Greater DAOR September Quarter (2017)

Official publication of the

greater

DOWNEY ASSOCIATION OF REALTORS ®

IN THIS ISSUE: • 2018 ELECTION RESULTS • Deducting your home office

LO S SA LG U

• HOW TO DO A 1031 EXCHANGE

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R• • REALTO

AI TH FUL

• BL IND •

• TREES TO AVOID PLANTING

R CA • • STRONG

3rd Quarter 2017 Volume 4 Issue 3

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Joe Curd

CURD, GALINDO & SMITH LLP Trial Lawyers Alex Galindo

Jeffrey B. Smith

The experienced trial lawyers at Curd, Galindo & Smith have obtained numerous million dollar verdicts and settlements in favor of their clients over the years and can help you in your litigation needs. Curd, Galindo & Smith, LLP, is a full service law firm that includes practice areas of real estate, bankruptcy, criminal law, estate planning, civil business litigation, personal injury, product liability and police misconduct. The firm represents both corporate and individual clients of all sizes and those who have been seriously injured or have lost a family member due to an accident, defective product, police misconduct or negligence.

301 E. Ocean Blvd Ste 1700 Long Beach, California 90802 Telephone: 800-300-2300 www.cgslawyers.com

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2017 Leadership of the DAOR 2017Directors: Leadership of the DAOR Executive

Mario Acevedo, President Executive Directors: Ericka Saenz, President-Elect Mario Acevedo, President Dan Nevarez, Vice President Ericka Saenz, President-Elect Rowena Dominguez, Treasurer Dan Nevarez, Vice President Jeanette Dominguez, Baumann, Executive Rowena TreasurerVice President Directors: Jeanette Baumann, Executive Vice President Michael Berdelis Directors: Maribel Berdelis Chavez Michael Maria Lilley Maribel Chavez Remoun Said Maria Lilley Diane Sanchez Remoun Said RubenSanchez Sarinana Diane Vicki Spearman Ruben Sarinana Immediate Past President: Carrie Uva Vicki Spearman Immediate Past President: Carrie Uva DAOR Chaplain: Ruben Sarinana DAOR Chaplain: Ruben Sarinana CAR State Directors: Carrie Uva (also a NAR

National CAR StateDirector; Directors:Mario CarrieAcevedo, Uva (alsoEricka a NARSaenz, Josué Barrios, & Mireya (alsoEricka on CAR State National Director; Mario Ruiz Acevedo, Saenz, Executive Board) Josué Barrios, & Mireya Ruiz (also on CAR State Executive Board) Affiliates In Action Committee Carmen Meraz, Chairperson Affiliates In Action Committee Carmen Meraz, Chairperson Awards Committee Jason Cierpiszewski, Awards Committee Chairperson Jason Cierpiszewski, Chairperson Budget & Finance Committee Budget & FinanceChairperson Committee Nubia Aguirre, Nubia Aguirre, Chairperson DAOR YPN DAOR JasminYPN Jones, Chairperson Jasmin Jones, Chairperson Grievance Committee Grievance Committee Jeff Worthy, Chairperson Jeff Worthy, Chairperson LCRC Trustees LCRC Trustees Chairperson Kirk Cartozian, Kirk Cartozian, Chairperson Local Government Relations Local Government Relations Jimmy Mercado, Chairperson Jimmy Mercado, Chairperson Membership/MLS-Technology Committee Membership/MLS-Technology Committee Sandra Carnet-Gutierrez, Chairperson Sandra Carnet-Gutierrez, Chairperson Nominating Committee Nominating Committee Sossi Gabriel, Chairperson Sossi Gabriel, Chairperson Professional Standards Committee Professional Committee John Lacey ,Standards Chairperson John Lacey , Chairperson REALTOR Community Relations Committee REALTOR Relations Committee Esther Lee,Community Chairperson Esther Lee, Chairperson Scholarship Committee Scholarship Committee Natalie Romo, Chairperson Natalie Romo, Chairperson

Greater DAOR DAOR StaffStaff DAOR Staff Jeanette Baumann, EVP - evp@DAOR.com Jeanette Baumann, EVP - evp@DAOR.com Customer Care Department Customer Care Department Nelly Palma, nellyp@DAOR.com Nelly Palma, nellyp@DAOR.com communications@DAOR.com Andrew Garcia, Garcia,communications@DAOR.com Andrew JessicaAiwazzi, Aiwazzi,cs@DAOR.com cs@DAOR.com Jessica Amanda Camarena, Education@DAOR.com

MembershipDepartment Department Membership Julie Sartor, julies@DAOR.com Julie Sartor, julies@DAOR.com Violet Pantoja, Pantoja,membership@DAOR.com membership@DAOR.com Violet Susie Gonzalez, cs@DAOR.com Susie Gonzalez, cs@DAOR.com

The Greater Downey Association of REALTORS The Greater Downey Association of 12073 Paramount Blvd Downey, CA 90242 REALTORS 861-0915 - Fax 562 923-9995 12073 562 Paramount Blvd - Downey, CA 90242 562 861-0915 Fax 562 923-9995 www.DAOR.com

www.DAOR.com Monday - Friday 9am-5pm Monday - Friday 9am-5pm Saturday 9am-1pm Saturday 9am-1pm 24/7 text support : 24/7 text support :

