area. Um you know tax preparation from
3:08
what I understand is a non- tax expert is a team sport just like a lot of other industries and so we want to bring
3:14
different expertises to the table for people to have these strategies you know actually rolled out properly. So it’s
3:19
hard to get right. It also takes too much time, right? This particular this particular strategy takes a ton of time.
3:25
You know, you have to become the expert. You have to get the right contracts. You have to research rental valuations. You
3:30
have to record notes. You have to hope you didn’t screw up anywhere because there’s all kinds of like really particular edge cases. You have to make
3:37
actual payments in a timely manner. You have to have stuff actually contemporaneously recorded, meaning at
3:42
the same time as you do the action. And it’s just way too much for most people to remember. And it’s basically
3:49
impossible for most tax preparers to capture this information in a compliant manner. And so it’s a huge hurdle. Um
3:57
then let’s go on another one. It also is the risk really worth the reward? Like at the end of the day, is you know a few
4:04
thousand dollar worth it? Well, one is this only a few thousand or is this many
4:10
thousands like tens if not hundred thousand depending on your case? We’ll get to that. Is it still worth the risk?
4:16
like one critical mistake, you lose the whole thing. You’re going to pay penalties. And then also, you have to have meetings in your home. Like, are we
4:23
inviting strangers into our home? Like, what are we doing here, you know? So, the answer is no. You’re not inviting
4:28
strangers into your home unless you choose to. But let’s dive into it a little bit further. Uh when you’re
4:35
learning about the Augusta rule, a lot of times you’re left to, you know, YouTube, Tik Tok. Uh there are some
4:42
softwares out there, but they’re typically just a glorified spreadsheet where you’ll enter some information.
4:47
You’ll put in some notes. There might even be like an AI assistant to help you kind of, you know, capture the meeting
4:53
notes, that type of thing. But at the end end of the day, you’re still left to do the entire compliance yourself and to
4:59
be the expert. Or if you have a tax professional advising you, that tax professional has to be there to answer
5:05
questions for every single one of the meetings that you’re having in the Augusta rule. So, you could also hire a
5:11
specialy tax professional. Um, I did that. Cost me many thousands of dollars. Uh, I’ll get to that as well. So, again,
5:18
a lot a lot a lot of hurdles here. Hurdles that I had to go through, hurdles that your audience have to go
5:24
through, both as a preparer or as a business owner. So, and Nathaniel, I know that you’re going
5:29
to get in get into this, but for those of you watching that don’t even fully understand what the Augusta rule is,
5:35
it’s ability for you to rent your residence, your your house out to your
5:42
business for le 14 days or less. And and obviously, you need that you need to do
5:48
that properly and you can’t and there’s a art to how much you can charge. And so the two areas I believe that get messed
5:55
up the most is the comps of what you can actually charge and then the actual
Key Components of the Augusta Rule
6:01
documentation making sure it’s done well. Now there’s probably more but those are like the two main ones that I
6:06
know that majority of people are not doing properly. Um and so that’s when we we’re saying like yeah you could go to
6:12
Tik Tok and YouTube and books and like and get the concept. The concept is not
6:17
rocket science even though it’s kind of blows your mind when you think about it. It’s the doing it properly. Uh Nathaniel, is there any other things
6:24
that I missed in there? Just giving like an overview. Yeah. Well, I mean, you nailed the ones that are that are probably the most
6:30
missed. You know, it’s uh it’s it’s the comps for sure. Like I mean, most of us are not experts on getting comps and uh
6:36
you know, maybe maybe I could address this in a different order by presentation here, but uh let’s just jump right into it, you know, and we’ll
6:43
ignore the slides and come back to that. Um the comps. So when it comes to comps, you know, you actually have to go out
6:49
into the marketplace and find uh basically data that aligns with your use
6:56
case. So we we should back up from there like what is the Augusta rule on it on the most basic level? Well, you can rent
7:02
your home 14 days a year taxfree. It’s been in the tax code since 1976.
7:10
So, if you can rent your home for 14 days and you pay no taxes on that, why does that matter to us? Well, if you’re
7:16
a business owner, when you rent your home for 14 days, you can actually rent it to your business. So, if you’re
7:23
renting it to your business, your business is a separate person in the eyes of the IRS, unless it’s a unless
7:28
it’s a sole proprietorship or a single member LLC. Those are ineligible. So, now we’re getting a little bit into the
7:34
weeds, a little more technical for some of our audience. But if you have other entities, LLC’s, C corps, S corps, then
7:40
they’re eligible for this because they’re a separate person in the eyes of the IRS. So now you can rent your home
7:46
to your business. And when you do that, it’s taxfree. Okay. So now it’s a left-hand right-hand deal, right? It’s
7:51
one of the very few left-hand right-hand deals that the IRS actually allows. But because that’s the case, who you
7:58
know, who’s to say that you couldn’t just be like, “Well, I’m gonna rent my home for 50 grand today.” Yep.
8:03
I like 50 grand. It’s a It’s a friendly number to me. You know what I always say, Caleb? Every 50 grand counts.
8:08
Yeah, that’s right. Yeah, I can get that. I’m just going to choose 50 grand and it’s 50 grand a day. And but the IRS
8:14
says, “No, you actually have to substantiate that. There has to be a market rate.” So then the next mistake
8:20
people make once they realize that is they go and they look at Airbnbs. So, this was the mistake I made. I did this
8:26
because it’s easy data. You can go out, you can search, you can find them easily, and you think, well, it’s a home
8:32
and these are homes, so isn’t that a comparable? Well, yes, but we have to remember that with the August, when
8:37
you’re renting to your business, an actual comparable is a any legitimate business venue? And one of the questions
8:44
we always ask is what would a real business do? So, a real business, if it’s renting a separate space, would go
8:50
out, it would find a space that’s appropriate. It would find amenities that align with its business purpose and
8:55
it would pay whatever market rate there is. So, let’s say you’re having a uh you know like a client appreciation dinner
9:01
and you’re having a dozen people over. Well, you might go rent say like a winery or something like that, have a
9:07
legitimate business dinner, you know, talk about business, maybe even make a sale or or strengthen a relationship.
Documentation and Compliance Essentials
9:13
That’s a legitimate expense. And that winery might charge you, I don’t know, $2 $3,000 for the venue that day. Well,
9:21
that’s an actual legitimate comparable for your home for the right purpose, you know, so we can get into that
9:27
specifically a little bit later as well. But the mistake people make is misaligning the purpose with the comparables that they’re researching on
9:33
the marketplace. So, that’s something that we address very specifically when we do uh the August.
9:38
I love it. I love it. Appreciate you doing that. And then let’s let’s continue. And then almost nobody
9:43
actually does the the meeting notes. like that’s that’s something that like it’s you’re you’re doing a great job if
9:50
you’re doing a Airbnb comparison. You’re uh almost nobody is actually writing the meeting notes which you also have to do.
