0:07
Hi, everybody, this is John Jay. Thanks for joining. Hi, Liz, can see over that, John, great to see you. Thank you so much for having us on. We decided to join with you today, thing thing. Right. OK, well, I’m going to mention a couple of things. As always, you can reference more information at … dot com. And then, our privacy fight dot IO is the link to get you to the video membership area.
0:29
But, … dot com is more of a blog, there’s an order form there, too.
0:33
And, we have, I put, I publish some videos on YouTube, under the channel privacy fight, as one word privacy fight.
0:40
So, I just want to mention those two things here. But Liz, if you wanted to, you’re kind of like, let’s tell, tell me what we want to talk about today.
0:47
OK, great, so again, thank you so much for your time today. I’m here on behalf of a crypto trading group called Cosmic Crypto.
0:55
And we essentially are a group that is offered under a service through a company that we founded called star seeded ventures dot com.
1:04
And we’ve invited people to join our crypto trading group.
1:08
And the group is filled with a lot of people who have a lot of very benevolent service to others, philanthropic philanthropic projects. And so we’re super excited to help people who have all of these great ideas, and want to do some great things for humanity. The planet, animals, things like that. And we just want to help all these great people to, you know, essentially, you know, gain and gain the wealth that’s going to be needed to effectuate these projects. So we found your website through some mutual contacts and said, oh my gosh, this guy because he can all see that the crypto markets are starting to, you know, pick up and it’s looking really exciting for the month of October and we just want to make sure that, you know, we’re planning ahead and we’re prepared.
1:54
So, that once we do finally see those really nice crypto gains coming in and we know what to do with them, how to hopefully avoid paying taxes on them as much as possible so that we can redirect isn’t as much of those monies. You know, back into these projects that were, you know, really, that we dream about are really excited about. So, we wanted to, you know, bring you one and M, or rather in this case for joining with you and your group. So, hi everybody. And we have a great crypto group as well, again, it’s on … ventures dot com and it’s called Cosmic Crypto.
2:26
And we actually, you know, benefit from some really amazing Psychics and people with gifts that are able to see Prices make recommendations, and we’ve been doing very, very well with that, so if anybody wants to join our group as well. We’re here, and we’d love to have you.
2:44
So, John, for our group, I’d love for you, if you could just briefly, you know, give us a little bit of a background about yourself, and that way, they understand your background, and basically, why listened to you, OK, appreciate that.
2:57
About the seven, last seven years, I’ve focused most of my work on, um, wealth planning, because of these, these ideas. Like especially for Kryptos, because, you know, people want to invest in their, they, they see that they’re gonna make some money and they have these brilliant ideas and they want to work on those.
3:12
And they, they want to be able to roll over their money in a way or re-invest it in a way that it’s not taxed at the very beginning. They also want to avoid third party risk, which we’re all getting familiar with. We’re all seeing that the court system is not really what we think it is and things like that.
3:28
And the whole economic system is actually not fair.
3:31
So for the first thing, I started doing this work back in the mid nineties, and it was more about putting out fires as I like to say. It was about people with huge problems. It was in the first year was mostly IRS problems, so that was where I first started learning. Then it got into credit, card, debt, then it got into Mortgages.
3:48
And so it was mostly consumer debt, but small business, and I learned over the years, and I’ve probably worked over 30,000 different types of consumer based, small business based debt collection cases. In the last seven years, though, it’s more about how do I structure something for my, my wealth planning, and then my family, and, and things like that. So it’s more about building, which I really like, it’s less stressful. So, I’ve used these strategies over the years. So, here’s what it comes down to.
4:17
People want to know, I have, if they have money and investment, and they want to take the value out, how can they do that in a way that doesn’t create a huge, enormous tax liability?
4:26
And I’ve talked to so many people, over the last few years, that they could have made more money, and they were actually afraid to, or they could have taken profits, and they were afraid, too, for taxes.
4:35
And so, so, all I’ve done over the years now, I went through the difficult times in the nineties, getting people out of ugly situations with the IRS. Now that if you can do that, then you can solve any problem, right. If you can solve the IRS situation.
4:50
So what I was able to do is I’ve discovered that if I change the property rights over my client’s property, then I can actually divest the IRS from its ability to take the client’s property.
5:00
and I don’t care if the IRS is doing it the legal way or than not, legal way or whatever. I just said, that connection, I don’t even care if the client owes.
5:09
It’s just, if that he owes fine.
5:12
But I don’t let the IRS, or a creditor, a judgement creditor take my client’s money, unless my client wants to pay him.
5:19
That’s the bottom line.
5:20
So, if I’m just talking to somebody who’s got some nice money and, you know, some investment somewhere, and maybe two years from now, he’s going to take a windfall.
5:29
Well, I don’t have any stress there and I can use the same strategy.
5:32
I can show them how to structure everything. We can take our time. You can learn about it.
5:35
When it’s in the early stages, where it’s, you know, on fire. I asked them to just take my word for it. Please trust me, and it’ll be OK. You know, I’ve even had, after consulting with people, I’ve even had the wife called me and say, How can you tell my husband that? You know? And it’s been quite a wild ride. Yes. So, my, my, my background is, and I’m not an attorney, I’m not a CPA.
5:58
I do rely upon CPA’s if I need something done, I don’t like them, like a lot of people. I actually, for my own self, my own financial matters. I use a bookkeeper, and I don’t use one, I probably is one a year. So, I have a unique way of doing accounting. I don’t like to do the accounting. I would rather have someone else, and I would rather trust someone else in doing that.
6:18
I trust myself with the custodianship of the things that, give me access to my assets, because that way, if I’m no longer able to use them, like, if I’m dead or I’m lost at sea or abducted by aliens, my family hopefully can access those credentials. So I have a unique way of doing what you would call a state planning. I don’t have a state’s. Just rule number one don’t have an estate.
6:41
I do recommend having a well, so there’s some unique things I do. But basically, that’s my background. Lots and lots of interesting things over the years. I’ve written about 12 books. I don’t publish them naming them anymore.
6:53
Instead, what I do is I Publish articles, like you see on ACEP coins, and then I just write strategies for clients, and then I do these videos.
7:02
I find that’s more productive and it’s easy to keep things updated if I just do videos, instead of write books, Because it was so So cumbersome to write a book, and then publish it, and then wait, and then modify, and this sort of thing.
7:13
Right, right.
7:15
So you raised a lot of interesting questions, right? Just out of the gate there, and, you know, for me, I say to myself, OK, You know, you’re talking about, you know, paying taxes, like on these crypto gains. one of the things that I wonder about, for example, is: How do we actually track all of our crypto transactions? Do we need to track our transactions?
7:34
If so, you know, how do we do that? Or is there a software you recommend?
7:39
Also, can the IRS track those things?
7:41
Can they go back and audit those transactions and if they can’t, is there a reason to even track any? Yeah, that’s a good question. Let me, Can I answer that real quick? Yeah. Because if you have more, we can do that. But on the tracking, if you’re using software on the exchanges, the answer to that is yes. The IRS can see everything. That’s the whole point.
8:00
The whole point of it. Think of Coinbase. Coinbase as an an agency of the IRS.
