hey everybody welcome to this week's facebook youtube live with yours truly mark kohler a cpa attorney entrepreneur lemonade stand owner uh real estate investor crypto miner crypto i'm living the american dream trying to live it with you now please don't go anywhere yet let me tell you what the title is about today's live because i can promise you if you have any business investment or interest you've got to hear this and it's so important i've titled this a rant because i'm a little upset but it's going to be for your benefit i'm not mad at you i'm mad at just the complexity of the tax law and i that's that's my career i love saving taxes i love building wealth and there's a lot of websites out there and a lot of youtube personalities sort of like oh the 10 best ways for passive income the five best the 25 best the 21 best okay that's all good that's all well and good i want all of you young or old 15 years old or 75 years old to be making money online or with a small business on the side or a little rental property or whatever i love it but you have got to know how it's going to be taxed just because it says passive income doesn't mean it just goes in this little box on your tax return and you pay little tax hell no now i know it's been in the news elon musk saves this much in taxes and warren buffett only pays this much and jeff bezos only pays this much and it's passive income and there's a lot of misrepresentation from some of those reporting companies on what their actual tax rate is they're paying taxes folks but what i need to tell you is i'm going to talk about your income not billions not millions or hundreds of thousands if you're going to make a little bit of money i want to show you how it's going to be taxed and the best way to save and not pay the most there's a ying and yang if you're going to make money you've got to know how to protect it and i know it's a pain in the butt and so many of you hate talking about taxes but i'm going to try to make it fun energetic entertaining useful helpful all the above so i got my white yellow pad here white board yeah ipad i'm going to write on it i'm going to try to help you get a straight answer on this topic and i want to welcome your questions now i'm going to explain passive income and it's going to rock your world you're not going to like a lot of this but you've you've got to know it now with me today i've got one of my senior attorneys i've got him out of mothballs you know he's buried in the office we're just putting food under the door devin munson the man the myth the legend this guy right in the middle of the cpa exam process he's got a masters in taxation he's a lawyer he's been to court he's been fought the irs this guy he's amazing not as good looking as me but that's okay we won't hold that against well do you heard that yeah i thought his might i thought his headphones were turned off okay i also have darren cherrington off the camera you can't see him darren's a regular here on our weekly live he is answering questions in the chat so if some of you get an answer from a darren charrington you're like who's this bozo just know he's with my team he's a legitimate lawyer i love him and he's here answering questions i want to say thanks to my producer corey our cameraman he's got four or five cameras we're going live on youtube and facebook for entrepreneur and my personal and i've got my marketing director over here ashlynn at directed ira she's helping us bring this all together for you today too so listen for a minute and then i want you to type your questions below and i'm going to give away some books we're going to have a good time today i'm here every thursday trying to give you straight answers from a real accountant a real lawyer with a law firm in accounting firm a trust company giving you the straight answers okay now here's the deal you've seen it before if you've been a part of my life we've got to bring up the trifecta the trifecta starts with your foundation which is your 1040 tax return and right above it is your revocable living trust now whether you're single young or old married divorced kids no kids whatever a trust owns your home and it's the res the owner of or the beneficiary of life insurance your investments your trust may own your boat your rv everything flows down into your trust that's the base of your trifecta then i divide your life in half and on this side i put your operations and your operations is your ordinary income an ordinary income is taxed the worst this is going to be the highest rate of tax and if you have a day job that's cool you got a w-2 your w-2 is going to flow down here to your 10-40 but you might have a little side hustle or even an s-corp or a full-time small business so i'm gonna put small business over here okay now what are we talking about today we're talking about this side passive income and a lot of you are like mark i want passive income i'm seeing those videos and workshops and trainings and i'm trying to create passive income with a youtube channel affiliate income mining commissions my multi-level marketing my downline i'm flipping land i'm flipping real estate guys i help all those clients in our firm we've got over a hundred employees in our law firm accounting firm and trust company helping clients around the country that's what we do i am entrepreneur magazine their resource on their social media for this topic you're getting a straight answer on what to deal with all right devin i'm going to throw down now i know you're already answering questions you keep doing it then we're going to tag team some more questions but let me get this out you keep doing your thing over there all right now i'm going to erase some of this mess over here so we can take some notes and i'm going to list for you what this passive income is all about okay so let's go through our list now some of you want to write here tell me what you think is passive income all right i want you to start typing it in there tell me what you think is passive income i'm going to start with two lists let's talk about rent short term capital gain so you're selling stock you're uh uh can they see that pretty well corey is that okay should i write it bigger but yeah oh you're zooming in a little bit there too a little larger okay long-term capital gain so if you're holding crypto or stock for more than 12 months you're buying and selling real estate interest we love that okay dividends time to trade says dividends what else we got node income okay we've got yes write bigger money while you sleep okay now that's a good one all right money while you sleep that's what we think is passive income that's not what the irs calls it all right selling online okay so we're gonna um web sales you know what i'm gonna do this i'm gonna make it a little bigger okay and can i kill that line i can't okay hang or tight everybody