Coming up on DTNS, Uber gives up calling drivers contractors in the UK. Wikipedia is about to charge and the chip shortage hits Samsung. This is the Daily Tech News for Wednesday, March 17th, 2021 in Los Angeles. I'm Tom Merritt and from Studio Redwood. I'm Sarah Lane from Salt Lake City. I'm Scott Johnson and I'm the shows producer, Roger Chang. We were just talking about relevant saints days and the naming of hurricanes on Good Day Internet. If you'd like that wider conversation, we also talked a little bit about NFTs. Become a member at patreon.com slash DTNS. Let's start with a few tech things you should know. Facebook said Wednesday will impose new restrictions on individuals and communities who repeatedly break its company rules. So people joining groups with past community standards violations will now see a prompt to review that group before they join. Facebook also wants to give moderators more responsibility, specifically in groups with a substantial number of people who have violated the company policies in the past or were part of communities that Facebook previously shut down. Someone with repeat violations in Facebook groups will no longer be able to post or comment between seven and 30 days, also losing the ability to invite other people to a group or create new groups. Twitch sent out an email to its streamers announcing it added new tools for creators to deal with take down requests and copyright strikes, because that's efficient that they had to develop an entire new system just to deal with copyright strikes. Specifically, Twitch added tools to let streamers mass delete their recorded streams to avoid being permabanned. A Tampa, Florida teen who took control of some well-known Twitter accounts last summer, you might remember a few of them. President Joe Biden, Elon Musk, Bill Gates, Jeff Bezos, Kim Kardashian, Apple Uber, just to name a few and solicited more than $100,000 in Bitcoin to restore those accounts has pled guilty in a deal with state prosecutors in exchange for a three-year present sentence. Because of his age at the time, the man who was a minor at the time was tried as a youthful offender, avoiding a minimum 10-year sentence that would have followed if he'd been convicted as an adult. Riva Health, which was founded by scientists Tuhin Sinha and Siri co-founder, Dag Kitlaus, is attempting to monitor blood pressure using software for at-risk patients to potentially indicate early signs of heart disease. To use Riva, you just need to open the app on your phone, tap Go, and then put your finger over the camera sensor. It uses the flash to send light through your finger and then it can track your blood pressure. They have a special algorithm to do it and it creates a rendering of it on the screen. HIPAA compliant, but not yet FDA approved. Amazon will expand its health care program. Amazon Care to employees outside the state of Washington as well as other companies. Amazon Care offers virtual meetings with doctors in an app and the ability to dispatch medical professionals to your home for things like physical examinations and also blood draws. It's run in partnership with a company from Washington called Care Medical. Amazon Care will now be available to other companies in Washington as well. Later this year, the virtual service will be made available across the US and in-person care options will be added in Washington, D.C. at Baltimore as well as other cities. All right, workers of the UK drive, says Uber. Unite as drivers, I suppose, kind of. Anyway, hey, speaking of Uber, Tom, they announced they have reclassified all 70,000 of its UK drivers as quote unquote workers in the UK, the worker category has fewer rights than an employee category, but more than a contractor. It's a third category that we don't really have over here. Workers are guaranteed the national living wage of 8.72 pounds, holiday paying, contribution to pensions. Uber will treat the national living wage as a minimum, meaning if the driver earns more than that on their fares, they will get paid more. But they'll always have that minimum, but they can never make less than that. However, Uber will calculate hours from the moment a driver accepts a trip, not count the time spent waiting between trips. This contradicts the UK Supreme Court's ruling on February or in February that Uber would need to count all time a driver is logged in and available to accept rides. Uber believes the February court case only applies to older policies it ended years ago and that it should not pay drivers while they may be logged into competing apps as well. And Nate Langston did a great video about this on Bloomberg. And I really do think that the worker category is right. The worker category, my limited understanding means I am entitled to some benefits like a pension and minimum wage, but I don't get all the benefits of a full time employee because I am allowed to just not work when I want. And that's essentially what an Uber driver is. It's like you're sort of at the mercy of Uber about getting rides, but you get the freedom to not work one day without having to call in or anything like that. So I think that category makes sense. I think it's interesting that Uber has just decided to wave the white flag and say, you know what, fine, we're just we're just going to call them workers. We're not going to fight this anymore. But I do think it's interesting that they want to fight if somebody wants to bring the fight to them over paying people while the app is logged on. I think they have an argument. If I've got Lyft and DoorDash and Uber open, should Uber be the only one that pays me when that app is open? Should I be able to get paid by three apps when I'm sitting there and I'm going to turn the other two off as soon as I accept a ride from the other one? If you're if you're a company that pays you or let's say you're an employee to a company that's taking phone calls from some customers, that makes sense. You're getting paid for that. But if it's a technology that allows you to then take calls in between those calls, but it's for another company and not to the benefit of the one you were just taking calls for, you wouldn't pay them either. So I do think they have a point there. And I hope I hope they don't get stuck with that because that seems too far to me. I mean, a lot of this also is OK. Let's say I'm an Uber driver. I'm in the UK. I'm in maybe a more rural area or otherwise just not getting a lot of fares. And I'm not working for a competing service at all. I'm just kind of waiting to get some money by somebody using the service that I have signed up to do. I can see where there are times where, yes, it makes perfect sense that being in that employee category that is not a full-time employee, but also better than a contractor makes sense, especially because you're allowing the workforce to be able to work for competing apps. But what if you're, you know, it's not really up to you. I mean, yeah, I guess you can make the argument if I gave up other money making opportunities to sit in my car and wait. And I just never got a fare. Shouldn't I get something for that? I think Uber is saying that that rarely happens, but to the person it does happen to, they're going to want to get paid for that. So I get that. The other outcome here is if this sets a precedent for other fights around the world, if they're going to look at the UK and say, that's a precedent, I'm not sure it does because we went through this in California. We went to the Supreme Court in California. They made a ruling. Uber then got laws changed. And they've kind of gone through this process. This is the end of the process in the UK. So it's a little different in each region. Snap has acquired Berlin company Fit Analytics, which helps you get correctly sized clothing and shoes when online shopping from 18,000 partners, North Face, Aces, Calvin Klein, Patagonia, Puma and more. Right now, if you're on one of those sites, you may see the ability to enter your measurements. And then Fit Analytics is what that site is using to use some machine learning and match you to the proper size from that brand, because, you know, sizes may be a large, but maybe you get a medium from Puma or something, you know, they vary across brands. Fit has also developed, though not yet launched, technology to use an image to match clothing. So now that Snap is going to acquire Fit Analytics in the future, Snap may be able to suggest an outfit that will make your selfie look better and then send you the right size. Snap has a service. I love the idea, probably just because I'm like, OK, my selfies, I don't really care about that anymore. I'm not using Snap that much in that regard. But I cannot tell you, and, you know, I'm sure there are a lot of hands being raised when I explain this. How many times I will say, OK, I need a new pair of jeans, for example, and I'm at a retailer's site and I kind of go like, well, but do they run large? Do they run small? Let's look at the size chart.  I don't know. I wish this was a little bit easier just to know, or you end up like Googling it and going to forums where people have been talking about that particular brand of jeans, you know, for 10 years. So it's all out there, but it's kind of convoluted. Something like this I can I can find at least for me, especially because I have size fitting problems all the time would be great. Yeah, I have this thing where no XL shirt is the same ever. So I can't order them anymore because some of them come fine. Some of them come too long. And this is a simple t-shirt we're talking about. Some have the sleeves right where I want them. Some don't. And I end up having to get extra large excuse me, double X as a default. Now, not because they're big enough, but because I know I'm covered on length. I'm a tall guy and there's not much I can do about it. So anytime I've used any service where there's some sort of even basic fitting kind of services attached to it, the better. And, you know, speaking in a time where, you know, we're we're getting a lot more of our stuff online, more than we ever did, more goods and services that we're used to seeing in brick and mortar stores, clothes being one of those. The more we're going to do that, the better that experience needs to be and the more accurate that experience needs to be. And right now it's a little bit of a crapshoot. So I'm all for this. It also. Oh, go ahead, Tom. Just real quick, given that Snap is a camera company, too. This makes sense in piping the camera and the e-commerce together to get brands into Snap. Oh, and I mean, listen, if this worked well, and I was like, I don't know, just look at my body and tell me what size I need kind of thing. That works great in theory.  