8:06
Right It is in essence it’s probably an agent of the SEC if not very soon, you know. So all these third parties, any third party where you don’t have turning client privilege. Yeah, you’re giving up all your data. When you open a mailbox, you’re giving up all your data to the FBI.
8:21
No.
8:22
So Yeah, so here’s what I recommend You’re not tracking Trades between coins, because I don’t know that that’s productive.
8:29
I think what you want to do is track cash and cash out just like any other investment Maybe almost like a stock investment So how do I do that? Well, I know what what coins I bought and I know how long I kept him and I don’t I don’t I’m not an advocate of trading frequently like on the hour.
8:45
I think you should buy something for the value of the thing You’re buying and then Watch it maybe or Sell it at a certain time or trade it for something else.
8:54
So a spreadsheet would do it. Now, I know that sounds like tedious.
8:59
But if you’re I think if you’re trading the right way the right way, which is maybe being a value investor. Buy the thing for the merits of the thing, OK?
9:08
You can record that in a spreadsheet or a piece of paper.
9:11
I mean, I would use a spreadsheet, but you have the date, the what you bought, maybe how much you spent. And it’s quite simple and go from there. If you’re using online tracking software, you are being tracked.
9:24
Everything is and no big deal. It’s really not a big deal really.
9:27
I mean, if, if, I’m buying and buying and buying and someone’s tracking, and they can see all the trades and everything.
9:32
Worst-case scenario, we’ve had 15 of these already.
9:36
A client gets a 1099 from Coinbase, right.
9:39
Because the software is based upon accrual based accounting and I’ll explain what that means in a second.
9:46
But the software presumes that you want a specific tax treatment in an accounting practice which is not in your best interest. That is going to create a tax liability. If you don’t know what you’re doing, If you go to a CPA, you’re going to have that problem. If you do what you see on Forbes, in the news on the internet, you’re gonna have that problem. You’re gonna pay way too much in taxes.
10:08
You want to, you, you don’t want to use the quaint tracking, but you want to use a spreadsheet and keep track of the coins you’re buying. And it comes down to simple math.
10:16
I mean, when I want to figure out my cost basis on something, maybe I have to pay tax on it, because there are times when you do. So.
10:24
If I, if I’m profiteer $5 million in one year and I take out $100,000 to do something fun, maybe I’m going to buy a car. I don’t know. Maybe I’m going to go on vacation, or who knows, maybe I’m going to add a room to my house?
10:37
That’s going to be taxable income. No problem, Well, what’s my tax?
10:40
My cost basis: don’t ask coyne tracking software. You’re gonna get some, You know? It’s crazy, so what you have to do is simple algebra.
10:50
It’s simple algebra.
10:52
It’s basically aeration proportion.
10:54
It’s that simple because Yeah, Yeah. So the cost basis in this case would be what you paid to? buy the coin initially, right?
11:01
Plus any fees that you may have paid you know on the exchange or to whatever retail platform right? In order to to get those coins, And then you compare that against what the value of the coin was when you sold it, right? To Get US. Dollars or whatever other fiat currency back in exchange for that that coin.
11:22
That’s it, and you would value in dollars at that point, And the reason why you do it that way is because you actually got the dollars Right, and so yeah, you would track it back.
11:29
And now I know you have a lot of um, Like so you’re not tracking it by coyne. Here’s what you’re tracking.
11:34
It you’re tracking it by the dollar amount you put into the investment and the date you did that It doesn’t matter what coins you bought or how many trades in between? It? Doesn’t matter, OK, now. You’re gonna have to explain to all of us why those trades don’t matter.
11:49
What matters is the cash because we’re being taxed What’s being taxed the cash, the currency you got it. Is there any Tax? Nothing else is being taxed. So what are we talking about?
12:02
I love when I hear there’s a crypto tax attorney.
12:05
There’s a crypto tax accountant OK, interesting I would love to see a crypto tax where it where is it? I’ve never seen it. I’ve never seen a new law. I show, I did a video a couple of weeks ago on showing people how to look at the Federal Register and track. all this news.
12:19
This bluff they’re giving you about the tax thing. It’s funny.
12:24
I get, I know in the articles come out because I don’t follow the news, but I still don’t the articles come out because, guess how many people asked me?
12:30
Joe, what do you think about this? Now, they said this. There’s no new law, OK, that the dollars are being taxed.
12:38
Track the dollars because, anyways, who cares about Bitcoin, unless we can buy a bunch of stuff with Bitcoin someday, which is probably soon, right? Now, I just care about how many more dollars I get to spend.
12:49
So, that’s the thing being taxed and I’m going to track that my life is much easier. I’ll give you maybe, maybe an example that this may be related. Tell me if this is a bad analogy, but I look at it like this.
12:59
If I go to buy a finished product in the store, a grocery store, I’m going to buy some cereal, which I don’t buy, but let’s say I get some cereal. Well, look at all the commodities that go into making the cereal.
13:12
Do we care what the price of the commodity is as the cereals making its way to the grocery store? Nope, I don’t think anybody does just the point of sale. Right? So right look at your investment like that, it’s cash in, cash out, it’s cash basis now, back to what I was saying.
13:26
Accrual basis.
13:28
Accounting has to do with taxing the value within a certain tax and tax and taxing period.
13:35
So typically it’s, let’s say December 31st, so it doesn’t have to be, but it could be December 31st is the end of your tax period. It could be quarterly also depends on what you would like. It depends on the structure you’re using. It depends on the instrument that’s being taxed.
13:47
So accrual based is based upon taxing the value and it gets paid out in dollars to the taxing authority.
13:52
No problem, that’s what big corporations do, OK, I’m not that most of us are not that, and even if we are, we can still use cash basis. In many cases, cash basis has to do with when the gain is realized.
14:05
OK, so explain to the audience what that means when you realize the game because do you realize the gain when you trade Bitcoin for X L M.
14:16
Do you realize a gain or a loss when you trade that X L M then for Shiva?
14:21
How does all that work, and when is it an actual taxable event to anyone that is buying, trading and investing in crypto?
14:30
OK, it’s when you sell stuff, sell stuff for, Yeah, When you sell stuff for dollars, then you could have a reportable event, it could be taxable, unos, it probably is reportable.
14:45
If you sell stuff for dollars that goes on the balance sheet, that’s already going to be filed, for example, you’re 10 40, right?
14:52
So if I if I invested, I started out with some Bitcoin, and my Bitcoin went up $5000, right, and then I decided, OK, I want to now, you know, trade that Bitcoin and go buy some XRP.
15:04
Do I have to pay income tax on that $5000 when I bought that XRP?
15:10
It’s not a requirement to do that. However, if you account for it that way, and you account for it under accrual based accounting and you file a tax return, claiming that as taxable profit, then the answer is yes.
15:21
The moment you file the tax return, it becomes required, but it’s not we don’t have to file a tax return. Well, I’m not saying that. I’m just saying. you’re the one you’re the one.
15:32
Just attorney the tax liability by what you’re filing and you have a choice All right? the other choice than any other choice is waited Till you get a gain and to answer your question. What is the gain I sell for dollars? Going from coin to coin?
15:46
Like on an exchange that is not a taxable event.