i'm gonna make this line a little bigger okay hang tight rent dividends short term capital gain that means you hold a stock crypto less than 12 months now everybody this is classroom time you got to know this and this is street smarts don't forget about what you learned in high school or college this is street smarts when it comes to building wealth long-term capital gain okay and we had uh rent someone set a side hustle uh network marketing go a little slower corey okay we've got mlm income that's multi-level marketing network marketing network marketing i'm getting back online selling online someone said selling online that's okay don't beat everybody else somebody's going hey that's that's passive or whatever hang tight etsy cool that seems passive um i've got oil and gas oil and gas royalties so you're you kind of buy into an oil well you're like that's passive uh full paid lending income so if you're making money from lending you're getting interest and points okay i'm cool with that um retirement income so you might social security and retirement income now devin i'm gonna have you add to this if i'm missing anything so look at that list you kind of like it right okay now what else have we got is it is not clear enough please thanks i can't zoom in we're going to try to make this bigger okay uh investment income investment income can be dividends interest uh a rental real estate and a 401k that's going to be retirement income a personal loan you're going to get interest okay this is all good someone said selling online okay how about this mining crypto you set up your little rig and you're mining crypto that sounds passive at night your rig is making you money how about you have a youtube channel you have a youtube channel your youtube personality you're making money on ads sounds passive right how about royalties from selling a book or royalties from a audiobook um how about residuals from selling insurance because you sold the insurance and you're getting residuals for years and years to come sounds passive what else we got content related royalties okay so royalties from book audio book um maybe a podcast something like that crypto staking oh i love it crypto staking that sounds passive see this is all great ways to make money i'm loving this but i'm going to shock you in a moment moment crypto staking hey devon we're on staking right we're counting that as mining right basically okay okay good um techie here anything subject to the limitations under code section 469 uh derrick we'll come back to you i know 469 af6 that's a passive loss limitations that's more irs stuff we'll come back to it defy is passive income like liquidity pools or crypto staking as well can you help me out on some of these okay um what you're doing right now getting people interested in your knowledge and posting your page and inviting friends okay hilda um i'm trying to get people interested i'm marketing right now i'm teaching i might sell online fair and be airbnb okay so an airbnb is rent you guys are still missing a couple that i had here well i'm gonna put land flippers a lot of people think flipping land is short-term capital gain or some see capital gains short-term capital gain i don't want to pay self-employment tax on so people think a fix and flip how about affiliate income did anybody write affiliate income affiliate income i'm an affiliate on amazon walmart target i want to i want to get affiliate income car advertisement uh crypto staking what is crypto staking a whole other topic uh we'll pass on that for a minute oil wells there's good is there a real estate age limit to the trifecta we'll come back to that not the same as mining da da okay now let's do this all right everybody now what was the one person said passive to them okay everybody listen now no no more ideas there's probably some more on the list but hang tight someone said passive income is making money while you sleep okay i agree that's passive income i want to make money while i sleep some you might buy my books or some of my videos tonight online hell i put a lot of time and effort into them and i want you to get the biggest benefit i can from it um i don't sell anything on etsy but i do have a youtube channel and when you watch my youtube videos i might get some ad revenue okay so youtube ad rev i love this stuff this is all passive okay you ready for the the reveal the bad news i'm going to put it in red the irs does not have that same definition hell no everything over here is not passive in the eyes of the irs are you still sitting down same you might have just careened off the side of the road i'm dead serious all of this income is subject to the f word fica self-employment tax mlm income network marketing selling online etsy mining crypto youtube ad rev royalties from selling a book or audiobook residuals crypto staking land flipping fix and flipping affiliate income that is all subject to self-employment tax and it's gonna kick your a that's the bad news today and my rant my rant is no one's talking about it so i'm going to give you the strategy to try to minimize the tax on this devin am i missing anything you liking it seems like a good list seems like a crappy list well it seems like it's complete it seems like it's accurate accurate okay everybody let's go back to the trifecta so what i say and this is what is typical is a lot of people go okay so here's my revocable living trust if you're 18 and older and have any property or income and you're trying to build a business you could use a trust if you're 70 years or older and you have any assets at all you could use a trust a whole topic for another day but we take your trifecta here passive income in the eyes of the irs is only rent dividends short-term long-term capital gain oil and gas royalties interest points social security and retirement income that's it for the most part i mean that's going to grab 95 of it that's passive this is where we put our llc to hold rentals to hold investments like stocks or crypto i'm gonna maybe buy land a farm a ranch hold the land there this is where i put my home this is all passive this is where i'm going to put my ira my roth my 401 k but people if you're going to be generating any of this type of income and this is where you get like if you're doing uber if you're doing um consulting if you're doing services like landscaping um you're getting a 1099 of any sort you're an attorney you're an accountant you're a realtor a dentist gosh devin yeah i mean all of this income is ordinary income and if you make 50 grand doing this you're going to pay self-employment tax of 15.3 percent that's 7 500 bucks then you pay state and fed and if you're in a 20 fed in a 10 state 30 you're paying 45 taxes on your on this money is that crazy okay so how we save from this is we focus on the fica we want to get rid of the f word which is right here