And that's how we're going to sell more jeans kind of thing. So the whole thing is a little bit more like real reality. What size are you really? And that made, you know, that that may backfire in some cases. Well, if it reduces returns, that's a big cost saving. So true. Yeah. You might see them just call everything a zero and then fit analytics to size you actually. Yeah, like what no one cares what your size is. Just send us a photo and we'll send you the G. Right. That's a good point. Well, Pinduoduo has passed Alibaba as the Chinese company with the most annual active users with seven hundred eighty eight million to Alibaba's seven hundred seventy nine million. So just ahead, but ahead, China has around nine hundred eighty nine million internet users. Alibaba is a shopping and content giant. Pinduoduo offers a shopping app that started by connecting buyers directly to producer growers, but now offers everything from oranges to iPhones. It's just a shopping marketplace. Alibaba still makes more money in Q4 revenues, specifically of two hundred twenty one billion one to Pinduoduo's twenty six point five five billion one. Pinduoduo was started in part by a former Google employee, Colin Wang, who stepped down as chairman Wednesday to devote all his time, as he says, to researching food and life sciences to improve China's agriculture. Besides connecting farmers with shoppers, Pinduoduo also has been working with farmers to pilot AI farms. Yeah, if you if you haven't been following this as closely as some of us have, Pinduoduo passing Alibaba in annual active users would be a little like Shopify passing Google in active users this past year.  It's that large. I guess it'd be like Shopify passing Amazon, maybe. But Pinduoduo is really fascinating because it's not trying to be a marketplace like an Amazon or even an Alibaba. It's trying to be a connector to say, hey, you got a bunch of strawberries you want to sell, let me connect you with a hundred people in the city that want to buy strawberries so you don't have to pursue each one of those relationships and vice versa. Pinduoduo does the group buying thing where if everybody gets into buy a thing, the price goes down. It's it's really fascinating and they are skyrocketing. Pinduoduo just started in 2015. Yeah, that was crazy. Like you your comparison of saying, you know, this is like Shopify suddenly having more visitors per year than Amazon was a pretty apt comparison. It just doesn't feel like that much momentum should have made or that much ground should have been made up in just five, six measly years in internet time. But I don't know markets different over there. So different conditions or whatever. But that's that's amazing. Like that's just crazy.  Like it just seems like an improbable overtaking in in this age.  It's crazy. Yeah, it is skyrocketed growth for sure. I also found it somewhat interesting that Pinduoduo's Colin Wang stepped down as chairman Wednesday. It doesn't mean that the company will do anything badly going forward, but might do things differently going forward. But this is a very nice number and metric to say, you know what, look at us. We've done quite well. And by the way, I would like to step down and do more research on food and life sciences, which Pinduoduo has tapped into already quite nicely. And it's going to benefit them. It's a little like Eric Schmidt taking over Google. So Sergei can work on the algorithm. Yeah. Oh, interesting. Yeah. Hey, folks, if you want to join in the conversation in our Discord, you got thoughts about Pinduoduo or anything else. Link your Patreon account at patreon.com slash DTMS. During an annual shareholders' meeting, Samsung co-CEO Kodong Jin said worldwide chip shortages will impact its business next quarter. That's significant. Co said, and I quote, our business leaders are meeting partners overseas to solve these problems. It's hard to say the shortage issue has been solved a hundred percent. You don't tell shareholders that unless you have to, unless you're worried that you would be culpable if something bad happened and you hadn't warned them about that. Samsung is the second largest made-to-order silicon supplier in the world after TSMC, but it does rely on suppliers for parts, just like any other manufacturer, including things like power management and radio chips. Samsung Securities Analyst, M.S. Wong, said shortages of Qualcomm chips, some of which are made by Samsung. You may not realize, Samsung is a manufacturer for Qualcomm, even though they compete on some chips. It's affecting everybody, except Apple. Apple seems to have weathered the storm well, but Wong said PCs will soon be hit due to the short supply of display driver integrated circuits and the profitability of television will be affected by soaring LCD panel prices. So we're still in the point where these chip shortages are going to get a little worse before they get better. Everybody's saying about six months. Samsung's Austin, Texas plant was affected by power outages last month, so that doesn't help. Reduced its production of Qualcomm 5G chips, which could reduce global smartphone output by as much as five percent, according to TrendForce. And Co also said the company is considering skipping a new Galaxy Note this year and you'd be forgiven for saying, well, yeah, I guess if they can't make parts, they're going to make fewer phones. But Co said this is unrelated to the chip shortages, saying it could be a burden to unveil two flagship models in a year, so it might be difficult to release Note model in second half. The timing of the Note model launch can be changed, but we seek to release a Note model next year. So he's saying and maybe what he's saying is there's not demand, but he's saying too complicated this year, but we'll do a note next year. Don't worry. Huh. Like the chip shortage thing feels like every time there's any kind of the shareholder meetings or hey, these were our plans for the next quarter or any of that stuff. I always feel like I'm just kind of on my on the edge of my seat with this sort of stuff, because I don't know what they're going to say. And it's always the worst idea in my head that it's going to be, oh, they're never going to make this again. Or this means that it'll be everything will be 50 percent more expensive because of whatever. And usually it's just, yeah, we might be a little bit delayed or whatever. In this particular case, though, you said earlier, you think maybe it's a demand thing. It may not even be like they have to be have to be able to talk about the chip shortage or acknowledge it that the elephants in the room, but it may just mean that that bigger phone or that that particular line just isn't seeing the same traction it used to see. Well, or both, right? It the chip shortages. I mean, it's a real thing affecting all sorts of companies in in in lots of different categories. But for Samsung to say, OK, shareholders heads up, things are going to be a little wonky this next quarter. And to hear the reasons that we, you know, we we can certainly point to true evidence as to why we would have a harder time with this. But at the same time, we're not going to sell that many notes. You know, we we we think it's the right time to not try to push a product that would eventually be seen as a lot of people as, oh, a failure, no one wanted it. Well, they might want it in slightly different circumstances for whatever reason. Samsung has decided to put all their oomph behind one flagship brand this year. And note fans have been worried about this day for a long time. So Co was very quick to be like, don't worry, we seek to put it out next year, but seek is different than promise. So, you know, if you want to be anxious about it, there's room to interpret that there. I do think it is probably more of a marketing market estimate decision that it is a temporary chip shortage decision. I think if they thought they could sell the notes, they'd figure out how to squeeze out a bunch of them. Well, the Wikimedia Foundation announced that it's going to create a new paid service called Wikimedia Enterprise for used by companies that need customized access to its data. Wikipedia has an API available to anyone that's used by companies like Facebook, Amazon, Apple, Google, all without charge. That free API will not change. Companies may still choose to use it for free, but Wikimedia Enterprise could deliver data faster, also customize formatting to make it easier to handle and also provide new options for sorting or posting. One example is an option to get the most community vetted edits on articles instead of just the most recent ones. Yeah, sometimes Google has been the victim of, you know, somebody does a little vandalism on Wikipedia at just the right moment. It doesn't get caught and it shows up in Google search results. So that could prevent that. It doesn't happen that often, but I think this is incredibly smart. I see it misreported in headlines everywhere as Wikipedia is going to make the big tech companies pay. They're not the big tech companies can keep doing it exactly the way they're doing it. What Wikipedia is doing is saying, hey, we think it would be worth it for you to pay us to make it better than what you get now for free. Are you surprised that this is their first much and say their first, they mostly fundraise. That's how that's how Wikipedia stays afloat. This seems like an interesting way to, I don't know, pivot a little bit. And they're not really taking anything away from anybody. This doesn't affect any users. You and I can still go to Wikipedia and get whatever info we want and benefit from the site in the ways we always have. But this is an interesting new way to monetize it. And sure enough, like I think Wikipedia could make the argument that their website, aka the vast array of content available at Wikipedia, is already this massive thing that everybody relies on. Every search engine shows, you know, up front results from Wikipedia. They all do it in some way or another. Yeah. And so they're all really important thing, right? But they don't pay for that in a meaningful way. So I guess this is just about Wikipedia making sure that they provide enough value for the price so that these companies say, yeah, we'll go the extra step and and do it your way. The formatting part of this seems like what is most beneficial for any company that would want to pay for it.  