Chapter 18:
Frey made it to a rundown town a day’s walk from Auld Haven before it got too late. Exhausted.
His breath misted in the cold night air as he pressed his back against the crumbling stone wall surrounding the town. As he looked up, he saw movement from the narrow valley entering the city. His heart pounded against his ribs, a rhythm of survival and defiance. Somewhere behind him, heavy footsteps echoed through the narrow canyon, deliberate and sharp, the sound of a hunter closing in.
The heavy ledger beneath his cloak pulsed faintly against his chest. It was a constant reminder that his name was now etched among the debts it contained, marked, circled, and calculated. The ink was still drying, but the consequences were already unraveling.
The House of Auld Haven wasn’t finished with him.
Frey’s pulse quickened. “So they’re coming after me?”
“They are already here.” Hearing Heka’s voice in his ear.
Frey’s hand drifted toward the dagger hidden beneath his cloak. “How bad?” he asked, looking as if he were talking to himself. “See for yourself,” Heka replied.
A sharp sound broke the silence, coming from within the walls, the unmistakable click of a crossbow being drawn.
Frey’s hand curled around the edge of his cloak. Within the rundown town, shadows flickered beneath the glow of an iron lantern. A figure emerged in the distance, cloaked in black, moving with the precision of someone who had studied their target’s every weakness, headed towards the front gate where Frey stood. The assassin’s mask caught the lantern’s light, glinting coldly.
Frey stepped within the city’s walls, ducked down the alleyway of the first building and the poorly constructed, crumbling stone wall, and pressed his palm against the ledger. “Heka!”
The ink in the book rippled, and the temperature around him dropped. Shadows curled at the edges of his vision. Heka’s tall, dark form materialized beside him, his eyes gleaming beneath the hood of his cloak.
“You’ve drawn attention,” Heka said, his voice calm despite the danger.
Frey’s jaw tightened. “That was unavoidable.”
Heka’s gaze narrowed. “Rewriting the ledger wasn’t enough for you; making fun of the situation.”
Footsteps closed in. The assassin’s outline sharpened against the darkness.
“What did I take?!” Frey hissed.
Heka’s lips curved faintly. “Power.”
A blade hissed through the air. Frey ducked as the steel edge sparked against the wall behind him. He rolled across the ground, twisting his cloak to shield his face. Frey’s hand shot to his knife. Too late. The figure said. The assassin struck a precise, sweeping arc, but time slowed.
Frey’s breath stalled as the dagger streaked toward him like a motion blur. Heka’s hand reached out, and the blade faded from his vision.
“You made a move they didn’t anticipate,” Heka said as he stepped forward. His shadow lengthened unnaturally behind him. “And now… they intend to correct the imbalance.”
Frey’s breath sharpened. He scrambled to his feet, keeping his back to the wall as the assassin regained their senses, looking confused about how the attack didn’t make contact.
The glint of steel flashed again. Frey ducked beneath the swing, his mind already calculating.
Risk and return.
“You said I could change who holds the chain,” Frey growled. “How?!”
Heka’s gaze darkened. “By holding it yourself.”
Frey’s hand tightened around the ledger. He could feel the ink pulsing beneath his fingertips, the weight of names etched into the pages. His name. Covey’s name. The House’s name. Every debt, every contract, every ounce of blood wealth that had shaped this twisted system.
The assassin lunged. Frey sidestepped, moving faster than he had ever been capable of before, twisting the attacker’s arm behind his back and driving him to the ground with a force he had never previously been able to access. The blade skidded across the stone. Frey pinned the assassin’s wrist beneath his knee.
“Who sent you?!” Frey’s breath was sharp.
The assassin’s eyes flashed beneath the mask. A low, rasping laugh. “You already know.”
Frey’s heart sank. “The house,” he replied.
A dull vibration ran through the ledger as Heka stepped closer. His eyes glowed beneath his hood. “You didn’t just disrupt their control,” Heka said softly. “You’ve taken a piece of it. And now they want it back.”