Text DAOR to 55469 Text DAOR 55469 Volume 4 to - Issue 1

Volume 4 - Issue 1 This publication is printed quarterly, March, June, September & December delivered This publication is printed quarterly, delivered This publication is printed quarterly, delivered in

Table of Contents: Table of Contents: Page

1-3 Greater Daor’s election day and results

Page 4 July luncheon Page 5 Realtor, Carlos Salguero Page 6 Community Shred Day Page 7-8 how to do a 1031 exchange Page 9 Top Producers Page 10 Realtor Appreciation Picnic Page 11 New Members Page 12 Deducting your home office Page 13-14 11 trees you should never plant in your yard Page 15 Affiliates Working For You On the cover page 11

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Congratulations

to the greater daor’s newly elected directors and executive committee

ERICKA SAENZ PRESIDENT

DAN NEVAREZ PRESIDENT - ELECT

RUBEN SARINANA VICE PRESIDENT

ROWENA DOMINGUEZ TREASURER

2018 - 2019 DIRECTORS

MARIBEL CHAVEZ DIRECTOR

REMOUN SAID DIRECTOR

ESTHER LEE DIRECTOR

LUTHER SANCHEZ DIRECTOR

MARIA LILLEY DIRECTOR

MICHAEL BERDELIS DIRECTOR

VICKI SPEARMAN DIRECTOR

MARIO ACEVEDO

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IMMEDIATE PAST PRESIDENT

120 REALTORS Joined us for our annual open house on July 26th to vote for their new 2018 leadership! Food was provided to all the REALTORS who participated.

We want to take this time to thank all the REALTORS who came out to vote and support in this year’s election process.

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ELECTION DAY & OPEN HOUSE

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JULY LUNCHEON WITH NINA ROWAN

At the July luncheon event, Greater members got together to congratulate the 2nd quarter top producers (see on page 9) and hear Nina Rowan from Rowan Health Concepts to help us create a foundation for a long term healthy lifestyle. www.Rowanhealth.com

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Interview with Greater DAOR REALTOR Carlos Salguero REALTOR • FAITHFUL • STRONG • CARING • BLIND

Why did you choose real estate as your career?

I always liked to visit open houses, I wasn’t even thinking about buying a house. I used to go look at homes from different areas, looking at the different styles. I would talk to the agents they shared with me what they do and I thought it would be a great opportunity. I felt real estate was perfect for me because everything about real estate would be up to me - the sky’s the limit. Once I got my license I started part time, I enjoyed it so much I became full time.

escrows. Show properties with my partner Maria Zuloaga, she is the one that of course drives, they won’t let me drive yet [he giggles] and learn about the new inventory for my buyers who are looking. I come to work every day except for Fridays where I go to the Braille Institute to take classes.

Are you a listing agent or a buyers agents - did that change from before the surgery?

Actually not, I am still a buyer and a listing agent - my sales style is You have been licensed since 1990, what year did you lose your 50/50. sight?

In 2006 after being in the business for 16 years.

Tell us about the surgery that took your sight?

It was really a shocking situation, I was having migraine headaches a lot, and after checking with doctors, they were sending me to optometry specialists. After having a couple MRIs they found a tumor - that was benign, thank God. The neurosurgeon informed me there was no problem with my sight, this surgery is common and done frequently - he even told me if he was my brother he would recommend this surgery.

I had trust and believed the process...and that was it. I woke up from the surgery and that was the end of my sight. It was very difficult, I was shocked when they told me the results.

What made you continue in real estate?

I continued in the real estate business because I didn’t want to feel sorry for myself and stay at home...so I better get out of here and go back to work. Having 15+ years into this career I have a built up clientele. My clients called me when they heard what happened and still shared with me their trust in me, they said “you lost your sight, not your knowledge”.

What advice can you give to any other REALTOR that feels like giving up?

The real estate business requires enjoying what you do so you can give the best service to your clients - If you enjoy what you are doing do not give up. If any person just gives up it’s because they don’t like this business. If I didn’t give up after becoming blind, and you give up for no reason, it’s because you don’t like the real estate profession.

Tell us if the advancement of technology is helping you, or harming you.

Most definitely it is helping me, a lot. You have to learn how to use it, but I have a program that reads to me my emails, it helps me reply and send new emails. I have taken computer classes for years at the Braille Institute learning what is out there to help us, which is a great help.

I’m still taking new classes on technology because there are new things out and changing all the time. [Carlos then showed us a devise he has that helps him color coordinate his clothing, it tells him what color something is. Then held a dollar in his hand and used an app on his phone to tell him how much money he was holding. ]

Frankly, if they don’t like it, they should get out of the business because it is going to show in the attitude with their clients and reflect that they are not doing the best job they can. Other than that, I would say there are a lot of buyers and sellers out there. Real Estate is a good business and always has been. Don’t give up, just keep working hard.

Give us a sample of a typical business day for you?

I get into work as soon as I can, but I am reliant on Downey’s Dial a Ride Program, so I get here when they get me here, they also bring me back home after the day. I check my voice mails and every day I will have at least one - and that one would be myself. Every night I call myself and leave a detailed agenda of what I need to do that next day.

