Learning Your Tax Deferral Options Jason Habeeb

Learning Your Tax Deferral Options Jason Habeeb

Just because you hit a great shot, it just depends on where the ball bounces, and it’s really a game of inches. I think that has to do a lot with life, I kind of related it to that and it was all on me to perform.”

Jason Habeeb is not only a prior-professional golfer, but he also sells residential real estate here in Northern California, and has some experience also, with the tax deferral strategy, the CRT, helping educate, especially in the Bay Area, folks who are challenged with capital gains tax.

 

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Learning Your Tax Deferral Options Jason Habeeb

 

Brett:

 

I’m excited about our next guest. His name is Jason Habeeb and he is a real estate professional, but also, not just selling houses, he’s also helping people with capital gains tax deferral. In particular, he’s using what’s called the CRTs, known as the charitable remainder trust, and it’s a way to defer capital gains taxes and essentially be able to fund charities of your choice. A really powerful proven strategy which we love here at Capital Gains Tax Solutions, especially if you are 100% charitable. Take a listen to this episode now, and enjoy the show. Our next guest is a rock star. He is not only a prior-professional golfer, but he also sells residential real estate here in Northern California, and has some experience also, with the tax deferral strategy, the CRT, helping educate, especially in the Bay Area, folks who are challenged with capital gains tax. I’m excited to dive in with our guest, please welcome to the show, Jason Habeeb. Hey, Jason, welcome to the show.

Jason:

Thank you for having me, Brett. Glad to be here.

Brett:

You can reach and find Jason at habeebrealestate.com, that’s H-A-B-E-E-B realestate.com. Jason, would you tell our listeners a little bit about yourself and share your current focus?

Jason:

Thanks! I specialize in residential high-end luxury listing in the Bay Area and the Sacramento areas, focusing on charitable remainder trusts as a tax exemption strategy for when somebody is looking to sell an investment property or primary residence. That’s kind of what I focus on, I’ve been doing real estate now for five years. I connected with an estate planning attorney and a fiduciary here in California that kind of taught me the ropes, and we travel all across California doing these seminars and teaching our clients on how to save money on taxes and put more money back in their pockets.

Brett:

That’s amazing and I appreciate you sharing that. Tell us a little bit about Jason growing up, who is Jason growing up. Beyond just maybe the golf or the hard worker or the persistence, what gifts were you given and what strengths were you given? I think we’ve all been given certain gifts, but what particular gift or strength were you given and how has it helped you help your clients today?

Jason:

I think it’s having the servant’s mentality, it’s learning clients’ goals and going after what they want and every client is different. Everyone has unique goals but growing up, my dad really taught me what hard work was but not what smart work was. I knew how to work hard but not learning how to build my own business. He was an employee his whole life, and for me, I had a bigger dream to open up my own business and add value, so that’s where I found my happiness per se but I had some good morals set by my father who taught me how to work hard, but as it relates to real estate, going back then, I went through 17 different jobs in high school, as a professional golfer as you mentioned, and that kind of opened up the floodgates for me as far as opportunity as far as what I wanted to do. I found out what I did not want to do, but I enjoyed customer service. I was working in restaurants, at Chili’s, Olive Garden, different various restaurants and learning how to serve the client. Obviously, the client was somebody who was ordering food from me, but I just kind of translated that into real estate, and now I deal with multimillion dollar properties.

Brett:

Absolutely. We’re always selling and serving someplace somewhere. I have a similar background where I worked at Cheesecake Factory for a couple of years and learned how to serve food and connect with people through dining, which is an amazing opportunity to learn on any level. Tell us about professional golf, that’s kind of cool. When did you know you had a gift for that and what was that journey, maybe it was in high school, when did you start playing, and walk us through that journey?

Jason:

It all started in seventh grade and my buddy across the street from me is like, “Hey,” him and his brother were golfing. He invited me out one day, and my parents lived in a neighborhood that backed up to a local golf course here in Sacramento and stuff. We would sneak on as 13, 14 year olds, play a few holes, and I just fell in love with it. I just loved how it had a lot to do with life, and now looking back at it, 15, 16 years later you can hit a great shot, but it still not might work out. Just because you hit a great shot, it just depends on where the ball bounces, and it’s really a game of inches. I think that has to do a lot with life, I kind of related it to that and it was all on me to perform. I wasn’t relying on a team per se, like baseball, basketball as you’re familiar with, so it’s just one of those things where I do my best when my back’s against the wall, and golf really kind of taught me that, so I kind of fell in love with it. I played all four years in high school. I turned professional right after high school. I had a chance to play for a local community college, but it didn’t work out very well. I chose to go professional instead of taking that right direction playing at the collegiate level, I had a big head back then, and it was just one of those things where I thought I could do it. I played in a few events. I’d placed in the top three in a few. It was the Pepsi Golf Tour. If you guys are familiar with that, it’s one step under the nationwide or the web.com Tour right now that really got me to the PGA, but God had a different plan for my life and I just kind of rolled with it. I got a job at a local country club here in Sacramento, and I met some of the top real estate agents, who are now my mentors, and a lot of them are my clients now. It’s actually cool to kind of see how everything kind of went full circle on that.