15:50
Why not OK if Let me just give you the example. So if I go from litecoin and bitcoin, and I’m really smart and the dollar value. I start with is one thousand dollars, and I go litecoin and bitcoin and I. keep doing that. And within three months, it’s $3000.
16:05
That is not taxable.
16:08
Now, I did It will be.
16:09
It would be if I sold all of it for dollars again, and I put a thousand in and got 3000 back and sure my, you know, my, my gayness three times. Right? The reason why it’s not is because there’s two criteria.
16:23
Let’s go back to the 10 40 on the 10 40, you have to answer yes or no as to whether or not you made a purchase of Kryptos. Right. Well, here’s what that really means. You can look at the irises website to see this explanation.
16:33
You have to look under Virtual Currency, some version of that. And you will see.
16:37
They have a Q&A section I think it’s question hashtag five And it says if you purchased someone else’s coins.
16:44
Meaning someone else own the private keys to those coins if you acquire those and you now have exclusive rights over the private keys and you got those by spending your own coins Not dollars.
16:57
Then if the answer is yes to having purchased coins Entry fees.
17:03
So this has to do with having the private keys for the wallet that actually holds the coin. Yes. So how is that different than when we’re buying and trading coins? Let’s say on finance or Coinbase? OK, this is my this, I wanted to say this 10 40 thing first. So you understand we’re talking about private keys.
17:22
So if I took a lot of dollars, and I went to Coinbase and I bought coinbase’s Bitcoin.
17:29
And maybe I bought my friend’s Bitcoin who cares I spent dollars to buy Bitcoin or coins that is a no on the 10, 40 as to not having purchased coins by their own definition.
17:41
Legally, we could say no to that question. You must say no, because that’s the truth if you’re gonna do it under penalty of perjury, you’d better say the answer, you know, the correct answer. So if you set Dollars on coins, I don’t care who they were?
17:53
That is a no on the 1040 to having purchased coins if you spent coins for someone else’s coins, and here we go back to the private key.
18:00
So that’s a yes, as having purchased your coins for someone else’s coins.
18:04
You got now the private key, where you didn’t have it before on Coinbase. Here’s what happens.
18:08
And I believe this is true for all the exchanges, I think they have to do it this way. The exchange owns the private keys and will not let you have them.
18:17
Maybe you can see him, maybe you can. I don’t know.
18:20
When you put money on the exchange, and then that shows up in your account, Let’s say you bought Bitcoin from Coinbase, you didn’t really buy the Bitcoin from Coinbase yet.
18:29
What happened is, they credited to your account with that, and you can see it there, so that you can track what you’re doing.
18:34
Well, what they did, is they changed the beneficial interests.
18:37
Because the account holder on Coinbase, is the beneficiary in the relationship.
18:43
Coinbase is the trustee because Coinbase has the private keys therefore Coinbase is the owner and trustee it owes the beneficiary back, when the beneficiary wants it.
18:54
This is the definition of a trust. And a trust is a relationship.
18:58
It’s not a document. You can express the relationship in a document.
19:02
So because, because of the nature of how the exchanges have to work, when you put dollars in there, and you trade back and forth, you’re never actually acquiring coins at all.
19:13
It’s just an accounting ledger on top of an accounting ledger. Right. Right? Technically, if you’re not ever actually acquiring coins, do you actually have to ever pay taxes on something that you never fired, as long as you’re in that umbrella? And that is why, I had to explain this to our accountant. And I’ve tried to do this. OK, so I explained this to the IRS and I and they agree with me.
19:37
I send a letter, went up, client, gets 1099. I take the 99, and I write a letter.
19:42
Now, this is a special, kind of, later, I started this back in, 2000. No, no. Take this back.
19:47
The first one I used here was like 1996.
19:50
OK, this is a request for determination letter, and I asked the IRS how to ask the IRS for a legal determination on something way back, And they sent me a booklet back then, it was a paper booklet. So I had to like, sit there on my computer for like hours and hours and hours, and re type this form letter they had back in the nineties. And to this day, I still have it, So I’ve modified it for what we’re doing here.
20:12
So, sometimes, it’s one year old letter. I love it, But I got the latest and greatest that, Oh, yeah, but I had to retype it, but anyways, so, so this letter is a six page letter.
20:24
It as a bunch of nonsense, but there’s a one little section on one page, which is illegal memorandum, and in the legal memorandum I explain to the IRS that explain why there’s no game and why there’s no purchase are not purchase or sale or disposition of assets. So I give the explanation using, you know, there’s some case law and things like that and there’s a little legal memory memorandum. And when I send it to them, they’re very cryptic in the response.
20:49
So what I tell them is my client is going to exclude the 1099 from his 10 40. Here’s a copy of this 10, 40 now. It doesn’t matter if he filed the 10, 40 by the way.
20:58
I can do this.
20:59
Whether or not you filed your 10, 40 if you’re going to file it That is.
21:03
so yeah so we send an unsigned or signed dead matter copy the 10 40 with a 1099 with a couple other documents.
21:11
And the IRS will sometimes write back and say please take no further action.
21:16
That’s it.
21:18
Wow, in response to the letter that you said, yeah, it’s a six page letter. And it has all this stuff in there and that’s their response. And this is why I tell them what I’m going to do.
21:26
I’m going to exclude this 1099, and they write back and say, Take no further action, OK? Or they don’t write back at all.
21:35
And nothing, we need that letter.
21:38
I have it, I mean, I can give it to you guys, but I’m just saying, Now this letter, I am going to do a special class on this, because I’ve done letters like this over the years, and if I if I publish it Excuse me, one second, if I publish it, not to say that you guys will do this, but it just becomes a novelty and an entertainment and people go, Oh, well, it’s better this way, and they start rewriting it. Next thing.
22:00
You know, it doesn’t work anymore, and then, I have to start over. So many people here. That’s a bad idea, guys. Don’t try to document even lawyers. I’ve sent this to a couple of attorneys and competence.
22:12
I ask them, you know, please keep it to yourself and they do, but they want is, they want to see why it works.
22:18
Yeah and I send it to CPAs and they won’t use it.
22:22
I have to use it, I don’t mind doing it for the client. I’m trying to help the client. I’m saying, Look, have your CPA if you’d like them.
22:26
If you like or you have, or you know, Teller. Here’s how you do it and they won’t buy it.
22:30
Oh, wow, that’s so interesting. Even though the IRS has routinely accepted the letter and said things like, hey, don’t worry about it. You don’t have to take no further action, and the CPA still will not accept this. Yeah.
22:44
Yeah, because it’s so far out of their, their understanding or their belief system, or they just, I’ve had the, everybody needs to pay taxes on everything. I agree with you. We should work. The definition of a tax is something you required to pay.
22:57
I have a problem with that, Right? That’s how our society functions. But I’m not going to pay more than I have to. And if you’re trying to trick me by by telling you have to adopt a certain accounting practice.
23:08
Well, that’s my problem, If I don’t understand that, because I’m responsible for, I sign the 10, 40, not my even My CPA is not responsible for that. But it’s funny how they’re in that profession.
23:16
I’m not, I’m, I’m, my profession, I would, if I had to use words for it, is that I manage risk for people, I show them how to manage risk. I guess that’s a more generic way to say, an ambiguous way to say it, so I don’t care what kind of risk it is. I don’t care if it’s a lawsuit. I don’t care.