this is the this is the problem right here we want to deal with the fica so what i do and this is for all of my clients whether they're a dentist a doctor an engineer an accountant a youtuber an affiliate marketer mlm you're selling crap on etsy you're selling online in the middle of your night in the middle of the night as a you're sleeping you're making passive income but the irs is going to hit you with self-employment tax so what we do is we create an s corporation or an llc and the llc taxed as an s corp or you can be an ink i don't care but you've got to have the s corp classification this is this is where i run my mine my crypto mine this is where i sell cows this is where i've been accountant this is where i do drywall this is where i do hair and nails this is where i'd be a lawyer this is where i do youtube this is where i sell books your s-corp you funnel all the money through that no self-employment tax no obamacare no corporate tax this is a freaking amazing i'm an s corp every dentist doctor lawyer realtor contractor developer plumber electrician we're all s corps so the trifecta really starts to look like this i've got your 1040 down here you've got an s corp here and you've got an llc here and the llc owns your rentals because that's passive income and then your s corp runs your businesses even if they're passive to you the irs still calls them businesses and we do a little w-2 so that you're cool with the irs and then everything else is a k-1 where there's no self-employment no obamacare and no corporate tax that's what we're shooting for and we've been setting these up for 20 years and if some of you freaking out going well mark you got to take a big w-2 you can't do that we do this every day i had an audit three weeks ago for one of my clients in california passed their payroll level perfectly no questions asked perfect so if i'm making if i have a client bringing in 150 grand and they spend 50 grand on expenses and they net 100 i'll probably do 40 grand in salary and 60 grand in dividend i just saved 15 on 60 000 okay now everybody just take a breath take a breath now we're going to do q a here in two minutes i'm going to take a drink take a breath now i want to slow down and give you one last example let's say you have an llc and you bring in 50 grand on your youtube channel or affiliate marketing or etsy or mlm downline you bring in 50 grand let's say you spend 10 grand on expenses you write off cell phone home office dining travel auto all the goodies watch my videos i'm all over it you net 40. so you take home 40 grand and you're just a cute little llc the irs is going to tax that at 15 percent 15.3 percent to be exact that's six thousand dollars then you're going to pay state and fed let me repeat this twice llc's limited liability companies do not save taxes let me repeat llcs do not save taxes whoever in the hell told you that you should set up an llc for your mlm or your etsy or your youtube they don't save taxes the only way they save taxes is if you convert this llc to an s corp we charge 150 bucks it's simple it's easy or you just set up an s corp to begin with we charge the same amount to set up either one i've got 10 attorneys at my office meeting with clients around the country and we do this in all 50 states but you go to the legal zoom or go online and set up your llc and think you're okay you're screwed because your list of what you think is passive income is going to get hit with the f word fica and it sucks so here's how it works when you make the same 50 grand and you spend the same 10 grand on expenses you get the same write-offs same freaking write-offs and you net 40 i issue you a w-2 of 20 grand and then the rest i take out is a draw or a dividend or a k1 and i know you accountants out there hate to call it a dividend because i know that's a c corp thing but people understand it so chill out but we're going to take this 20 grand as passive okay now we're back to passive income this is the trick i took what you thought was passive and it wasn't and i put it in the s corp and washed it this is how you launder money people i put it in the s corp and washed it and i spit out a w-2 and then everything else is now passive the s-corp makes the passive income passive after you take your salary that's the trick so how much did i save here over here you're paying fica on the entire 40 grand over here you're only paying fica on the w-2 the more money you make the more you save if you make a hundred grand i might do a forty percent allocation here i did a fifty percent allocation fifty percent to w-two fifty 50 to draw 100 grand i may do 40 you make 200 grand i might do 35 or 30 percent the more money you make the lower i can bring your payroll as a percentage of your income people i teach this to accountants around the country every year i've got books on this for 20 years i've never had a client audited for taking the wrong salary ever knock on wood this works if your account is saying i'm crazy i'll sign your freaking tax return we do it every day thousands of tax returns this year from around the country get a second opinion if your accountant is afraid of their own shadow if your accountant isn't talking to you like this you may have the wrong accountant whoo that was my rant was that ranty enough cory i freaking ran it i'm worn out i'm sweating i'm so upset i'm sweating oh my gosh bella g i'm gonna take bella g's question go back down go back down bella g look how pretty she is okay i'll go to patrick with the boring white peon red okay bella g says individuals with a 1099 is that allowed hell yeah bella i want you to get a 1099. is it okay to stay in s corp or should we switch to a partnership no if i have to switch how do i do that help me mark please thank you bella bella bella if this is you okay i'm going to pull this now i'm at 17 i'm sick of that chord okay bella here's your trifecta you get the next question you better be ready to blow right here i want you freaking out okay 10 40. so bella's down here this is cute little bella she's down here and she's making money okay and she's got an s corp now some of you are gonna ask this question let me say it right now you can have an llc taxed as an s corp same damn thing number two i only want you to have one s corp in your life let me repeat that if you're making more than 40 grand a year net in any of your businesses combined one s corp that's all i have one s corp you may say well mark you got a bunch of accountants and lawyers and blah blah blah you can have as many s corpses you want no i only want one so bella you're going to get a 10.99 for driving uber you're going to 10.99 for doing hair and nails you're going to get a 10.99 for your youtube channel you're gonna get a 1099 for crypto mining you're going to get a 1099 for consulting i don't care you can have 10 1099s going into one s corp but