You go, I know where that's from. It's Wikipedia and everything kind of looks the same. But, you know, the idea of delivering data faster, OK, there are probably some use cases for that. But to be able to customize the format into what kind of makes it seem like it's your own thing, if you're a third party, that does make a lot of sense to me. Yeah, I think of it, you know, you don't pay for Windows 10 anymore, right? It's just Windows 10 and you get the update. You don't have to buy a new Windows 10 when Windows, you know, 11 comes out, they just don't do that anymore. Where they make their money is charging enterprises for support. And in fact, those enterprises basically get Windows for free, too. But then they get all the support that goes with customizing it and rolling out patches in a better way at all. This is the same thing, but for Wikipedia information, which is, yeah, you can get it for free, but we could make it easier and better for you if you would like to pay us. Well, has anyone here ever wondered why I mean, birds hum the way that they do?  They hum is a very nice way of putting what a hummingbird does. There is an insect-like quality to it. Yes, I agree. If you don't know what you're listening to, new research from Eindhoven University of Technology, Sarama, a spinoff of the company from the university and also Stanford University explains how the birds wing generates its sound at 40 beats per second. You might say 40 beats. I mean, is it really that fast? Yeah, it is. It's really fast. That's what makes a hummingbird a hummingbird. The researchers observed hummingbirds using 12 high speed cameras, six pressure plates and 2,176 microphones and found the audio results to be not unlike insect wings, less birds, more insects. And this could help in the future, making certain devices like fans or drones quieter because they would mimic that insect-like quality rather than a bird. This explains so much because it sounds like a drone or it really does sound like a hornet.  And then I see this very peaceful, lovely hummingbird, you know, just hanging out by the flowers and everything. I'm like, oh, OK, it's fine. And science has made it all make sense to me now. I find them incredibly relaxing. I haven't been around a hummingbird in a while, but that, to me, is a synonymous with spring growing up. You just hear hummingbirds. And for whatever reason, that sound doesn't bring me out, but bees do. So if I hear a bee humming near me, it's like I want to run from those bees, but not hummingbirds. It's fine. We can land on my shoulder. Come drink nectar from my ear. I don't care. Ever seen the tech talk of the guy who spent like 12 months getting the hummingbird to land on his anyway. It's a really good one. I'll send it to you. Yeah, they might be able to take some of this analysis, too, and use it in technology, right? And be able to create new flying things. Oh, for sure. Yeah, because there's I think there's so many. There's so many devices now that it's like, I mean, helicopter, bird quality, maybe if, you know, we push the envelope a little bit, we might get devices that make more sense for us. Yeah, I just need to be able to communicate that my ear is not a flower hummingbird, and I'll feel perfectly safe before your ear was. Think of it that way. You're you're part of nature for them. Yeah, some curious hummingbird one day is going to be like, what's in there? Check it out. All right, let's check out the mailbag. Let's do it. So yesterday on the show, we reminded folks that a Daily Tech News show and this week in science, we are collaborating and we're going to have a crossover show in April. And we really want to solicit ideas from both audiences of what we should talk about, what we should what we should use for the hive hummingbird mind of ours. John Bailey wrote and said ever since and probably before Star Trek Voyager, I've been interested in the concept of bionural circuitry. We're slowly starting to work towards things like prosthetics that can interpret the body's electrical signals. But what about reversing that process? Could it be possible at some point to build a biological processor? And there are there are DNA computing and similar things, neural networks. So yeah, that is a good one, John. Thank you for sending a topic. We will definitely put this in the hopper for the upcoming this week in science crossover show in April, just about a month away. Keep them coming, folks. 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Hi, and how are you all today? The question says, find the equation of the tangent and the nominal to the curve x is equal to 1 minus cos theta y is equal to theta minus sin theta at theta is equal to pi by 4. So here we are given two equations that is x is equal to 1 minus cos theta and y is equal to theta minus sin theta. We need to differentiate these both equations with respect to theta. So this implies dx by d theta is equal to minus of minus minus sin theta. So this implies dx by d theta is equal to sin theta as minus minus will become plus over here. Similarly here we will find out dy by d theta it will be 1 minus cos theta right. So this means dy by dx will be equal to what? It will be 1 minus cos theta upon dx by d theta that is sin theta. Now we will find out dy by dx and theta is equal to pi by 4. So it is 1 minus cos pi by 4 divided by sin pi by 4 that is equal to 1 minus 1 by root 2 upon 1 upon root 2. This further gives us root 2 minus 1 upon root 2 getting divided by 1 by root 2 which is further equal to root 2 minus 1. So we have slope of tangent equal to dy by dx and that we have found out to be root 2 minus 1 whereas slope of normal is minus dx by dy. So it is minus 1 upon root 2 minus 1. Now we need to find out the value of x1 and y1 also. So when theta is equal to pi by 4 we have the value of x as root 2 minus 1 upon root 2 and we have the value of y as pi by 4 plus 1 by root 2 that is by just substituting the value of theta as pi by 4 in these two equations we have their values. Now we can easily find out equation of the tangent that is y minus y1. So it is y minus pi by 4 plus as minus minus will become plus plus 1 by root 2 is equal to dy by dx that is found out above as root 2 minus 1 into x minus x1 that is root 2 minus 1 upon root 2 whereas equation of normal is y minus y1 equal to minus 1 upon dy by dx that is root 2 minus 1 into x minus x1. Right? So these two are the required answer to the given question. Right? So hope you understood the whole concept well and enjoyed it too. Have a nice day ahead.


Hello and let's talk about the farm bills. The bills passed by the Modi government last week were signed by the president despite requests by the opposition to not do so. Footage from the Rajasabha has revealed that the members who sought a physical vote on these bills were in their seats when they asked for this request. This contradicts the version of the Rajasabha deputy chairman Hariwansingh who said that they were not in their seats and hence the demand was refused. Procedural issues aside, it's become increasingly clear that the Modi government's logic of supposedly freeing the farmers through these bills is full of holes. And this is clearly reflected in the massive protests that took place and are taking place across the country. We talked to journalists Aninder Chakravarty on this issue. Thank you Aninder for joining us. So we're continuing our discussion on the farm bills. We've seen protests over the past week of course, lot of protests across the country. And again and again, we've something we talked about last week but it might make sense to go in some more detail now. Is the question of what freedom is being offered to the farmers as per the government? The government claims that this is going to be a revolutionary moment for them. This is going to liberate farmers from the oppression of the Mondays from the APMC system. So is the APMC system really that bad? See the APMC system is not great. It is meant to be something which will protect farmers from the exploitative, you know, the old Sahukar, Zaminda thing that we have watched on Doordarshan when we were children, you know, the black and white movies, Dhopika, Zameen. And I was recalling yesterday that even if you, I don't know, have you seen Mr. India, the movie Mr. India? Oh no actually. You have. Okay, this movie has... I know about it but I haven't watched it yet. Then Anil Kapoor wears this belt which makes him disappear. Exactly. So, and it has that famous Mogambo-Kushwa dialogue. But it is about these big traders, these who put stones into rice and dal and Mr. India makes them eat it at one point, right? So this image of the Aditya or the grain trader who's a villain is actually inbuilt into our system. We understand it very well. So it's very easy to make us feel that they're villains and then there's no doubt that they have done many things which are bad and they exist all over the country, right? My point is that the APMC system, what does it do? It essentially says the law said that all produce needs to come to these designated wholesale mundis which will be regulated. Whatever farmers are bringing will be weighed, recorded, transactions recorded, prices recorded so that we know what is available, what price farmers are getting. Technically, this only works Prashant. If the