23:32
I’ve had cases where a person’s, like, they were going to get a judgement and it was going to basically result in all the equity from their home being taken, and so I will, I’ll fix that.
23:43
Legally, yeah, and eliminate that. So yeah, it’s things like that.
23:47
Right. Well, it’s interesting too because you know, speaking about, you know, assets like real estate, for example. I know that on your website.
23:54
You know you talk about how people can set up, you know, companies where they can actually then move their own crypto gains from their personal wallet into the Wallet Avenue LLC that they’ve set up. And they can do that for the purpose of then purchasing an asset using that LLC and then deferring. Yeah, deferring, rice, you know payments. So think about that a little bit too. Because I know there are a lot of people in our group. It’d be really interested in that. I’m gonna give you guys a phrase. You’re gonna want to know this.
24:25
But I’m gonna start with the the question. I get in response to that explanation. What happens if the IRS wants to know about it?
24:32
And so, my response to that is, they can see everything.
24:36
You can confirm that everything is correct, and that you did it. And if they asked you why, the answer could be something like, I did it to avoid taxes.
24:46
Nothing wrong with that, because we all try to do that.
24:49
Just don’t lie, right, OK. So the way this works is if I have a beneficial interests now, there’s in law. There’s always these fictions that are created and if you understand what they are, you can use them for your benefit.
25:02
So, if, if I own something like, I own my car, and then I, I actually bought my car and I own it, and then I gave it to my daughter, and I said, just drive it, I’ll ensure and all this stuff, which a lot of parents do.
25:16
She’s the beneficial owner, I’m going to make sure she takes care of it. She gets the oil change. I don’t want to deal with that, but I actually am the title holder, right? So I’m the legal owner, but she’s the beneficial owner.
25:28
Most of us are the legal owner of our car and also the beneficial owner. We don’t have to be the same thing with assets. Same thing with cash.
25:35
Same thing with the bank account. We can do all kinds of steps.
25:38
So if I have kryptos and I’m the account holder, and I want to change my liability or tax situation, I can move my asset to another owner, Titleholder, I can change the title, I can convey the property for estate planning purposes.
25:59
And it’s done for estate planning purposes.
26:02
This is the phrase Geis estate planning purposes, and the fact behind that is that the beneficial interests do not change.
26:11
Now, I’ll give you an example of how this works in the real-world without regard to taxes.
26:15
So, if I Like we do this in Florida, Florida is a place where the people up north, they finally realized that they should be living in Florida.
26:23
They come down to Florida, and they hold the title of their home, they just bought in a trust.
26:30
So, the trust. Well, OK. So, what will happen is the, in the mortgage contract, most people get a mortgage.
26:36
So, in the mortgage contract, there’s a clause in there that’s called the Due on Sale Clause, due on sale clause.
26:45
If you qualify as a borrower to buy a house with a mortgage, they’re gonna underwrite the loan in your personal name with your credit.
26:54
And if you transfer the ownership of that property to a third party that never went through the, you know, the underwriting process, the bank is going to act as if its interests have been prejudiced.
27:06
So, it has a due on sale clause in the contract, rightly so, and it has the right to call on the note and foreclose.
27:13
However, if the beneficial interest stay Identic identically the same, no due on sale clause.
27:19
That’s right. Because this is how we … and if you’re asking me, How do you, John? How do you know you’re not a CP? I didn’t know this works. Because they are The everyone recognizes this, in-law let me give you another example. This has to do with the conveyance tax, not income tax.
27:35
Not capital Gains Tax, Not really sales tax. It’s more of a conveyance tax and in Florida is called the Documentary Stamp Tax. They have one in California and some other states, not all states have it.
27:47
If I convey the title of my house for estate planning purposes, again, the beneficial interest remains the same.
27:54
That is that exempts me from the documentary Stamp Tax, which is huge here in Florida. It’s a huge chunk of the money.
28:01
Yes, it is.
28:02
In order to get that, I have to the government has this form. Every county has this form. Don’t They’ll give it to you if you ask. Sometimes they act like they don’t have it but there’s a checkbox form. They really do. You check the box that says Conveyances, first state planning purposes and even some of them make it difficult to where there’s no option except it says other and you have to check the box.
28:22
And then right, beneficial interests remain the same.
28:26
And they will exempt that dollar amount.
28:29
Right. Same thing with the IRS. Same thing with capital gains.
28:32
Yeah, there’s some law, it’s so funny, I worked on a deal where we actually had the client drive out and take a boat out into international waters and then sign there, OK? Hey, I’ve done that. I’ve done that in the nineties. I was learning. Yeah, that’s cool. I mean, you could do that then You gotta documented with GPS co-ordinates. That’s sometimes expensive necessary. It’s really not necessary. All you have to do is change of property rights.
28:59
If I have a tax liability or if I have any liability to a third party stuff I have, can be ordered by a court to be taken from me.
29:07
Without my permission that the court can take it from me right if I have cash in the bank, right?
29:12
Well, if myself and my brother owns it and I and I owned it before and now he and I own it, for whatever reason, I’m no longer the exclusive owner of it. I don’t have the exclusive rights over that to spend the money.
29:25
So therefore, I don’t have the liability. So, a judge would say, yeah, you can take all this stuff. And when they go to get it, they realize it’s not my stuff.
29:32
It’s kind of my brothers, That’s what we’re doing, right? And then they can’t take it because you’re, your brother has equal interest in what’s in the account?
29:43
It is his interests, and he’s an innocent party, OK. Right.
29:46
So, OK, So purposes of asset protection, let’s say, from liability, Right. Exactly, so, we have an esteemed party which I’m gonna get to that concept in a second here, because someone asked me that in the chat, and someone asked me about Canada in Canada. I don’t know. I believe the IRS is also Revenue Canada.
30:02
OK, so yeah, that’s great, because I noticed in the chat we do, we have people in Canada. We’ve got people in Australia. OK, like I said, yeah, we have the same system. I believe all the accounting is almost identical.
30:18
So the process, there will be different, you can always ask your authority, your government authority, you can ask it for legal determination.
30:23
You can even ask the attorney general for legal determination when it comes to like, let’s say you’re running a business and you have a liquor license. You can ask for illegal determination from the Bureau of Alcohol Tobacco and Firearms or or from your state licensing. So, I would just go and go and check with your, your revenue, Canada, or whoever. If you wanna, if you want to do that, and understand what we’re talking about here, Understand the nature of the property ownership, and that is how you can show that there’s no liability.
30:51
Let’s see. So, what I ask a lot of clients is to get them started on. Some of this stuff, OK?
30:59
Let’s go back to Innocent Parties.
31:00
So an innocent party, I create an innocent party by changing my property rights, I can change my property rights, because now the beneficial interests do change, but I also have other rights to do that. I can, I can still do that.
31:11
As long as someone’s not going to be prejudiced, like a creditor or somebody else, I can plan ahead, OK.
31:17
Um, Innocent party can be two owners of, let’s use the LLC as an example, because I know a lot of you are familiar with this, the limited liability company, which I can use anywhere in the world, even if your government doesn’t recognize it, It’s easier if it does.