9:56
But uh yeah, let’s let’s continue. So we Yeah, we talk about the notes here now
10:02
too before we jump in. The notes are critical and what I’m told from my partner in this John Hire who’s been a
10:09
tax attorney for 30 years. He’s taken cases before the IRS. to my knowledge, he’s always he’s won every one of them
10:14
that’s gone that far and usually negotiated them out far before that. Um, and is arguably the country’s leading
10:20
expert on the August rule. Um, he’s the only guy I know that’s actually uh gotten the entire uh synopoly case,
10:27
which was a case that directly addressed the August rule, came out, I believe, in 2023. He actually got the entire
10:33
shopping cart full of records and has read through the entire transcript, not once, not twice, but three times in
10:39
entirety. like he knows this cold. And uh what he said, you know, and that’s an
10:45
aside, that’s just saying, look, he’s legit. But when it comes to actually meeting notes, he said basically nine
10:51
out of 10 times if you actually have substantiation, if you actually have written notes, the audit pretty much
10:57
disappears. So if you take nothing away from this recording other than the fact that you need to have legitimate meeting
11:03
notes, you’re so much farther ahead than anybody else. Yeah, that’s well that’s well said.
11:09
That’s a takeaway for sure. Just take that away. So, so yes. Well, well said. So, uh we already touched on
11:16
this, but like what’s the why is it called the August rule and what’s the history? Um so, it’s named after uh the
11:22
Augusta Golf Tournament or Augusta, Georgia, where the Masters tournament takes place, I should say. And uh what
11:29
happened is the residents of the golf course back in the 70s successfully petitioned Congress to change the tax
11:35
code so that this carveout existed. They were renting their homes for the national tournament every year. Uh
11:42
getting a ton of money. I mean, we we’ve heard of like 10 to 20 grand a day for these homes on the golf course and they
11:49
didn’t want to pay taxes on it. They didn’t want to have a separate business entity to, you know, contain the rental
11:54
income. They didn’t want the hassle. And I don’t know this for a fact, Caleb, but I’m guessing that there were several
12:00
congressmen or legislators or judges that may have lived on the course during that time period and may still continue
Historical Context of the Augusta Rule
12:08
to live there today, some of them. So, uh, you know, people sometimes ask, well, maybe this will go away and I
12:13
think maybe, but who does it benefit and is it in their interest to keep it? And
12:19
the answer there is yes. So, you know, do we know? No. But is it still there? Yes. Has it been unchanged since 1976?
12:26
Yes. Um, and so what it is is section 28A, subsection G, and we already said
12:32
what it is, but it allows you to rent your home for two weeks a year. And if you do it for two weeks or less, it’s
12:38
taxfree. If you go over that by even a day, 15 days or more, you pay taxes on all of it. So, this only applies when a
12:44
residence is rented for 14 days a year or less. And it was created uh in Augusta, Georgia. People heard about it.
12:51
They got outraged because of the tax savings and there was a big kurfuffle. So, it got popularized and was known as
12:56
the Augusta rule. But the outrage subsided and the rule persists for me as
13:02
I learned about this. Um, I had paid six figures in taxes that I didn’t need to pay. Six figures of my money that I did
13:09
not need to pay. I paid to the IRS because I did not know this rule. Every time I say that, it still makes me a
13:15
little bit ill. We this this this rule is does not need
13:21
to be as complicated as it is now and we’ve made it less complicated. But um I had a successful small business. I still
13:28
have a successful small business. And at the time I got a tax bill that was larger than my salary. I had a couple
13:36
little girls and another one coming on the way. I happened to be another boy. And uh I was like, “How do I pay my
13:42
bills with a tax bill like this? This is disgusting, frankly.” And I went to my
13:47
tax professional and he told me there was nothing else I could do to reduce my taxes. Um, you know, he was trying his
13:53
best. He had saved me money before. He was a great guy. Uh, he just wasn’t equipped when it came to the August rule
13:59
and other strategies. I talked to another tax professional. He told me the same thing. So, I just kind of sat there
14:05
for a couple years until I met John. I yeah I met John at a uh a real estate
14:11
investing conference uh because that’s another activity I involved in and uh
14:16
paid him thousands of dollars. This was the very first strategy he told me about and then I spent the next two years
14:22
researching it and an uncertainty because even though he told me about the strategy I was then left to then
14:28
executed on my own still and that’s where I got bogged down. Some people don’t bog down there, but typically if
14:35
they don’t bog down there, it’s because they’re actually doing something wrong in the rule, they’re actually leaving a
14:41
gaping hole that if it was challenged, they’re probably going to get smoked in an audit. So, uh, John is like the guy
14:47
on this. He is a total expert. So, very grateful to work with him on this. When
14:52
it comes to the August rule, there’s really basically four steps. Planning meetings in the home that are legitimate
Practical Steps for Business Owners
14:58
business meetings. We we’ll get into this more next. hosting those meetings, getting paid for those meetings, then
15:05
deducting and saving. Very, very simple on on its on its face. So, there’s 10
15:12
essentials though when it comes to the August rule. 10 things that are like they’re like the ten commandments basically like thou shalt, thou shalt
15:18
not like don’t do this, do this. Um, and number one is that you have to have a
15:24
rental agreement that you’ve signed on or before the date of the event. And people get this wrong all the time.
15:30
Yeah. all the time. All the time. Like I got this wrong. Also, after I carefully researched
15:36
everything, I was like, “Oh, I got this. I’ll go do this.” This one slips. Everybody, right? We’re in a hurry.
15:41
We’re doing our work. Well, let’s be honest. Most people at the end of the year are going to their
15:47
CPA if they’re going to do the strategy, picking 14 days up, 14 days throughout
15:54
the year, and then making something up after the fact. almost nobody has a an
16:01
agreement before this actually happens. So yeah, that’s that’s great.
16:07
Yep. It’s great. And it’s also kind of like, oh man, you know, all the people who are listening now are like, oh, really? Yeah. Everyone’s everyone’s like, uh,
16:14
yeah, everyone’s having that. That’s exactly right. And I laugh
16:19
because I’m right there with you. This is this is me, you know, this is this is the problem I had and still have apart
16:25
from our done for you system. So, um, number two, uh, you have to find comparables and good comparable
16:32
properties for your event and have them properly documented. So, what do we mean by that? Well, I explained a little bit
16:38
earlier. You can go to Airbnbs, but if you do that, you’re leaving a ton of money on the table, you know, and if
16:45
you’re doing this strategy, why would you want to leave money on the table? We we want people to have the best
16:50
comparables. Now, John tells me we can’t say we want to maximize the benefit. maximizes like a curse word to the tax
16:56
lawyer. But we want to optimize it. We can say that we want to optimize it. We want it to be market and we want it to
17:03
uh reflect, you know, a valuation that is comparable. We want to get as much as we can with
17:09
staying in the guidelines and not putting ourselves at risk of it getting disallowed.