The assassin seemed visibly worried about Heka’s presence, making sure not to make any sudden moves. Frey stood slowly. The assassin’s breath rasped beneath the mask as they lay still on the ground. His eyes were fixed on Heka as he spoke to Frey. The weight of the ledger settled heavily against Frey’s chest.
“You can’t break the chain,” Heka said. “But you can become the hand that holds it.”
“You have a choice,” Heka said.
“I already made it,” Frey replied. He tucked the ledger beneath his arm and stepped over the fallen assassin.
As Frey took his first four steps, turning his back to the assassin, walking away, almost waiting for the perfect opportunity, the assassin didn’t hesitate. A short blade flashed from beneath his cloak as he lunged toward Frey.
Heka didn’t move. Suddenly, he was face-to-face with the lunging assassin, a fluid shadow.
The assassin’s blade swung through empty air; Heka had already shifted behind him.
A flick of Heka’s hand. A flash of gold from the threads of his robe.
The assassin’s body stiffened. Then his head rolled, cleanly severed at the neck. His body collapsed soundlessly into the dirt.
Heka then shifted back to Frey, with him none the wiser.
The road ahead was long and dark, but Frey no longer walked it blind. He could feel the weight of the ledger in his hands, the power it held, the names it carried, his name among them.
Rewrite the contract. Reclaim the pen.
Frey pulled his hood over his face and walked into the shadows. Heka’s form dissolved into smoke, the ink curling into the edges of the ledger as it settled once more beneath Frey’s cloak. The road ahead was no longer a path of survival. It was a path of control.
This time, Frey wasn’t just surviving the game.
He was about to play it.
Frey’s Journal: Cycle 9, Phase 2, Solar Arc 218
Owning real estate is really one of the most effective tax-saving tools available. It can lower your taxable income and keep more cash in your pocket:
1. Mortgage Interest Deduction
You can deduct the interest you pay on your mortgage (up to certain limits) from your taxable income.
In the early years of a loan, most of your payment is interest, so owning a home can significantly reduce your taxable income.
2. Depreciation “Magic.”
The IRS lets you spread the cost of a rental property over 27.5 years (residential) or 39 years (commercial) as a non-cash expense.
Even though your property might be going up in market value, on paper, you claim a yearly depreciation “expense,” which can wipe out much or even all of your rental income for tax purposes.
3. Operating Expenses & Repairs
Any ordinary, necessary expense to manage, conserve, or maintain your rental property, like insurance, property management fees, utilities, landscaping, even Googling “how to unclog a drain,n” is deductible.
Those repairs and maintenance line items directly reduce your net rental income, dollar-for-dollar.
4. 1031 “Like-Kind” Exchanges
When you sell one investment property, you can roll the proceeds into another “like-kind” property without triggering immediate capital gains tax.
You defer paying gains until you finally cash out for good. In practice, you can keep trading up properties and let that gain keep growing, tax-deferred.
5. Cost Segregation Studies
You break a property into components (such as carpets, wiring, and HVAC) with shorter depreciable lives (5- to 15-year assets) instead of lumping everything into a 27.5-year asset.
You accelerate your depreciation deductions in the early years, creating larger paper losses now that substantially reduce your taxable income.
6. Opportunity Zones & Tax Credits
Invest gains into designated “Opportunity Zones,” and your deferred gain grows tax-free if you hold for 10+ years. Or use historic rehabilitation and energy efficiency credits when rehabilitating older buildings.
You get credits against your tax bill or even permanent exclusion of a portion of your gains, depending on how long you hold.
Buy a rental property and immediately bank the depreciation and operating expense deductions.
Run it like a business, keep receipts, track hours.
When ready to upgrade, consider a 1031 exchange into a larger or more luxurious property.
Explore Opportunity Zones to super-charge deferred gains into even bigger long-term tax-free growth.
Over time, these strategies can transform a single property into a multi-property portfolio that not only generates cash flow but also creates paper losses, which you can use to reduce your overall tax bill. That’s how real estate owners get to keep and reinvest more of their own money.