Brett:

That’s amazing, thanks for sharing. That’s so cool. The different paths that God leads us down and the different opportunities, but obviously the lessons we can learn, especially through sports and athletics and being challenged. Jason when did you become fascinated and are obsessed with helping others it really achieves whether it be financial freedom, buying a home of their dreams, really helping people with their finances as it relates to real estate?

Learning Your Tax Deferral Options Jason Habeeb

Learning Your Tax Deferral Options: “We have what it takes to take what you have.” – Suggested IRS Motto

 

Jason:

It was a family matter, one of my first transactions, it was in San Bruno, a city outside of San Francisco, and I was with my uncle. I was selling his house that he’s owned since 1982. He’s a single guy. It was his primary residence and this was before I heard about a DSP or a CRC and he’s always like a father to me when we lived in the Bay area. We lived there and he allowed my parents to save up enough money to purchase a home here in Sacramento. I’ve been here almost 20 years now since then, but I’ll never forget what he’s done for my family. When it came time for him to follow us to Sacramento and when I got my real estate license five years ago, he let me lease his house. We sold it for top dollar 100,000 over leased price. The Bay area market was still booming and it was booming back then but what I didn’t know was how to save him money because he was only exempt for 250,000 for the state exemption tax as a single man. He had to pay capital gains tax on the residual up to a million dollars when he bought it for 100,000 dollars. He’s paying about 35% of state and federal capital gains tax on that difference between 350 and a million dollars. Hundreds of thousands of dollars, his hard-earned money, he works 60 hours a week, he owned a grocery store in the city and he worked by himself. He didn’t have any employees and he’s just old school. He didn’t really trust anybody. He worked his butt off and all that money that could have been in his retirement to supplement that went to Uncle Sam, right? It was on my heart to do this kind of research, I need to save my clients money and that’s how I could add value to my clients. I did a bunch of research. I got really connected with a fiduciary who has 35 years plus experience in this field and also an attorney estate planning attorney and together, it gave me the idea of going out, cause there’s a lot more people just like my uncle that need our help and our services. And what more value can you bring us by putting more money in their pockets?

Brett:

Well said, I couldn’t say it better myself. When you help people escape feeling trapped by capital gains taxes and keep more money in their States and their families. We can give more or support our families more rather than to the government who wasted away pretty quick. To me, that’s always a win. Shifting a little bit here, I’m curious about maybe the biggest mistake and maybe you kind of already talked about it that you or a client has made in regards to capital gains tax and maybe that was the story they didn’t know about something and they ended up paying all the tax or it could be like a fail 10 31 exchange. Does anything come to mind beyond the story you just talked about?

Jason:

Yeah. There’s a gentleman that we met with after our seminars in the Bay area, he had about $20 million for the property and he had his financial advisor, he had his attorney there, he had a CPA there, which we all recommend for our meetings with our clients, just to get a different opinion. A lot of these guys I’ve been with this individual, this potential client for 20, 30 years and developed a trust, but they never heard of a DST or a CRT. When we were talking about it they wouldn’t tell you what they don’t know and they don’t want to make themselves kind of feel like that they didn’t know to the client that they’ve been servicing for 20 or 30 years. In my opinion, I think it could be considered malpractice if you don’t give the alternatives to the client. That client ended up choosing the advice of his trusted colleagues of 20 or 30 years and they didn’t go with my attorney and my fiduciary and my services and ended up paying. I followed up and he told me how much he paid for capital gains taxes and he said, “Hey Jason, I appreciate you guys setting this appointment.” You could tell he was, he was pretty teed off on that and all we can do is just add value and get in front of as many clients as we can and, and see what we can do for them.