you're going to clean the money you're going to take all your write-offs so this is your write-offs and then you're going to take a w-2 and everything else is no self-employment tax no corporate tax no obamacare and you just made all of this income passive bella you're golden now if you say you have a partner then i take partners and i do this one s corp one s corp llc for the partnership done if devon calls me up and says hey mark let's set up a new restaurant together restaurant ordinary income not passive you go well mark you're going to sleep at home you're not going to flip burgers at the restaurant it doesn't matter it's a restaurant we don't look at me and how much time i play into it is if it's passive we look at the operation it's a freaking restaurant anybody involved at all is going to be subject to self-employment tax so i set up an s corp this is mark devin sets up his s corp and this is the restaurant and then we filter the money through our 2s corpse so bella if you have a partner we got to talk about an llc all right devin the floor is yours all right this one uh passes off of bella's question um it's it's a smaller income she's uh it's harsha patil and he says i have a large w-2 and 40 000 in house in-house rental and airbnb passive and then 25 000 in car rentals which would be active uh does it make sense for me to have an s corp and have two solo 401ks for me and my wife to save on taxes basically same question just he has a large w-2 but less than 40 000 of of income okay now let's get this up on the board you stay with devin corey stay with devin we got a w-2 husband and wife and they have rentals and how much income are those producing the rentals are making 40 000. okay 40k now i don't know if he's making that on paper or cash flow because he might have a loss here even though he has tax-free cash flow story for another day people okay then he has a car rental business and he makes twenty five thousand dollars in his car rental business i don't know if that's that aggressive personal property no rental personal property i thought was active or you mean subject to se subject is that sea tax yeah that was my understanding i might be wrong what about the rv see that's passive rv's personal property something to look up corey ashlyn i'm gonna i'm gonna make a call here okay we're gonna figure this out while we're on the line here um okay let's build another question while we're hanging devon take another question what else you got we're going to come back what's his name patel uh hershaw patel or shopita okay okay do another question go you're right i'm looking grab one dude nick can i create an llc and use it together with a partner and their llc so we can both get write-offs absolutely right so nick asks can i create an llc and use it to partner with with to partner with partner and their llc so we can both get rid of so there's a lot of different ways to structure this uh you can have a partnership llc with your partner and then each of you have your own separate partnership a separate individual llcs or you can have your two llc's go in a joint venture with this partner just depends on your specific situation but there's a lot of ways to structure this and absolutely you can you can do this on your own or you can do this as a partnership yeah let's get another question mark's out of the way yeah okay okay cat's away let's play okay okay now i just caught i just called i just called one of our bring it back to me i just called um rick taylor he's in our office he is a former irs agent he's one of our partners and i just made a con confirmation call with him now this is important for patel's question is that okay if we go back okay all right so here's the question patel said damn it what's wrong with my thing i'm frozen okay cory help me out oh i know what it is it's probably this there we go okay so um here's the problem everybody check this out patel's making 40 grand in passive income from his rentals okay i can live with that that's passive no problem now over here he might have iras and 401ks and all those goodies we're not talking about that over here he has a sole proprietorship he has a sole prop which i hope is an llc if he's renting cars right and he rents cars now cars are personal property and then therefore the income from this even though he's at home in bed is considered ordinary income so the ordinary income from renting these cars is going to be subject to self-employment tax now how much did he see he made from that 25 000 rose what do you think i'm gonna say net because gross it wouldn't make any sense okay let's do let's go both ways let's say net um he's got net 25 grand he's going to pay self-employment tax at 15 on that we're looking at about 32.50 yeah so 3 250 of self-employment tax depending on what state he's in we might want to make an s election but i i just don't think that's smart for 25 grand we usually say the triggering points around 30 or 40 grand net now let's say he's doing 25k gross now we can whittle that bad boy down i want to write off home office auto cell phone travel get the kids involved cleaning the cars i mean i want to write off a ton of expenses and get this 25 grand down to 10 grand if i can or less so in this situation he's still going to be subject to self-employment tax so we still have a self-employment tax problem but until he exceeds 40 grand net i'm not really interested in it and he's got a big w-2 so we've got we've got to figure out what's the wife's income where do we want to push this money we could set up a solo 401k and maybe push some of this income over there my goal would be to wipe this out and the big thing on the w-2 if he's got a big w-2 what i'm thinking can you hear me okay if he's got a big w-2 what i'm thinking he's probably already maxed out his self-employment tax he's already wiped out his uh social security at least if he's over 150 so if he's making more than 150 000 a year he's only paying 3.8 percent so who needs an s corp yeah right not at 25 grand you're never going to need it yeah i liked it yep we've got another question um you mentioned you were going to answer patrick with the boring red pea patrick all right go ahead so if i took a margin from my brokerage account oh and before we go on i have to mention we didn't we didn't spend enough time on this but i i was right right unbelievable just had to bring it up right you were right okay so personal property is subject to self-employment tax okay so moving on to patrick's question sorry patrick he's been waiting a long time uh if i took a margin for my brokerage account as down payment for investment property can i use the margin interest in the same way as mortgage interest as a reduction on the rent income okay let's diagram this people so he's got a stock brokerage account patrick and he's got the stock uh account with let's say a