P4 – Using Your LLC – Part 2
0:00
So, the trade name is useful when I, the way I use it is like this, if I’m gonna receive mail for a company, Let’s say it’s a limited liability company, I don’t designate that as an LLC on the 15, 83 form.
0:12
I don’t indicate that as a company.
0:14
Instead, what I do is, I use the company name as if it’s a trade name, as if it’s a sole proprietorship or a DBA doing business as So, if it’s, um, XYZ company, LLC, when I do my 1883, I’m going to writing the XYZ company as my trade name, not XYZ Company, Cama, LLC, because there’s no reason I need to disclose that information because the Postal Service will want information about the company. It may want to copy the articles and all this other stuff, just like a bank would.
0:48
So, just avoid that and use your company name as a trade name.
0:52
All right.
0:52
Now, there’s another thing in here, and this is a trade secret that I have.
0:57
Using a re mailing service.
1:00
There are services all, you’ll get your mail, they’ll open the package, you’ll have a payment on the inside of the envelope to do this service.
1:08
They’ll take the payment out, or maybe you’ve done it online with a credit card, or PayPal, or they’ll take the money out of the envelope and they’ll have another envelope that you’ve already addressed And inserted into the first envelope.
1:20
They’ll throw away your old envelope, take out the money and take the envelope you included and drop it in the mail, that’s a re mailing service.
1:28
Those are kinda split, those guys destroy records as they go.
1:31
So if you really want some privacy rebuilding as a way to go, there’s some expensive ones and there’s some cheap ones.
1:37
So, those companies, those services, do not require 1083.
1:42
It’s not necessary. You can get it. You get what you need, either way.
1:46
Just just to let you know, all right?
1:48
So, let me go into some more detail.
1:55
I’m going to talk more right now about the structure we’re using for the kryptos, limited liability companies.
2:02
And not filing the tax return, here’s why.
2:05
You’re going to illegally.
2:06
you’re going to legally avoid the reconciliation process and the accounting. So filing a tax return is just an accounting function.
2:16
The IRS has its own accounting function.
2:18
So it has a business master file, an individual master file. It has something called a non master file.
2:25
It has all kinds of files are nothing more than accounting ledgers.
2:29
When you apply for an EIN, no file is created.
2:33
When when the thing that got the EIN gets a 1099, no file is created at the IRS. The IRS doesn’t care.
2:42
When the thing that got the EIN and got the EIN files, a tax return, now the IRS cares.
2:50
What’s going to happen is the IRS is going to create an accounting, what’s called a ledger.
2:55
A book, something, it’s going to create an accounting ledger, and it’s going to measure it against the tax return you’re filing.
3:02
And based on how you’re filing or the tax treatment and what you’ve filed, it’ll do what’s called a reconciliation now. I may be speaking out of school here. This is the language I use. I don’t know if an accountant wants to use this language.
3:13
He may agree, or she may agree. I don’t know.
3:16
But this is what I say, OK.
3:17
So the tax return creates a reconciliation process, and so the IRS is going to see, all right, one of the one of the things it looks for is to make sure that the return being filed, matches all the reports given to the IRS.
3:29
So, if 6099 were filed and the tax return does not include all six, there’s going to be, someone’s gonna get it get, noticed at the IRS, and someone’s gonna have to look, a human being, is going to have to look at that, otherwise, it’s all software just churning through this stuff, OK?
3:45
If everything matches.
3:48
You can avoid the reconciliation if you just don’t file a return, But just keep in mind, you, most people have already filed 10, 40.
3:55
So, if you’ve already been falling 10 forties and you’re doing that on a regular basis, and you’re still, you know, needing to do that, then continue reporting any personal use of this LLC money, gave it goes to cash, report it on your 1040, OK?
4:11
That’s just in the event, you get audited and the IRS is all this money out there.
4:14
And wonders how you’re getting like, how you got a new boat and it doesn’t match your income status, your income bracket, right?
4:21
So, just be, just be aware that do the risk, do the right thing.
4:27
We use the LLC for disqualified escrow. This is a bad use of the term. I’m just going to use it that way. I think you guys know what I’m talking about is not escrow, OK, it’s just a way to move the money in a way where you’re not gonna realize again.