I will call repeat clients to see if they need me. I will check on my open

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In closing words There is a life after blindness, there is a men’s support group at the Braille Institute who help the new or young men who have just lost their sight - they are suicidal and don’t feel good and so depressed. We help them by showing them they must stay busy, to be thankful they are still alive, and try to motivate them. I tell them how I still work, that it is possible to continue.

If it wasn’t for Father God who has always given me the wisdom and the strength especially to continue, and for my real estate family here at Century 21 My Real Estate, I would not have gotten through it. We treat each other like family, we truly care about each other....there is no way to say thank you enough.

Community Shred Day

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HOW TO DO A 1031 EXCHANGE: IMPORTANT RULES & DEFINITIONS TO KNOW 2017

By Benjamin Smith

How To Do a 1031 Exchange in the Year 2017?

A 1031 Exchange, also called a Starker Exchange, is a powerful tax-deferment strategy used by some of the most financially successful investors. This is, perhaps, even more true in 2017, where prices in many U.S. cities have surpassed the “bubble levels” of a decade year ago. Because of this, many real estate investors think that 2017 is the optimal time to exchange properties in expensive markets for cash-flow properties across the country. If you’re interested in learning about how to do a 1031 exchange, there’s really no better time than NOW. In this comprehensive article you’ll learn the answers to five of the most frequently asked 1031 exchange questions this year.

FAQ 1 What is a 1031 Exchange?

The term 1031 Exchange (aka a“Starker exchange” or a “Like Kind exchange”) is defined under section 1031 of the IRS Code. (1) To put it simply, a 1031 exchange allows an investor to “defer” paying capital gains taxes on an investment property when it is sold, as long another “like-kind property” is purchased with the profit gained by the sale of the first property. We’ll discuss like-kind property in more detail in section four.

Brandon Turner from Bigger Pockets explains that a 1031 exchange has more benefits than just saving yourself from taxes.

According to Brandon, a 1031 exchange can allow a real estate investor to shift the focus of their investing without incurring the tax liability. For example, perhaps you are investing in properties that are low-income and thus high-maintenance. You could exchange the high-maintenance investment for a low-maintenance investment without needing to pay a significant amount of taxes. Or perhaps you want to move your investments from one location to another without the IRS knocking. The 1031 makes this possible.

(2) Note: Traditionally, a 1031 exchange is where one property is literally swapped for another property of like-kind. However, the likelihood that the property you want is owned by someone who wants your property is really, really unlikely. According to Forbes, this is why “the vast majority of exchanges are delayed, three party, or Starker exchanges (named for the first tax case that allowed them). In a delayed exchange, you need a middleman who holds the cash after you “sell” your property and uses it to “buy” the replacement property for you. This three party exchange is treated as a swap.” (3) FAQ 2 When to do a 1031 Exchange?

When you sell an investment property, even if you weren’t the one who initially purchased, you end up on the hook to pay capital gains tax.

If you’ve made some bad investments, or you just have bad luck, selling your investment can cost you more than you make. But, if you own a rental property that is worth significantly more today than what you (or the original owner) purchased it for, you can make a killing by doing a 1031 exchange. The big question: how should you do your 1031 exchange in 2017? Continue reading the next section to learn some tips and strategies for success!

FAQ 3 How To Do a 1031 Exchange Right Now? To do a 1031 exchange effectively, you must exchange one property for another property of similar value. In the process you avoid capital gains, at least for a while. An investor will eventually cash out and pay taxes, but in the meantime, an investor can trade properties without incurring a sudden tax obligation. It’s an important tool for real estate investors that has become a bulls-eye for tax reform evangelists.

However, the 1031 Exchange Rules require that both the purchase price and the new loan amount be the same or higher on the replacement property. That means that if an investor were selling a $1 Million property in San Jose that had a $650,000 loan, they would have to buy $1 Million or more of replacement property with $650,000 or more leverage.

We’ll talk more about 1031 exchange rules in section 5. First, you’ll want to know about the four types of Starker Exchanges used by real estate investors.

FAQ 4 What are the 4 types of 1031 Exchanges?

When it comes to doing a section 1031 exchange with real estate, there are four main exchange types investors can choose from. The most common like-kind exchange types include the simultaneous, delayed, reverse, and construction/ improvement exchange.

Continue reading to learn more about each type of exchange.

1 – Simultaneous Exchange This allows investors to relinquish and close on a replacement property in the same day.

Originally, this is what a 1031 exchange was–a direct exchange between two parties.

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Today, this type of exchange isn’t very common. Why? Because what are the chances that the person who owns the exact property you want also wants the exact property you own? It can happen, but the possibility is pretty slim.

The delayed like-kind exchange is by far the most common type of exchange chosen by investors today. This type of exchange gives investors a maximum 180 days after the sale of their property to identify replacement property.

Note: we’ll discuss the rules associated with a Delayed Starker Exchange in the next section.

3 – Reverse Exchange In theory, the reverse 1031 exchange is very simple: you buy first and you pay later. What makes it difficult, however, is that this type of exchange must be an all cash purchase AND most banks won’t lend to you. Why is it so difficult to get a loan? It’s because you cannot be on title to the replacement and the relinquished property at the same time.

