Counselor reference · not shown to the household
You may have seen this
Nothing on this page appears in a family's Blueprint. It is here so that when a household asks about something they saw online — and they will, by name — the answer is ready, and it is the same answer every time.
- 1What does it actually do? Most descriptions are a headline, not a mechanism.
- 2What is the qualification test? Almost every seminar strategy omits this. Naming it is the value.
- 3What does it require you to commit to, and can you reverse it?
- 4Who signs the return, and will they sign this?
Do not argue the strategy. Naming the qualification test is the value — it is the part the seminar left out.
Tier 3
Aggressive — answer honestly if asked, never volunteer
Writing off a hot tub, sauna, or home gym
Tier 3A medical capital improvement is deductible only to the extent its cost exceeds the increase in property value, only with a physician's prescription for a specific diagnosed condition, and it lands as a medical expense subject to an income floor — not as a business deduction. The strategy is narrow and it is not what it is marketed as.
The family holiday as a board meeting
Tier 3Real meetings are deductible. Anyone accompanying you has to be an employee travelling for a genuine business purpose with expenses that would be deductible to them in their own right. Personal days never qualify.
“Write off your life”
Tier 3A framing, not a mechanism. The individual items inside it run from entirely mainstream to things we would tell you not to do. Each one has to be assessed separately, and the frame itself should not be adopted.
Cash-value life insurance as a tax-free account
Tier 3The tax treatment is real. The commission structure and the illustrated returns are where families are harmed. Compare it against putting the same dollars into a retirement plan first — this is typically the fifth “tax-free account” in a five-account pitch, and the first four are mainstream.
Oil and gas working interests
Tier 3The deductions are genuine. It is also an active investment with real loss exposure, and it is unsuitable as a tax-motivated purchase.
Tier 4
Do not recommend — name it, name why, move on
Syndicated conservation easements
Tier 4A listed transaction. The deduction is disallowed in full, with penalties on the underpayment and reporting obligations on top.
Micro-captive insurance
Tier 4A listed transaction under final regulations. Some arrangements are legitimate; the marketed ones are not, and the reporting burden and examination risk are severe.
Using your 401(k) to fund a business (ROBS)
Tier 4Under sustained enforcement attention. The risk is plan disqualification, which puts the entire retirement account at stake.
Converting employees to contractors
Tier 4Classification is a factual test about the working relationship, not something you elect. It creates exposure for you and for the people involved, and it is never a tax strategy.
Starting a business to create deductions
Tier 4Spending a dollar to save a fraction of it is a loss. An activity without genuine profit motive has its deductions disallowed, and rules exist for exactly this fact pattern.
“Keep your first $400K tax-free”
Tier 4No provision does this. It is a headline stacking several separate strategies together, each with its own qualification test. Take it apart and assess each piece.