31:32
The limited liability company can have owners. They’re called members. Sometimes they’re managing members, or just members.
31:40
They can be, If they can have one or more, OK, So if I have one owner of an LLC, like if I own it, well, then, it’s a single member LLC, and any personal liability I have would attach to any assets the LLC has, because I own 100% of it.
31:59
But if I add my sister on there, then that’s different, and the way I do that is I’m in the articles with the state where I was published.
32:06
I registered the company, So now, it’s public record as to who the ownership is vested in, right?
32:12
So, unless my sister and I have the same identical liability to the same identical creditor, they can’t They cannot pierce the corporate veil, as you guys understand, OK? And so long as you’re following corporate formalities, which is very important, that’s how you retain the protections of the corporate of the business entity. It. Well, it has to be what you say it is. So if you publish the articles, you operate that way now. You don’t have it. That’s right. Yeah. You don’t need minutes. You don’t need to keep track of things like that, But it’s enough to have the the articles on file with the state.
32:41
And you want to have a decently written operating agreement, and we can get into that. That’s a little more involved. But it’s not so essential.
32:50
What the most important thing I’ve found over the years, almost almost 30 years now. It’s on the public record. It’s what appears.
32:56
it’s the title of the property, OK? It’s a title, like I can have a single member LLC, and I can avoid all the tax consequences, no problem.
33:05
If the IRS ever wants to make a deal with me and I own a bunch of money, they’re gonna look at my interest in the company. They’re gonna say, Hey, that’s your money, too.
33:11
And they’re going to be right.
33:12
So just understand where that is.
33:14
So the innocent party can be two people that own an LLC, it could be you.
33:18
It cannot be a married couple, Husband wife can’t be OK. That’s a single party.
33:24
Probably not innocent party because you guys have all kinds of liability going to debts. You drive a car.
33:30
I like to say consider other types of liability because as a human being that goes out and does things and interacts with people, and has a car You could be accused of things.
33:39
You can be subject to civil asset forfeiture. The great story I like to tell people is this gentleman called me one time this years ago maybe 10 or 12 years ago And he called me says yeah, watch your videos and I I talk to my friend. He said, call you, and it was great. Yeah, thanks. And I went ahead and transfer my car into my church.
33:55
And I asked them, OK, so let me get this straight. You actually have a church where, like, there’s people that go there and they donate money. It’s like you show up on Sunday, he goes, Yeah, yeah, it’s actually a church and I said, OK, so it’s a 501 C 3 or something, right?
34:06
Because, yeah, I said, and you conveyed your car title. Now, the church owns a car also.
34:12
And he said, yeah, so I said, OK, so imagine this scenario.
34:15
You wake up on Saturday morning, and the car has gone, C called the Police, and Lucky for You, by lunchtime, they recovered your car. And it was on the inter-state abandoned. Somebody had gone for joy ride.
34:25
But as a matter of policy, the cops have to check the car, or they have to search it, and they searched the car, and they found in the trunk, human, blood, and cocaine.
34:34
So now we’re interested in medical heat going well. I mean, I’m just saying, you never know. The purpose, yep, total. Silence on the other side. I was like, oh, are you there? And, I said, Now, imagine the cuffs that police have questions for you. And so, you know, you’re gonna do some talking. Oh, my gosh, you know? Because, now, the thing that a lot of people depend upon and that care about and that you care about, it’s at risk is in jeopardy. Because of this thing, instead, I’d use that example. That real life, real true call, I had, OK.
35:04
Because that’s why I say your car is on fire and caches on fire. Your car does all kinds of nastiness.
35:10
It gets out there and you could be the best driver ever and somebody just, you know, T bone you and no drama from there.
35:17
Yeah. So you want it, you want to compartmentalize things.
35:20
So, the way you do that is, you have an, a true innocent party in the LLC, Not a husband or wife.
35:26
You can add a child on there, who’s adult age, or close to adult age. I say 716, 18, those are good, OK?
35:33
Doesn’t mean that he gets any money. It just means his names on there, and as a courtesy I like to let people know Hey, I call my brother, They can add your name to my company. I’m like, Yeah, sure, fine. You know it just depends on your relationship with people.
35:43
A lot of times, people ask, what liability do I have if you add my name to the LLC, and the only liability would, would be limited to what money you paid that person, OK?
35:53
All right, OK, so there’s an innocent party, so the latest thing I like to do, and I didn’t do this for many years until recently.
35:59
I started using unincorporated associations or trust and my clients already have.
36:05
I make those, the owners of the LLC, and that is your innocent party.
36:10
And that does not give you charging order protection.
36:13
Charging order is a writ from a court in order that says, The owner of the company has a 100% interest in the company.
36:20
And the creditor can take the company’s money for the owner’s liability, that’s a charging order.
36:27
What, where you have recognized court recognized protection in the court and by law, by statutes, is that if there are two owners of an LLC that are not married and that don’t have the same liability, the only liability is when the individual debtor member of the LLC is received receives money from the LLC That’s what’s at risk with the money that they’re actually receiving from the LLC itself. That’s the part. That’s at risk. Exactly.
36:54
Yeah, So what you’re what you’re explaining to all of us essentially is this is a method, right This is a Way that once we have our crypto gains, right we can take our our profits from our own crypto wallet.
37:09
We can actually create an LLC whereby you know, we create that LLC then we create a profile with the exchanges or anywhere that we’re gonna actually be moving those coins right into a wallet That’s held by the LLC once we move those assets right into that wallet may become the property of the LLC. What you’re explaining is, if we then go buy assets with, with that money that’s in the LLC, we can protect those assets by having multiple members of the LLC, again, other individuals that we trust, such that because we each have an interest and it’s an undivided. Hm, hm. I’m trying Yes, so, interest, right, That’s right, undivided interest.
37:52
And then specifically, if we don’t specify right exactly what those interests are, right. Because it’s, it’s better to leave that sort of nebulous in the documentation so that it’s not don’t matter, I’ve seen lots of documents like that and it’s totally not necessary. You can be crystal clear about what it all comes down to disbursement.
38:12
It all comes down to what money is disbursed to whom when OK.
38:17
so yeah. yeah, you can have a clear 20%, they can’t touch it until you get the 20%. They can only touch the 20%, it’s actually distributed.
38:24
Yeah, and if it’s 8%, they can only get that, right?
38:27
Then, if the document doesn’t call for any require distributions, there’s another thing I you said that very well, because in my operating agreements, as a matter of my profession that I choose to the way I choose to do things, I exclude any distribution schedule.
38:43
Not that you have to do that, but because it’s OK, Good question, I mean, this is good, because I don’t have to, you don’t have to, but I do, because I, I want to make sure that it’s really bullet proof, and I hate to say dummy proof.
38:59
Exactly, and putting that information in there, and you start specifying.
39:04
Yeah, I mean, it could lead to some things, but I just want it to be, so far, it’s worked so far. I’ve never had a client come back three years later and say, hey, that thing it did for me, this thing that thing happen, can you help me out? Never had that happened, yet?
39:16
And it just makes it easier.
39:18
I mean, even for myself, my own, I do the same thing I do for clients.