The solution: you can create an LLC that can take title to the replacement property. Once you sell the original property, you can transfer the title of the replacement property into your name.

4 – Construction/Improvement Exchange There are a lot of investors that sell a property, and realize that the one they want to buy costs less than the one I relinquished.

What do you do? Well, since paying taxes is out of the question…you might consider doing a Construction or Improvement Exchange.

This type of exchange allows you to use the remaining funds to build or improve on the property you want to buy.

FAQ 5 What 1031 exchange rules must I follow?

Rule 1: Like-Kind Property To qualify as a 1031 exchange, the property being sold and the property being acquired must be “like-kind.” This is a very broad term, meaning that both of the properties must be “the same nature or character, even if they differ in grade or quality.” In other words, you can’t exchange farming equipment for an apartment building, because they’re not the same asset. In terms of real estate, you can exchange almost any type of property, as long as it’s not personal property.

For example: Exchanging an apartment building for a duplex would be allowed.

Exchanging a single family rental property for a commercial office building would be allowed Exchanging a rental property or vacation rental for a restaurant space would be allowed. **It’s important to note that the original and replacement properties must be within the U.S. to qualify under section 1031. **Another fun fact: When using a Starker Exchange doesn’t have to be a 1-1 exchange.

For example, you can exchange one property for multiple replacement properties and vice versa: you can exchange multiple properties and for one larger property. As long as the new properties are like your original properties, you’re good to go. Do yourself a favor and get a good qualified intermediary to assist you.

Rule 2: Investment or Business Property Only A 1031 exchange is only applicable for Investment or business property, not personal property. In other words, you can’t swap one primary residence for another.

For example: If you moved from California to Georgia, you could not exchange your primary residence in California for another primary residence in Georgia.

If you were to get married, and move into the home of your partner, you could notexchange your current primary residence for a vacation property. If you were to own a single-family rental property in Idaho, you could exchange it for a commercial rental property in Texas.

Rule 3: Greater or Equal Value In order to completely avoid paying any taxes upon the sale of your property, the IRS requires the net market value and equity of the property purchased must be the same as, or greater than the property sold. Otherwise, you will not be able to defer 100% of the tax.

For example, let’s say you have a property worth $2,000,000, and a mortgage of $500,000.

To receive the full benefit of the 1031 exchange, the new property (or properties) you purchase need to have a net worth of at least 2 million dollars, and you’ll have to carry over at least a $500,000 mortgage. It’s important to note that the $2,000,000+ value, and $500,000 mortgage, can go towards one apartment building or three different properties with a total value of $2,000,000+. (FYI: Acquisition costs, such as inspections and broker fees also apply toward the total cost of the new property.)

Rule 4: Must Not Receive “Boot” A Taxpayer Must Not Receive “Boot” from an exchange in order for a Section 1031 exchange to be completely tax-free. Any boot received is taxable to the extent of gain realized on the exchange. In other words, you can carry out a partial 1031 exchange, in which the new property is of lesser value, but this will not be 100% tax free. The difference is called “Boot,” which is the amount you will have to pay capital gains taxes on.

This option is completely okay, and often used when a seller wants to make some cash, and is willing to pay some taxes to do so.

An example of this would be if your original property is sold for $2,000,000 and the property you wish to exchange under section 1031 is worth $1,500,000, you would need to pay the normal capital gains tax on the $500,000 “boot.”

Rule 5: Same Tax Payer The tax return, and name appearing on the title of the property being sold, must be the same as the tax return and title holder that buys the new property. However, as an exception to this rule occurs in the case of a single member limited liability company (“smllc”), which is considered a pass-through to the member. Therefore, the smllc may sell the original property, and that sole member may purchase the new property in their individual name.

For example, the single member of “Sally Jones LLC” is Sally Jones. The LLC can sell the property owned by the LLC, and because Sally Jones is the sole member of the LLC, he can purchase property in his name, and be in compliance with the 1031 code.

Rule 6: 45 Day Identification Window The property owner has 45 calendar days, post-closing of the first property, to identify up to three potential properties of like-kind. This can be really difficult because the deals still need to make sense from a cash perspective. This is true especially in today’s market because people tend to overprice their properties when there are low-interest rates, so finding all the properties you need can be a challenge. An exception to this is known as the 200% rule. In this situation, you can identify four or more properties as long as the value of those four combined does not exceed 200% of the value of the property sold.

Rule 7: 180 Day Purchase Window To qualify under a 1031 exchange it’s necessary that the replacement property be received and the exchange completed no later than 180 days after the sale of the exchanged property OR the due date of the income tax return (with extensions) for the tax year in which the relinquished property was sold, whichever is earlier.

As you might realize, there are many rules and qualification requirements that you must comply with in order to perform a successful 1031 exchange. To sum things up, the biggest advantages of a 1031 exchange is that you can avoid having to pay capital gains taxes on the sale of an investment property. This can be a huge benefit for real estate investors who know which markets are primed to grow next. It can also be a huge downfall for beginning investors, or those who don’t understand the changing real estate landscape. If you don’t you risk falling victim to one the biggest disadvantages of a 1031 exchange–the reduced basis for depreciation on the replacement property.