hundred grand in it okay and he took out a loan and let's say a fifty percent loan let's just say and he got fifty thousand 000 and he takes that 50 000 and injects it into an llc and then he uses the llc and uses the 50 grand as a down payment and he goes out and buys a rental property and maybe he's going to do an airbnb and he's going to create cash flow and he's going to get a second mortgage well a first mortgage but look what he did he took money from his stock brokerage account and a money from a bank and so he's into this rental with no cash in out of his pocket he borrowed everything now dave ramsey may go hold the phone dave ramsey be freaking out you got you took a loan here and a loan here now if this thing is cash flowing over and above the mortgage payments because remember he's got two loan payments he's got a loan payment here and a loan payment here now let's just say if he's can cash flow above those two loans and the risk tolerance makes sense which is a whole other topic dave ramsey wouldn't touch this with a 10-foot pole i'd be willing to talk about it but being 100 leveraged on a rental doesn't make me too excited but let's just say the cash flows and things are rocking he buys the rental the question is devin can you write off the interest on that loan i would say yes damn i was hoping he was going to be wrong three the answer is yes so the answer is you could write off the interest on this loan because it's for an investment property so the llc would be making the loan payment and you get to write off the interest you also get to write off the interest on the first mortgage plus property taxes plus hoa cell phone travel dining electronics computers home office so this little rental property is going to make some sweet write-offs that you might be able to use against your other income it's going to hopefully cash flow and you don't put any money in out of your own pocket now that's passive but if you did that with the crypto mine you're going to have self-employment tax because a crypto mine and staking is subject to self-employment tax now some of you may go stake unit is not subject to self-employment tax make sure your cpa that carries malpractice insurance that signing your tax return told you that and signed your tax return because if you get audited your accountant can pay the bill but if you just found a sexy website that says staking's not subject to self-employment tax who knows you could get audited you go well this website said who cares who cares so if you're staking crypto make sure you got a professional stand behind that all right next question you got one i've got a short one and then we'll have to find the longer one um uh i can't even say his name pez the candy boy i guess that says i have an s chord but i don't get a w2 from it i do get a k1 though ouch okay pez the candy boy says uh i have an s corp and he says i do not take a w-2 no w-2 okay now on the face of it that may not be bad i'm going to be very technical if you're taking draws meaning you're living on any income from this s corp you are required to take a w-2 if you take a w-2 the irs is happy you pay your fica everything else is no fight that's why we do an s corp now if you say well mark i'm not taking any draws or i just have losses okay cool you're getting a k1 but you're not required to take the w-2 until you take draws or income if you have draws or income and you're not doing a w-2 freaking get on it second quarter payroll is due this month in july so when you have year 2021 you've got to take payroll four times during the year april july october and at the end of the year and then you get a w-2 that's how it works every s corp has to do it i have to do it and you save a ton of money in taxes it's all good okay can i take one up here yeah all right i'm going to do i'm just going to read it i don't know how good this is micah don't let me down micah allen says hey mark i have a rental property that i purchased in my name and want to transfer it to my llc so he has a rental and it's over here in his name and we want to move it to an llc love it so far so good without triggering the do on sale clause how do i go about doing that love your stuff mark thanks for all your help well micah thank you for the question it's a good question and micah i'm gonna give you a book uh so even though patrick patrick your question was good so was yours bella i'm just feeling generous just want to help micah micah corey will you make sure micah has a book or your cpa isn't telling you and you know what i'm just going to do it bella you get tax on legal playbook write this down ashland bella tax and legal playbook patrick business owner's guide to financial freedom mark just heads up you might want to add rob's question on with this because they kind of go together okay all right rob a i'm going to answer your question but you don't get a book okay where's patel i got to get patel in there too so patel we will give you another what your cpa isn't telling you corey you got all those names no okay patel write down patel okay tax on legal playbook bella financial freedom patrick what your cpa isn't telling you micah allen that's impressive right i just remembered all that now if you have won a book today you just email corey c-o-r-e-y at mark j kohler.com say hey i'm the person that won that book hook me up and they'll cory will get your information and verify it's you if you did not win a book today please don't email corey unless you're single age 24 blonder brunette corey let's go all the way to 40. i'm feeling really good all right okay taxmatch.com if you're a real estate professional cory wants to hear from you okay now we will we will give away some more books here too okay now back to micah everybody listen if you buy a rental property you do not under any circumstance want to keep it in your name hell no because if anything goes wrong they're going to sue you you don't want to get sued so you say well mark i want to deed it over to my llc but the bank's going to call the loan due no they're not they've already sold your mortgage five times over you have a new servicer i'm sure you do from the day you closed at your freaking bank as long as you are still the underlying owner you haven't sold the property anyone i have never had a client in 20 years by the way i've interviewed bank attorneys over and over again throughout my career here even on the podcast i have never had a client have to pay the due on sale clause for transferring a property to their own llc or their own trust please do not listen to anybody freaking out and do not whatever you do walk into the bank and go hey is it okay if i deed my property to the llc what are they going to say no because you can't even go to the bathroom at the bank without getting manager approval so don't go into the bank just freaking do it we have a transfer