Brett:

Unfortunately, this it’s a common occurrence and I liken it to a healthcare professional you’ve gone to all your life, right? Then your primary physician, your family doctor, you develop a connection and a trust and they’ve been there for you to help you with your whole life for all of your health and all of your family. Then all of a sudden you need to have brain surgery or knee surgery or shoulder surgery, something that’s very specialized and just because the family practitioner has never done the surgery before, It doesn’t mean it doesn’t work and the surgeon hasn’t been successful. Which really the question becomes what are the main questions you should be asking to make sure that you’re comfortable with whatever structure you have moving forward, even if your primary CPA, tax attorney or state planning attorney doesn’t know about this specialized service such as the deferred sales trust, or a charitable remainder trust or Delaware statutory trust, or even a 1031 exchange. Most people know about a 1031 now and really the question has become “What is the tax deferral strategy? What’s it based on what section of the tax code is that based on?”. The next question is, how many of these have been done? Right? a couple, how long have they been doing it for it? Have they done thousands of them? How many IRS audits have they survived? Just like you would ask a brain surgeon, “Hey, how many surgeries have you done? How many patients died? How many patients went to jail?” You want to know what the track record is and as soon as you have that evidence and that track record, then you can make a decision based [00:13:30] upon, I’m going to pay a million, two, three, four, $5 million in tax or defer it all. That’s the important question to ask and when you can ask those, especially if you can pre plan to do it today, rather than when you’re in 30 days to close and it’s the heat of the deal. And it’s a lot of emotions going on. Preplan, right? Get there early, because the key is once you close and escrow is over and the funds have been sent to you, the tax is triggered and you’re going to pay that tax. [00:14:00] The key is to pre plan and ask the right question. After helping countless investors, Jason and clients with real estate and different needs. I’m curious, where may some of the maybe the one or two things that you found to be the best way to create and preserve more wealth?

In my opinion, I think it could be considered malpractice if you don't give the alternatives to the client. Click To Tweet

Jason:

I would just say it’s timing. It’s like you mentioned going over, pre-planning, going over goals and asking the right questions. I think that it is key for my particular clients when it results in the sale of a property or an investment property is, “Hey, tell me about your goals. Tell me about your timeline, because it’s very important to understand that as far as the marketing strategy, as a real estate professional, to know the competition, to study the market, to advise accordingly”. It might be better for them to wait or it might be depending on what’s available with current inventory, current buyers, current rates, these are all questions that I ask my clients and in the end it really helps their bottom line because we can better strategize a marketing plan for them to help them get the most out of money and net it and save money on the capital gains tax, whether it’s through a DST or a CRT, whatever strategy they are they really need to have this done months in advance in order to better prepare for that sale, the property, if that’s the direction they want to go.

Brett:

As a reminder, listeners are listening to Jason Habeeb on the show here, habeebrealestate.com you can find him. He helps people in Northern California sell high-end primary homes and also has some experience with the CRT charitable remainder trust. Jason, I consider you a wealth advisor and I’m curious what should every other wealth advisor, different industries, such as maybe financial advising or a business broker or commercial real estate syndicator. What should they know about your services, how you work with your clients and how could they best work with you to help the client for all of their needs for real estate?

Jason:

Absolutely. Basically we’re a power team, the financial advisor, the attorney, the CPA, we’re all in it together. We’re all here to work together for the best services for the client to help them through this process. I’m not a licensed attorney or financial advisor, but I do study in the field just to better serve my clients, but I always defer it over to my trusted advisors on that. We all kind of need to understand where the numbers are in regards to the property and it all starts with myself evaluating the property and then giving that to the attorneys, giving it to the financial advisors and the CPAs to see if it’s really going to make sense for the client. We’re all in constant communication back and forth with each other and kind of strategize in the best way to view that. In the end, the client gets not just myself, but all four of the professionals that are involved in the transaction.

Brett:

I think you mentioned you have a nice list that you’ve compiled, maybe it’s called like a black list of all the best of the best that you’ve worked with in different parts of the industry for different clients needs. Touch a little bit on what that is and, and how that helps your clients.