This means that if you were to sell your replacement property, even at a deficit, you would still be accountable for the capital gains on the initial property. In other words, if you want to maximize the benefits of your exchange, it’s important that you choose your replacement property (or properties) wisely, investing in a market that has good potential for growth in the future.

Like-Kind Exchange Benefits To Take Advantage of Now At it’s core, a like-kind exchange (also called a 1031 exchange or starker exchange) is executed for one reason: to defer taxes. What many people don’t realize is that it can do so much more than this.

At Real Wealth Network, we advise our members to exchange their high-value investment property for turn-key, cash flowing, investment properties in the strongest U.S. markets. We do this to help them leverage their tax-savings to invest in properties that will (a) generate more cash flow every month, (b) take less time to manage, and (c) give them more freedom.

Here’s an example: “My favorite [like-kind exchange] success stories was when a woman named Jill came to our office in mid-2007 and told us she had 3 properties in Stockton, California worth about $400,000 each. She said they were very old and in need of repair, and each brought in about $1200 per month in rent. Jill really wanted to quit her job and retire but she didn’t think she could live on the net income from those properties, which was about $2400/month (net refers to the remaining cash flow once expenses are paid.) I was very happy to be able to look Jill in the eyes and say, ‘I’ve got great news for you. You can actually retire today.’ I explained that she could exchange her three old, dilapidated California properties in very rough neighborhoods for nine brand new Texas properties in highly desirable areas.

Here’s how the numbers would look: She owned the 3 Stockton properties free & clear.

They would sell at that time for about $400,000 each. Thanks to Section 1031 of the US tax code, she could exchange those properties tax-deferred for 1.2 million dollars worth of property in Texas.

The average home price in Dallas, Texas was $122,000 at the time so finding 9 high-quality properties for under $130,000 each would be easy. And even more surprising was that those properties would easily rent for $1200 each.

Remember, Jill was getting $1200 rent on just three properties in California, and those homes were in total disrepair. Maintenance and repair costs were eating up the cash flow.

Fortunately, Jill listened to me and took the leap, and the results were astounding. She sold the Stockton homes and I helped her exchange them for nine really lovely Dallas properties. I also helped her put all thoseproperties under excellent property management, so she no longer had to suffer as a typical landlord fixing toilets.

Her gross income went from $3600/month to $10,800/month and her net income went from effectively zero (due to the old homes requiring so much repair) to $6500 in monthly net income. Plus, the homes she bought in Texas were brand new and would require little or no repair for years.”– Excerpt from Kathy Fettke’s (Real Wealth Network Co-Founder and Co-CEO) book Retire Rich With Rentals.

1031 Exchange Success Story We had a house in San Francisco. It was a rental property, and we knew we wanted to sell it. But if we did sell it, we would have to pay a pretty hefty capital gains tax. So, we knew we had to do a 1031 exchange. Do you have any idea how many 1031 exchange rules there are? It’s insane. We were looking at making about $1.5 million, but there was no way we could buy “like-kind property” in the Bay area, and actually make a profit. That’s when we heard Kathy Fettke on the radio, and what she was saying sounded too good to be true. It really did.

We were very cautious when we first found Real Wealth Network, so we took our time.

But eventually we trusted them. Their whole ideology is about teach you how to be a great investor, and it really works. I mean, I’ve learned so much more in the last year or so than I ever knew about rental property before.

It was amazing how much father our money went outside of the Bay Area. I know the old rule of thumb was, “You have to be around your rentals.” But with technology, the internet, and a trustworthy team, this isn’t necessarily true anymore. At least it wasn’t true for us.

The result: We sold the one property in Bay area and using a 1031 exchange we turned around and invested in about 20 properties, increasing our cash flow six times. Claudia & Julian Fraser Today Claudia and Julian own over twenty properties in 3 states, and they’re bringing in about $15,000 of net cash flow every month. It all started with a successful 1031 exchange.

Important Takeaways Are you inspired now? Hopefully the answer is yes by now. Why? Because everyone has the ability to end up with passive income from real estate – even if you don’t have any money to start with. All you need is the education to know how to do a 1031 exchange correctly — understand the rules, develop a strategy, and find the help you need to get the deal done right.

This article is just a basic overview of how to do a 1031 exchange in 2017. Hopefully, you now realize how important it is to understand the intricacies of real estate investing, real estate market cycles, and growth opportunities before you even think about attempting a 1031 exchange. If you’re a beginner, you should start by learning how and where to invest in real estate in 2017. For those of you who are more experienced, take some time to get a solid understanding of 1031 exchange rules–you need to know them like the back of your hand, or you still might end up with a huge tax bill.

Truth be told, a 1031 tax-deferment is incredibly complicated, even for career investors.

Even a small mistake can jeopardize the deferment of your capital gains taxes, which is why most investors seek professional help.

If you need any help at all, let us know. We can give you referrals to excellent self-directed IRA companies, 1031 exchange facilitators, and world-class CPAs that specialize in real estate tax.