Minimize Estate Taxes Through Strategic Gifting
The IRS allows you to gift a certain amount each year to individuals without triggering gift tax. Leveraging this strategy reduces your taxable estate while benefiting your loved ones.
– Take advantage of the annual gift tax exclusion (currently $18,000 per person as of 2024).
– Use direct tuition and medical payments (not counted toward gift tax limits).
– Please consider setting up a 529 college savings plan for your grandchildren or children to reduce your taxable estate while providing for their education.
Instance:
If you gift $18,000 to each of your two children and two grandchildren annually, you reduce your taxable estate by $72,000 each year while benefiting your family.
Strategic gifting lowers your estate’s value, reducing potential estate taxes and helping your heirs immediately.
Establish a Family Limited Partnership (FLP) to Protect Business Assets
If you own a business or substantial real estate holdings, an FLP allows you to transfer ownership while maintaining control and providing tax benefits.
– Create an FLP to hold business assets or real estate.
– Transfer limited partnership interests to heirs over time using the annual gift tax exclusion.
– Maintain control as the general partner while heirs hold limited shares.
Instance:
If you own a rental property worth $1 million, transferring 20% to each of your two children through an FLP could reduce your taxable estate while retaining decision-making authority.
An FLP allows you to pass wealth to heirs at a reduced tax rate while maintaining management control and protecting assets from creditors.
Tax-Loss Harvesting
A strategy where investors sell underperforming investments at a loss to offset capital gains taxes on profitable investments. This reduces overall tax liability.
Instance:
John sells stocks that have dropped in value, realizing a $3,000 loss. He uses this loss to offset $3,000 in capital gains, reducing his taxable income. If his losses exceed his gains, he can deduct up to $3,000 annually from his ordinary income and carry the remaining losses to future years.
Complex tax situations, such as business ownership or multiple income streams, often benefit from professional guidance to uncover savings opportunities.
Understanding the tax system is more than knowing what you owe. It’s about leveraging your knowledge to make more informed financial decisions. By understanding the types of taxes and their implications on personal and business finances, you can develop effective strategies to minimize liabilities and optimize your wealth. Whether through deductions, credits, or strategic investments, a well-informed approach to taxes is a cornerstone of financial health and success.
Tax-Efficient Strategies for Investments
1. Reinvest Dividends Strategically
Instead of automatically reinvesting dividends in a taxable account, consider directing them to tax-advantaged accounts or reinvesting them selectively to maintain control over your tax liability.
2. Utilize Qualified Charitable Distributions (QCDs)
For individuals aged 70½ or older, QCDs allow you to donate up to $100,000 annually from an IRA to charity without including the distribution in taxable income.
Instance:
A retiree avoids required minimum distribution (RMD) taxes by directing $10,000 to a favorite charity as a QCD.
Manage Holding Periods
Long-term capital gains (investments held for over a year) are taxed at lower rates than short-term gains. Strategically timing the sale of assets can lead to substantial tax savings.
Instance:
Selling stock after holding it for 13 months results in a 15% long-term capital gains tax instead of the 24% short-term rate for someone in the middle-income bracket.
The Big, Beautiful Bill (BBB)
Several provisions are tied to President Trump’s 2025 economic agenda and build upon or extend the 2017 Tax Cuts and Jobs Act (TCJA).