17:14
That is exactly right. That’s exactly which feels like maximize, but we’ll go with op. Optimize makes you feel more
17:20
smart when you say it out loud. So we we’ll get that we’ll make John happy. Make John happy. Yep. So he he is in our
17:27
corner. So um there’s an artis science to this and most of us are not trained on doing this and uh our team does this
17:35
like we do this daily. Yeah. Yeah. And and you have great documentation on the flip side. So yeah,
17:42
the whole Airbnb thing, that’s what I did, just an FYI. So, like just just IRS, if you’re listening to this, I may
17:47
have not done all the steps properly, but I’m pretty sure I under underid my
17:52
deductions cuz all I did was I just looked at Airbnb stuff and and just took
17:58
the average. So, that’s that’s what that’s what I did. There’s some people that are like
18:04
on something something that I haven’t had the pleasure of having and they’re just they just think their house is
Common Mistakes and Misconceptions
18:10
worth 20 20 30 grand a day kind of deal. And so on the flip side, they’re could
18:16
be in really hot water. Yes. If they actually got it challenged. Um whereas like if you did the whole Airbnb
18:22
thing, you’re just missing out, but you’re I don’t think the IRS would come after you if they’re like, “Hey, you you
18:28
charged yourself you gave your business a discount.” Like, I don’t think you’re necessarily getting in trouble for that, but you can get in trouble if you overdo
18:36
it. Is that correct? That is correct. And and and you’re right, Caleb. I mean, which way would you rather which ditch would you rather
18:42
be in on this? Right. The one that’s going to get you roasted to a a nut brown crisp or the one that they’re
18:48
going to be like, “Yeah, you can keep all that.” Yeah. I I mean, I would air I would air on the side, but but again, if we had if
18:55
we had someone in our corner like actual proof and I didn’t have to worry, I would obviously want to go right up to
19:00
that line. Um if I if I knew I had the receipts. Yeah, that’s that’s exactly right. So,
19:06
okay. Um that’s what we want to do. And not only that, but properly documented. So, one of the things that we found in our
19:12
in our process of doing this over and over and over again for for business owners and for tax professionals is that
19:17
you can find a comparable and then next week it’s gone because guess what? The internet is not static. So, we actually
19:25
screenshot ours as well as catch the URL. So, just heads up if you’re doing this on your own, you’re going to want
19:30
to do that because things move. So uh okay, another one and this one is interesting because
19:37
this is not in section 288 subsection G. Okay, this is our take on it. So we want
19:42
to differentiate that for everybody so we know out the gate that this is our take. We think that you need to have at
19:48
least three plus attendees in person for the rule to be legitimate. Okay. Well,
19:54
why is that? And why three specifically? Uh well, one, this is a a business
19:59
meeting. It’s a legitimate business purpose. And if you have just two people, uh what we found in our
20:05
experience is often that tends to be like a husband and wife. You know, say they’ve got a an LLC and it’s a husband
20:12
and wife partnership. Well, uh one thing we count husband and wife as one
20:17
attendee. A lot of common property states out there, a lot of uh businesses owned with a husband and wife. Well,
20:23
husband and wife for our purposes is one attendee. We want two additional. And
20:28
the reason we want this is because narrative matters. Right? The story matters and we want a
20:34
strong story. We want to be able to say, “Look, there were there were multiple people meeting together. They needed a
20:41
space to meet together because there were multiple people and they’re meeting together for a legitimate business purpose.” So, is this in the the actual
20:49
code when it comes to the the August rule proper? No. Does this strengthen the narrative? Absolutely. And so we’re
20:56
requiring it in our program and we do advise that others consider this as well strongly that you have multiple
Best Practices for Meetings and Documentation
21:01
attendees. We love meetings where there’s a lot more than this. This is our minimum. What else? Number four.
21:07
This one also catches a lot of people. This is also not in section 28A. Um this
21:12
is that meetings must last 4.5 hours or longer. Well, why is that? Like why 4.5?
21:17
Why not, you know, three or five? We picked 4.5 because we want to get a full
21:23
business day deduction when we do this, right? We want the full business day. Now, you could do the August rule and
21:28
get an hour, but what’s the limiting factor on the August rule deduction, Caleb? I would say half half a day then.
21:35
Yep. Half a day. Yep. But the limiting factor on the August rule is your 14 days, right? You get 14 rounds in the
21:41
chamber to put it one way or you get 14 shots, right? So, if you spent one hour on one day, you just shot one of your
21:47
bullets. That’s right. So you you know you could get a hundred bucks for a day, but you
21:52
only use one. Let’s get that full business day, right? And you’re saying if you go four and a half, every the IRS will say 4 and a
21:59
half versus 12 hours. We don’t care. That’s that’s a day. That is correct. You need four and a half hours justifies
22:06
you being able to write off the full day rate. That’s exactly right. They in another section of the code, they define a
22:12
business day as four hours and 1 minute. Okay. So 4.5 is rounding up, but you
22:17
just thought you want to be safer than sorry because what if the IRS asks you if you got up and went to the bathroom, man,
22:24
you know, you go get a snack during that meeting? Disow. Yeah, I know. I’m I’m locked in. I don’t
22:29
I don’t I don’t even think about anything but work. Exactly. You know, we want to have this. So, let’s not get cute, right? So, 4.5
22:37
hours is our minimum. We want longer than Okay. So, right away, as a business owner, I hope you’re thinking that’s ridiculous. I never have
22:44
four and a half hour meetings. I hope you’re thinking that because that’s a really long meeting in my world. I don’t
22:49
know about yours, but that’s really long. So, yeah, it’s like, is this even worth it? Okay. Well, we we’ve thought
22:56
through this and and one of the giveaways, you can just grab this from us uh at the end is 72 ways to really
23:02
make this optimized for you. So, uh we cover all this in that in that giveaway.
23:07
But, uh what we love to do is we love to have uh stack purposes. So let’s say you’re doing uh you know an annual
23:14
review. Well, you can have your marketing meeting, your ops meeting, right? Your your financial meeting. You
23:19
can start stacking these together and those are combined purposes can fill out that time frame. Another one is it’s
23:25
very common to have a legitimate meal around a business purpose. So again, if you’re having a prospective client or
23:32
let’s say you’re doing a Christmas party with your whole team or whatever, there’s a meal. Well, you have setup,
23:37
right? You have the meal, you have the cleanup. pretty soon it easily exceeds four and a half hours. I look at I actually look at the four
23:43
and a half hours and and if you can’t hit four and a half hours, you need to take a art class and get more creative
23:50
because there’s there’s so many different ways. I mean you and that’s the other tough thing is like we we host our leadership
23:57
so they they’re here so we actually legitimately are working for more than eight hours. I’m sure I’m sure our team
24:03
would love the definition of a full workday four and a half. But um yeah, but I mean there’s so much so like it’s
Final Thoughts and Encouragement
24:10
hard to even quantify like we do team building um and that doesn’t necessarily look like a boring old meeting but we’re
24:16
like pouring into each other and you know give and and so a lot I mean yeah four and a half hours should be very
24:22
easy to do but I think the key thing is documenting it uh which is very few
24:27
people are doing but if you document it I don’t think there’s an issue. I think going back and trying to verbalize or
24:34
articulate it after the fact is where people can get themselves in trouble. 100%. Yep. 100. That’s exactly right.