39:21
So, I mean, I just want less drama. I just want to enjoy the use of my money. I want to come, not always. Sometimes, sometimes, it’s fine, But just, just, again, just to be clear, again, we’re distinguishing guys between an LLC that, we create for, the purpose of pouring over our crypto assets, are crypto gains right into an LLC? That? we own, exclusively as the sole member? LLC? OK, for the purpose of holding those gains?
39:48
And then you just distinguish that between an LLC that we create for the purpose of purchasing assets that we want to protect that we want to make bullet proof is. John is explaining from liability from third party creditors, OK, And in that case, that’s what John’s talking about having multiple members of the LLC Right, And then not necessarily specifying, for example, distribution rights. And Again, this keeps it where you’re able to actually protect those assets from third party liability, Because what happens is when you start to have this amount of wealth that you’re gonna get from your crypto games? And you start to buy all these assets.
40:26
You need to protect them and then John, we would put no assets separately in separate LLCs, correct? Specifically, let’s talk about real estate for example, OK. We can talk about strategies. I want to mention one more thing on the CLC.
40:39
OK so we can have a single member, but it doesn’t have to be you individually. So a lot of us, or everybody, all of us, have affiliations with groups of other people. Namely, we’re all part of a family. Whether or not your relatives are still alive, I mean, you still come from a family.
40:53
Or friends, or neighbors or whatever, unless you just live out in the woods, I mean, gosh. But, we have things in common with other people. You’re all familiar with this, Homeowners’ Associations.
41:03
Did you know that if you’re renting a property in a neighborhood, you’re still a member of the association, because you have the same rights as the owner, as a tenant?
41:12
So, yeah, So homeowners associations includes all the homeowners, it does not include the board of directors, as the board, because the board doesn’t own any home.
41:23
like that. See. So, you gotta think how this stuff works, OK, so, Right? So, because we’re all part of associations, I like to keep things real simple. I’m just going to imagine that.
41:32
Every client I work with, every person I work with has a family, and probably somebody in the family is still alive.
41:38
OK, so, I’m going to give that family a name, and let’s say the client’s name is John Smith and so I’m going to call that family that John Smith Society.
41:47
For example, I’m going to start out that way. If he doesn’t, my client doesn’t like it, he’ll tell me, and I’ll change it.
41:53
So, because it’s an association, I’m gonna describe it that way, and I’m gonna make that the assert the association, an owner of the LLC.
42:01
So, my client, John Smith, has an LLC that he’s using. He’s signing for it, he has all the authority on it, he doesn’t own anything. Why?
42:09
Well, because I just, I just named an owner. That’s not him.
42:14
And the owner actually exists because it’s his family.
42:18
Great agreement for that, for that LLC. Operating Agreement would specify that John Smith has signing authority to bind the LLC.
42:26
Even though John Smith doesn’t own anything in the LLC, it’s exactly right.
42:30
Yes, he’s the boss. But just knowing anything. All control, no liability, no ownership, yes. Uh-huh.
42:38
So the association one’s family, is an association, Maybe you don’t like Uncle Bob. And we don’t like invite him to Thanksgiving, but he’s still part of the family, So there’s, and it’s private, right, Because not everyone can be in your family.
42:50
So, what’s part of it?
42:51
So it’s a private membership association. It exists.
42:55
So, friendly.
42:57
Write a name.
42:58
OK, yeah, well, yeah, well, I make it the owner of the LLC.
43:02
In many cases, and in establishing that private membership association, is, is established through a written instrument, a legal instrument, Or is it just a name that you put into the document? Literally. Just a name and that’s all that’s required. I don’t need a document now if you come back to me a month later.
43:19
I know I said that quickly, and gloss dial back the second, I think, that through a little bit. But, yeah.
43:27
If you come back to me a month later, and say, You know, this is interesting.
43:30
Um, my wife is asking about, what happens if I die, and all this my kids are asking, or we’re both considering, you know, This thing called a state planning estate planning is what you do with the stuff that you have the right to sell and spend when you’re dead or what happens to it? Or what you want to have happen to it, right? So that’s part of your estate. So, that’s usually managed through a will that brings you into the court system, probate things like that.
43:53
That’s if I can, alright. I don’t want you to everyone, OK. OK, so kids, whoever, that, So, I’ve, given your family name, it’s unique. It’s never been used before more than likely.
44:07
But your family’s still is there, and it exists, and because you’re the boston, because you act on behalf of your family, because you act in behalf of the owner of the LLC, no matter what you call it.
44:17
Right. The owner of the LLC is the trust, and you’re the trustee.
44:21
That is a relationship, so, I’m not saying that this is the LLC, is it trust?
44:27
The LLC is what it is, it’s an LLC, it just happens to be owned by an association, and the relationship of the person who call it makes all the rules, creates a trust relationship.
44:38
It’s just like with, with my children, or your children, there’s a trust relationship that, by the time they’re old enough, you’ve done the job to help them go out into the world. Right. That’s a trust relationship. Is kinda the same thing here, so I’m gonna see if I could try to mute someone because I don’t, I don’t want them, you know. I’m gonna have to go ahead and unmute yourself Leah.
45:01
OK, sorry about that. OK, No problem.
45:04
Sorry, OK, so I just want to get into so I want to show you guys, there’s ways to do the ownership and this goes back to what I was saying about changing your property rights.
45:12
Understand what you have at your, at, your, at your, and within your reach and use it.
45:19
That does not mean that Uncle Bob can spend the money in your newfound wealth.
45:23
Nobody has a claim on that. Nobody in the association, nobody in the trust does, You still make all the rules.
45:29
Yes.
45:30
So, So, when you set up this, this LLC right, and you have the association that actually owns the LLC, and then you act, let’s say as the seiners. because obviously, you want to have, you know, you want to be able to essentially have control over what happens with the assets of LLC. So now you go over to your local bank, right? Because you want to go ahead and set up a bank account, and you want to transact business through that bank account.
45:53
What type of document Do you recommend that we actually take to the bank? Because, do you want to take the full operating agreement that has all of this information in it? Never, never do that. Short form. Yeah, yeah. I’ve never, never, never disclosure, real, actual operating agreement. I give a fake when the clients.
46:10
Yes.
46:11
Totally, yeah. Or a short form one, right, I’m going to tell you the basic. Yeah, yeah, let me tell you why.
46:15
Because I will lie as long as I can get away with it legally, and if I’m being being an advocate for my client, so, count on that, but I will not lie to you. I will lie to anybody else who is going to create a risk for you.
46:27
As long as I can get away with it, I’m not going to commit fraud, though. So, or put another way, you’re going to protect your privacy to the fullest extent. That’s what we have to do in these days. We have to live with our privacy sometimes, so yeah, that’s right. Yeah, yeah. So I give them, it’s neither dang business, OK? But it’s not because. Here’s, here’s the last you take.
46:47
When you give up the agreement that formed your company, OK, the operating agreement is the company.
46:56
You take that up and whether you understand it yet or not, that agreement is proprietary.
47:03
Correct. That is just like as special as, as private as the color of your underwear. Yes. I have to tell anybody what that is. Only your partner, OK? And the operating agreement, right? It’s private.
47:16
Bankers, they’re idiots. They’re providing a service. They don’t need to know it.