government is going to buy at a procurement price, right? Or say this is the flow of price. If you try to buy below that, we will punish you, right? So the APMC Act also is accompanied by other things like the essential goods, essential commodities, which put a limit on how much you can store, right? So there are these three things which come together because if you look at warehousing in India, most of the warehousing from the data that one can get from 2018, 2020 is actually with private players, right? The government has about 25% of the warehouses and it is not generally accessed by farmers. It is accessed by these big traders. So APMCs are controlled by big traders. There's no doubt about it Prashant. But nonetheless, the fact also remains that the APMCs right now and you also written about and we also talked about their sheer lack of enough APMCs. But they also offer in the current circumstances, one of the few possibilities for farmers to actually get a fair price. And that fact also remains. So let's say that people say that it's only Punjab farmers who are unhappy because they're the ones who get MSP as if there's something very bad about getting MSP. Because if you look at it, even I was just calculating that how much does a Punjab farmer earn from, let's say an hectare of wheat growing land, right? Now we know that 67% of Indian farming families, two thirds have land which is lower than one hectare. Now, on an average, if you tell hectare, if you told me what an hectare is, I frankly have no idea. I know that it is 2.47 acres. But what is an acre that you've stumped me. So what I did was essentially I calculated the yield of wheat in a hectare of land and how much revenue a farmer would get if they produce. Now in 2018-19, I think there was a record yield of 52 average yield of about 52 quintals per hectare of land in Punjab. Okay. And you know that the MSP, which has been given now which is 2.6% higher than last year when you included the bonus, that is 1,975 rupees. So let's say that about 50 to 52 quintals of wheat could be produced on an hectare of land in Punjab. Then a Punjab farmer would end up with about a lakh rupees, right? If we look at UP, UP, the well-irrigated areas, the one hectare would again produce about 50 quintals of wheat, but lots of UP is actually very poorly irrigated. A lot of it is very dry and added. And in places like this, the average yield is between 30 to 35. Now even if I take a 35 quintal yield on one hectare of land, then essentially a UP farmer, a farming family would make about 70,000 rupees from that hectare of land if they sold at MSP, if they grew wheat. We know most don't, aren't able to sell at MSP, but that's a separate issue. So Prashant, when I hear one lakh or even 70,000, I think, okay, that's not too bad. One lakh rupees, 70,000 rupees. I mean, you get in a city or town, it's not too bad at all. And in village, that would be go a long way, right? And you think that really our farmers really that badly off because if one hectare is owned, they're making out to buy. But you have to remember that there are two seasons, maybe a third season of vegetables being grown here and there. So effectively, it is six months of work for one lakh rupees in Punjab and 70,000 rupees in UP. But this does not include costs, Prashant. So when we talk about any business, right, what will we do? We basically remove costs to work out what real income is. Now, are you aware of how costs are calculated in India for farmers, Prashant? Include inputs, fertilizers, all that stuff here. So there is a thing called the Commission for Costs and Prices, I think, CACP, right? And they publish three sets of costs on an average for farmers statewide. The first is what is called A2, which is all out of pocket expenses, which includes expenses and kind. But obviously, you also have to put in labor, which is something that you have to calculate in Pew that if these people work somewhere, this family, what would they make? So the second cost which is given is A2 plus FL, right? And the formula that the government, Modi government supposedly uses is A2 plus FL plus 50% and then a bonus is added to decide what will be the minimum support price, what farmers should get. But farmers have been consistently saying that this is not enough because if I have land and I use my own money, right? Effectively, I'm losing out on rent because if someone in a city or non-agriculture person was sitting on land, they'd put it out on rent and earn money from that, right? So there is an imputed rent cost that I'm losing out on. If I'm using my own capital to buy things, there's an imputed interest cost because if I had put that in a bank, I would get interest on it. So there is the third cost, which the Swaminathan committee had said should be what we call the comprehensive cost. It said that comprehensive cost of C2 plus 50% is what farmers should get. They cost plus a 50% profit on that, right? Now the C2 cost is higher in UP and lower in Punjab. This should not be a surprising because obviously the higher the yield, the average cost is going to come down, right? So the C2 cost, comprehensive cost in Punjab is about 1200 and 80 odd rupees and in UP it is about 1560 rupees, right? So you take this and work out the cost and you'll see that an average Punjab wheat farmer ends up with 35,000 rupees of profit from one hectare of land. An average UP farmer in a dry area will end up with 15,000 rupees of profit for six months of work. And this is not an individual's income, right? This is an entire family's income. This family labor goes into it. Now think about it, 15,000 rupees and the average, the government's own NAFIS survey, the NABAD financial inclusion survey tells us on an average, the UP agricultural family size is about six people. Now divide 1215,000 rupees for six months, for six people and what do you get? 200 rupees per month from agriculture, right? In Punjab, you will get slightly more, about 6000 rupees per month for five people or 1200 rupees. So on an average, a person living in an agricultural family in Punjab is getting six times more. Why? Because there's no MSP in UP, there's no Monday in UP, there's no irrigation in UP and all of that exists in Punjab. That's the difference. Absolutely. So what you're basically seeing is that if a more efficient APMC and MSP system were to come, that would be probably the best way to actually solve many of the issues you were talking about rather than actually destroy the APMC system and claim that you're liberating farmers. Because as we said that if Mr. Shanta Kumar of the BJP, of course his conclusion is different. When he did a report on FCI in 2014-15, if he said that only 6% of farmers are able to access Mondays, state procurement agencies. And even within that, those who sell it, they only get 35% of them get MSP for wheat and 27% for paddy. So even those who access it are unable to do it. So how are you blaming APMC or MSP? There is 94% of farmers and at least I would say 80% of the overall produce is being sold to private players already. It's not as if they're doing extremely well. Absolutely. And there's also a time when MSP procurement is actually for a very limited number of goods. So it's not even across a wide variety. So now in this context, the other question would be what happens with private players or the big private players coming to it? What is likely to change right now? So I was speaking to someone who belongs to a big Aratiya family from Madhya Pradesh and he said that, look, the point is that this is essentially a holding game. People make money if they have holding power. And he meant that both in physical sense, availability of warehousing and the second is availability of capital. So he said, look, what happens is that let's say I have bought, I anticipated that the price of Masoor Dal is going to go up to a certain amount and I bought up all the Masoor. So he said that, you see, how MSP works is that my family goes to small farmers and buys up their product. So if I'm going to get, let's say, 1850 rupees per quintile for on MSP for a particular product, I actually pay 1750 to the farmer or 1800 to the farmer. The 500 to 50 rupees difference is entirely mine. The farmer doesn't have to spend on taking it and loading it to the Mandi, I pick it up. That is my cost. And as we know that mostly all finance is provided by these people, the Aratiyas and so here's the thing. His point was that ever since ITC each opals entered the system, farmers are getting more or less the same price that we were giving. But we are getting replaced by ITC agents and we have started working for ITC because big, he said that ITC is still restricted by the rules. But when bigger players come into the system, they have a lot of holding power. So let's say as I was taking the example of Masoor Dal that he gave me that I have bought up all the Masoor this year and then Masoor Dal prices crashed for some reason, global prices crashed. I had to offload it because I could only store it for let's say seven, eight months. The next year what happened is that he told me that apparently Masoor is used for packing of crude in some way. I don't know what it is mean fracking he meant. I don't know. It is used for that in the Gulf countries. I'll have to find out about the details about how that works. But he said that and prices shot up. So he said that my family made a loss because they couldn't hold it. A bigger family and holding is not warehousing. It is a cycle of finance. Because when you hire a warehouse, you have taken money to hire it. You have to pay interest to someone or you lose out your interest yourself. This is an opportunity. So beyond the point you don't have the holding power to hold that warehouse, you have to clear it. A bigger company with more capital can hold it for two years. So they will see a down cycle for one year but they will see the up cycle of the second year. His point was that there is no way farmers are going to gain from that. But you have to take into account that he comes from a family which is a trading family. So one has to keep that in mind. There might be marginal