24:41
Number five, credibly document your agenda and take meeting notes. So that
24:46
you already said it and we’ve said this before. You have to document things. You have to take meeting notes, right? You
24:52
got to nail this. If it’s not documented, it doesn’t exist. It’s that simple. Again, n you recommend taking pictures
24:58
as well? We do. That’s an optional thing for our program. Um, and that definitely strengthens the narrative, right? Like
25:04
whatever strengthens the narrative, we want it. Uh, that’s not required, but the notes are you have to actually write
25:11
out this is exactly what we did. Now, now to what extent? Well, the the more
25:17
the better, right? Uh, a lot of our clients now are taking an AI recorder, recording the meeting, and then just
25:23
uploading the summary into our software. Yeah, I love it. Perfect. Right. Like why not? So, and if
25:30
you can’t record it and have it be legitimate, then what are you doing anyway? Like, stop it.
25:35
Yeah. How cool would that be? You get audited and then you send the IRS these just long files and being like, here’s
25:41
here’s not just our notes. Here’s the transcription. Uh you could be like Donald Trump, have
25:47
that perfect phone call, you know, have that perfect full day meeting. You could send it to the IRS and have them take a
25:53
look at it. I love that. Absolutely. Yep. And that’s the way we should be thinking, right? Don’t try to get cute with this. Do it right. You’re
25:58
going to do Yeah. Right. So, number six, have a strong business purpose for the events. And we
26:04
again, a lot of this is is basic stuff now, right? Like if you’re not having an actual business purpose, then don’t do
26:10
it, right? That the Augusta rule works when you’re renting your home for business purposes. So, this should be
26:17
stuff that actually forwards the mission of the business. It actually uh it actually lends itself towards building
26:23
profitability, towards strengthening relationships. the things that an actual business would do. So, we constantly tell people to ask themselves, “What
26:29
would a real business do?” You know, we get asked these technical questions and we can go in a technical answer, but it’s usually answered by, “What would a
26:36
real business do?” And then the people kind of, you know, think through and they’re like, “Okay, yeah, I know what to do.” Right? Yeah.
26:41
So, have to have that purpose. Number seven, mind the entertainment is usually not deductible rules, right? Some people
26:48
go into this and they’re like, “Well, great. I’ll just, you know, throw a kegger and I’ll call it business because
26:54
I had like one or two people over for business. That does not work right now. So, what about food?
27:00
Yep. Can you have food? Can you even have a beer or a drink with your meal and during business? Absolutely you can.
27:07
That is that’s a normal thing in the course of business. Okay. You just can’t go. So, and that can be
27:12
deducted, I would imagine. Like that can be a part. So you could, if you’re doing comps, you can say, “Well, what would a
27:19
venue charge if they’re feeding us twice, you know, lunch and dinner and
27:24
all?” I would imagine that that could go into the comps. But what you’re saying is, um, you’re you can’t go overboard
27:32
and, you know, spend a ton of money that then the IRS will be able to say, “Yeah,
27:39
this is unreasonable uh for a business thing.” though there’s some really crazy
27:44
things that businesses do. Just an FYI, but but you’re just saying like you just have to you just have to go back to if
27:50
this is challenged, how to justify that this is a ordinary and necessary expense
27:55
that the business would do. If you’re an accredited investor and want to find a place where you can look at all the
28:01
advanced tax strategies that I know or have I’ve been pitched or I’ve heard, um, I’ve created a place for you. It’s
28:06
called taxandassets.com. It’s a free community for accredited investors that want to go deeper on
28:12
potential tax strategies for you to do research on, for your tax team to do research on. You can go to tax andassets.com or check out the link in
28:19
the description. Yeah, actually, let me back that up. So, you cannot include any food in the August rule. Those are separate
28:25
deductions. So, now we can we know we can expense meals, right? And you can expense this just like you would if you
28:31
went to a restaurant with your But you can’t that can’t go into the comps. it cannot go into the comps because remember fundamentally what the
28:37
Augusta rule is for is you know you’re renting your home to your business right and if you’re renting and it’s actually
28:42
a residence that you’re renting right so well what is a residence by the by the code well a residence is a place that
28:49
you can eat sleep and go to the bathroom you got to have those three facilities
28:55
okay so if you have those three facilities now it can be a residence now is it a personal residence is it a
29:01
residence for you to make it a personal residence, you have to have resided there, overnighted there for two weeks a
29:08
year, 14 days a year. So, we we often say two weeks just to have people not
29:13
confuse the 14 days in the August rule with the 14 days here. These are two different 14s in two different sections
29:18
of the tax code. But in order for it to qualify for a residence, you have to have lived there for two weeks and it
29:24
has to have a bedroom, bathroom, and kitchen. I see. So, when we’re trying to get the comps, we’re doing it just on the residence. No
29:29
personal property, no audio visual equipment. if we’re using a comp from a a hotel or something like that. In fact,
29:36
what we do when we’re doing the comps, we actually look for that stuff and we back it out. We subtract it from the valuation.
29:41
I see. Because it has to be pure real estate. So, I just want to clarify that. So, another question would be like I
29:48
have a studio in my home and let’s say our team comes and we film
29:54
uh and all. I wouldn’t be able to then say I wouldn’t be able to necessarily
29:59
add that in and say that I should have a higher valuation because I have a full
30:05
$30,000 studio in my home. Is that correct? Yeah, you you can actually consider what
30:11
do the amenities allow you to produce. Okay. There are amenities. So like let’s say so some of our clients have like a huge
30:17
patio or a pool or more parking than others have or yes a studio or something
30:22
like that. Okay. Okay, well, what are other comparables that give you those amenities? We’re really looking at the real estate around those amenities and
30:29
the use case. We what we can’t do is say, “Oh, there’s a price tag on all this equipment.” That’s not actually
30:35
part of the real estate. Does that make sense? Okay. Heard I I think we’ve uh we can move on, but that’s that’s really
30:41
helpful and I appreciate you sharing that. Okay, sounds good. So, again, this one we’re just trying to say don’t throw a
30:47
huge party. We’re not Another thing that gets audited is like um you know hunting cabins uh you know um equestrian
30:54
centers. We’re not trying to do that type of stuff. That’s commonly abused. So avoid that. Um number eight um have
31:01
an actual movement of money, not just a bookkeeping entry. We see this messed up all the time. Well, people at the end of
31:07
the year will be going through like I need to save more money. I’ll do the August rule. I’ll go back retroactively and they’ll cut just one giant check for
31:14
all these, you know, rental events that they made up. Well, what would a real business do? Like would a real business
31:20
they would pay 30 days after or immediately. Yeah, that’s right. Usually before the event,
31:26
if not on the event, worst case scenario, net 30. Yeah. So, we mirror the same thing, right?
