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Building Wealth Through Smarter Tax Planning in Northwest Arkansas

June 29, 2026

In this episode of The Same Day Podcast, Mat Zalk is joined by Noah Rosenfarb, Founder of Wealthrive, to explore advanced tax strategies that can help entrepreneurs and investors keep more of what they earn. From retirement account flexibility to charitable planning tools, Noah shares practical ways to approach taxes as part of a larger wealth-building strategy.

Building Wealth Through Smarter Tax Planning in Northwest Arkansas

Through Wealthrive, Noah works with founders and investors to create comprehensive financial strategies that prioritize long-term freedom and sustainability. His background includes multiple business exits and extensive real estate investment experience.

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Here’s a glimpse of what you’ll learn:

  • [04:15] Why Noah Rosenfarb created the 23 Overlooked Tax Strategies list
  • [08:26] When a self-directed IRA LLC makes sense — and when it doesn’t 
  • [15:04] How premium financing lets a bank fund your life insurance strategy 
  • [21:42] Mastering donor-advised funds for smarter, more impactful charity giving
  • [24:42] The Dual Harvest strategy: buying discounted seeds to generate huge deductions 
  • [29:23] Using discounted gift cards to legally double charitable deductions 
  • [34:05] How entrepreneurs should think about audit risk and tax strategy
  • [45:45] The highest ROI investment: Scheduling intentional time with your spouse

In this episode…

 For many entrepreneurs, taxes are treated as an unavoidable expense. Noah challenges that mindset by encouraging business owners to see tax planning as an investment decision that deserves the same level of analysis as any business opportunity.

When approached strategically, tax planning can help create more predictable income, increase investment flexibility, and strengthen long-term financial outcomes. The insights shared in this episode are especially valuable for Northwest Arkansas investors looking to build and preserve wealth.

With Northwest Arkansas experiencing continued economic growth and increased investment activity, many business owners are searching for ways to optimize financial performance. Noah explains that thoughtful tax planning can unlock opportunities that many entrepreneurs overlook while focusing solely on revenue generation.

Resources mentioned in this episode:

Quotable Moments

  • “We as taxpayers get to decide what we’re going to report to the government, and then it’s the government’s job to decide if what we reported is accurate and in accordance with the laws.”
  • “Taxes are such a big expense that if you’re not paying attention and you’re leaving it to someone else, you’re just leaving a lot of opportunity on the table.”
  • “We’re always making decisions. Should we hire that salesperson? Should we buy that piece of equipment? Should we invest in this project?”
  • “I never think insurance should be your best investment.”
  • “If any of your listeners are willing to make that investment in their most important relationship, I’m sure they’ll get a higher ROI.”

Action Steps

  1. Review your tax strategy annually, not just your tax return: Proactive planning helps you identify opportunities before year-end and avoid leaving money on the table.
  2. Evaluate risk and reward in your tax decisions: Treating tax positions like business investments allows you to make informed choices instead of defaulting to overly conservative compliance.
  3. Explore self-directed retirement accounts for alternative investments: Using retirement capital strategically can unlock tax-advantaged growth in real estate and private lending.
  4. Consider donor-advised funds for charitable giving: Contributing appreciated assets can maximize deductions, reduce capital gains, and increase your overall impact.
  5. Protect liquidity through thoughtful estate and insurance planning: Creating tax-efficient cash flow and legacy structures ensures your wealth supports your family long term.

Sponsor for this episode…

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need. 

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

Powered by Rise25 Podcast Production Company

Episode Transcript

Intro 00:04

Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Mat Zalk 00:21

Mat Zalk here, I’m the host of The Same Day Podcast, where I connect with top business experts and real estate leaders. Top guests on this podcast on previous shows include Chip Gaberino of Topeca Coffee, Vondell Burns of Thankless Production, and Scott Reeves, now of First National Bank of Coweta. Fantastic community banker. If you need banking services, you should definitely go talk to Scott Reeves. Today’s episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management. We are a full service property management company helping our clients buy, renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management. Doesn’t matter what rental you have single family homes, condos, townhomes, apartments. We have the management solutions that you need. 

 Go to keyrenterpmc.com or email us at [email protected] . And as a reminder we’re operating across Tulsa, Oklahoma City, Wichita, Northwest Arkansas, Kansas City, Saint Louis, Missouri, and Indianapolis. Give us a shout. Before introducing today’s guest, I want to give a big thank you to Jeremy Weisz of Rise25, who connected Noah and I or is it me? 

 Visit rise25.com for done for you podcast services. They’re a great organization. Today’s guest is Noah Rosenfarb, who’s a third generation CPA and Founder of Wealthrive, where he helps successful entrepreneurs and real estate investors become rich beyond money. He specializes in advanced tax strategy, wealth design and legacy planning, helping high income business owners turn their largest expense taxes, of course, into a powerful wealth building tool known as the creator of 23 Overlooked Tax Strategies, a widely shared resource designed to help business owners legally keep more of what they earn while building predictable income. An ideal lifestyle and long term generational wealth. 

 Keys to the Kingdom Noah Rosenfarb. Welcome to the show. How are you?

Noah Rosenfarb 02:24

I’m awesome.

Mat Zalk 02:25

Are you really in Australia right now? I can’t tell from your background.

Noah Rosenfarb 02:28

Australia? Yeah. No, I’m really here. It’s. I can see the future.

Mat Zalk 02:33

I love that. Tell us, just for the sake of of jealousy what you’re doing and why you’re in Australia.

