I see a clear parallel with business partnerships. The time we spend getting to know our partners will pay off in terms of more trust, less friction, and more productivity in the end. In the Initiate Stage of Partnership Development, we can plan to limit pressure by negotiating realistic timelines and defining ahead of time how we’ll measure our success. We can clarify what we want from each other up front and agree on our partnership mission. Like the astronauts, we can be clear about what tasks we need to perform. But we can also commit to developing the relationship with our partner as a prerequisite for success. In the Initiate stage, we start to move away from planning our partnership and toward the activities we created the partnership to accomplish. In other words, now we are ready to start a task.

When initiating your partnership, it is important to remember to keep the task and relationship activities balanced. Spending the time up front will result in exponential benefits in the end. In the first trimester of development, you want to spend about two-thirds of your time on relationship development and about one-third on task design. This is also true once you have identified your partner and are initiating an activity. It is important to build the relationship with the partnering team implementing the initial activity. The challenge at this step is to build a strong relationship between the partners while creating a plan for a successful task.

There is one more technique to avoid paying the taxes due on some of the profit from your real estate. This is by securing new financing to pay off the existing loan and net additional cash at the closing because of the increased value of the property. If you are still in the equity-building years of our plan, you will probably use that money to acquire an additional property. One of the great advantages of getting at some of the profit using this method is that there is no tax due on the money. Because we “borrowed” the money from the bank, we have to pay it back, and therefore, not only do we not have to pay any tax, but right now we can write off the interest as a deduction on the property.

Owners who have properties that are managed particularly well prefer this technique. What’s more, if you’ve managed your property correctly, the increased rents should more than cover any increased mortgage payments. If you are in a market where you can pull out most of your equity to move into another property and still keep the original property, you could be well on your way to creating a comfortable retirement scenario for yourself.

To sum up a long and complicated chapter, this information is designed to give you a basic understanding of real estate taxation and some tax-deferral methods. The goal is to make you aware of the complexity of this area so you will seek the advice of your tax expert before you make any move. When it comes to taxes, even minor mistakes could be costly. To that end, we recommend the following.

First, before you ever list a property for sale, make sure you schedule a general review meeting with your tax consultant. Review your goals, discuss all the alternatives, and get a general idea of your position. Second, when listing a property for sale make clear to your agent and in the listing contract that any transaction must be reviewed and approved by your tax consultant. And, finally, when negotiating a potential sale or exchange, include a contingency that gives you a right to have the final purchase agreement reviewed and approved by your tax consultant. This will give you an out if your tax expert advises you against the transaction.

Emotional compatibility is not a statistic within a range that incorporates the entire population such as an intelligence quota (IQ). It is a matching process. In relationships, each unique individual is matched with another unique individual. There are many types out there. If you find yourself always with the wrong type, get help.

The same is true for investment compatibility. There are hundreds of asset classes. Step 1 discusses the emotional implications of all the major and many minor investment classes. Fortunately, if you find yourself incompatible with the stock market, the chances of finding better investment satisfaction elsewhere are high. In the case of Michael and Susan, once they work on their investment maturity, they will find many asset classes that suit them better than stocks.

It’s said that the Canadian Mounties “always get their man.” In reality, the IRS makes the Mounties look like a bunch of amateurs! No other organization in America has the ability to collect on unpaid debts like the IRS and government agencies. Not only that, they’re pretty unforgiving in terms of the penalties and interest they charge to people who don’t pay what they owe, when they owe it.

With a tax code that many accountants and financial planners struggle to master, there are hundreds of thousands of individuals who are caught off guard and unprepared by large tax bills. If you find yourself in this situation, it’s crucial to begin communicating with the IRS about eliminating this debt as soon as possible.

While no one makes it a goal of their life to owe child support or alimony, you can often find yourself owing significant amounts of money due to someone else’s decisions. Because there is often a mountain of emotions tied to these debts, they are some of the easiest to negotiate and find a compromise that works for both parties.

The legal system and states have become increasingly aggressive in pursuing people who fail to pay what they owe. Because of this increased aggressiveness, failure to pay child support or alimony can lead to garnishment of your wages and a debt that follows you even if you declare bankruptcy of move out of the country!

Like legal and medical debts, proactive negotiations can often reduce or even eliminate amounts you owe to other parties. Hence, if you find yourself in this situation, you need to put it at the top of your prioritized list.