4:42
It avoids the personal gain, that’s the idea, So there’s no statute.
4:45
All right, there’s no regulation, and there’s no assessment, nor will they be an assessment because you didn’t follow return. When you file the return, that the return is the assessment now.
4:56
The assessment doesn’t become the assessment in IRS records in its system until an IRS employee, a fixes, a file number to the face of the tax return you filed, whether electronically or by paper, it doesn’t matter.
5:10
So, at that moment, an assessment is created, there’s an accounting entry, OK. It’s called an assessment.
5:17
By not filing, you’re not creating the assessment, therefore, there’s no reconciliation!
5:21
But, again, there’s no obligation until there’s an assessment.
5:26
There’s no assessment until you file.
5:28
So it’s weird because once you file, you’ve created an obligation to file for that period.
5:35
So think about that for a minute.
5:37
OK, furthermore, the types of asset we’re talking about here cryptographic currency.
5:42
Nowhere in the tax regs, in the statutes, case law, nowhere is there describe any type kind or class of tax?
5:52
Cryptographic currency, Yes. It’s defined as property. Lately they’re talking about. It’s going to be defined as intangible property, OK, fine or intangible assets. That’s fine too.
6:05
But again, there’s no taxing statute.
6:08
There’s no tax table, there’s no tax rate for cryptographic currency. They cannot tax the kryptos, and I’m gonna give you an analogy real quick.
6:16
But let me get into this.
6:18
There’s no regulation that describes the type kind or class of tax for a cryptographic currency transaction unless it’s sold, dispossessed for US dollars.
6:34
That’s the difference.
6:36
So, here’s why I explained earlier, in a recent interview, we don’t have the infrastructure to tax kryptos. Here’s why, if you were to tax kryptos, then you would have to pay the tax in kryptos.
6:49
Just like if the government were taxing trees, you would have to pay the tax in trees.
6:55
So the tax assessor would come out to your tree and cut off some bark or a branch, right? Get his pound of the tree, right?
7:03
That’s not how we do things.
7:05
Alright, we do things in dollars, US dollars, Federal Reserve notes, whatever you wanna call them. That’s why there are no taxes on crypto is we don’t have the infrastructure for it. Right now, Wyoming is leading the way, probably California’s next. They’re probably trying to create public policy or public opinion to influence people, to accept.
7:23
That kryptos could be taxable if everybody goes along with it.
7:26
Then yeah, sure, they will be OK, but right now they’re not.
7:33
So moving kryptos from wallet to wallet if you still own the wallet or if you control the access to the wallet.
7:42
Moving kryptos from wallet to wallet is not a taxable transaction.
7:47
This is the same thing is trading between kryptos, OK wallet to wallet that’s not taxable now.
7:54
I am spending money if I spend it from my wallet to some other guy’s wallet, right, to a business owner. That is spending money.
8:01
Again, it’s not spending dollars I’m just spending to another wallet Yes, I’m dispossessing assets at that point but if I’m going from wall to wall and they’re my wallets I’m not dispossessing assets.
8:15
I Think you can look at the case law for gold and silver, right? That’s a good rule of thumb to follow.
8:20
Likewise, if I take cash in my LLC, a Coinbase exchange, and I transfer the cash dollars let’s say it’s $500,000. Let’s say, for example, I move $500,000 through a wire.
8:36
Or, I do it through a Certified funds, whatever, or write a check.
8:40
And I move it to another LLC account.
8:44
That’s my account on the signer for it. I’m the owner of the company. Or it’s another person’s account. He’s the owner and I’m not either way.
8:51
It doesn’t matter, I can move cash or kryptos from my LLC account to another LLC account. That’s not a taxable transaction all the time.
9:03
I can move the money over there to fund the purchase of another asset.
9:08
Alright, so we’ll get into some more details on how to do the contracts and this sort of thing. I’m gonna give you some contracts, there’ll be connected, some templates you can work with.
9:17
And of course I’ll help you with it, just let me know, but I want you to see it’s pretty easy to do this stuff.
9:24
I want to get rid of dispel some myths so you don’t make mistakes.
9:29
All right, so, let’s see here.