agent in our office doing deeds at 3 600 counties around the country started the manager of that department brady weiner just talked to brady wayneer in our office at kkos lawyers he'll help you with the deed transfer micah but people make sure your trust owns your llc and deed that rental into your llc so you get asset protection that's what we're shooting for and rob said how many properties okay cory i need to see the question there thanks rob says will transferring rental properties which have been held in my personal name or revocable living trust for 10 years or plus into a newly created llc incurs substantial tracks for towns transfer taxes and be reassessed now that's a different question when you deed the property to this llc there are some states that charge a transfer tax because they don't have a state tax so where the government giveth the government taketh away we're talking about florida washington state possibly nevada now there's certain exemptions you can check on boxes when you do the d transfer that can get you out of the transfer tax but make sure that you're consulting with your accountant to avoid any transfer tax the answer is rob and everybody out there 95 percent of the states you're not going to have a problem and it is true in california if you deed into an llc you might have a prop 30 13 prop 13 reassessment on your tax on your property taxes so you got to be careful there if you're worried about property taxes and the property's gone up tremendously in value so are we going to try to get that property out of your name absolutely we might use a land trust and back door into an llc just to get you protection but those are good questions all right devin your question all right says uh looking to buy my first property using the resources you made available uh i'll live in it for one year then switch to a rental is this a trust property or an llc basically should i put the property that i'm going to live in for a year should i put it in my trust or should i put in my llc if i'm planning on moving out in a year okay i'll play pictionary while you answer the question all right trust owns it so yeah if you're going to live in it uh just put it in the trust we can always transfer to the llc when you're ready to start renting it out that's usually what we do because you might change your mind in a year so i would want to make sure to to keep it in the trust in the meantime and then as soon as you start renting it out we can always transfer it into the trust right into the llc at that time and that's the right thing to do people living it is your personal residence until you're ready to make it a rental now if you sell it within two out of five years you can sell it tax-free so you may sit on it and own it for two years and then sell it and kind of cash in on that equity but if you're going to just turn it into a rental transfer to the llc and be off to the races uh rob a says are short-term rentals passive or active income rob great question everybody this was an irs notice not a lot of people know this a trust here's your trifecta a lot of people think oh with my s corp because it's short-term rentals i better put my airbnb over here and i'm going to put it in my s-corp to avoid self-employment tax but the irs has said airbnbs are considered passive no self-employment tax we do not want it in your s corp we're going to put it over here and let it run through passive now what the irs has said it you cannot provide daily concierge hotel type services so no nightly cleanings turn you know turn down service chocolate on the pillow crap like that this is going to be you know two three five days or more and you clean at the end of the rental process yada yada so airbnbs are considered long term in the eyes of the irs so that's a good thing okay your turn devin all right uh i'll take an easy one uh t trong said i sold some bitcoin but i bought another coin right away do i have to pay tax on what i gained uh you you bought bitcoin at eight thousand dollars and you sold it at fifty five thousand dollars you're going to have gain on that that that difference and then you turn around and bought another uh bitcoin at fifty five thousand dollars okay then when you sell it for sixty five thousand dollars you're only going to have ten thousand dollars in gain or if it goes down to thirty five thousand dollars you'll have twenty thousand dollars in losses but gain is assessed when on on the income you made while you own the property okay i'm going to play with this for a minute for all of you crypto investors out there there's really three things to deal with if you're mining crypto in your own name you have got to funnel it through your s corp that's the income and if you're paid in bitcoin you have to recognize that income in your s corp and then as soon as you recognize that income i deed it over to your holding company and your bitcoin or whatever crypto you're mining goes over here see this is your personal wallet that you started with fiat currency so your personal wallet owns all of your cryptocurrency and let's say an llc over here this is for asset protection it's not to save taxes over here is where your roth ira is owning your cryptocurrency that's where we want to own our crypto so if you mine in your own name your trust owns your s corp we're saving on fica then as soon as you mine it you recognize the income from the mining then you transfer it the irs has said there are three ways crypto is taxed if you sell it it's taxed gain or loss and if it's a loss you get to take to take the loss some of you might want to harvest some losses and turn around and buy some crypto right back right now crypto's down for the based on the last 18 months sell it capture a loss use it okay the next thing you can do if you trade it if you trade crypto for another coin it's taxed gain or loss and then the last thing is if you use it to buy something so if you take your bitcoin and go buy a tesla so if you go buy something it's taxed so you've got these three taxes of taxable events okay uh how did losses factor in cruising cruising crypto what's cool about let's go back to this example right here is if you've got crypto and devin you can add to this i'll just give my two cents you might have bitcoin that makes you money and you sold some ethereum that loses money they all net out and then they come down onto your 1040 on a schedule d it's called a schedule d and you've got to recognize your income now by the way i know some of you are thinking well i'm using my crypto in an off-site storage site in europe and the the us isn't going to tax it bullcrap do you know what the number one question is on your tax return this year after your name and address did you buy sell exchange or have any interest in cryptocurrency yes or no under penalties of perjury if you answer that yes you got to account for