31:33
It’s that’s and we look for it to be again since the agreement has to be contemporaneous, we make the payments contemporaneous at the same time.
31:39
Now, if someone comes to us and they say, “Look, I’m just onboarding and I had an event two weeks ago. Can we scoop
31:45
that in?” Yeah, we’ll do that. It’s that, you know, a real business would do that. Okay. But what would a real
31:50
business do? They would not have an IOU sitting there for months, much less a year or years.
31:56
Yeah, for sure. Move money. Number nine, properly report and file the forms. You can do all this work and
32:03
if you don’t actually report it, it does nothing for you. So, how do you actually do this? And
32:08
this is probably more for the tax professionals, anybody. Well, you’re receiving income, so there should be a
32:14
1099. Some people say, “Whoa, don’t like you’re actually then telling them that there’s money moving.” Well, that’s what
32:20
you’re supposed to do. You 1099, there’s money coming in, but then you also need to put a note uh on the 1040 that says,
32:28
you know, money was received, but then this is not taxable income. And we we put these instructions in our filing
32:35
forms. We just have a one page where it’s just like, put this line on this line, put this line on this line. We
32:40
tell them exactly what to do. It’s a copy paste, but you have to do that properly. What happens then is they see
32:46
the income, they’re like, “Hey, wait. Where’s that?” Then they see the note. Oh, there’s a reason for this note.
32:52
We’re not going to follow this up any further. Good to go. So, it has to be done properly. Has to be have to use the
32:57
proper forms. And number 10, this one, uh, you know, you could say, “Well, that’s not really a technical thing.”
33:03
No, it isn’t. But get started now. Just like I talked about, I literally lost
33:08
six figures of income I could have had by not starting now. So, you know, it’s like the classic, when’s the best time
33:14
to grow a tree? Well, 50 years ago. Well, when’s the second best time? Right now. Like, don’t wait. If this is a fit
33:19
for you, do it now. Okay. We just told you a ton of problems and a ton of issues. So, why the heck should
Understanding the Augusta Rule and Its Implications
33:25
you start this? Yeah. And and I just I have a couple questions that may come up later, but if
33:30
you rent a house, can you do this? So, if you’re renting a house, how many days is it rented? Okay.
33:37
It’s rented a lot more than 14. A lot more than 14 days. Disqualified.
33:43
Yep. So, if you’re if you’re doing it on an apartment, you’re and you’re doing the
33:50
August, you’re straight up going to get crushed if you get audited on that. Yeah. If you if you are renting it out
33:56
and also doing the August rule, correct? You you’ve absolutely destroyed the August. No, I’m not saying renting it out. I’m
34:02
saying you’re renting. You’re personally renting. Okay. So, what again, let’s go back to our residence definition. An
34:08
apartment qualifies as a residence. If you’re residing there for more than two weeks, it is now seasoned in in for this
34:14
use case, it absolutely does qualify. So, if if you’re renting your residence, you may absolutely apply the August rule
34:22
to this. Okay. So, if you’re renting a studio in Miami on if you’re renting a house just in
34:27
general, it’s it’s available. Uh, and you can do that if that’s if that’s your um Okay, that was that was one of the
34:34
questions that that I had. I know you have a slide that I believe is going to be addressing this, but you can do more
34:40
than one home. So, if you own two homes or you rent a home and you own another
34:46
and it’s both your your residents, you can use you could use Can you do 14 on
34:52
both? Correct. the limitation. It is wild and that’s one of the things that I learned too in this. Never knew that before.
34:59
Never had Tik Tok tell me that or any of the other sources. You can do as many homes as that as you live in for 14 days
35:06
a year. And not only that, but in order for a home to be considered your residence, if you have a direct family
35:12
member who lives there, it’s also qualified as a residence for you. So if your mother, brother, sister, you know,
35:20
daughter, son has a place that they reside, you know, bedroom, bathroom, kitchen that they’re in for 14 days or
35:26
more, you can now you use that home and rent it as well. So it’s a way
35:33
Yeah, this is where it gets really Hold on, hold on. This is I’ve never heard of this. So my family my family
35:41
has I both both both my wife parents and my parents have lovely properties and we
35:48
we spend time back in that state. We go back home and you’re you’re telling me that I potentially could
35:57
it create a legitimate re way to have my business
36:03
pay myself even though I don’t own the home but I have a direct family member that is in in that residence.
36:10
That is correct. Y but could what if my parents wanted to do the role themselves? Does it is do
36:17
could we both do it separate times on same property or is it or is one property only get 14
36:24
every 14 per property. It’s 14 per property. That’s the limitation. Really where where we see this is not so
36:29
much business owners then renting other residences that are seasoned by their uh
36:35
relations. It’s more of a way to conveniently pass on a few bucks to your son when you uh stay overnight in his
36:43
the house you bought for him at college. you know, that type of thing. So, let’s say you’re in a college town and you bought a house, your kid could live
36:49
there through college and you’re you’re in town and you and you’re there for business. Well, you can pay your son whatever you would have paid to go to
36:56
the hotel and they get some taxfree income. So, it’s just a nice way to kind of transfer and disseminate some of that
37:01
wealth taxree to your your direct descendants. That’s where we see this employed. So, I want to emphasize that. But you can do it to yourself if you
37:07
want. You’re saying Yep. Okay. Yep. This one we’re gonna get John’s gonna shoot me an
37:12
email. We need to get John. Yeah. To weigh in on this, well, we might take this out if it’s not
37:18
true. If this is if this makes a recording, this has been verified. And I uh that is something that I feel like
37:24
that’s breaking news because I’ve never heard that before. Um I feel like your
37:29
life just got a lot busier after letting me know that. Thank you.