Key Changes
| Policy Change | What It Means | Who It Helps |
|---|---|---|
| No federal tax on tips | Up to $25,000 of tipped income is exempt from federal taxes (phases out above $150K income) | Restaurant, gig, and hospitality workers |
| No federal tax on overtime pay | Deduct up to $12,500 (single) or $25,000 (joint) in overtime income | Hourly workers, nurses, tradespeople |
| Expanded Child Tax Credit | Raised to $2,200 per child through 2030 (with SSN requirement) | Families with dependent children |
| Higher Standard Deduction | Increased to $31,500 for couples filing jointly | Most middle-income households |
| Auto Loan Interest Deduction | Interest on up to $35K car loans is deductible (AGI < $150K) | Commuters, essential workers |
| Newborn “Trump Accounts” | $1,000 tax-deferred accounts for every newborn | Young families and future savers |
| No tax on Social Security income | Social Security benefits are no longer taxable | Retirees and older workers |
| Raised SALT cap | SALT deduction limit temporarily raised to $40,000 (AGI < $500K) | Residents in high-tax states |
| QBI Deduction Continued | Keeps pass-through deductions for small businesses | Entrepreneurs, LLC owners |
| Carried Interest Taxed as Ordinary Income | No more 20% capital gains rate for carried interest | Closes a major hedge fund loophole |
Where Do You Fall?
If you’re a single filer with $60,000 in taxable income, you’re in the 22% bracket.
If you’re married, filing jointly, with $150,000 taxable income, you’re in the 24% bracket.
Use this chart and new deductions to lower your taxable income, increase refunds, and maximize what you keep from your paycheck.
Create a Unified Family Vision
Preserving family wealth isn’t just financial; it requires shared values, goals, and a legacy plan.
Instance:
Regular family meetings to discuss the purpose of the wealth, such as funding education or supporting philanthropic efforts, will also foster unity and a sense of responsibility within the family.
– Encourages transparency and avoids conflicts.
– Ensures all members understand their roles in wealth preservation.
Building a preservation-focused strategy involves collaborating with professionals, including accountants, certified public accountants (CPAs), financial advisors, and estate attorneys. Many individuals struggle to coordinate advice from multiple advisors. Hire a family office or designate a trusted financial steward to manage these relationships and align recommendations with long-term goals.
Trusts, such as dynasty trusts, protect family wealth from estate taxes and creditors for multiple generations.
Instance:
A dynasty trust funded with $5 million can grow tax-free over decades, providing income and financial stability to grandchildren and great-grandchildren.
Wealth preservation relies on future generations’ ability to manage it wisely.
Instance:
Implement family education programs that teach heirs to invest, budget, and make informed financial decisions.
Combining Financial and Non-Financial Strategies
While building financial stability is critical, non-financial aspects, such as fostering a shared purpose, a united family unit, and a lasting legacy, are equally crucial for achieving lasting wealth.
Understanding your family’s journey and goals fosters cohesion.
Instance:
Documenting a family history and establishing a mission statement can guide future generations in making aligned financial decisions.
A legacy isn’t just money; it includes values, traditions, and contributions to the community.
Instance:
Establish a family foundation to support scholarships or community programs, fostering the value of giving back.
Key Actions to Minimize Taxes and Preserve Wealth
- Set up a Living Trust to bypass probate and streamline asset transfers.
- Purchase Life Insurance to cover estate taxes and secure financial stability for heirs.
- Leverage Gifting Exemptions to reduce the taxable estate gradually.
- Incorporate Charitable Contributions for tax benefits and community impact.
- Establish Long-Term Trusts to protect assets for multiple generations.
- Foster Financial Literacy and shared family values to ensure wise stewardship of wealth.
These strategies create a robust plan to minimize costs, preserve wealth, and leave a lasting legacy for your family.
Although obtaining wealth is straightforward, safeguarding family wealth is more challenging. Financial stability is only one part of building family wealth; other equally important factors exist. These include a similar history, a shared appreciation of wealth, and an unshakeable commitment to leave a lasting legacy. Addressing these non-financial issues will make it easier for people to maximize the wealth in their family tree.
Tax Strategy: Choose-Your-Own-Strategy Tool
With Average Savings, numbers vary for everyone.
Dirt dried beneath Frey’s fingertips as he sat beneath the cold glow of the moon. His pulse had yet to settle. The assassin’s laugh still echoed in his ears.
The ledger felt heavier than before, not because of the names it held, but because of the truth it carried.
Power wasn’t given. It was taken.
And for the first time in his life, Frey realized he was no longer being controlled.
He was the one holding the pen.