47:20
And they’re incompetent.
47:21
It doesn’t serve them to see it anyways. What they’re doing is collecting records for your liability to create a liability for you.
47:29
That’s right. So that’s why we give them a fake document, and don’t argue with them.
47:32
Makes life easier.
47:34
And we document guys. What he’s saying is, you know, you can put together, again, it’s called a short form agreement. It’s very, it’s just a very abbreviated form of the operating agreement itself. So the name of the company, The date it was established, who has signing authority, just the most basic information that the bank requires, so that you can go ahead, open up that bank account, transact business, and so that the bank understands who’s allowed to sign on the account. Who’s allowed to draw money on the account? That’s exactly right. You hit it Right on. And the thing that makes them, except the document is at the very top, it says, operating agreement.
48:08
That’s right. It’s totally not. But that’s what it says. That’s all. They see a signature on there, OK? That’s all I care. Yeah, But it’s no. Anyways, Here’s why I do this is very, very important.
48:20
Don’t even do this when, five years down the road, and you can’t find me anymore.
48:24
Don’t even do this then.
48:26
Don’t go anywhere. We need. You know, I’ve played I’ve been around. I’ve been around as long as you do this, so.
48:34
The first thing that someone wants to do is going to do the first strategy. Any attorney is going to do or any government agent is going to try to get ahold of that operating agreement because he’s going to try to say, or she’s going to try to knock it down and try to break it apart and say, well, you see here isn’t There’s a liability here and this is big or whatever they’re going to do? And you can You don’t want that in the bank’s file.
48:56
Here’s the thing, let’s say, Let’s say you paid a dream team of lawyers and experts to write this contract, right? And you’re in that position. And when you get to that position, you already lost.
49:06
If someone’s trying to, if you care about someone getting that operating agreement, you already lost, you want them to get that operating agreement, that sounds contradictory.
49:16
You don’t want to give it to them.
49:17
But you want them to go try and get it in an orphan. They get it, they have to justify to a judge why they should have the right to see your operating agreement, and I’ve never seen that.
49:27
None of that.
49:29
And it’s not because I’ve done anything, is because the system doesn’t need to do that, OK, But, that’s, this is another reason why I write the agreement’s this way, but if they were to get it, they’re going to get it under subpoena now. That’s correct. Yeah.
49:42
So, here’s how this plays out and again, we’ve never even gotten this far, but let’s say we did.
49:47
So the the subpoena, the operating agreement I’m going to follow motion to quash.
49:54
I’m gonna ask for protective order.
49:55
I’m gonna make them prove it, under every condition I possibly can, and if I still can’t, OK, fine, guys, you get to have it. And guess what?
50:03
If you don’t have one, I would still make the fight.
50:07
Let’s say you have an LLC and you never have an operating agreement. You don’t even know what that is. Let’s just say you did it yourself, and you’re doing fine, Everything’s great. You don’t have an Operating Agreement.
50:15
You should have one, but you don’t.
50:17
And so they’re doing all this mess right. I would not write to them and say, I don’t have an Operating agreement. I would act as if I do.
50:23
And make him get it. And the moment they get it, and that the judge is going to say, You got 10 days to give it up.
50:30
I will go get one and write it up and make it so that it’s bulletproof and then give it to them.
50:36
Right? Exactly.
50:38
And the one I’ve given you, the one of my standard documents that I believe is bullet proof, if it ever was subjected to a court order to be produced, that would not help them.
50:50
Right. Exactly. That’s, that’s why I do that. So I’m not saying, practice. Best practice, best, practice. Always. Yeah, don’t get into the fight. I mean, I’ll tell you a true story, and I just, man, I lost $100,000.
51:04
It costs me when I could have spent $500, and I had to hire this attorney as this years. Years ago, 2002 or so in this.
51:12
It was just a stupid thing I did, being lazy and it cost me $100,000 of attorney fees because I didn’t have a contract.
51:22
It was a Handshake deal, and it was worth a lot more than $100,000. It was worth probably $30 million. But at the end, after a year and a half and my attorney did a really good job for me, I came into Office, I think I paid the last last $15,000.
51:37
You know, and I was actually happy to do it because it was my fault, and I saved me a lot of money in the future. But she said to me, you know, John, you could have saved all this money If you just pay me 500 bucks an hour to Dennis.
51:48
I said, I know, I know, you know, and then she gave me a couple of pointers. You know, after that. So, it really, it’s worth it. I mean, it’s not so much that the document is written.
51:56
Like your trust is so well written and it is by this prestigious law firm that doesn’t matter. What matters in one of the first risks I addressed with a client is costs of litigation.
52:07
What’s this going to cost to defend.
52:10
If I can make it in a way where it won’t be needing, needing a defense, then I win.
52:16
Cause zero for that.
52:17
Yep.
52:18
I’ve had that conversation so many times with my clients, telling them, Listen, guys, remember, it will cost you much less money. You have me. Write your contract now, Yes. And if you just proceed forward, I will testify, and I have that conversation with them all the time.
52:36
And luckily, I think a lot of people do get it and it’s, it’s very encouraging right, when you when you realize you’re getting through to people that way. And so I don’t think she put the stuff don’t be cheap. It’s worth it.
52:47
I don’t yeah, I don’t like I don’t like going to an attorney or an accountant and say I don’t know what to do please help me.
52:54
I at least want to have some clue And they maybe be involved with the solution. You see if you go to them and say please help me, I’m I don’t know, you’re gonna get exploited. Most of the time.
53:02
So it’s just, Yeah, and, maybe they don’t mean to, but sometimes, and sometimes they don’t like to want to do certain things, so you just have to really kinda get, It’s your money, you gotta really technically.
53:13
Yeah, exactly.
53:14
So I did want to ask you a couple of other things, but I want to also just be mindful at the time so because we’ve got some great questions coming up here in the chat and I’m just kind of glancing down this one let’s see.
53:30
Gosh, you’re right.
53:34
OK, so Kelly Layer asks, What about those who have people in different countries? For example, and she has a business partner in the UK. She is in the United States.
53:46
OK, if the interests are maintained in a particular country, that person’s name can be on the instrument, You can have that person named in the articles, and have his interest expressed in the Operating Agreement.
53:56
It doesn’t matter, you just have to pick the jurisdiction, and then, OK, that may depend upon the nature of the asset.
54:02
It may also depend upon regulatory requirements and remedies.
54:07
Cause sometimes you need to be in a jurisdiction for a remedy. And hopefully, you guys can work it out, so you don’t need to use the court system.
54:15
But, yeah, there’s a couple of factors there to consider.
54:18
And the remedies that you’d be considering on the, you know, you’re saying, based on what you would reasonably anticipate in advance, right, might be issues that might arise. And then, therefore, you take into consideration what the remedies might be. For example, if there’s a dispute in the agreement, or the arrangement, And something you didn’t anticipate, there’s a dispute.
54:36
A court will take jurisdiction, but you’ve gotta be in the right, sadists to, to have the right court take the jurisdiction. So what is that? It depends on, like, if it’s a hotel in New York, OK, Well, then, it’s going to be New York LLC, more than likely, or, or SQL, or whatever it is in, New York.
54:50
I’m not gonna, yeah, I’m not gonna make the owner in Ireland.