Noah Rosenfarb 02:40

So I was sharing with you that my wife and my 15 year old daughter and I are on and around the world trip for her freshman year of high school. So we decided to kind of take partial sabbatical, celebrating my 25th wedding anniversary, my 50th birthday, and and just the good fortune that we’ve had in our life.

Mat Zalk 03:00

Good for you. Some life goals for some of our listeners potentially does. Does she have any qualms about missing her freshman year of high school?

Noah Rosenfarb 03:08

Yeah, but, you know, they’ve been outweighed by the vast, overwhelming support of not only her friends, but all the adults she interacts with who, like, kind of encourage her with, well, you’re going to create all these memories for life. And then, you know, I say, well, tell, tell Eden, my daughter, how many memories you have from your freshman year of high school, you know, and and so it can’t compete. You know.

Mat Zalk 03:31

I love it. Well, I’ve had a chance to review 23 Overlooked Tax Strategies, an amazing document that you’ve put together. It’s a little bit of a teaser. Jeremy Weiss shared it with me. I guess you presented it to an EO group.

Jeremy’s a member of EO. I’m a member of EO, and you presented it to his chapter and we’re going to link to it in the show notes. It’s an amazing document, full, chock full of ideas for how to minimize some of your tax liability. And when you see this, if you’re listening, when you see this document, you’re going to realize that you’ve you’ve never even heard of some of these strategies. And so that’s why Noah put this list together. 

 And again, we’re going to link to it in the show notes. But I wanted to talk first. The very first thing, like tell me a little bit about your background and how these 23 strategies came to be, came to be put in your document.

Noah Rosenfarb 04:15

It’s an interesting story. So I’m an EO member as well, and I had sold an operating business in 2014 and essentially retired for the first time. And afterwards I was looking for things to do and contribute to the people in the causes that I care about. And so I, I decided to share with my forum, which then led to my chapter, which then led to other chapters, the tax strategies that I had used for my family because I rarely pay taxes, and when I did pay taxes, it wasn’t very much. And that was a result of the, you know, thoughtful planning that I did.

I’m a third generation CPA, and I just, you know, I was my own best customer. And and as I started sharing these ideas, people were like, well, how come my accountant doesn’t tell me that? So I decided, you know what, let me put a list together of just a bunch of ideas that if you print them out and you go to your accountant and you say, hey, can we go over this list together? They’ll look at and they’ll go, oh, you know what? This is a good idea. 

 Oh, this is a good idea. And the reaction is entrepreneurs is always like, well, if this is a good idea, why didn’t you tell me? But the problem with most tax preparers is that they’re focused on compliance. They’re not focused on helping you generate the outcome you’re looking for. And so so anyway, after I promoted this, then people kept coming to me, you know. 

 No. Can you help me, Noah? Can you help me? Know what? Can you help me? 

 And finally, a couple years ago, I answered the call and I built a team of accountants, lawyers and financial planners that help entrepreneurs build their tax strategy. We call that firm wealth drive, and we don’t prepare tax returns. We just help entrepreneurs develop a tax strategy because we feel like that’s really the missing piece.

Mat Zalk 05:54

And is there ever pushback from the CPAs that are preparing that are on the compliance side? Is there ever a disconnect where they always a client would say, well, I was advised that I do the following things. And the CPA says, well, I can’t.

Noah Rosenfarb 06:07

Yeah, it happens time and time again. And actually we recently just published an ebook called Is Your CPA The Problem? Because what we find is that oftentimes, you know, 90, 95% of cases, the CPAs are trying to tell the clients what they can and can’t do when they file their tax returns. And that’s not the way our system works. It’s a self-reporting tax system.

We as taxpayers get to decide what we’re going to report to the government, and then it’s the government’s job to decide if what we reported is accurate and in accordance with the laws. And when they have a question, they’re going to audit us. And last year, we know that just about 2% of taxpayers got audited, which means 98% of people had no questions asked. And so what we do as entrepreneurs is we’re evaluating the risk and reward of taking different filing positions on our tax return. And we believe as entrepreneurs ourselves that, you know, we evaluate risk for a living. 

 We’re always making decisions. Should we hire that salesperson? Should we buy that piece of equipment? Should we invest in this project? All of those are risk adjusted decisions, and the same should be true when it comes to filing your taxes.

Mat Zalk 07:19

Interesting. So the problem may be our CPAs.

Noah Rosenfarb 07:23

I believe in many cases it’s it’s the entrepreneur’s inability to recognize that they are responsible for the tax positions they take. And instead of relying on an accountant to tell you what positions to take, you need to be educated. And I think we’ve seen an evolution when it comes to health. 40 years ago, people would just do what the doctor says. Now people are much more proactive about their health.

They know what’s good for them. They know what’s bad for them. They’re doing their own research. They’re figuring out what supplements to take and how to increase their longevity. I think the same application and mindset has to apply when it comes to taxes, especially if you’re making $1 million or more. 

 Taxes are such a big expense that if you’re not paying attention and you’re leaving it to someone else, you’re just leaving a lot of opportunity on the table.

Mat Zalk 08:11

Sure, I love that paradigm shift in the in the compliance sector, driven by some strategic perspective of what’s happening. Can we turn can we turn to three strategies that we’re going to discuss. And I’ve got a couple of questions on each.

Noah Rosenfarb 08:26

Yeah gladly.

Mat Zalk 08:28

One of the strategies is open Self-directed IRA, LLC. I think many of our folks would understand what a self-directed IRA is, but what’s self-directed IRA, LLC?