Jason:

I’ll give a shout out to Kent Meyer at Traditions Law Firm in Rocklin, California. Kent has 45 years of estate planning expertise, but he’s really the one who kind of sat me down and shared what this charitable remainder trust is and how it helped save his clients, millions of dollars in taxes throughout the years. He’s got a PhD, he plays hockey 75 years old and he works out five days a week and owns. I don’t know how he has this much energy coming with me to seminars. I really look up to him as a mentor, but he’s one of the main reasons why I kind of had this passion to help my clients and to save them money because I saw the opportunity, he was already doing and partnering with him, doing these seminars all across California, through the apartment owners association, where they specialize in investors dealing with those types of people that maybe came to America the early sixties or seventies in California. They bought all these different properties as their retirement and they’re tired of tenants, toilets, and termites, the three T’s, and they want to get out, but they’re scared because they’re really house rich and cash poor because it’s all in their house and they’re looking for these strategies to exit their property and maximize their retirement just like how my uncle was. He was an immigrant from the Middle East and he came down and he worked his butt off. Unfortunately, you missed out because I had no idea about this when I first sold his property. That’s what kind of enlightened my heart to really focus on this and to partner with the right people, to refer my clients to.

Brett:

I appreciate Jason for sharing and what a legacy that to have mentors  like that and it makes us want to be those mentors for somebody someday when we’re 75, hopefully playing basketball or golf and helping people at seminars. Are you ready for the lightning round?

Jason:

Yeah, let’s do it.

Brett:

All right, a favorite book you’ve read in the past six months.

Learning Your Tax Deferral Options Jason HabeebJason:

Can’t Hurt Me by David Goggins.

Brett:

Your favorite podcasts, maybe you’re listening to right now.

Jason:

Joe Rogan. Definitely he has multiple great ones.

 

Brett:

Best golfer of all time?

Jason:

Best golfer of all time? Tiger Woods is.

Brett:

If that’s a place to visit in Northern California. What’s your favorite spot to vacation?

Jason:

I would say Bodega Bay.

Brett:

That’s the end of the lightning round. Now, the last question Jason here we go. How do you stay centered in your values and stay encouraged to charge forward to reach new goals?

Jason:

I think it has to do a lot with my faith, being rooted in God and relying on Him and not on my own strength to do what I do. Real estate is very stressful and I’m 28 years old, I have gray hair, you can’t tell right now on camera, but there’s some gray hair and my first few years of real estate I was really burning out and having an organization and a balanced with faith and hard work and working smarter, not harder. I think it has really been the keys to balance and to increase my business and allow me to have more personal time with my family and friends and travel and still ramp up my business and serve my clients that’s the biggest key.

Brett:

Jason, thanks for sharing. Thanks for being on the show, it’s really been a pleasure. And for our listeners, you can reach Jason at habeebrealestate.com. It’s H A B E E B realestate.com. He’s also on Facebook, Jason Habeeb. Hey Jason, thanks for being on the show.

Jason:

Thank you, Brett. Thanks for having me, take care.

Brett:

I want to thank all of our listeners too, for listening to another episode of the capital gains tax solutions podcast. We believe having a plan is the key to having a tax referral strategy that works for you and getting clarity on what you want to use. It might be a charitable remainder trust. If you’re a hundred percent charitable, it might be a deferred sales trust, 1031 exchange Delaware, statutory trust. There are legal loopholes for you to take advantage of, but if you don’t take action and get a plan and get your trusted advisors to rally around that plan, it’s going to be very difficult to execute when you sell your highly appreciated primary home business or commercial real estate. I’m your host, Brett Swartz. Thanks so much for listening and we look forward to seeing you next time. And in the meantime, go take some action on all of this content. All right. Thank you so much for listening to the show. A couple of show notes, Jason Habeeb, his website is H A B double E B realestate.com. I love the fact that he took not only inspiration from his grandfather who paid a bunch of tax. He took that story, He took that challenge and he turned it into action to learn about the CRT, the charitable remainder trust, to help clients to defer capital gains taxes using that strategy, right? He’s not only a real estate agent, but he’s also someone who’s focused on helping people with charitable causes and different taxes kind of a win-win for everybody. That is a great strategy, a proven strategy, which we like here, especially if you’re a hundred percent charitable. Take a look at Jason, especially if you’re looking to sell a house, buy a house here in Northern California. He’s also a part of my personal mastermind and we are connected very well here in Northern California. I hope you liked the episode, share it with any friends and family who might be of benefit to them. And thanks again for listening.

 

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About Jason Habeeb

Learning Your Tax Deferral Options Jason Habeeb

I take a different approach when it comes to my business. Understanding what the client’s needs are is my first priority, making sure I do my very best to not only meet their expectations but to exceed them are my second. I cover the Bay Area as well as the greater Sacramento areas taking on residential and commercial clients. I also offer a unique way to help my clients bypass the capital gains taxes from the sale of a property. If you would like more information on how to avoid paying capital gains taxes without the use of a 1031 exchange please feel free to contact me.

 

 

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