gains here and there. There might be some way in which these big companies will come and undercut existing trading families. But again as you know the point is that there is so much entrenched interconnections that it is I don't think it is going to be that easy to replace these people and also I do not think that you know as I've written about how the main issue is about finance which is going to appear soon. It is not really Bandis or APMCs. So in this context the other argument that has often been posed is that this is and because big companies are going to come in there's going to be a sudden rise in efficiency across the supply chain in terms of storing in terms of the entire sector we're going to see a new far more efficient sector. So do you think that argument actually makes sense? If that were to make sense then we would have seen much more efficiencies in the rest of the world. Is it much cheaper to buy a potato in the US than in India or in the UK when you go and buy it from a shop? Of course not. Now the point is that wastage takes place in different forms. We know from studies that local markets in Latin America have lower wastage than the big corporate you know big fresh super stores because super stores come packaged as you have to buy five kilos at one time and quite often you buy five kilos thinking it is much cheaper on an average which you throw away two kilos because it goes bad. And this is a standard thing that happens. Wastage is massive in rest of the country not at the point of transit but at the point of consumption. So net wastage remains the same. It has not reduced and this is studies across the world has shown that. So I doubt that that is going to happen. The idea that in terms of back linkages this is going to work because you know what will happen is that these big corporates will be able to tie up with seed companies and provide seed to contract. Farmers have been contracted to grow a thing cheaper. They'll tie up with large scale fertilizer companies provide cheaper fertilizer. They'll have access to finance and etc. Okay let's take the case of Punjab. The point is in Punjab a study by Subpal Singh which was published in EPW shows us that in 2014 most of what farmers were buying were from traders. Whether it was except for fertilizer which was from corporates whether it is seed other than what seed they store themselves. Additional seed that they bought. Seed, pesticide, farm equipment, fodder everything they were buying already. So there are backward linkages already in the system. It isn't as if some traders are waiting for this massive thing to happen which they couldn't think of. So finally I want to give a quick question in terms of we have gone through various aspects and like we said I think the thing we both agree on is the fact that more Mondays and more stable and as well as robust MSP would be the simplest most intuitive way to address the issue. So why is it that these two are the things that are found nowhere in the farmers introduced by the Modi government? Because the Modi government doesn't believe in public spending. Number one it doesn't want to do public spending. It wants to transfer it on to corporates. The second part of it is that I think that if you look at the manufacturing and services sector it has reached its saturation point in and there. We know that corporates aren't making money. Their margins are being maintained entirely by cutting costs. So if their profit margins are expanding or being maintained it's because they're cutting costs. They're reducing all kinds of expenditure. Whatever their cash is they're putting into the financial sector. So financial instruments. So they're buying back shares. They're giving bonuses. So essentially they no longer need money. They're not raising money anymore to expand. Because manufacturing and services which delivered essentially to the middle classes that has reached its limit. It's not going to go.  So how many cars will you put in there? If you've bought four cars it's unlikely you're buying another. So all that has happened. The replacement demand stages already come. The only place where replacement demand is pretty quick is food. I mean you replace it every meal. So I think that the big capital wants to move into this last space of food production and trade. Because we know that trade restaurants trade and allied services is about 20% of the GDP. And food trade is a huge part of that process. 40% of I think one of the last IVF studies that I saw showed that 41% of all street vendors were actually vegetable sellers. So this is a very complex economy and a lot of people depend on it. Not just the big traders. We know that in Bombay a news news report showed told us that in Mumbai people have lost their jobs, taxi drivers, drivers, they're selling vegetables. So the number of vegetable sellers has gone up sharply in Mumbai. So this is a clear sign that there is a huge number of people involved in this wholesale and retail trade of vegetables and crop and food. And that is where it is a good space to take over and earn more profits from that. Accumulation and extraction of surplus of various kinds. Whether it's surplus value or surplus itself. So that is probably the thing that they're waiting to do. Right. So what we're likely to see is a lot of new chains coming up across the sector and a complete change in the market scene as well. And there will be some kind of gains to groups of farmers and there will be other groups of farmers who will lose out. So what we'll see is a change in the rural area and it's not going to be that easy. There will have to be alliances on the ground that these big farmers will make at least with the local artyas. If there are 10 artyas they will have to make an alliance with the top. It's not going to be otherwise it's not going to happen. Thank you so much for talking to us. Thanks a lot. That's all we have time for today. We'll be back on Monday with more news from the country and the world. Until then keep watching news click.


What else can we do to really engage people to understand where their food comes from? Because as we become more and more urbanized, we have a disconnect as to where our food comes from. And also, what could we do ourselves if we want to increase the food security of our province? Today, Minister Norm Letnick, a good colleague, announced $250,000 in funding for 10 projects to help support local food economies, food security in a number of regions around the province. And to help them continue to do the good work of understanding or helping people understand where their food comes from and improving BC's food security for British Columbians. Hopefully, we'll be growing new farmers. As far as our volunteers go, it allows our volunteers to be more knowledgeable about how food is grown and what it takes. And hopefully, they'll be more active in that whole volunteer component of food growing. We look forward to the ongoing success, the continued growth in the program. I think the important part is about the partnership that this type of project brings. It brings with the government support, it brings communities together, it brings not-for-profit societies together. So it's all about enhancing those partnerships and helping build those local food economies. So important is that more and more people are being focused on the importance of local food production, knowing where your food comes from, who's growing it, and benefiting the communities all at the same time. The biggest effect for us is that we will be able to continue getting fresh produce from community farms. It's not something that the average food bank can provide. It's too expensive. And we are able to help five other food banks with the produce that we receive from community farms. This kind of program today will go a long way to help feed British Columbians and help British Columbians feed themselves.


Look what I got in the mail from EasyEDA, boards for the 4-digit hex display. These are four-layer boards, and were about 7 US dollars each. If there were only two layers, it would have been about 40 cents each, so I definitely went luxury. There's not much need to pay attention to signal integrity here. I laid out the board so that the displays go in the center, all the resistors go on the other side under the displays, and the Atmel chips, one for each digit, go on the side. The spacing of the connectors is also breadboard friendly. I put the circuit board under my Amscope inspection microscope, and solder all the SMD resistors and capacitors first. I'm using .4mm solder here. There are only 40 SMD components, so it's not too bad to hand solder. I could have gotten a stencil for the 34 components on one side, and saved some time, but I'd only do that if I were making a lot of these. Anyway, next I use the programmer to program the Atmel chips. There's an adapter for programming surface mounts. Once the four devices are programmed, I solder them in, then the seven-segment displays, and finally the pin headers. Now it's time for the smoke test. I pet the cat, and turn on the power. That worked. Great. Now I'll hook up the inputs. It seemed to work okay, but then I noticed that blanking the display wouldn't blank one of the digits. I also found that one of the inputs was non-responsive. Not so great. So after resoldering the problematic pins and getting no improvement, I took out a fresh board and the multimeter, tested the connections for continuity, and found none when there should be. At this point, it could be a defect in the PCB manufacturing, or a fault in the design. I looked at my board in Kaikad, and sure enough I was missing those connections. I had failed to run DRC before output to Gerber. My bad. Well, nothing that a couple of bodge wires won't fix. With those in place, I retested and the board works as intended. I fixed the problem in Kaikad and generated new Gerbers. The Kaikad project and Gerber zip file are all in the GitHub project linked below. The next step will be to connect these to the data and address lines of my TMS-9900 CPU project, and that will be the subject of the next video. Thanks for watching.