Noah Rosenfarb 08:41

Yeah. So the first thing, maybe for those that aren’t familiar IRAs or individual retirement accounts, they are provide certain tax benefits. And so one of the tax benefits of an IRA is that the growth is not taxed. And then if you do a traditional IRA when you put the money in the IRA, you don’t pay any taxes. If you do a Roth IRA, you don’t you pay tax on the way in.

But on the way out it’s the opposite. So if you pay no tax on the way in, you got to pay tax on the way out, but no tax on the growth. If you pay the taxes now through a Roth IRA, it grows tax free and you take it out tax free. That’s my favorite. And so many taxpayers don’t take advantage of the ability to use the self-directed component of an IRA. 

 So most IRA investors are investing in publicly traded stocks and bonds. But this shows about real estate. A lot of your listeners are investing in real estate, and if they can make those real estate investments through a retirement account, they may be able to get additional tax benefits. And additionally, they may have access to capital that they didn’t think about. Maybe there. 

 They’ve got a 401 K from a prior employer. Well, when you leave your employer, your 401 K can get rolled into a rollover IRA. And you could then put that IRA in a self-directed IRA. Self-directed means you get to control what it’s invested in. And that can include private investments like real estate. 

 I like to invest in a lot of private debt in addition to private real estate. And, you know, I’ve got plenty of examples to share of how that’s benefited me in the long run.

Mat Zalk 10:19

And when you think about real estate, though, with all of its tax benefits of depreciation and accelerated depreciation, how do you consider the effect of the IRA in those decisions? Should I be investing directly in depreciable assets? Should I think about real estate that has less depreciation.

Noah Rosenfarb 10:40

If you’re a real estate professional, which means that the real estate losses will offset all of your ordinary income, no matter what the source was. You probably don’t want to use an IRA structure because you’ll miss out on that benefit. In addition, if you’re an active investor in real estate, you cannot use an IRA because you can’t actively add any value to the real estate that you invest in through your IRA. It has to be all passive investments. So if you’re a passive limited partner in a deal where you’re going to get allocated passive real estate losses and you don’t have passive real estate income, that it’s going to benefit you, then an IRA can definitely make sense.

Also, a 401 K, a self-directed 401 K is even better because it avoids something called UBIT, which is tax on the sale of a real estate asset in an IRA where the the tax on that sale is based as a percentage of the amount that was in a mortgage. So the self-directed IRAs I find I really like using them most for income oriented investments. So like I mentioned, private debt. So let’s say you’re doing hard money lending. You know, you’re lending money to a flipper and you’re going to generate a 12% yield plus some additional returns on the sale of the asset. 

 That’s a great investment to put in a self-directed IRA, because none of that interest income is going to be taxable.

Mat Zalk 12:05

Right? I think about it also for self storage deals because there’s very limited depreciation in those in those deals. So that’s what I’ve done in the past too. But yeah, I haven’t considered doing any kind of real true real estate deals where I’m going to get a bunch of depreciation and that can benefit from a, you know, a loss on the K-1 from a, from a.

Noah Rosenfarb 12:24

Right. Yeah. If you’re active and you’re generating those losses and they’re offsetting your income, that’s the great tax strategy. We recommend every client possible use that. That’s what I use for decades.

I’ve been a real estate professional for 26 years now and and always acquiring real estate to generate losses to offset my ordinary income.

Mat Zalk 12:45

And so what is the difference between a self-directed IRA and a self-directed IRA, LLC?

Noah Rosenfarb 12:51

So some self-directed IRAs are organized as LLCs, which is referred to as checkbook control. And that’s where you, as the IRA owner, actually write the check for the individual investment on behalf of the LLC, as opposed to some self-directed IRAs, which are not LLCs, where you’ve got to go through your custodian and your custodian is the one that has to write the check.

Mat Zalk 13:17

Which is what I do. So if I were to transition, what would you say? Some of the most common mistakes are, are that people make when they try to take this approach.

Noah Rosenfarb 13:26

So compliance is always the biggest issue, especially when it comes to retirement plans, because the failure to comply with the requirements if you’re audited can result in significant penalties. And those penalties can actually be 100% of the assets of the plan.

Mat Zalk 13:43

Wow. Okay.

Noah Rosenfarb 13:45

Yeah. So the penalties are significant.

Mat Zalk 13:47

A significant benefit of using a professional to to do this if you’re going to take this approach, is there is there a a net income or net worth level really that it makes sense to do the LLC, the self-directed IRA, LLC, or is this kind of for anybody at any level?

Noah Rosenfarb 14:04

It’s it’s really for anybody at any level, any level.

Mat Zalk 14:08

At a certain level. I mean, are we talking 2 to $5 million of net worth? Are we talking $30 million of net worth?

Noah Rosenfarb 14:13

It really depends. I would say what’s happened for me personally is I’m now transitioning out of all of my self-directed IRA LLCs because of the complexity and managing that complexity, because I had traditional and a Roth for me, a traditional and a Roth for my wife. So that was for checkbook control LLCs. And now I’ve basically manipulated all of that into one self-directed 401 K, so I can accomplish all of my goals for one entity and some, you know, essentially liquidating and collapsing all the others. To to try and simplify things.

Mat Zalk 14:49

Interesting. Okay. The tax strategy. Number two have a bank pay life insurance premium. And this is also referred to as premium financing.

What is premium financing and how does it work.