Real Wealth Network 1900 Olympic Blvd Ste 200 Walnut Creek, CA 94596 888-RW-NETWORK www.realwealthnetwork.com

Kathy Fettke, Co-Founder

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SECOND QUARTER

GREATER DAOR TOP PRODUCERS GOLD TOP PRODUCERS: Remoun Said, Suhaila Sabir, Maria Fernandez, Michael Berdelis, Luther Sanchez & Jose Manjarrez

SILVER TOP PRODUCERS: Ruben Sarinana Jr, Ray Penado, Misael Vasquez Jr, Jorge Jara, Edwin Rivera, Gilbert Navarro, Julio Midolo, Erica Moreno, and Jimmy Alexander BRONZE TOP PRODUCERS: Marie Picarelli, Chuck Chavez, Juan Madiedo, Rigo Gaxiola, Chris Orellana, Yolanda Munoz, Janeth Pazmino, Benny Moran,Virginia Hernandez, Anabella Hernandez, Miguel Gonzalez Jr, Lluvia Martinez, Lourdes Galvaz, Victor Ambriz, Edgar Ramos, Robert Colangeli, Teresa Pulido, Gus Guzman, Evan Garcia, Durga Baumann, Fernando Moreno, and Juan Enciso CONGRATULATIONS TO ALL OUR AWARD WINNERS

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REALTOR APPRECIATION PICNIC

WE GIVE THANKS TO ALL OF OUR SPONSORS •Andy Zuloaga, Farmers Insurance •Brenda Tamashiro, Farmers Insurance •Roy J. Jimenez, TLD Law •Claudia Contreras, Elite Escrow Group •Gabriela Minjares, Alterra Home Loans •Belen Garcia, Presidential Escrow •Tom Ramirez, New American Funding •Gloria Navarro, Old Republic Home Warranty •Mario Loria, Bay Equity Home Loans •Raul Osegura, American Financial Network •Veronica Gutierrez, Pacific Escrow •Ozzie Carranza, Farmers Insurance •Daniel Trejo, Farmers Insurance •Ariadne Defreitas, American Financial Network •Aaron Serrano, State Farm

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Greater DAOR Welcomes

New Members

Welcome and congratulations to all our new Greater REALTORS May : Jose Luis Acosta Sr., Diamond Real Estate 1; Mario Barcenas, Intero Real

Estate Services; Sonia Berrios, Executives Bankers; Christian Caballero, Century 21 A Better Services; Romeo Camerino Jr., Excellence Premier Real Estate; Earvin Javier Chavez, Ameron Realty, Inc; Jose Luis Cordova, Briones Realty; Yarlene Cortez, Century 21 A Better Service; Rey Cruz, Nira Realty & Services; Angel De La Torre, Century 21 Jervis & Associates; Flor De Los Santos, Intero Real Estate Services; Fulvia Garcia, Monica Vargas, Broker; Hernan Izales, International Investments; Carlos Jauregui, Intero Real Estate Service; Jose Estefan Lopez, Century 21 Allstars; Carlos Meza, Lotus Group Real Estate; Jasmin Molina, Century 21 My Real Estate; Monique Morales, Century 21 Allstars; Omar Moreno, California Properties & Realty; Steve Navar, Century 21 Allstars; Luis Alberto Nunez, Century 21 Allstars; Linda Pak, Wonnie Kim, Broker; Subin Park, Wonnie Kim, Broker; Oralia Pena, Luis Torres, Broker; Jose Perez, Lotus Group Real Estate; Lilian Pineda, Hoag Property Management Inc.; Cynthia Saucedo, American Team Realty; Robert Ramirez, Century 21 A Better Service; Jeremy Rivera, ReMax Innovative; Isabel Valdivia, Keller Williams Realty Downey Market; Edel D Williams, Century 21 My Real Estate Company

June: Catalina Alvarado, Century 21 Allstars; Amanda Banda Raya, Century 21 A Better Service;

Thomas Batiste, Excellence Premier Real Estate; Brenda Becerra, ReMax Dynasty; Armando Benitez Medina, AGB Legacy Group; Aaron Carillo, ZPLF Real Estate Solutions; Polo Carrillo, Berkshire Hathaway Home Services; Diego Barco Castillo, Intero Real Estate Services; Erick Castro, Century 21 Allstars; Keegan Cin, Nationwide Real Estate Executives; Dallys Cobian, Equity Smart Realty; Maria Yesenia Diaz Bellot, Intero Real Estate Services; Maria G Enciso, Century 21 Allstars; Jose Frausto, Berkshire Hathaway Home Services; Christian Anthony Garibay, Good Opportunity Homes & Investments; Brandon Gharghoury, 24 Hour Real Estate; Rosalia Steny Guillen, Equity Smart Real Estate; Elias Herrera Jr., Century 21 My Real Estate; Livier Jimenez, Ameron Realty Corporation; Jonathan Leal, Keller Williams Realty Downey Market; Sarah Lin, Castle Realty Homes; Romina Lomeli-Dangelo, Century 21 My Real Estate Company; Martin Marquez, Jr., Keller Williams Pacific Estates; Lorena Medina, Intero Real Estate Services; Maria Mokay, 24 Hour Real Estate; Giovanni F Morales, Realty Source; Leslie Noriega, VIP Real Estate Firm; Mauricio Nunez, Jr., Century 21 Allstars; Melanie Reyes, Century 21 My Real Estate Company; Jose Luis Rivera, Century 21 My Real Estate Company; Giovanny Rodriguez, VIP Real Estate Firm; Salvador Romo, Jr., Velasco Realty Group; Steve Sedano, 24 Hour Real Estate; Martin Torrea, Keller Williams Pacific Estates; Martha Winkler, 24 Hour Real Estate