37:34
We are going to verify this one very specifically. I know 100% the transfer to the to all the the family members,
37:41
but we’re going to verify if you could pocket yourself. But no, but that’s so but you’re even saying like cuz I I
37:46
thought because I’m I’m going off of like the being a state residence, but you’re just saying like if I lived in a
37:52
home for 15 days technically, let’s say it was like my fifth home, right? Um I I
37:59
only stay there 20 days a year. You’re saying because I’ve lived there 14 days
38:04
out of the year, that technically registers as um
38:09
qualifying res. And then if I only stay there 20 days, I
38:15
really have to create a really strong justification on how you know 14 of those days if I want to maximize that
38:21
was actually workrelated. It couldn’t just be my wife and I you know you know
38:27
having a business meeting you know so I think it’s not again but there’s it is interesting where you could have you
38:33
could do some really interesting things. So, we’re going to continue. But that is uh that is something that helped expand
38:39
my brain cuz I thought this was just a limited to one home. And if you’re have
38:45
multiple homes or your mind’s racing as well, again, this is why you want to do this properly because uh it is it feels
38:52
overwhelming, but I’m starting to see a lot of money could be saved if you do
38:57
this properly. Yeah. Now, we have a lot of our clients have two to four homes
39:02
and they are Yeah. you know, it’s they’re really really uh able to use this well. And a lot of these homes they
39:08
purchase so they have a place to stay as they’re traveling around the country on business. Um so they’ll go to one home
39:15
and they’re like, “Look, I’m just staying here to kind of like assess this region.” So I’m bringing people into the home. We’re having these meetings. I’m
39:20
going to go to the next one. Um and and our clients are routinely uh doing that
39:26
sort of activity and benefiting from the August rule in multiple residences. And not only that, but we’ll we’ll jump ahead to it does not have to be located
39:33
in North America for the August rule. The home that is that is another like never knew that. We’ll get we’ll get to
39:38
that a little bit more here. Let’s go through another case study though. So, um this one I uh changed his name
39:44
because I I wasn’t able to to reach out and uh ask to get permission in time for our presentation here. But this is a
39:50
current client of ours. Um and he’s a serial entrepreneur in New New Jersey. He heard about us on a podcast and he
Real-Life Applications and Case Studies
39:57
had two qualifying residences. I can’t even remember if he had heard about the August rule prior to to hearing about
40:02
us. U but he certainly didn’t know what it actually did or how it could be applied. Um but as soon as he heard
40:09
about it and we walked him through the program, he signed on immediately. Um and he was eligible for film production.
40:16
And we absolutely love film production because use case matters. like what you’re using the house actually for for
40:23
your business purpose matters in terms of the amount you can deduct. He had two nice homes, but what he also had was the
40:30
purpose of actual film production. And what we do at the gestal.com is we’ve
40:35
partnered with a national film scouting organization based over in LA, you know, near Hollywood. And what they’re what
40:41
they do is they go anywhere in the country and they will provide valuations for properties specific to film usage.
40:48
And so we’re not talking about filming yourself with your iPhone or even like a call like this, you know, over Zoom or
40:54
whatnot. We’re talking about you have a cameraman, you have a lighting guy, you might have like a you have a gaffer, you
40:59
have, you know, there’s multiple people involved, like you’re filming a real film. So, if you’re doing that level of
41:04
production, which he is, then you can get a film valuation, which we provided
41:09
for him. And he is currently tracking, even though he only signed up, I want to
41:15
say like less than 60 days ago, to get 14 days at both residences producing
41:20
content for this next year. $140,000 deduction. Wow. Yeah. Killing it. And he is in the again
41:29
high bracket, high tax state. He is gonna pocket a huge chunk of that. Yeah, I I I’m sure Yeah,
41:37
hopefully he takes care of you guys at Christmas. I feel like you’re going to get a lot of Christmas gifts. That’s That’s kind of
41:44
what I’m thinking. But yeah, once you run through the cool thing about uh Joe here is that after he ran
41:50
through his training, he was like, “Wait, that’s it?” We’re like, “Yeah, that’s it.” He’s like, “Are you kidding me? That was so easy.” Like, Joe, we
41:56
love hearing that because we’ve only spent two years making this easy. Yeah. Yeah.
42:03
Yeah. To put this together and and package it so that the business owner didn’t have to become a tax expert. So,
42:08
let’s talk about how do we optimize it, right? How do we get the most benefit,
42:13
the most bang for our buck if we’re going to do this? Well, we mentioned a lot of these things, but let’s summarize them. Well, your resident size and
42:19
amenities matter, right? Like, what market are you in? What sort of place do you have? We take that all into account,
42:24
and you should, too. Um, do you have more than one residence? Right? you can literally multiply the effect with more
42:30
than one residence. Um, we are not limited to residences in the US. What we’re limited to is a place that
42:36
actually is seasoned as a residence by you staying there for two weeks a year that has a better bathroom and kitchen.
42:43
So, we um have clients who have homes in Mexico, homes in Canada, you know, you
42:48
can have homes in any number of countries who have treaties with us and uh in the North American area. Um, I’m
42:54
not going to get into which specific countries here on this call. We go through all those specifics with clients when we onboard them. And we have
43:01
clients that you can have a home in Mexico, you could have a home here, you could have a home, you know, in Guatemala, and as long as you have a
43:08
US-based business and you reside in those residences, you know, more than 14
43:13
days, you can actually have a meeting in those homes, that qualifies for the Augusta rule. You’re even telling me, but you’re even telling me like I could
43:19
in Guatemala rent a place for a month, go down there and two weeks, let’s say,
43:25
let’s say 10 days um of that whole month, I’m doing legitimate business
43:32
there, you’re telling me that that that qualifies even though I am. That’s 100% correct. John has
43:38
walked you through all this. It’s why Yeah. I mean, there there’s there’s so many because that’s what people some I
43:45
mean, this doesn’t work if you’re just doing a 7-day offsite cuz you didn’t hit the 14-day minimum, but there’s so many
43:53
use cases. I mean, there’s there’s people I know that, and I don’t know if Europe counts, but I know people that go
43:59
to Europe for one to two months, and Europe is tougher. And and the reason is is there’s actually another section of
44:05
the code that talks about like the locust of business. So if you have everybody traveling from the US like way
44:11
out of the North American area for business, you have to have the the average attendees traveling from an
44:18
equidistance uh distance around the area you picked there. There’s some funky
44:24
stuff in here and I can’t even get into a specifically John after I hear you. I hear you. To summarize it, it is North American
44:30
area. Yeah. Okay. Heard. Yeah. But yes, let’s say you’re you’re an influencer and part of your job is
44:37
filming. Well, you could go rent an amazing place on some island, stay there for a month, film a ton of content and
44:44
you could have 14 of those days, you know, be for the Augusta rule. Yeah, it’s awesome. Yeah, totally. So, um, again, another
44:51
one, event size. Okay, are we having those minimum meetings where there’s like three people or are we having, you
44:57
know, 50 people or 500 people? Well, we get into different comps when you when you talk about hundreds of people. you
45:02
got these wedding venues that are massively expensive to rent out or these these mansions and you know if you’ve
45:10
got a large gathering you can justify a much much different comparable so that matters and then the specific use case
45:16
of film production is probably our all-time favorite use if you’re producing actual you know like
45:22
production level film it gets us into a whole another tier of valuations so we love Yep and and clients should look for
Optimizing the Augusta Rule for Maximum Benefit
45:29
that so FAQs We can I mean there’s a whole page here. We don’t have to talk
45:35
about one or any of these, but I put this here in terms of like Well, let’s let’s run through them.
45:40
Yeah, exactly. Yeah. So, how many residents may the Augusta rule apply to?