Hello, and welcome to the session in which we will discuss troubled debt restructuring. So what is the big idea with the troubled debt restructuring? It's a mouthful, and it sounds very intimidating. Well, the basically what we're looking at is when the creditor, when a lender, when the bank grant concessions to debtor, to the borrower, not made under normal circumstances. What does that mean? It means at some point the bank says, you know what, I should cut my losses and accept whatever I can get from the borrower because I may not get anything. And this happened during the real estate crash of 2007, 2008. I was still in practice, and we had many construction in real estate companies as clients, and they went through this troubled debt restructuring. So I still remember those days where I had to deal with this topic right front and center. Simply what happened is this, we have two options. The person in trouble and the creditor, they'll have to agree and they will agree on two things. Either they will settle the debt that's called settlement of the debt at less than the carrying amount. So if you owe a million dollar, they would say, if you can give us 600,000 and we call it even and it's done. We settle the debt at less than the carrying value. If that happens, the debtor would record the gain. It's an unfortunate that they would record the gain. Think about it. You're going out of business or you're in trouble, but somehow you happen to record a gain. That's fine. You record a gain on the settlement of the debt. Now also you might record either a gain or a loss on the asset that you are exchanging will hold on that. The creditor usually would record the loss. Usually it's a part of allowance. So if the creditor estimated enough allowance, it will be an allowance. If they don't have enough allowance, they'll have to debit a loss or some sort of a write off expense. The other option is rather than settle the debt. And once you settle the debt, basically the case is closed. You settle the debt, the debtor go their way. The creditor goes the other way and it's over. The other option, if there is some issues with the debt is modification. What is modification? You modify the terms of the debt. So the debt don't go away. What does that mean? It's either extended that lower the interest rate, accept the lower payment, but the process keeps on going. Now, from an accounting perspective, we have to look at two treatments when it comes to debt modification. It's called basically the technical term is loan impairment. And what we look at is we will look to see if the future cash flow from this new deal is less than the carrying value of the debt. Or if the future cash flow, again, un-discounted is greater than the carrying value of the debt. We would look at these two options in the next session. For this session, we would look at how to deal with troubled debt restructuring when it comes to settlement of the debt. Now, how do we settle the debt? Think about it. How do you settle a debt? You just have to give something to the creditor. What would you give them? Obviously, if you have the cash, you wouldn't be in trouble. You're going to have to give the creditor non-cash assets, and those could be construction vehicle, building, land that you own, some sort of a value, or some might accept stocks of your company. They might say, okay, I want 50% of your company, 40% of your stocks. If they think there's a value into it. And guess what? If banks or creditors did accept those and accepted stocks in construction company two years later, they would have been made whole and even make a profit because two years later, the economy picked up in construction company. Since then, they've been very busy because the government lowered the interest rate. So this is what you will do. The creditor should account for any non-cash asset or equity interest received at fair value. So whatever you receive in stocks of the company that you are dealing with, or if they gave you assets, you have to value them at fair value. And this is important. Why? Also, the debtor will have to value them at fair value. What does that mean? That means when they give you something, they either have to record or again. Now the best way to illustrate this concept is to actually look at an example to show you the process and the journal entries. Before we look at the example, whether you are a student or a CPA candidate, I strongly encourage you to take a look at my website, farhatlectures.com. I don't replace your CPA review course. My motto is saving CPA exam candidate and accounting student one at a time. I'm a useful addition. I can provide you with additional resources, which can help you with your accounting courses with your CPA exam preparation. I supplement your CPA review course. I'm not asking you to cancel your CPA review course on the contrary. You will need one. Your risk to try me is one month of subscription. You are investing in yourself, you're invested in your career. Give it a chance. If you like it, you keep it. If not, you cancel. Your potential gain is improving your performance and passing the CPA exam. If not for anything, take a look at my website to find out how well or not well you're university doing on the CPA exam. This is a list of my accounting courses that I cover with resources that's going to help you understanding the concept, applying the concept. My CPA supplemental resources are aligned with your Becker, Roger, Gleam and Wiley. So it's very easy to go back and forth between my material and your CPA review course. I do provide you access to 1500 MCQs, multiple choice questions, those in addition to my other CPA questions that are released by the AI CPA with detailed solution. If you have not connected with me on LinkedIn, please do so. Take a look at my LinkedIn recommendations. Like this recording, share it with other connect with me on Instagram, Facebook, Twitter and Reddit. Local Bank loaned $10 million to Adam Construction Company, ACC. Due to the real estate crisis, Adam Construction Company can no longer make the payments. Let's see what happened. Local Bank agrees to accept a land from Adam's company with a fair value of $8 million in full settlement of the $10 million obligation. So simply put, the bank says, okay, you owe me $10 million, give me that land that's worth $8 million and we'll call it even. The land has a book value of $12 million on the books of Adam's company. So we're going to do the journal entries for both the bank as well as Adam's company to see how it works. Let's start with the bank. Local Bank will credit the notes receivable for Adam. That's it. They're going to have to credit this $10 million because they no longer have it. They have to remove it. They will debit the land. Instead they got the land for $8 million. Remember they have to record it at fair value, at fair value. Now the difference is allowance for doubtful accounts. And here we are assuming the bank estimated enough losses that this goes against their allowance. If they don't have enough losses estimated, if they don't have enough allowance estimated, it will be a loss. Now what would Adam's company do? Well Adam will be happy to remove the $10 million notes payable from the local bank. They will debit the notes payable and also they will need to get rid of the land. They will get rid of the land because it's on the books for $12 million. They credit the land for $12 million. Now here's what happened. Adam had a gain and Adam had a loss at the same time. How? When it comes to the land itself, when it comes to the land itself, okay, the land has a book value of $12 million and fair value of $8. It's as if Adam sold the land for $8 million, had a loss of $4 million and gave the $8 million to the bank. It's the same thing because look, the bank got $8 million. But that's all what happened. It's if they sold it. So if they sold it, they would have a loss of $4 million. So Adam will book a loss on the land of $4 million. That's the bad news. The good news is Adam had a loan of $10 million. He got rid of a loan for $10 million for something that's worth $8 million. So what happened is this. The land, again, we had a liability for $10 million. We purchased it back. We settled it, a liability of $10 million and we paid for it only $8 million. What's that $8 million in the land? Well, we have a gain. We have a gain. So notice what happened. We have a gain and a loss at the same time, a loss on the land itself. Because think about it. Adam could have just sold that land, get the $8 million, write a check to the bank and gave them the $8 million and book the loss of $4 million on the land sale. But they didn't do this. Just basically, it's if they sold it to the bank. On the loan, Adam owns $10 million. The bank says, give me $8 million and I will settle your loan. Well, I have a gain on the loan. So notice you have a gain and a loss and this is what I was trying to say earlier. You could have a gain or a loss. Well, what else could happen? Well, instead, assume local bank agrees to accept from Adam Construction Company, $400,000 share of its $1 common stock that has a fair value of $9 million, I would have taken this deal, right? In full settlement of the $10 million loan. What happens here? Let's go through the journal entries again. From the bank's perspective, they will remove the notes payable for Adam's company. They will debit equity investment in Adam's Construction Company and they will debit allowance again or a loss depending on their balance. This is local bank. What would Adam's company do? Adam will be happy to remove the loan of $10 million. They're going to have to issue stocks of $400,000. Remember, number of shares times the power value, number of shares is $400,000 times the power value happens to be $1. Then what we do is we determine whether Adam has a gain or a loss. Well, let's think about it. Adam settles a debt for $9 million. That's the fair value that they gave out and the debt was for $10 million. Simply put, Adam would have a gain of a million dollar. The entry will need to balance since we're issuing stocks. Anything left, we're going to credit paid in capital and excess of power for the difference and that's the $8.6 million. This is the entry that Adam would make under books. Obviously, if I was the bank, I will own an Adam's stocks, assuming I know what happened post 0708 or it could be that I invested in the Adam construction company. The economy kept going south and Adam went out of business, so your equity investment is worth zero versus the land. You can sell the land. Basically, the bank will take a risk. Usually, the bank don't accept stocks. They usually prefer land or some asset that they can sell or they can value. It doesn't fluctuate as much as stocks. What should you do now? The best way to learn this concept is go to my website, farhatlectures.com, work additional multiple choice questions and look at additional resources. In the next session, I would look at the second option. Remember, we can settle the debt. That's one way to do it or we can have a modification of the debt. That's the other option that we have. In the next session, that's what we do. We would look at the modification of the terms and see what would happen if we have a modification of the term. Again, I'm going to invite you, farhatlectures.com. Invest in yourself. Invest in your career. The CPA exam is worth it. Don't shortchange yourself. Good luck.