Noah Rosenfarb 15:04

Yeah. So most people understand that they can acquire life insurance. Life insurance comes in two basic types. One is term insurance, which means I’m going to get this for ten years, 20 years, maybe even 30 years. And the goal of term insurance is that you’re going to waste your money, you’re going to pay the premiums every year, and you’re not going to die.

So it’s going to be a waste of money, but it protects your family while you’re trying to build your, you know, your net worth and, and make sure that if something were to happen to you unexpectedly, everybody’s going to be okay. They’re not going to have to sell the house. the. The other type of insurance is permanent insurance. And permanent insurance. 

 You buy because you want there to be a death benefit when you die. And in some cases, your people invest in life insurance, permanent life insurance because it can generate a good rate of return, and that sometimes that people wonder like, well, how could insurance be a good investment? But it can be. And what most people don’t know, though, is that when you do acquire this permanent insurance, banks are willing to lend you money. And the reason that we would borrow money to buy insurance is the same reason we borrow money to buy real estate, though I very rarely see people that that pay 100% cash down for real estate. 

 Most people like to leverage, you know, 60 to 80% as much as they can. And the reason is for that arbitrage, like you mentioned. And so the same is true when it comes to insurance. There could be an arbitrage opportunity between the cost of debt and the rate of return inside the insurance contract. So I’ll just give you an example. 

 For me personally, when I was 40 years old, I acquired some permanent insurance about a million and a half dollars worth of permanent insurance. That policy was designed for income, not for death benefit. And the goal was that at my age, 65, I could take out $7,500 a month tax free for the rest of my life. That was the design of the policy. The premiums on that policy were 60,000 a year for ten years. 

 Now, what I did is I paid 30,000 a year for five years, and the bank paid 30,000 a year for five years. And now I’m in my 10th year. The bank’s been paying the 60,000 a year for the last five years. So all in, I’m in for 150, the bank’s in for 450. And that policy, like I said, is designed that after it pays off the loan, I’ll receive 90,000 a year of tax free income from age 65 to my death. 

 And in the interim, I have the death benefit, the million and a half dollar death benefit. And it also comes with some other what they call living benefits. So if I’m disabled, it’ll create a monthly income stream to cover my costs of care. So again, I thought that was a good trade. I had my wife do a policy, you know, and then my brother did a policy and my business partner did a policy because it was well designed. 

 None of that debt goes on my balance sheet. So it’s not a disclosed loan in the way that that particular policy was structured. But in the alternate scenario, I had a client come to me a nine figure net worth family. They had no significant insurance. And when I asked them why, he said, we don’t need insurance. 

 We’re wealthy. I said, no, no, no. But, you know, wealthy families don’t buy insurance because they need it. They buy it because it’s a good investment. He said, I don’t believe you. 

 Well, at the end of the day, he acquired a $63 million life insurance policy on himself and his wife. He borrowed 100% of the premiums from the bank, so his only out-of-pocket Cost was about 180 grand a year of interest. And so for that $180,000 a year of interest, he was able to acquire this $63 million of insurance so that when him and his wife pass away, now the debt on that is about 22 million. But when him and his wife pass away, there’s 40 million of liquidity that’ll be there for his kids and grandkids, all income tax free and estate tax free.

Mat Zalk 18:55

So when would somebody use this as like an estate planning mechanism like that ultra high net worth client did versus, you know, cash flow in later years?

Noah Rosenfarb 19:06

It all depends on your goals and your needs and your portfolio. And, you know, I like to say I never think insurance should be your best investment. But nobody ever died. And their family said, oh, you know what? We have way too much cash.

So I think, you know, creating liquidity, especially for entrepreneurs that are focused on real estate, is always going to be helpful Because if you haven’t structured your affair properly and you’re going to owe estate tax, you’re going to need cash to pay the tax. But if you’ve done everything in such a way that you don’t have any taxes to pay, it’s just nice to have liquidity at death because your family members that may have been relying on you to manage the empire that you’ve created, they may not have the same level of sophistication and operational excellence, and they may not know how to pull the levers to continue to get the cash flow to to come out of those properties. The same way you did.

Mat Zalk 19:58

Is kind of in the same vein as the last question. If somebody is listening to this and they’re in the 1 to $5 million net worth category, is this something they should be thinking about, or is this really a total plus strategy?

Noah Rosenfarb 20:08

Yeah. So the the premium finance insurance that I did when I was 40, I think that applies to anyone making $100,000 or more. It’s like turnkey financing. And again, a great product for anybody that could save, you know, let’s say 25,000 or more per year. And for some people, it’s actually an alternative to like let’s say, funding the 401 K because their 41K is going to also provide them with deferred income.

But there’s no real exit valve if you need that capital in the shorter run. Whereas with some of these insurance policies, you could access the capital at an earlier time without any penalty.

Mat Zalk 20:46

If there’s a loan against the policy. Do you have to collateralize something currently or does it?

Noah Rosenfarb 20:52

So there’s always going to be collateral. The type of policy that I mentioned that I did on myself, where it’s not on my balance sheet, that’s because there’s no additional collateral. So the loan isn’t even with me as an individual. It’s really with the carrier that put together this structure. And again, one of the things that was attractive to me as I was signing all these, you know, mortgage guarantees and, you know, out there buying real estate, I didn’t want to have this other debt that I had to disclose to the lenders.

Mat Zalk 21:19

Sure. That’s a very, very interesting product. Premium financing. Okay. Let’s turn to number three.