45:47
Yeah. As many as you can stay in for 14 days a year and season. That’s that for me was a that’s that’s a
45:54
big right away takeaway. Um that’s awesome. What qualifies as a dwelling 14
46:00
days or more? Mhm. Yep. Bedroom, bathroom, kitchen. Uh, does the rental value of my home
46:06
change depending on the purpose of the meeting? Yes. So, if it’s an hour versus four and a half hours and then if we’re
46:14
using what else could change other than time, you know, we talked about uh um you
46:19
know, depending on the day, season or or year. Uh so, we have uh one uh potential
46:25
client, I should say. He’s told us he wants to onboard in the new year because he’s changing the structure of his company. um and he happens to live near
46:31
the Kentucky Derby. So for at least three days a year, if not a week, his
46:37
valuation uh goes up into that 10 20 grand a day. Wow. And and we can capture that. You know,
46:42
part of what we do is we collaborate with our clients to identify those outliers like let’s say they live next
46:48
to an NFL stadium or something like that. Yeah. Right. And Super Bowl comes. Well, we want to capture that, right?
46:55
And we and we can. So yes, it definitely changes. Okay. Um, how do you calculate the
47:00
suggested rental value? You you mentioned this earlier where you’ll you’ll look at comps and you’ll try to
47:06
try to think like the business, like we’re not just looking at Airbnb. Uh, we’re we’re looking at what would be
47:13
comparable to a business renting out for an actual business meeting. That’s correct. And what we do when we
47:20
do that is not just like either hop on AI and tell it to do something for us. Trust me, we’ve tried. We have tried
47:26
left and right to AI, you know, this process and still currently at the time of this recording, it is not even close
47:32
to doing this for us. Well, yeah. And so this is still a manual process. Our people actually email, actually call
47:38
and talk to owners, talk to venue managers, you know, and dig this up. And we don’t just get one. We typically have
47:45
uh like five of these comps and and stack it in like detailed notes. So we we want to make this chewy. If
47:51
somebody comes and wants to challenge it, you know, and and and nawing, what have we done? We want to have a lot of gristle and bones in our presentation.
47:58
So, they just spit it out and go, “Yeah, you’re going to be so excited the first time you guys get challenged with one of your clients.” You’re going to be
48:03
like, “Yeah, it’s going to be it’s going to be a fun day.” Um, we we we built this knowing that we
48:09
would at some point get audited and we’ve built it to the point where we look forward to that. Yes. Like John literally talked about this
48:15
early early in our planning of just like, “Oh, yeah. We want this to get audited because they’ll they’ll start
48:21
looking at this uh like a comparable product. There’s another product out there, our RC comps, you know, and
48:26
they’re like the gold standard. If the IRS sees an RC uh report or RC reports, I’m sorry, RC reports uh you know, for
48:33
um reasonable compensation, they’re like audit over, we’re done, you’re good. And we want this to be the same thing
48:38
for the Augusta rule. Who can use the Augusta rule? I’m imagining anybody um that owns a home.
48:45
It’s just if you don’t have a business, then you don’t necessarily get the business to be able to get that
48:51
deduction. But anyone can rent out their house 14 days or less and not have to claim that.
48:58
Correct. I have a buddy who’s a a ultra high W2 owner and he’s got a vacation home on a nearby lake and uh he wasn’t
49:05
eligible for the actual uh rule to, you know, pay his business because he has no business himself, but he uh doesn’t rent
49:13
out his nice cabin, but he decided, you know what, I’ll rent it out for two weeks and just got to, you know, pocket that
49:19
tax free. So, yeah, I love that. Um I’m a sole proprietor single member LLC. Can I use the Augusta
49:24
rule? No. Answer is no. Yep. Okay, break down break down what that because I feel like
49:31
a lot of people just got sad because they have they set up their LLC
49:37
and talk to me about talk to me about the difference between that. Sure. So other uh some other people will
49:43
say you can do a single member LLC. We’re not comfortable with it. Um you know what John likes to say is you know
49:50
when it’s gray we play. Um, and this, but there’s shades of gray. And this one, uh, we don’t have a definitive
49:56
interpretation from the IRS that says that a single me single single I got to say that right. A single member LLC is
50:03
treated as a separate person. And so if it’s treated as the same person, well, who are you renting to, right? You’re
50:10
just And I’m not I’m not trying to argue with you. I just Oh, yeah. The purpose of the LLC is to
50:15
limit your liability. And so the idea would be someone would set set up a single member LLC to shield from li I
50:22
mean because there’s no tax benefit of set setting up a single member LLC but you do it for liability purposes. So
50:28
you’re just saying that you guys are not comfortable with with that because it’s
50:34
a little too gray. Um because okay it’s still treated as like you said it’s
50:40
basically treated as if it’s a a sole prop almost in ter you know in certain finally as an S corp a partnership and
50:48
CC Corp all uh thumbs up multimembery yeah there’s there’s a
50:54
number of different things we even have trusts that that can be used in this. Okay. Both revocable and and non-revocable.
51:00
Yeah. You’re revocable. Can I have uh more than one business on the same account using the free money
51:07
plan? Yes. So, that’s specific to our software. We call it the the free money plan. It’s the done for you plan. Um and
51:13
yes, you uh you can actually have multiple businesses. So, let’s say you have uh one business and you’ve only got
51:19
a two-hour justified business meeting, but you want to have another couple three hours with a different business.
51:25
Well, you can do that. And you can do that on our platform and and stack that. So then you’ve still had a legitimate
51:31
business meeting or meetings that justify the August rule, but now you split it between a couple businesses and
51:36
also split the the payments that are paying to you personally. Uh do I need to have three attendees
Navigating Complexities of the Augusta Rule
51:42
every time? I I think the answer is no. You could have more, but you’re just saying three is the minimum.