it if you answer no and you get caught not good and you're like well but it's not in my name it's in this you know some story what were you going to say on that i was just going to say this is where uh contacting a tax professional is going to be a great help if you experience a huge gain on your uh from from crypto gains this year or from stock gains i've just helped clients with this this last week where we harvested some losses to offset those gains so they had some stocks that were down in value they didn't want to sell them but we sold them and turned around and bought them again same exact stock sell them turn around buying it's called harvesting losses you harvest those losses in years that you have a large capital gain the the opposite is true as well if you have a huge loss one year uh you can harvest gains so you take some of your other stocks and offset those losses by harvesting some gains in the future or in that same year and you use it to to offset those those huge years where they have huge huge influxes or huge uh downturns in the market and you happen to have a sailing event use some of your other passive investments to offset that i love it totally agree now the last place you can put your bitcoin is in your retirement account if your roth owings owns bitcoin doge uh ethereum litecoin bit what does it matter no taxes ever gains or losses do not matter so i really like putting crypto in a roth ira um okay [Music] okay triple eight says hey mark you guys are awesome uh my question is can i thank you triple 888 my question is can i have more than one crypto wallet designed or designated to my crt yes you can put real estate crypto and a business and stock all in the same crt you're good triple a you're good uh devin you got a good one i'm still looking okay um gold color says please speak about shutting down my wyoming llc down wyoming llc's sold to california residents these i found are useless and very much frowned upon by the state of kami california all right gold color boy say how it is tell us how you really feel okay um gold color i agree wyoming and nevada and delaware llc's are oversold not only to californians but to people all over the country now does that mean wyoming nevada delaware new mexico llcs are bad no gold color it depends on your situation the reason why people are getting away with this and i'll tell you i set up wyoming llcs for california residents sometimes it depends on their situation what's got you ticked off is there's people in a cell to everybody and they don't need it and so you say they're useless well they can be helpful now kami california they don't care if it's wyoming nevada utah or new jersey if you have an entity set up in another state and you live in california and you're a california resident they're still going to freaking tax it so number one point is not all wyoming llc's are bad for everybody across the country it depends on the situation number two california is going to tax any freaking entity not just wyoming hence why i moved out of california but i love to visit um wyoming llcs where do we use them i use them for two things so we're back to our trifecta and where do i use them i use them as a holding company i can create massive privacy and better protection but does what does my wyoming llc do it owns my other llc's in other states so i still have my california llc i still have my arizona llc still have my pennsylvania llc but i may funnel them all into a wyoming llc for privacy and a double layer of protection you want to add to that devin sound good perfect perfect perfect today all right question next call i got one um so jason jarrett says i we got to back up here a little bit and kind of make a help help you understand what an ira is here so if if you own bitcoin in your own personal name this is what i'm presuming right that you own bitcoin in your own personal name and you're thinking about transferring that bitcoin or that cryptocurrency to the ira we can't do that right we're not allowed to do that uh you're not allowed to sell it to your ira you're not allowed to just transfer it into your ira the only thing you can put into your ira is cash so you're limited to seven thousand dollars a year if you're over fifty six thousand dollars seven they say 70. hopefully it's not that would be great if it's 7 000 a year if you're over 50 and 6 000 if you're under 50 um and it's cash you put the cash into the l into the ira and then the ira buys the bitcoin but you can't take bitcoin that you already own and transfer it into the ira you sell the bitcoin take the cash put six thousand dollars into the ira and then take the ira and use that six thousand dollars to buy cryptocurrency but you can't transfer that transfer is prohibited okay now i feel inspired here i'm going to give you one last question plus we're going to give away four more books corey prepare names to just read them off to me when you're ready two males two females youtube and facebook okay now i'm gonna i'm just gonna throw down a killer strategy based on devin's comment guys this is this is deep this is masters doctorate level stuff now i'm going to talk about it in the framework of crypto but you could do this with real estate affiliate marketing youtube marketing mlm marketing let's talk about what devon just said so let's say you've got your 1040 down here you've got your revocable living trust and you've got some bitcoin over here so let's call it bitcoin little b and you've got an llc now some of you could say that's a rental so you could call it real estate or bitcoin it's just an asset and it's sitting here inside my llc we divide your life in half okay and over here let's say you have your s corp with the crypto mine all right or let's say you're over here doing a fix and flip or you have a 1099 as a realtor see the difference i got real estate hold realtor bitcoin hold cryptomine same concept right makes sense now here's what's cool you say well mark i want to sell this bitcoin and get it over to my roth ira well we tell you you can't do that no way so what do we do we maybe sell the bitcoin take that cash and we come over and contribute that cash to your roth and you go yeah mark that's great but it's only freaking six grand or seven grand that's nothing oh you want more well what the s corp can do where you're doing your crypto mine it can establish a solo roth 401k now this little bad boy in combination with your backdoor roth combined i could do 60 to 70 000 in one year it's called the mega backdoor roth i've got articles on it and videos on youtube go google kohler mega kohler roth you'll see all the videos so now i can take cash from the sale of this bitcoin or cash or bitcoin from the mine and fund the 401k mega roth strategy if you're married times two now maybe you're doing real estate fixing flips and 10.99 maybe you're doing rentals same