9:35
All right, so we talked about that. Alright, good.
9:39
So, this gets it, gets us into, is the issue of how to move profits, right? So, what if that cash, I just used to fund another company was profits.
9:46
So what, I just funded another company If I If I put in my personal bank account or I bought myself a house and put the house in my name, OK, that’s profits.
9:55
Let’s report it on my 10 40, right. I think we all understand that much.
10:01
So, if you want to buy a liability like house, car, boat, whatever, or you want to pay off some debt, you want to pay off some personal debt with your windfall from kryptos, you want to go into cash or whatever. It doesn’t matter how you do it.
10:13
If you pay off personal debt with any asset, it doesn’t matter if the asset went through an LLC or was in gold, It’s still income. It’s still personal income because it was a personal debt. Even if your Uncle Bob paid it off. It’s still personal income, so, keep that in mind.
10:30
So, how would I get around a situation where I want to buy a new house and I got a mortgage on the one? I’m in now? I got a nice way to fall and I’m a multi-millionaire, right?
10:38
And I want to pay off my mortgage for, let’s say, I just wanna buy another house and sell this one.
10:43
Well, there’s a better way to do it, instead of paying off my mortgage, or having someone else pay it off, is two finance, the payment of the mortgage.
10:56
So there’s a couple of ways to do it, a simple ways.
11:00
Instead of paying off my mortgage with my windfall, I would simply set up a company.
11:05
Fund it with cash now, and use that company to get a payoff statement on my mortgage.
11:11
And I would pay off the mortgage with this, the second company.
11:16
Now that moment, if I stop there, I’m going to have a tax consequence, right? Like I said, doesn’t matter how you’re going to paid off, it’s a tax consequences for paying off a personal debt.
11:26
But if that second company now records a mortgage lien, a real one, it has to be real numbers.
11:32
Are real interest rate, and there has to be a payment history and all this stuff that I set up, uh, and it has to be for fair market value, whatever works.
11:41
Then I’ve just refinanced the old mortgage, I didn’t just paid off with a windfall. OK. So I’ve taken my windfall and I refinanced an old debt.
11:51
That’s a really clever way of doing it. You can do that for a car. You can do that for credit cards.
11:57
A lot of you know my opinion on credit cards.
12:00
I don’t like to pay them off, if they’re old, unless it’s gonna benefit me going forward. Like, if I’m going to get into a business venture and by paying them off, yeah.
12:08
If I’m gonna make some money with the debt.
12:09
Yeah, good idea, Just to pay him off, so I can feel better or keep my credit, it’s up to you, and for me, I’m not going to do that. I don’t care.
12:19
All right, So we can do real estate vehicles.
12:23
I can also use my limited liability company to own other valuable properties, like things that are normally title.
12:29
I wouldn’t try to title gold, unless I’m holding it in a vault.
12:34
If I’m holding in a fall, OK, maybe the account holder is going to be my LLC. It doesn’t have to be, but it can be.
12:41
Let’s say I want to own a registered patent or registered intellectual property, right? Then I could use my limited liability company to do that.
12:50
Likewise, I could, I could be the owner of the patent.
12:52
And I could then license out to my company, the right, to sublicense out that my patent use, right?
12:59
And the company can then receive the cash flow and disburse it according to, however, I want to do it, but I can own the patent rights.
13:07
That’s an example of how to do something.
13:09
So, there’s different ways of structuring this.
13:12
I mean, I’m, we can talk about it personally so that way.
13:15
You’re not just watching a video and hope he guessed, right, So we can definitely talk about it. But I want to share with you some of these strategies I’ve used over the years. OK, so yeah, you can title. You can title, I think property that is going to be titled. You can use a limited liability company for that. So if I want to buy some property let’s say again, I want to buy a house. I can title it in an LLC. Just keep in mind about the state where you’re doing this in the state and the county have certain tax benefits to homesteading. Some are better than others. Some are negligible, so won’t matter. Some are so good that like, in Texas, for example, I think Texas is pretty good for homestead exemption, homestead exemption will protect you from creditors. So it may be worth it to do it and make sure you do it right. Make sure you have all the proper forms, and I even consult with a real estate attorney, right, to make sure I do it right.