ON THE COVER - GREATER DAOR CELEBRATE THEIR PAST PRESIDENTS Greater DAOR Celebrate their past Presidents - front row (l to r) Marina Martin 2004; Eugenia Gil 2003; Mary Ellen Brady 1998; 2nd row Vicki Spearman 1993 & 1997; Bev Baumann 1996; Carrie Uva 2016; 3rd row Sossi Gabriel 2010; Larry Kooiman 1984; Marvin Rosenow 1994; 4th row Patrick McCallum 1995; Michael Berdelis 2013; Steve Roberson 1999; 5th row Mario Acevedo 2017; Mireya Ruiz 2014; Russell Skersick 2012; 6th row Jason Cierpiszewski 2015; Chris Baumann 2002; George Gordon 1987

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12 Tough Questions (and Answers) About Home Office Deductions

DEDUCTING YOUR HOME OFFICE

Question: Can I put a home office anywhere?

Julian Block: A primary rule in figuring if your office meets the IRS criteria is that you must use the space exclusively and on a regular basis for your business, and it must be your primary place of business. Here, you might add a partition to define your space.

Image: IKEA

Studio But Not an Office

Question: I’m a massage therapist, but I don’t work full-time. Does my studio qualify for a home office deduction? J.B.: If your studio is your principal place of business, and it’s used exclusively and on a regular basis, then you qualify. Section 280A of the Internal Revenue Code provides guidelines. You don’t have to work full-time.

Image: Maree Natal Bento, LMT

Two Heads More Deductible than One?

Question: I work in the same home office space as my husband, but we have separate businesses. Can we both take the home office deduction? J.B.: Each business would have to file its own Schedule C, but only one of you can take the deduction for the home office space.

Image: Andrew Egenes/Flickr

Tucked Away in a Nook

Question: I converted a big closet to an office space. Is that deductible? J.B.: A partition or other physical separation is helpful — but not required by the IRS — in determining if your space is a home office. Here, the office is neatly tucked away behind a pair of bi-fold doors, and the office space is well-defined. Image: Rossington Architecture

Beating the Bushes for Deductions

Question: Is a portion of the maintenance that contributes to the upkeep of my home deductible for my home-based business?

J.B.: Probably not, unless the maintenance is connected to your work. If you have a landscaping design business, then maintenance may be essential to your livelihood, and a portion might be deductible. Consult your tax adviser.

Power Up Your Deduction

Question: What portion of my home utility bills is deductible?

J.B.: Deduct utility costs as a percentage of your total utility bill if you use Form 8829. For example, if the square footage of your office equals 10% of the total square footage of your home, you can deduct 10% of your total utility bills. If you use the simplified home office deduction ($5/sq. ft. up to 300 sq. ft. or $1,500), you can’t also deduct your home office utility costs.

Aloha! I’m Taking my Biz to the Beach

Question: I’ll be out of town for a while; can I claim any part of the home office deduction if I work while I’m away?

J.B.: If your home place of business meets the regular requirements for exclusive, regular use, then the deduction remains available when you work while traveling, or do some tasks from a fixed location other than your home.

The Kids are All Right

Question: I use a lot of living space for my home-based day care business, but at night and on weekends, the day care is closed. What’s deductible?

J.B.: The rule to qualify for the home office deduction is “regular and exclusive use” of space. But a day care facility is an exception. It must be used regularly, but not exclusively. You must meet all governing licensing requirements to qualify as a day care.

Me and My Laptop

Question: I run my business on a laptop, which I use anywhere. How do I claim a deduction?

J.B.: There’s no home office deduction here, but you may depreciate your laptop (and other business-related equipment) on Schedule C. Or, claim “first-year expensing,” which may allow you to write off the entire cost of your equipment at once.

Inventory Storage

Question: If I conduct business mainly outside my home, can I still deduct the space in my garage where I store my inventory?

J.B.: The storage space you claim for a deduction must be separately identifiable and suitable for storage. That means it doesn’t have to be physically connected to your principal place of business, but it must be used exclusively for business purposes.

Opening the Door to Deductions

Question: I’m remodeling to include a separate entrance for my business. Is the remodeling work deductible?

J.B.: It’s not a deductible expense; rather, it’s depreciable. The cost of building a separate entrance gets added to the cost basis of your home.

For a look at how depreciation is figured, check IRS Publication 946.

(Note: Depreciation isn’t relevant if you take the simplified home office deduction.)

Your Backyard Office

Question: My home office is a separate structure. Home much is deductible? J.B.: A separate structure is easy for the IRS to identify as a qualifying home office, as long as you use it regularly and exclusively for business. If you use Form 8829 to take actual expenses, you can depreciate the entire cost to build a separate office structure.