concept i can push all that over here to buy rentals inside my roth or mega roth 401k that was deep we've got methods to help our clients make big money tax-free you can do the same thing peter thiel's doing jeff bezos warren buffett all those mega rich people we see in the news they're using the same strategies we're teaching our clients they just have a few more zeros you can do the same thing okay devin's going to answer a question then we're going to give away some crap i mean some good books okay uh i did not have a question ready what what the whole time i said get a question ready okay now spike says bitcoin sucks now spike please know when i'm saying bitcoin i'm just talking about cryptocurrency in general now if you're down on cryptocurrency that's cool i i'm not saying cryptocurrency is the next best thing to slice bread i have clients that are all real estate i have clients that are all notes i have clients that are all cattle i have clients that are all import export or youtube rev it's all the same to me it's either a small business with ordinary income where it's passive and i'm hiding it i'm protecting it and i'm saving you freaking taxes so spike i like what you're saying i heck i hardly own any bitcoin i'm mining bitcoin through my nice hash miner but i'm not going out and buying bitcoin so don't get no don't get down it's all good everybody okay you got your question now is killing time for you thank you i appreciate it damn it quantum shore asks uh please note 401k or he doesn't know he he says please no 401k employer contributions are 25 of s corp compensation okay true right when you're trying to put money into a 401k mark says you can put seventy thousand dollars in there what how does he get to seventy thousand dollars well two ways one is the way that quantum shore is saying where the company you put in as an employee now we're presuming you're over 50 years old to get seventy thousand dollars in there but you're over you're over um 50 years old you put in 26 000 as an employee the company matches you at uh 25 of your salary and and your salary would have to be somewhere around 150 000 and you're putting in a maximum of 63 grand into the 401k and then you add that to your backdoor roth ira of of 7000 that's where we get to 70 000. that's option number one but quantum shore there's another way to do this what mark was talking about is the mega backdoor roth 401 k with a mega back door roth 401k as an employee you can contribute your entire salary minus your your side the employee side of the self-employment tax but you can put your entire salary into the 401k so your salary would only have to be if you were trying to put 63 000 in somewhere around 65 67 000 for a salary to do the mega backdoor roth 401k and max it out am i right i'm doing some math here so in 2021 i can do [Music] 60 i can do my 60 if i'm over if i'm under age 50 people i can do 58 000 and a 401 k the name of this person asked this question quantum shore okay quantum you're pissed i know you're like saying you guys are wrong hang tight quantum trust me do you think i'd go out on freaking youtube and facebook live and post this for millions of people if i was wrong on this maybe i would i mean stupid but i'm trying not to be so ain't tight quantum okay you could if you're under age 50 in 2021 you can put 58 000 in a 401k now i'm gonna talk about how to get there in just a minute plus you can do your backdoor roth for six grand you may say you can't do both yes you can we can teach you how this is going to be a back door roth and plus you've got your 401k you could even have a 401k at work to stack this and we'll talk about it together you could have 64 grand if you're under age 50. okay now if i'm 50 or older so i'd go like this 50 or older in 2021 i can do 58 000 plus my makeup of 6500 plus my backdoor roth of all right so now i'm at 64 5 71 5 right okay now quantum's going how in the crap do you get this all into roth i have a whole video on it i have a whole article on my blog that's vetted by 20 different attorneys and cpas quantum people this is legit you can drop that into a roth now just quickly what devin was commenting on and i'll put it in red here is that he's saying this 58 000 or 65 5 and this 58 000 here to get that into the 401k you do your first 19.5 or 26 000 that's your employee e deferral you could do it at work and get a match you could do it in your own solo that's a whole other conversation then the rest of it you said well it's only 25 percent of comp okay cool and then you can do what is called a non non-not non-deductible and non-oh my gosh oh yeah it's called an after tax contribution if you've never heard of this it's killer you can do what's called an after tax contribution and get up to this amount i'm not kidding it's the truth this is called in combination i call it the mega backdoor roth because you're using the 401k back door and the roth backdoor and once you do the after tax contribution you convert it to roth on day two there's no limit on that if you guys got chills did you get chills this is legit right i hope you're having a good time people we call this hot live webinar not hot yoga we call it hot live webinar because we can't turn on the ac it makes too much noise we can't turn on the crypto miner because it's two noise oh so we're in here sweating okay corey tell me who my winners are dan deangelo is a winner of what your cpa isn't telling you but we're telling you your cpa may not tell you what we're telling you okay financial freedom who's the winner now if any of you win you got to go to corey c-o-r-e-y at mark jcoehler.com next time choose an easier name okay he was active okay t-tron let us know who you are okay tax on legal playbook who's the winner uh terry c kerry c kerry c t t as in taxes she's a realtor and she wants to get in touch terry c okay and corey wants to get in touch with her she's a realtor terry c corey cory's making an overture here this is highly inappropriate but but you can come visit our corporate offices and come live i'm going to give away a court matt sorensen's book the self-directed ira handbook this is good yes lori crowley crawley okay that was a little easier laurie crawley now see corey's gonna give me crap later that i can't hear him but he made me wear these freaking headphones so you know you're the problem not me okay all right i want to say thanks to devin here one of our tax attorneys at the firm darren's over here been answering questions corey thank you kinda ashlynn we really appreciate you terry get out here and meet corey everybody we're gonna have another great event next thursday at four o'clock mountain right here on youtube and facebook answering your questions helping you make money learn what passive income is be careful go out and make money but you gotta pay the tax man have a good strategy thanks everyone