The use of a donor advised fund, often called a DAF, to make contributions to your favourite charities. What’s a DAF and why is it better than just writing checks directly to a charity?

Noah Rosenfarb 21:42

So most people know that when you write a check to a charity, you get a potential tax deduction. That tax deduction is on schedule A of your tax return. It’s an itemized deduction. And now most people that have a home have typically itemized their deductions up until the last couple of years. Now that those laws have changed.

And we were capped at the salt cap, the $10,000 cap on real estate taxes that limited the number of people that were itemizing their deductions. Now it’s going up to 40 grand, but subject to some income limits. So some people may or may not itemize their deductions. They may kind of be on the bubble. And what puts them over is their charitable contributions of five, 10 or 20 or 1000 or more per year, and in lieu of making that contribution via cheque to the charities that you care about in each individual calendar year, you can lump your charitable contributions together through a donor advised fund, where you get a tax deduction in one year and then the donor advised fund actually makes the contributions to the causes you care about on an annual basis where you’re not getting a deduction anymore. 

 But the money inside that donor advised fund gets to grow tax free. And the other more significant benefit is that often we’re using a donor advised fund to donate appreciated stock instead of cash. So you bought some Tesla stock, some Nvidia stock, instead of writing a check to, you know, your church or, you know, the Cancer Society for five grand or ten grand out of your bank account. Take 30,000 40,000 of your Nvidia stock or Tesla stock contributed to a donor advised fund. When you do that, you don’t have to pay any capital gains tax on the sale of the stock. 

 The stock goes into the donor advised fund. You sell it inside the fund and there’s no capital gains tax. And then you drip it out to the causes you care about when you want to write them a check.

Mat Zalk 23:37

Beautiful.

Noah Rosenfarb 23:39

Yeah. So it’s just a much more efficient gifting strategy, especially for people that do have some concentrated stock positions or any stock position. You know, you might just have some portfolio and you might even have an S&P 500 index fund. You could even just contribute that.

Mat Zalk 23:54

And you give up any control when you when you donate to the DAF or is it fully within your control. On a continuum.

Noah Rosenfarb 24:02

It’s fully within your control when to sell the stock that you contribute.

Mat Zalk 24:07

And you can define exactly where it goes to what charities.

Noah Rosenfarb 24:11

And you can. Exactly. Yep. And there’s, you know, thousands of places that have these donor advised funds. Wherever you do your investments, they likely have an offer.

And then also certain causes that you care about. They may offer this as well.

Mat Zalk 24:27

Interesting. What are some. So those are three of the 23. What are some other things that are not on the list. Again people can find them in the show notes of this show, but what are some things that are not on this list that you might have up your sleeve?

Some additional tricks and tips.

Noah Rosenfarb 24:42

I’ll share two fun ones with you. So one very interesting one is that clients of mine buy seeds. So broccoli seeds, tomato seeds, corn seeds, and the only reason they buy them is because there’s a way that they’ll make money and the way that they actually make money by buying these seeds from me is I sell them at about one sixth of what their fair market value is. So let’s just say you were going to buy $600,000 worth of seeds from me. I’d only charge you 100 grand.

And then after a year of you owning these seeds, we’ll store them for you in our climate controlled and insured warehouse. But after a year of you owning these seeds, you can donate them to a nonprofit. Who’s going to actually distribute those seeds? They’re going to get planted in the ground, they’re going to turn into food, and they’re going to feed hungry people. But when you make that donation, the IRS says you get to donate it at fair market value. 

 The $600,000. So if you’re in California or New York, you’re $600,000 tax deduction. That saves you 300 grand. Well, you only invested 100 grand and you only had to wait a year. So in a in a year, you’re 100 grand turned into 300 grand. 

 Plus, for those of you that care about it, like me, you’re also feeding hungry people. So we call that dual harvest at Dual Harvest. We share information about that strategy and that that one is supported by some significant case law. Because the IRS, you know, we’re not the first people to think of this. The IRS has challenged other taxpayers that acquired something at a discount, with the intention to donate it later to make a profit on their donation and the IRS has lost. 

 So but you asked at the outset, you know, to some. Do you get pushback from accountants even with a strategy like that? I went to my former colleague. I used to be a tax accountant, and my one of my colleagues that I started working with in 1998, he’s now the head of the tax department for a large tax firm. And so I said, hey, Jordan, take a look at this. 

 Tell me what you think is wrong with this. Nothing’s wrong with it. I said, would you recommend your clients do it? Nope. I said, why not? 

 He said, why would I tell them to do it? You know, it’s all risk, no reward.

Mat Zalk 26:54

That’s an I mean, there’s plenty of reward in the scenario you just posited about California taxpayers.

Noah Rosenfarb 26:58

Not to the tax, not to the accountant. Right. He doesn’t get anything for it.

Mat Zalk 27:03

And how do you how are you able to sell discounts at a at a 80%. I’m sorry. Yeah. Great. Great question.

Percent discount.

Noah Rosenfarb 27:10

So two reasons. So one is we have a relationship with a seed grower who’s also a client of ours. We actually helped him, you know, purchase his father’s interest in the business and do that transaction in a tax free way. So, you know, created a great outcome for him. But in addition, when I looked at the information that we were that he was sharing around his business model said, wow, you’ve got really good margins.

Let me see if there’s an opportunity for us to do something here. And he has seeds that would otherwise, you know, be overstock. Sure. So he he goes around to his suppliers and says, hey, what overstock do you have this year that you’d be happy to get rid of at a discounted price, at a wholesale discounted price? That’s so that’s one way we acquire them at a lower cost than market value. 