51:47
That’s correct in our platform. Yeah. Uh can I use this rule if I’m getting
51:53
just getting started with my business? I would assume yes. Yeah, it really depends on, you know, do
51:58
you have income? I mean, if you don’t have income, you can still do it and it could be a pass for deduction, but
52:04
really should you be focusing on it then? I mean, we’re trying to coach people, you know, what’s best for them? Again, let’s not have the tail wag the
52:10
dog. Like, go make money, man. Right? Go be productive. And then when your tax
52:15
bill gets really big, I I typically use the measuring stick when it gets, you know, bigger than your your first
52:21
professional salary, then start strategizing, you know, and you you might adise. I think that I I endorse that. I uh I I
52:29
think a what you focus on grows and and so you could be a business owner that is
52:37
trying to focus on saving a few bucks and you could be walking over $100 bills
52:42
in the process. And so I think that’s I think that’s wise. Um but I think I
52:48
think it’s if you can have people in your corner to do both and that’s where you guys come in because I do think you
52:53
know it’s all the math. It’s like you obviously it wouldn’t make sense to work with you guys if you’re helping someone save a couple hundred bucks. Like it’s
53:00
just not going to be worth the time, energy, what they pay you guys to help. But I’m sure there’s a breakdown of when
53:06
it just becomes, as you’re saying, free money, which is not a compliant word, but you know,
53:12
um it’s a great marketing word. Um uh so and then the last question is if
53:18
uh what if my company has multiple partners, can I still use the August rule? I would I would assume you you
53:24
can. It just absolutely probably probably creates a couple more complexities. I would imagine
53:30
it does, right? You’d have to then agree as partners at the partner level that you want to do this. That probably
53:36
involves uh you know some meeting minutes that you’re going to record and uh and keep and
53:42
there’s no limit to what the business that business could rent out a venue every day and deduct that. Um so you
53:49
could let’s say you have a three three partners in a business. Could you do 14 days at each
53:57
house if it’s legitimate? 100%. you could just do, you know, rotating welving door and take turns. Y
54:03
and and just just hypothetically like if you had three business owners, then it
54:10
the uh doing the Augusta rule is a lot easier because all three business owners
54:15
could be together and there there you have three or more. Is that am I reading
54:21
that right? That’s correct. Okay. So then you whereas like Yeah. Whereas like a lot of people that
54:28
they would they really have to be extra intentional and get get more more people there. Um yeah. Yeah. What if you had a weekly
54:34
meeting with the partnership and you decided to rotate it between the partners’ homes? Yeah. I love it. Yeah. That’s a weekly meeting over
54:41
dinner, right? So Sure. Absolutely. Have a weekly meeting and and break bread during the process. Um the thing
54:47
is what else? What else? I I Yeah, I feel like this has been so thorough. Yeah. The thing is is that I wanted to
54:53
say Caleb is the business owners as business owners, you’re already doing this, right? Exactly. Already having that dinner.
54:59
Yes. So, it’s just about capturing it. So, yeah, let’s just uh Well, we give
55:04
away all these free bonuses. So, we want people to at least take this away. Um, you know, we had a potential client come
55:10
up to us the other week um at an event we were at, and you know, their their home when we did the comps on them on
55:16
their home was only like 400 bucks a day. It was super low. And so, we just said, “Hey, I’ll tell you what. take all of our free stuff, do everything on your
55:23
own. You can we just give it all away, but you you’re really not justifying enough with your particular residence in
55:29
your remote uh you know, living situation for this, but you can still do this. And we want everybody who’s
55:35
watching this, you know, even if they don’t qualify to work for us or work with us, at least take all this information, do it on their own. Um what
55:42
we’re looking for a minimum is that we uh we charge a minimum of $1,000. And so
55:47
that typically means that we want to have a minimum of a thousand dollars a day in 14 events valuation. That’s kind
55:53
of like the lowest level. You know, most of our clients are are several thousand a day. Uh if you know, even up to
56:00
$10,000 a day per residence and having multiple residences. Um and and you
56:06
know, if they’re wondering, well, what do you guys even charge? We it’s very simple. We charge 8% of deductions. So,
56:12
whatever deductions we can justify behalf of the client, we charge 8% of those. That allows us to keep it super
56:19
simple. If the client feasts, we get a snack. If the client doesn’t get a meal,
56:24
we starve. It just aligns itself with results. And we have to justify those
56:29
results. And by the way, and we didn’t even mention this, Caleb, um I really pushed John to provide some sort of
56:36
guarantee for our clients. And if if you know tax attorneys or attorneys of any sort, generally speaking, they hate the
56:43
word guarantee. Yeah. And we got John to say guarantee. We give an an audit protection guarantee.
56:49
So when people follow our program and and we again, we’re doing it for them and they’re they’re they’re walking
56:55
with us in a compliant way, then not only if they’re challenged will we defend them, we will provide that
57:01
defense, but we will pay for it. Wow. Wow. Okay. So this is like we put our
57:07
money where our mouths are on this and and and have aligned everything to it
57:12
be, you know, the again free money, you know, done for you, you know, peace of
57:18
mind. And so really what we’re bringing to the table uh is, you know, you could do this on a spreadsheet. You can you
57:25
can distract yourself from your business and and and run with this. Um but we’re what we’re bringing is is unlimited
The Future of Tax Strategies and Business Growth
57:31
coaching because we do that for all of our clients. We literally review every single event for compliance.
57:37
Oh, and we bring uh so like the coaching, the accountability because even me on my
57:42
own when I knew this rule and was up and running, I looked back and I was like, “Oh man, I only captured eight events. I left like half the money on the table,
57:49
right? We’re trying to get as close to 14 as we can or 14.” And so you’ve got
57:54
the again the coaching, the accountability, and then you got the peace of mind because we’re going to back it up. Well, and again, I I don’t
58:00
want to speak out of turn because you might I don’t know if I’m getting special treatment, but it’s like very
58:06
white glove as well. It’s like as we have meetings, we we hit up our team and
58:11
get everything taken care of. And it’s it’s one of those um you guys are standby and it’s been nothing but fun
58:18
working with you. And I just want to also give you flowers. We met as you were developing this and when we first
58:24
had our first conversation, you weren’t even ready to show me anything. It was the concept. It was the, you know, this
58:31
is the thing that we’re doing. You had the domain, which I was like, that’s a great domain that you got and uh you
58:36
were, you were building and uh you have delayed launching until you got it to a
58:41
place where you can stand by. And I find that that’s um that’s honorable because
58:46
there’s uh you know we are both quick starts and I think we’re always fighting against ourselves of of launching
58:53
yesterday but uh doing you you guys are doing it right and um I don’t there’s no
58:59
doubt in my mind that this is going to take off. I feel very grateful for it to be one of the first podcasts cuz I I’m
59:05
sure this is going to be one of many and um I just excited to see you guys grow
59:10
and I can uh encourage my audience um to to take advantage of this. So if you are
59:17
if you have clients that need to know about this, there’s a way that you guys can work with with Nathaniel and their team. If you’re someone that wants to
59:23
take advantage of this directly or if you’re a tax strategist or CPA, there’s a lot of opportunities and I would just
59:29
encourage you to uh look into it and uh and I believe this this bonus is
59:35
something that will be um again just a no-brainer. So again, I’m grateful. I’m
59:40
I’m encouraging more of our guests to come on and like give give away generously because I want uh people that
59:46
subscribe to the show, that watch, that listen uh to have big advantages. So, if you’re listening on the podcast, we’ll
59:52
make sure that wherever this QR code takes you, we’ll have the link for you to click in the show notes. Uh,
59:58
Nathaniel, is there anything else you want to say? I really appreciate you coming and giving a ton of value.
1:00:03
Yeah. No, I’m really grateful for the opportunity, Caleb, and you’ve been nothing but encouraging and uh generous
1:00:09
as we’ve developed this product. And so, I appreciate uh, you know, you being in our corner as we’ve developed this. And
1:00:15
really, again, it comes down to that mission. Let’s put a billion dollars back in the pockets of business owners,
1:00:21
you know, whether they have a tax practice or they’re out uh, you know, pouring roads for us. Uh, we want people
1:00:27
in this country who are producing value to have more oxygen in their tank. Well said. All right. Subscribe for more content. Thank you.