Nicely, but the life of the land is in its real estate. I am a real estate agent with Keller Williams in Honolulu. And this week we have Troy Wada with Impact Wealth Solutions here to tell us about a Delaware statutory trust. Some of you landlords who don't wanna be landlords anymore might really find this interesting. Hi Troy, thanks for joining us. Hey Kiana, thanks for having me today. Hey, yes, I'm so glad you're here. So can you tell us a little bit about yourself first? Definitely, so I get my name is Troy Wada and I'm the principal founder and founder of Impact Wealth Solutions here on Oahu as well as we have offices on every island across the state. We started the company back in 2013. Fast forward today, we have over 1,000 clients statewide and we work with companies such as Hawaii Electric, Hawaii Financial Federal Credit Union, Kauai Government Employees Federal Credit Union and Hawaii Electric Employees Federal Credit Union. I'm working with their membership as well as those employees on overall holistic financial planning and wealth management. As a part of that, Kiana, as you know, the Delaware statutory trust and 1031 exchanges has been a, I guess, a growing topic that we've been working with realtors, great realtors like yourself and their clients in educating them a little bit on the 1031 exchange process, but more importantly, how to make the most of their real estate and investment property. Wow, okay, so I know there's people out there and they're thinking Delaware statutory trust, that must be only good in Delaware. So what exactly is a Delaware statutory trust? A Delaware statutory trust is basically, it will look and feel like a real estate investment trust, but it's very different. And the biggest difference with a Delaware statutory trust in comparison to a real estate investment trust is number one, it allows the investor to 1031 exchange proceeds from their investment property into this particular investment vehicle. And number two, you know, by doing that, it allows them to defer the taxes whereas if they were working with a traditional real estate investment trust, that tax benefit is not allowed by doing that. But some similarities in regards to a real estate investment trust and a Delaware statutory trust is that it consists of institutional great real estate, which people pool their money together up to 500 different investors and therefore by 500 different investors pooling their money together to buy a particular property. For example, it might be ESPN's US National Headquarters. We're able to buy much better quality institutional real estate. And for, as you mentioned, for those people tired of managing their real estate, it gives them a way to be active in the real estate investment market or to take what they've built here in Hawaii but get out of the management duties and the management headaches. We like to call those the terrible tease with the toilets, tenants and trash. They can basically enjoy the good tease, the tenants, the traveling or just talking story with friends and not having to deal with any other management headaches. Okay, so let's back up a little bit and what exactly is a 1031 exchange? So if you don't mind, Eric, if you could put that up on the screen there for us starting with maybe slide number two.  And in some cases the 3.8 Medicare surtax but there are some rules that follow the Delaware statutory trust. The 1031 exchange, I'm sorry. And if we look at slide number three, basically with those provisions, there's timelines. And what that means is that first of all, when we sell a real estate investment property in order for us to take advantage of these tax benefits, we need to buy equal to or greater than the value of the property we originally sold. But there is a timeline and that timeline that we need to follow that was listed there is from day number one, we need to identify replacement property within 45 days. If we fail to do that, basically what happens is that it would be considered a fail 1031 exchange and then force your investor to pay all of those taxes that come across with selling property that has gains in them. But not only that, there's another hurdle that we need to pass. And that's basically not only do we need to find we're qualified replacement property or what we call like kind property within 45 days, we actually need to close on that property or one of the properties within 180, which Tina, as you can imagine, you're the expert in this, finding qualified replacement property in today's real estate environment with everything that's going on, let alone tightening of lending practices, it might be pretty challenging out there to do that. Yes, yes, we are seeing with the guidelines tightening up, they're taking longer, much lower inventory, harder to find what you're looking for, competitive, competing offers, multiple offers. So yeah, it could be challenging. So what exactly are the capital gains? What percentage are they avoiding by doing a 1031 exchange or a DST, the Delaware Statutory Trust? So what kind of money? So in regards, sure. In regards to capital gains tax, a couple of changes actually happened this year, whereas many people in the past experienced paying a 10% a long-term capital gains rate tax on any capital gains, which basically means anything, any dollar above what they originally paid for the property and what they sell it for was normally subject to a 10% capital gains tax rate. Now in 2020, that gains rate has changed. It is now, depending on how much money you make, you could pay 0% capital gains tax, which will apply to very few people because that income threshold is about $40,000. But if you make more than that, your long-term capital gains tax rate this year in 2020 has increased to 15 or 20%.  This would be your CPA or someone of that magnitude to make sure that you know and fully understand what tax rate that you're in based on the capital gains that you're looking at. But beyond long-term capital gains, when it comes to selling investment property, there's several other taxes that would apply. Number one would be what we call a depreciation recapture. So since you've originally bought the property, you have the ability to recognize depreciation on your investment property. And if that was a residential property, that depreciation is divided by 27 and a half years. And if it was commercial property, your depreciation would be divided by 39 years. What depreciation allows you to do is basically depreciate the value of the physical building, which then gives you tax benefits on some of the rental income in which you're collecting today. That rental income, a portion of that based on your depreciation is tax deferred, right? And again, it's tax deferred, not tax-free. And if you sell your property without doing a 1031 exchange, 25% of that depreciation will be recaptured and then taxes will be owed on that amount. And then lastly, depending on your income, you could be subject to a 3.8 Medicare surtax. And that would be in addition to your long-term capital gains tax rate as well as the depreciation recapture. So, Keena, as we talked about many times before, it makes sense for most investors, of course, your situation would, everyone's situation varies, but to look at a 1031 exchange because you could be saving a lot of money on taxes. So, this 1031 exchange and a DST or the Delaware Statutory Trust is only for investment properties, correct? It's not for your personal residence. It's investment properties only? Absolutely. 1031 exchanges only apply to investment property. And actually, if it's your primary residence that you're planning to sell, many of you know we have what we call section 121, homeowner's exemption, where it's $250,000 if you're a single person above whatever you paid for it, you get to take out of the property tax-free and it's $500,000 for a married couple. Okay, and is there a certain time that you have to own your investment property before you can say, okay, I wanna put these into a DST? What if someone buys a rental and they're just like, if being a landlord is just not for me. Is there a certain time they have to keep the investment property before they can roll it into a 1031 exchange or the DST? Usually the timeline or the recommended timeline is about two years. Now, of course, you'd wanna confer with your CPA because we've seen some cases where the property was held less than two years, but it's still classified as investment property because it was not their primary residence and the client was still able to do a 1031 exchange. Okay, so say I bought the property. I don't really like being a landlord. I'm ready to, and I've kept it for two years and I'm ready to do a DST. So what would I need to do and what are the benefits of doing it? Well, the first thing you probably wanna do is contact you, Kena, to see what the property is worth, because what we wanna find out is, based on what your property is worth, what it would sell for, what your mortgage balance is, what you would wanna move or what the equity will be moving towards the Delaware statutory trust. Now, on average, most Delaware statutory trusts pay about a 5% cash on cash return. So for example, a million dollar property with a $500,000 mortgage, when you sell the property, the first person that gets paid off is your bank, which leaves you with 500,000 in equity. If you were to 1031 exchange that $500,000 in equity into something like a Delaware statutory trust, you could probably expect about 25,000 a year net rental income, and which many people find attractive, because Kena, as you know, many of our rate of returns or cash on cash returns here in Hawaii is usually lower than 5%. I mean, what would you say our average net rental rate is here in Hawaii? Oh, you caught me up on that one. So I know a lot of people are looking for seven. We're averaging three or four. I know I am. Yeah, and that's pretty common.  Yeah, investors are looking for seven. They're always wanting that rate of seven, and it is tough to find in Hawaii. Very tough, very tough to find. So yeah, so I'm ready to get my DST. What do I have to do after they get done with me? They let me know they want to sell the property. So once they get done with Kena and we figure out what we're gonna sell the property for and we run the numbers, what we need to do is we need to identify what we call or who we call a qualified intermediary. Now this could be someone like Julie Bratton over at Old Republic or Tiffany Davies over at IPX 1031. And what we need to do is we need to ensure that we get a qualified intermediary in place because anytime we have what we call constructive receipt of any funds, meaning that if you decided to sell your property with Kena and we skipped the qualified intermediary part and your money went to a title or SRA company like Fidelity, what would happen is that if we did not set up the qualified intermediary account, the minute the money hits your account and we close, that will be taxable. So we wanna make sure that we daughterize, cross our keys and basically set up a meeting with our qualified intermediary, set up that account to notify them we will be doing a 1031 exchange as well as working with a title and SRA company to notify them, we'll be doing a 1031 exchange. And then basically what happens is we close on the property, the funds get sent to Fidelity which then gets forwarded to our qualified intermediary. And at that point the 45 day window starts ticking where we have two ways we can identify property whether it's a three property rule or a 200% rule which means that we can identify up to three properties or twice the value that we sold for that we need to replace. Okay, so can someone take their funds from the investment property and roll them into a owner occupant? No, or can they? There are rules for that and of course you're gonna wanna work with your tax professional as well. But we have heard of instances where people get an investment property, rent it out for a period of time and then later on move into it. Okay, so say they've