 The second is the valuation. So he primarily sells to large scale commercial farmers who are buying on average, you know, hundreds of thousands of dollars worth of seeds, millions of dollars worth of seeds. And and they in this business, they quantify it by per thousand seeds. And so most of them are buying 50 million seeds or more in a single transaction. Yeah. 

 When we’re selling to our customers, we have a limitation because the people that are giving us the supply, they said, hey, we’ll give you this supply. As long as you agree, you will not sell it to any customer that’s going to buy more than 5000 seeds at a time. And so as a result of that restriction, when we have to get our appraisal, it limits, it increases the value. Because now you’re going to the home and garden center where you’re buying a packet of 50 seeds. That packet of 50 seeds is five bucks. 

 Well, you know, so it increases the value that we’re able to appraise them at. And we’re buying at a discounted rate. So those two factors together give us this significant arbitrage.

Mat Zalk 29:02

Yeah I guess I was thinking of it from a discount. If somebody puts a covenant on your on your purchase, you would say, well, I’m not going to pay nearly as much for this, but then if I have to go sell them individually, Packetized there you would charge more for a small quantity. Yeah. Yeah. Incredibly interesting.

So you weren’t the one that created this, but you you systematized it? Correct. Yeah.

Noah Rosenfarb 29:23

And and maybe I’ll give you a corollary. So then we have another strategy. We use this year which was more immediate. The strategy I mentioned, you have to know a year in advance that you want to use this tax strategy for your benefit. It’s also limited to 30% of your income.

So if you make $1 million you’re limited to only a $300,000 deduction. But clients of ours this year, in addition to their seed donations, they also purchased gift cards for other devices and products that were then donated. And the way they acquired those gift cards was at an 80% discount. And and so essentially, let’s say they bought $500,000 worth of gift cards. They would have paid $100,000 for those gift cards. 

 And then they donated those gift cards to a charity. Then those charities are able to distribute the gift cards, and gift cards are treated like cash, which is subject to a 60% charitable contribution limit. So. So if you had $1 million income and you had 300,000 to donate of seeds, we could buy another $300,000 worth of gift cards for 60 grand and double up on your deduction.

Mat Zalk 30:31

And so there’s the you can take up to 60%, 30% with the seeds and 60% with the cash. It’s just a it just wipes out the income equivalent. I mean it’s like taking depreciation on on a real estate asset.

Noah Rosenfarb 30:47

Correct. Yeah. And again subject to different rules, different risks. You know of course every strategy has its own risk profile associated with it. But yeah.

So and and the interesting thing about this application of charitable contributions is it applies to 100% of your gross income. So if you had capital gain income and you had ordinary income, It the two of those is 60% is your limit of the two of them. So if you had a half $1 million capital gain and $1 million of ordinary income, well, now you’re at 60% of a million and a half when you take off the 60%, that’s taking off all the ordinary income. So you’re really just leaving, like the capital gain income that you’re going to pay tax on. Wow.

Mat Zalk 31:31

That is fascinating. That is that in itself is worth people going to wealthrive.com and having a conversation. Yeah.

Noah Rosenfarb 31:40

And just just so we’re clear with your audience members, we kind of start at $1 million and up of taxable income, whether it’s capital gain or ordinary income. And that’s one of the reasons I produced that list of 23 ideas is, you know, people would come to us, they have 400,000, 500,000, 600,000 income. Hey, take that list. Go to your accountant. Hopefully they come up with, you know, 50 or $100,000 worth of tax savings for you.

And that’s a that’s a given. You know, that’s a freebie. That’s just ideas that are already available in the marketplace. You’re just Your accountant hasn’t thought of them for you yet.

Mat Zalk 32:11

But if I look at my previous three years of returns, for example, does that mean if my if my income was a million, but my AGI was because my accountant is doing a good job, my AGI is 200,000 or something? Should I come to you or is that am I doing.

Noah Rosenfarb 32:28

Good AGI.

Mat Zalk 32:30

A million or more?

Noah Rosenfarb 32:31

Yeah. After you’ve done everything you know of, you still have $1 million or more. Come to us and we’ll help.

Mat Zalk 32:36

You if you have $1 million or more. After everything, you know, you’ve got a significant income problem. Exactly. Way too much. It’s a good problem to have.

Noah Rosenfarb 32:43

Yeah, it’s a good problem to have. And, you know, we’ve we’ve dealt with a lot of people that have had significant incomes and you know, they’ve I’ll give you my second example. So a guy comes to us, he’s making about 100 million a year of net income as an active trader. And with his planning, he’s able to get his income down to about 30 million. So he’s done, you know, he’s got the best advisors in the world.

He’s done everything he knows possible. And so he comes to me and I said, look, you’re doing so much stuff. You know, I don’t really want to charge you a fee. Typically, we charge clients $15,000 to develop their tax strategy. And then when we implement that tax strategy, sometimes we earn commissions on the back end. 

 But in his case, I said, look, you’re doing all this amazing things. Like, I’ve really only got one solution for you. And the solution is that you’re going to invest in this particular tax structure, and that tax structure is going to generate a negative k one that’s going to offset your $30 million of ordinary income. So you’re going to save $15 million of tax. It’s going to cost you $3 million. 

 Just the cost to put in this structure in place. So net you’re going to be ahead $12 million, but you’re going to have to pay the tax in 16 years unless we do something between now and then. So 16 year deferral for basically saving.

