Owning a Home

 

I purchased my first house in 1975 for a little over $50,000; it was a ranch style home with three bedrooms, two bathrooms, a carport, an acre and a half of land, nestled safely inside about ten oak trees.  I purchased 10 additional acres of land behind it.  I had an annual salary of $12,000 and my wife's salary was right around $8,000.

We sold that house for $40,000 profit that was split between my wife and I due to a divorce after twenty years of ownership.

In 1993, using that profit from my first house, I purchased another house in another state for a little over $100,000.  Collectively, my second wife and I put down $40,000 and borrowed the rest.

Since that time, I have owned five other houses, all of which were more expensive than the previous one, and all of which a nice little profit had been made.  When my last house was sold, I made more profit that the cost of my first house which took into consideration inflation and cost of improvements.  An increasing real estate market helped make that happen as well.

Twenty years ago, my second wife and I became debt free and that made a difference in profit realization as well.  Consequently, I have encouraged couples to become debt free.

I have owned homes in good times as well as in bad times; I have purchased homes when employed as well as when unemployed.

HOW DID I DO THAT?

In 1993, I created a small business that I incorporated with the help of a lawyer ($500 fee) and since then I have used that company to flow my revenue through (both salary and consulting fees).  I pay corporate income taxes as a sub chapter S Corp and file quarterly statements as well as an annual report as is required by law.  My CPA fees are about $1500 each year - but I have never had to pay taxes because there has always been a loss.

During times when I am unemployed, I use my company's tax records to buy a home.  All of this is perfectly legal.

In 2015, I dissolved my company and started paying taxes again but never have I gone over $1500...

So...  for twenty-two years, I legally avoided paying taxes to the IRS...

If I had of paid taxes, it would have been much more than the $1500 I paid my CPA.

HOW DID I LEARN THIS?

I discovered this possibility in 1979 when I attended the Babcock Graduate School at Wake Forest University to get my MBA.