inherited an investment property and they wanna sell it and use the funds to purchase their own home. Is that something you can do without paying the capital gains taxes? The factors to consider, number one would be a date of death appraisal. So based on real estate and non-retirement stocks have great tax benefits to them. And the biggest one is what we call a step up in cost basis. And what that means is that the date or the value in which the property was sold out at the time of inheriting it will become the new cost basis. So an example for that is let's say we had a property purchased in 1950 for $20,000. And fast forward today, that property is worth a million bucks. If our owner or our investor inherited that property and at the time it's cost basis was $900,000 or even a million bucks and they decided to sell it the next day. They would pay little to no capital gains tax because their cost basis is a million. They sell it for a million, zero gains. At that point, they could take whatever proceeds they have and then buy another property which they could live in, no problem. Okay, okay. So let's go back to, we wanna do our DST. So I've come in and I don't wanna buy any more properties. I don't wanna be a landlord anymore. How can you help me? So Eric, if you pull up slide number three, these are some benefits of why people look at a Delaware statutory trust as a way to either get out of the management or create a better estate plan. And because the DST is usually pre-existing, it doesn't require the investor to manage it. The best benefit that we get a lot is that it removes them out of the management responsibilities. Number two, it allows investors to get access to institutional grade real estate, which normally as a single investor, they can't really do on their own. But by pooling the money with $500 people, it allows them the ability to buy bigger and better property, limited personal liability. There are loans that are associated with some of these Delaware statutory trusts. And the reason why that is, is because if you remember, as I mentioned earlier, successful 1031 exchange requires you to buy equal to or greater than in real estate in terms of the value of the property that you just sold. Not everyone owns their property debt-free. In that example of that million dollar property with a $500,000 mortgage, in order for them to avoid or defer taxes, what they need to do is they need to buy a million dollars worth of property, but they only have 500,000 in equity. The Delaware statutory trust allows the investor to participate in the loan that's already put on this Delaware statutory trust, but never have to qualify for it. And because they never have to qualify for it, legally they can't be liable for it, which is why we call it a non-recourse loan. This is very big for many investors because it's a great way for them to basically be hands-off in the management, get a stable or steady rental income coming in on a monthly basis, but ultimately become debt-free. Paying off those mortgages on those investment properties and not having those liabilities. The minimum investment for the Delaware statutory trust is $100,000. Another benefit of the allows our investor to be diversified not only geographically because a lot of these DSTs do not reside in Hawaii, but it also allows our investor to be diversified by asset class. We can choose to invest in things like healthcare related properties, like senior living centers. The radiology department at NYU, student housing, multi-family, or even office buildings like the ESPN property I mentioned. It's a great insurance policy as well because these properties are usually readily available and that 45 day window of that identification period won't really apply to us because we'll know what we have available and we can usually identify the day that we close our property. As I mentioned, the one benefit of using the DST is that when designed correctly, we can basically minimize or eliminate all taxes associated with the exchange or with the sale of that property. But more importantly, the DST creates a great estate planning vehicle which allows you to hold on to the estate. Whether it's aging property that is in need of repairs coming up and you don't wanna repair it, owning this type of physical real estate allows you to take advantage of this step-up in cost basis and basically do what we call a swap into your drop. Keep 1031 exchanging into properties in which you don't have to maintain, keep getting that income to basically leave it to your beneficiaries so that they would have that step-up in cost basis and basically sell it with little to no taxes associated with that. So you mentioned the income. So what kind of income could a person expect from the DST? So on average, as I mentioned earlier, it's about 5% cash and cash return or just what we can expect. Is that coming monthly? Is it like a monthly income they can try to live on? Does it come yearly? It's a 5% annual cash and cash return which is paid out one 12th every month, which is another benefit of the DST. In past when we worked with clients, even your clients, where they're selling their investment property, we're usually able to close, identify and have them getting rental checks within less than a month, within a couple of weeks, which is a good benefit for some people because it kind of minimizes the interruption of rental income coming in because they sold their investment property. So say they're in this DST for nine months and something comes up and they need their money out. Is that something they can do? Can they get the money out or can they take like an equity loan like they would on a property? They're not allowed to take an equity loan because they're not on title of the property. This is what we call fractional ownership. Now, however, if they decided they needed to get their money out, there would be a process that we would need to follow. Now, historically what has happened in the past is the investor will notify our DST or sponsor company that they need to get funds out of the property. And what would happen is because you need to be an accredited investor for this, which means that you have a $250,000 annual income or a million dollar net worth exclusive of primary residents, we need to find another accredited investor to buy that person's interest. So the sponsor company will go out there and help us find that accredited investor to replace the proceeds that we would want purchased. And at that point, it's no different than selling any other real estate where we need a willing buyer because we have a willing seller and we will have an agreed upon price. The timeline of this usually happening has been on average anywhere from 60 to 90 days to complete the transaction. Okay, so you talk about being an accredited investor to be able to take part in a Delaware statutory trust. So if someone has not been accredited, they cannot do a Delaware statutory trust? No, they cannot. Now, what we would encourage you is, before doing this or wanting to know more information, please reach out to us because being an accredited investor, usually if you own investment property, that investment property comes towards your net worth. So many times what we find is that people that own investment property usually are, by nature, an accredited investor. But we'll help you figure that out. We'll help you figure that out. Yeah, and so, okay, so what were the, what did you have to meet to be an accredited investor again, just so people can kind of keep those in mind? $250,000 in annual income for the last two years or a million dollars in net worth exclusive of your primary residence. All right, so where did this Delaware statutory trust come from, just a quick little history? Because I heard it was interesting. So, yeah, so a DSP evolved back in 2004 previous to the Delaware statutory trust, a vehicle that was similar to it was what we call a TIC or a tenants in common. And the tenants in common structure was designed where 35 people could pool their money together in expectation to buy bigger and better properties. Now, the drawback to a tenants in common was number one, every single person associated with a tenants in common had the number one qualifier for financing. In today's day and age, that might be very difficult to do but not only that privacy of information and all these things. Number two, a tenants in common is an unregulated business entity which means that business was done on a handshake. So, in fast forward 2004, I always like to say necessity is the mother of invention. People realized that they needed to be a better vehicle for people to pool their money together to buy bigger and better properties. And in 2004, the Delaware statutory trust was born. For those of you watching this today, you could easily Google internal revenue code or IRC 2004-86. And what that means is that there's an internal revenue code built around the Delaware statutory trust which allows it to qualify as like kind property. So, what happened was that the DST allows for up to 500 investors which meant that we could probably buy bigger and better quality institutional real estate. But number two, none of the investors have to qualify for financing because trying to qualify 500 investors for financing might be a pretty challenging feat. So, by the nature of that, the benefit of a DST is that it's just that. It allows people to participate and pool their money together to buy bigger and better properties, not be liable for the mortgage associated with it, but more importantly, get out of the management responsibilities. And while still having all of the tax benefits and the tax deferral benefits is owning regular real estate as if they own it themselves. Yes. So, if someone wanted more information about doing a DST or even a 1031 exchange, what would they need to do? How can they get with it? I think you could easily contact us via our website which is wwwdreamclanlive.com. But as I mentioned earlier, my recommendation, Kina, will be contact someone like you. Contact a real estate professional. Have your property evaluated and reviewed to make sure that we know what numbers we're working with. And at that point, let's get together. Let's take a look at the property and what options are available for a 1031 exchange. We always like to work with great real estate professionals like yourself because you kind of quarterback the plan, the overall arching plan. Our job is to just help you find solutions. All right, so yes. And I have had a client work with Troy. It was a wonderful experience. And sometimes, I guess I've had another client. Sometimes they don't always work but Troy is there to kind of guide you and let you know what will work and what will work. So thank you so much. And if you guys have any more questions for Troy, I would be happy to connect to you. Do you offer other services? Also, I'm sure you are a full service financial wealth planning. We definitely are. And thanks for asking, Kina. We focus on wealth management. And when we work with our clients, we build and we construct wealth plans looking at various financial disciplines. So thank you, yes. We help in all aspects. Yes, so more than just the Delaware statutory trust which can be done in Hawaii, not just in Delaware. All right. Definitely. Yes. Thank you so much, Troy. And thank you everyone. Yes, thank you everyone for joining. The life of the land is in its real estate. I will see you all in two weeks. And we will be talking about a self-directed IRA which can be used to purchase real estate investments and help with real estate investing. So that one would be another good option with everything that's going on and the way the market is going. And as we mentioned right now, the real estate market is just, it is just going crazy. We have more buyers than we have properties. We have buyers looking for properties. I have buyers looking for properties. So please reach out if you have anything. And thank you, think Tech Hawaii. And I will see you all again in two weeks.