Mat Zalk 34:02

12,000,015 and 16 years.

Noah Rosenfarb 34:05

Unless you do something else. And of course, there’s other things that we, you know, should hopefully be able to do between now and then. But he says, man, I’ve never seen anything like this. You know, I’ve got the most expensive advisers in the world. Let me get my own tax opinion letter.

And maybe at the end of this story, I’ll tell you what that all means. But he spends $250,000 to have his white shoe law firm that’s charging $2,200 an hour. Try and pick apart this strategy. And at the end, they say, you know what? You’re more likely than not that in the event of an audit, this structure will get upheld. 

 So he, you know, gave us the $3 million in fees to get this outcome for for his, for his family. And so, you know, I just had a recent case, we got a guy selling his business for $3 billion. And we kind of get this same question over and over again, hey, I’ve got the most expensive, talented advisors that money can buy. They’re charging me 2500 an hour. Why? 

 Do you know stuff that they don’t know, and it really comes down to risk and reward. There’s not as much incentive for the white shoe law firm when they go into a partner meeting to say, here are the things that we were willing to do for our clients. When you’ve got 50 partners in a room, the guy who’s the most conservative is going to control what they’re willing to share with their clients. Whereas when you have a tax strategy firm that’s really built at the margins to be to to be able to show what’s most aggressive and defensible that’s out there in the marketplace, then it’s the entrepreneur’s decision to decide, do I want to take that risk? Yeah. 

 So maybe if you don’t mind, I’ll just describe how risk gets assessed by entrepreneurs, because I think that’s a helpful framework for the listener. So I mentioned before that 2% of taxpayers get audited, which means 98% don’t. That number skews by income. So if you have over 10 million of income, your probability of an audit is about 10%. A lot of the planning we do obviously reduces that income. 

 So you actually reduce your audit rate. But if you are selected for an audit then the IRS is going to ask you questions. And the questions they may ask you may be about things that are things they could disagree with, or it may be things that they’ll agree with. So assuming they agree with you, then the audit is over. They call that a no change audit. 

 And in 20 to 30% of cases, audits are no change. In 70 to 80%, there’s some change. The average change among all taxpayers is $55,000 of tax. So, you know, again, that includes all the billionaires that they’re auditing. So even that on its surface, if you think like okay, my above average or below average, when you look at average incomes, you know, 55 grand, maybe that’s worth the risk. 

 If I only have a 2% chance of having to pay that money. Well, there are things you could do when you disagree with the IRS to protect yourself. So one of the things you could do is get a tax opinion letter, and a tax opinion letter will prevent the IRS from charging you a penalty. So I mentioned before we’re talking about self-directed IRAs. The penalties could be so significant they could take away the whole account. 

 Well, you might in a case of someone who’s using at a friend of mine, I taught a strategy. He used a great strategy to avoid tens of millions of dollars in tax on the sale of his business using an IRA. He got a tax opinion letter. So in the event the IRS disagreed with them, the worst case scenario is you got to pay them the tax that you would have paid them if you did it the way the IRS wanted. Well, if you did it the way your accountant told you to do it in the first place, then you would have paid the tax anyway. 

 So that doesn’t really cost you anything. The second thing they’re going to charge you is interest, and the interest is on the amount that you should have paid them from the date that you should have paid them until the date that you actually pay them. And the IRS is actually charges a reasonable interest rate. It’s average. More recently it’s about 7%. 

 But you know, think of it like a mortgage rate. It’s not it’s not extreme. And so if as a real estate investor or whatever else you’re investing in, you’re generating market like returns, you probably have out earned the interest that the IRS is going to charge. So you had your money, you probably did a little bit of arbitrage with it, but now you’ve got to pay them back plus interest. And if you have that tax opinion letter, that’s your worst case scenario.

Mat Zalk 38:32

So is it worth.

Noah Rosenfarb 38:34

That’s what.

Mat Zalk 38:35

Is it worthwhile people getting tax opinion letters for smaller things like the 23 strategies that you have? I mean would it cost them $1000 or $500 to get a tax opinion letter? Because these are tried and true strategies that you’ve that you’ve.

Noah Rosenfarb 38:50

Generally you’re not going to get an opinion letter for certain things that are so basic. I mentioned that that taxpayer that saved $12 million, he spent 250 grand on her opinion letter. We had someone that would write an opinion letter for ten grand on that same strategy for that same client. He just wanted to use his own lawyer, because it gave him a higher degree of confidence that he was getting, you know, real value, not like fake value.

Mat Zalk 39:14

Yeah. How how do you know these tax statistics? Are they published somewhere? Does the IRS.

Noah Rosenfarb 39:19

The IRS publishes them.

Mat Zalk 39:20

Yeah they do. So they say they people got audited. The categories of audit were for for AGI. Yeah.

Noah Rosenfarb 39:27

Exactly. And they break it down by income level. And again we disclose a lot of that in our you know is your CPA the problem book. Because the CPAs are basically putting themselves in a position of being an auditor of your return and auditing 100% of the line items, despite you only having this small risk and then taking a position that might be contrary to yours as a taxpayer because they don’t think it will survive 100% of audits. So we have in that book a list of questions to basically interview your accountant to understand why is it that they may say no to something that we may be encouraging you to consider?

And, and what we often find is that it’s not based on case law. It’s not based on an assessment of the actual underlying tax strategy. It’s just I don’t I don’t know that you’re going to 100% of the time have the IRS agree with this, this deduction. And it’s like, well, okay, that’s maybe I’m willing to take the risk that 50% of the time they’ll disagree with me.