Image: Decorated Shed

You can find this article on houselogic.com

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11 Trees You Should Never Plant in Your Yard Some trees are more trouble than they’re worth. Before you head to a nursery, see pictures below

1. Silver maple (Acer saccharinum)

Big, fast-growing, and a dandy shade tree, silver maple is widespread in eastern states and the Midwest. Unfortunately, the speed at which the tree grows makes for weak, brittle wood that may break during severe storms. The shallow root system invades sewage pipes and drain fields, and is notorious for cracking driveways and walkways. Image: A Corner Garden

2. Ash (Fraxinus)

Sturdy and tough, the many varieties of ash that populate North America are some of our most beloved trees.Professional baseball bats are made from its wood — how American is that?

But the venerable ash is threatened by the emerald ash borer, a tiny beetle that’s on track to wipe out the species. If you’re looking for a long-term tree for your yard, look elsewhere.

Image: Will Cook

3. Quaking Aspen (Populus tremuloides)

The aspen is found in northern climes and higher elevations. Its white bark and gently vibrating leaves are attractive, but its root system is insidious, sending up dozens of suckers that relentlessly try to turn into new trees. Once established, it’s war. In fact, the largest living organism in the world is a Colorado aspen root system called Pando. It weighs 6,600 tons and is thought to be 80,000 years old. Try digging that out! Image: David Wilson

4. Lombardy Poplar (P. nigra ‘Italica’)

The Lombardy poplar was once a favorite landscaping tree known for its speedy growth (up to 6 feet a year) and distinctive columnar shape. However, they’re prone to a number of diseases and bugs that turn them into raggedy eyesores, and their running roots are invasive and difficult to eradicate.

5. Willow (Salix)

With its long, slender branches that hang down like Rapunzel’s tresses, the willow is one of the most recognizable of all trees.

Beautiful on the outside, yes, but the willow has an aggressive, water-hungry root system that terrorizes drain fields, sewer lines, and irrigation pipes. The wood is weak and prone to cracking, and the tree is relatively short-lived, lasting only about 30 years. Image: EV Grieve

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6. Eucalyptus

Imported from Australia and popularized for their speedy growth — some varieties will shoot up 10 feet in a year — the eucalyptus has a bad rap for suddenly and unexpectedly dropping big, heavy, resin-filled branches. In some areas of Australia, campers are warned not to pitch tents under eucalyptus trees. Its showy bark peels off annually and adds to seasonal maintenance chores.

7. Bradford pear (Pyrus calleryana)

The Bradford pear was imported to the U.S. from China in the early 1900s as replacement for orchard trees that were dying.

With its compact shape and profusion of spring blossoms, the Bradford pear became a suburban favorite — until folks realized that it was highly prone to splitting and cracking when it reached maturity. And those blossoms? They’re on the stinky side of the fragrance scale. Image: Casey Trees

8. Mountain cedar (Juniperus ashei)

Stay away from the mountain cedar in late winter. This bushy tree, native to the south central U.S., releases massive amounts of pollen during the cooler months, causing severe allergic reactions in many people. Even if you don’t have allergies, planting one in your yard may affect your neighbors.

Image: Utexas.edu

9. Mulberry (Morus)

Big surface roots, lots of pollen, messy fruit, and shade so dense that grass refuses to grow underneath. What’s to like about the mulberry? If you’re a silkworm, the answer is: plenty! The mulberry is the silkworm’s only source of food.

Silkworm farmers should plant away! Otherwise, you’ll be happier with a different kind of tree in your yard.

Image: Great Plains Nursery

10. Black walnut (Juglans nigra)

Native to North America, this well-known shade tree produces prized cabinet- and furniture-making wood. It also produces pollen and plenty of fruit that’ll drive you, well, nuts when you have to clean it all up in the fall. It’s true sinister side, however, is that it secretes growth-inhibiting toxins that kill nearby plants, wreaking havoc on flower beds and vegetable gardens.

11. Leyland cypress (Cupressocyparis leylandii)

These fast-growing evergreen trees are favored for their ability to quickly create a living privacy screen. However, they require constant upkeep and trimming to keep them healthy, and as they get taller they’re increasingly likely to uproot during storms. The center of the tree forms a mass of dried twigs and branches that are considered such a fire hazard that many communities officially caution residents against planting them. You can find this article on houselogic.com

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AFFILIATES IN ACTION WORKING FOR YOU

Roy Jimenez TLD Law (562) 923-0971

Raul Oseguera American Financial Network Inc. (562) 665-4132

Old Republic Home Protection

(800) 282-7131 Ext. 1273

Veronica Gutierrez Pacific Escrow Inc. (562) 929-2121

Ariadne Defreitas American Financial Network Inc. (562) 440-7621

Armando Gonzales Loan Depot (562) 756-1477

Brenda Tamashiro Farmers Insurance (562)-367-2581

Ozzie Carranza Farmers Insurance (562) 372-4452

Monica Villarreal iMortgage (323) 864-5340

Daniel Trejo Farmers Insurance (562) 408-3001

Carmen Meraz New American Funding (562) 453-7652

Manuel Rodriguez Alterra Home Loans (562) 307-2122

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Gloria Navarro-Tittelfitz

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