These are fictional case studies based on true stories to illustrate real-life cases with devastating outcomes.  Names, characters, business, events, and incidents are the products of our imagination. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. 

Let me tell you about Pink Rose and the $200k tax bill

Issue:  Pink and Blue are married. At age 55, Pink quit her job to care for her elderly father, Jack. With great appreciation, Jack transferred the title of his $1,000,000 home to Pink; he purchased the home for only $50,000 several decades ago. 

Jack passed away a few years later, and Pink moved into this house after she and Blue divorced. She went back into the workforce, retired at age 65, sold her home, and moved to Florida to buy a new house using all of the proceeds from the sale. 

When filing her taxes, her accountant said she owed the government over $200,000. Pink used all her cash to buy a new home and did not anticipate having such a huge tax bill. After going to her bank, she realized she could not quickly refinance because of the drop in her income. Consequently, the IRS and California will assess penalties and interest on the taxes she owed.

Prevention: First, we would have saved Pink over $200k if consulted with us before her father transferred the title. Secondly, she could have asked us after the first mistake by her father. In addition to tax knowledge, we also understand the mortgage rules. Therefore, we would have been able to project her tax liability and structure her purchase with a loan before she retired. Our solution could have provided a mortgage interest tax deduction and eliminated her tax penalty and interest assessment.




    These are fictional case studies based on true stories to illustrate real-life cases with devastating outcomes.  Names, characters, business, events, and incidents are the products of our imagination. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. 

    secret to preventing a big tax bill

    Tax people don’t handle real estate. 

    Real estate people don’t handle tax. 

    Financial advisors often are not real estate brokers, tax accountant, or both.

    The case above needs all three and more.  The likelihood of us saving this person lots of money is relatively high, often with no extra cost.

    Why?  Because we are both a tax, real estate, financial advisor, and more.  We can see your situation more holistically.


      Tax Issues: Jane Doe, a 55-year-old marketing consultant, got a letter from the IRS stating she owes $1,300,000 in taxes and a lien filed according to Internal Revenue Regulation 301.6323(f)-1?

      Solution: We took on this case, got the IRS to release the lien, and allowed us time to investigate and resolve this big tax issue. In one of the years, the IRS owes this client. However, due to the statute of limitations, our client lost the opportunity to get back her refund. At the conclusion, we SAVE this client over $1.3 million of inaccurate assessment. She ends with over just $8k of liability, most due to failure to file and related penalties.


      Tax Issues: Apple Pie, a 50-year-old self-employed mechanic, got a letter from the IRS stating he owes $123,000 due to an audit of his 2003 to 2017 tax returns. A lien filed according to Internal Revenue Regulation 301.6323(f)-1.

      Solution: Unfortunately, Apple used a tax preparer who did not know how to make a proper argument and got stuck with this bill. Apple already settled with the IRS. For some reason, whoever helped him did not adequately file the IRS installment paperwork, forcing the IRS to put a lien on his property and bank accounts. Furthermore, those people took Apple’s money and were not responsive. Time was running out. We took this on, communicated with the IRS, got the lien released, and filed the appropriate paper.


      Tax Issues: Ginger Ale’s dad passed away and was not a resident of California. However, Ginger got a letter from FTB saying that her dad must file a California tax return.

      Solution: We helped Ginger by providing FTB with proper documents and filing the appropriate form. FTB accepted and closed this case.

      Tax Issues: Water Melon started a technology consulting firm in 2018. In November 2018, EDD sent him a letter, Notice of Assessment, stating he owed $11,540.

      Solution: Water hired us to resolve this with EDD. We spent several hours communicating with EDD and filing appropriate returns. Luckily for this client, we reduced his bill to zero.


      Inheritance: Pat Stepup, Harvest Loss & Use Step-up, SAVE over $170k on taxes.

      Problem: This is a bittersweet story. Pat has been buying and selling stocks for over 50 years. With constant changes to tax laws, his wife Hanna hired us to file their taxes. In the next tax year, we learned that Pat had terminal cancer. Throughout their decades of marriage, Pat has always been the one handling their finances. Therefore, Hanna is apprehensive and needs lots of guidance.

      Solution:  After the second year of tax filing during the off-tax season, we reviewed their investment positions and harvested losses to offset their tax liabilities. When Pat passed, we coordinated with his investment custodians, helped Hanna with confusing paperwork, and used step-up tax rules to save her money in taxes. The Stepup family saved over $170k and reduced lots of stress between all the strategies.


      Inheritance: Jane Smith, RMD, and the $155k tax bills


      Jane inherited a $500,000 retirement account from her uncle when he died on December 28, 2014. Like her uncle, Jane is frugal and has always filed her taxes. In early 2015, her husband became ill. Her work health insurance covered her family; therefore, she worked while caring for her sick husband. In 2017, she sought help with filing her taxes. We discovered she missed a critical deadline regarding that $500,000 IRA. First, her uncle did not take out his RMD in 2014. Second, due to her preoccupation with her sick husband plus work, she forgot to take the RMD for 2015 and 2016. The IRS and FTB assessed her over $30k of penalties, plus she had to amend her past tax returns. Third, she had only three years to distribute all of these assets. This problem increased her tax liability by over $125k. The total devastating outcomes cost her over $155,000.

      Solution: All too often, a competent person like her uncle becomes forgetful. Her uncle or close family members could prevent a devastating outcome if they sought professional help. For over two decades, we learned some of the reasons for these mishaps. They include:

      • Pride of being independent
      • Mistrust of financial professionals 
      • Mistrust of family members 
      • Not knowing where to start
      • Believed bad things only happen to other people
      • Think the advice is worth the cost

      Some of the reasons may be legitimate. However, you should assess the validity and take appropriate action before too late. Contact us for further conversation.