Mat Zalk 40:32

Or is the tax preparing CPA at risk of any personal reputational damage for signing that return or. Yes, it’s that return.

Noah Rosenfarb 40:46

It’s not reputational damage. It’s monetary damage. And so that’s what they changed the law a number of years ago where they call preparer penalties. So if a preparer knowingly files a return that’s erroneous or fraudulent, or contains a material misstatement, that preparer can be liable for penalties. Now what we do, the stuff that we’re recommending, which we have tax opinion letters available for all of it.

If the taxpayer gets a tax opinion letter that precludes the account from being charged to prepare a penalty.

Mat Zalk 41:19

Got it. And and opinion letters are generally written by attorneys, by tax attorneys rather than tax attorneys.

Noah Rosenfarb 41:29

Correct. And and they’re independent third party tax attorneys. So we don’t ever write the opinion letter because we’re in a conflict position. Like I mentioned, we when you when you buy those seeds I make more money. So so I can’t write the letter to say it’s good.

You got to have somebody else write the letter. Right. And we, we of course have before we have any client make any investment. We’ve identified a lawyer that’s reviewed the structure that said, hey, I’m willing to write the letter because they understand what it is we’re doing and what case law we’re relying on.

Mat Zalk 41:58

Fascinating. But we all need a little bit more money. We need a little more, generate a little more income so we can come utilize some of your services.

Noah Rosenfarb 42:07

Yep.

Mat Zalk 42:07

Any other anything else to share with our audience? I wanted to ask a couple things about where are you getting information generally, what do you like to listen to in podcasts? What are you reading in books? I mean, what what entertains you and what interests you?

Noah Rosenfarb 42:21

So I’ve been focused most recently on the, you know, shift in technology and artificial intelligence specifically, and even more recently, kind of this open claw phenomenon and how agents are being built. And that’s the goal that I have, is to take what right now requires the manual, laborious effort of accountants and financial planners to understand all of our clients input, to make recommendations for an output and figure out how we could digitize that experience, because at the end of the day, we have about 14 ingredients that go into our recipes, and each family’s recipe is unique to them and their risk tolerance and their situation. But on average, you know, there’s a lot of the ingredients that we’re using over and over again. And so I feel like the technology has progressed to a point where we should be capable of designing software that can interview you as a taxpayer, ingest your existing tax returns, ask you a bunch of questions that are relevant and then produce for you, hey, here’s your custom tax strategy. You know, priority ranked based on the amount of savings you’ve received and the risk profile of the strategy.

So that’s that’s the goal for 2026 is to figure out how to make that become reality.

Mat Zalk 43:40

Does does that mean that you’ve spun up your own instance of mole Bot on a on a separate server?

Noah Rosenfarb 43:47

I spent about four hours trying to figure it out, and I couldn’t get to the finish line. And I’ve got a friend, a new friend who actually said, you know, let me help you. And but but I’m, I’m trying. I’m so unfamiliar with the technology side and and so right now we are we have an open position that we’re hiring an AI agent builder. So if any of you are listening and you’ve got a kid that that is a AI whiz kid and they’re looking for a summer internship, have them reach out to Noah at thrive.com.

Mat Zalk 44:17

What’s amazing is just using Claude to do to set up your multi-part, formerly Claude bot instance and trying to navigate everything with AI. It’s just it’s a brave new world out there.

Noah Rosenfarb 44:30

It is. And you know, I don’t want to get left behind. And I think that the the technology is moving so quickly. You know, we didn’t talk much about real estate, but you know, it’s impacting real estate as well. And you know, it’s very challenging at the moment to see far into the future.

I think it’s so cloudy. It’s cloudier than ever.

Mat Zalk 44:54

I mean, you can see it just with volatility of stocks, of legacy successful legacy businesses. Noah Rosenfarb is a third generation CPA and the Founder of Wealthrive, where he helps successful entrepreneurs and real estate investors become rich beyond money. He specializes in advanced tax strategy, wealth design and legacy planning, helping high income business owners turn their largest expense, which of course is taxes, into a powerful wealth building tool. That was the creator of 23 Overlooked Tax Strategies, a widely shared resource designed to help business owners legally keep more of what they earn while building predictable income and ideal lifestyle and long term generational wealth. I think no, you’re a prime example of all of that with your one year around the world family vacation, and I admire what you’re doing.

Appreciate you being on the show.

Noah Rosenfarb 45:45

Thank you. With pleasure. I’ll give you one last tidbit, because you mentioned it. The rich beyond money side. So the the single best change in my schedule that I made, I made when I was 40 and I started spending Wednesdays with my wife.

So I changed my calendar. I booked it out from 8 a.m. to 3 p.m. while the kids were in school, and she and I would go to the beach, go for a walk, go to lunch, and just making that simple shift in my calendar. The Pareto principle applied itself, and I got all my work done and the rest of the week, you know, because we limited the time that I was available and, and that single shift. If any of your listeners are willing to make that investment in their most important relationship, I’m sure they’ll get a higher ROI.

Mat Zalk 46:28

I love that. Thank you for sharing. Appreciate you being on.

Noah Rosenfarb 46:32

Good pleasure. Nice to talk to you.

Mat Zalk 46:34

Yeah.

Outro 46:38

Thanks for listening to The Same Day Podcast. Tune in to a new show each week and be sure to subscribe to get future episodes.

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