54:54
Even if one of the members is in Ireland.
54:56
His interests have to be in the states.
54:59
Got it. So, if somebody wanted to open up at, or form an LLC with somebody in another country, and somebody here in the United States, they can do that, simply by adding that person’s name, as a member of the LLC, and then, they can go ahead and open up a bank account here in the United States. Obviously, you’ll be recommended, or assume, the person that lives in the United States is going to be the signer on the account, that’s right way to do it yet.
55:24
And then they both can put their crypto assets into the crypto count that’s created for that LLC with Exchange or wherever it is that they’re going to keep their, their current, their crickets, Right?
55:36
That’s right.
55:36
Generally, for a business, a business enterprise arrangement, I recommend that you have at least two seiners from the business when you, you might call them the board of the board of directors, They might call them the partners.
55:48
If it’s only two people, then find both the outside for the account.
55:52
If there’s three or more or 15, still have two people.
55:55
And it’s not about trust. I mean, maybe a little bit of it’s about trust, but it’s more about being pragmatic.
56:00
Because if one person is not available, you still want to have some protocol to deal with that.
56:04
So to people, is a just a way to be pragmatic. And how would you do that? Then if you’ve got, you know, another person or multiple people in different countries and the bank will physically walk in and saying, well, OK, then you can have to work out the back. Yeah, I know. There’s there is a way a lot of foreign clients, I know from Canada and whatnot, they’re able to open accounts here in the states. Not that they have to. They don’t normally do that, but they can do that. They can use their ID and all this and from Canada.
56:29
And they’ll, they’ll do it. Some banks won’t. Some credit unions? Well. Yeah, OK. Great. Thank you. So, let’s see. Here’s another question. This is from.
56:38
Lets see, Hora, and she says, question to you, John, you may have mentioned this, but do we get taxed on crypto after a certain amount or every cent that we cashed out.
56:49
In general, it’s only what you realize as a game.
56:53
It’s, it’s not, it has nothing to do with the value of the coins unless you’re using accrual based accounting, OK?
56:59
And so the gain again is calculated by taking the amount G originally put in, plus whatever fees you paid to buy that crypto, right? And then you subtract that amount from whatever the amount was when you sold the crypto and then it’s the difference between those amounts that you actually pay taxes on.
57:18
That’s right, OK. That’s exactly right.
57:21
Yeah, OK. Here’s another question from little teen.
57:25
Can a veteran of the video membership helped me with single member, LLC, PMA versus multi member LLC, pros and cons or is one better: OK? you’re both getting you’re both getting charging order protection. It’s just that one is recognized by the court, and the other is not the PMA or the trust owner. The single member. Trust single member PMA does not have charging order protection but just the same. it’s an innocent party.
57:49
So, the creditors explain to people charging order protection. People don’t know what you’re talking about.
57:54
The charging order is when the Court says to the creditor, who asked the judge for an order, allowing the creditor to take property from the debtor.
58:06
Correct the property is 100% literal line that the creditors get in and who get exactly first dibs. Your stuff, everything gets to levy. It’s a charging order is a love. It’s an order from a court.
58:19
Got it.
58:20
So So the Court will recognize the charging order when there’s two members that are not married on an LLC.
58:26
The court does not recognize a charging order protection, or, or a separation, or any sort of thing.
58:33
If there’s a single member, let’s call the trust or a PMA.
58:36
However, part of the application process that the creditor has to undertake to go to the judge and ask for it.
58:42
He’s going to have to justify the interest that the creditor has and the defendants interest in the organization.
58:51
And if the owner of the organization is an innocent party and it’s not the defendant, the attorney can never justify it to the judge, so he won’t even ask. Or if he does ask, he’ll just look like a fool.
59:02
And they have an undivided interest.
59:05
Yeah, I mean, even that, too, So, yeah, what I hope to get. They have an undivided interest, right? I mean, that’s never even going to be on the table to discuss, anyways, because it’s not even the party.
59:14
Let me give you guys an example Like I said, I’ve been doing since the nineties, OK? And I never called it.
59:20
This what I’m calling it now, like PMA, or on a corporate organization. But, what I used to do is, if a client would come to me like a chiropractor and he’d be having a tilt take, till, take is where the IRS does a, loving takes everything.
59:32
So imagine you’re running a business, and it’s generating 30, $40,000 a month.
59:36
And your, most of that money is coming from the merchant processor. Write credit card payments, OK? Yes.
59:42
So, he owes the, let’s say it was a half million dollars to the IRS so they’re taking everything. They don’t care.
59:47
They don’t care if the business goes down, which is stupid, but anyways, So I can’t stop that, in many cases.
59:53
So what I will do, is, I will create a new company with, I’ll make my client that the owner, like he has right now, but it’s a new company. It’s a new LLC.
1:00:01
He has an LLC, it’s, it’s an S corp, but I just set up a new LLC, make him the owner, and I go to the merchant processor, I give them a W nine.
1:00:09
I say here’s a new company to pay to, and here’s a new EIN, all the money starts getting routed over there.
1:00:14
All his new bank deposits go over there.
1:00:16
Well, guess what happens to the IRS totally cut off.
1:00:19
What are they going to do about it?
1:00:21
Come to the table and try to work out a fair deal instead of taking old stuff.
1:00:25
Shut his business down, Are they gonna go to that new company that they can see, that I just set up, that he is also the signer for?
1:00:32
And take the money from it. Nope.
1:00:35
Why?
1:00:36
It’s an innocent party, right? And even though they can see that you specifically went after the liability was created, created a new business organization, started moving the money, and having all transactions go through that new organization, they can’t touch it, And it’s perfectly legal.
1:00:54
That’s right. I’ve had one client in one crazy case, she was a trustee, and she totally messed up.
1:00:59
She was wrong, but again, I tried to get her money back.
1:01:03
And it was a few thousand dollars, I forget what it was, like, $15,000.
1:01:06
So the Irish took it out of a trust, and they said your trust is fake, basically, they just took it.
1:01:11
Yeah, they put a levee and they said, The name of the trust is your alter ego and we’re taking it.
1:01:15
So they did, so I had her resign and I appoint me as a trustee.
1:01:19
So I got I became the trustee and I filed an 843 claim for refund with the IRS, and I said, This trust is not responsible for this woman’s tax liability.
1:01:30
It’s personal tax liability, not on the trust, and she got the check back.
1:01:34
They sent the money back to the incredible, incredible. and then I resigned and pointed her, but then we fixed it after that. You know, so it was a shot in the dark and it worked. I’m just saying, Look how strong it is for being an Innocent party.
1:01:45
Yeah, yes, And it’s it’s amazing. Somebody’s asking also. They’re kind of asking, and I think this is the question, so is. And what is the difference between an LLC, and then a PMA, and they’re kind of wanting to understand the PMA a little bit better.
1:01:59
And maybe what that’s used for: OK, the LLC is where you’re getting all your protection from the LLC.
1:02:05
The title itself is protecting you from taxes and creditor liability, the PMA or the trust, or the two member owner in the LLC.
1:02:13
That is where the, maybe your interest in the LLC is questioned that would survive a creditor or adverse party from trying to get it at that money, or that property, or the property rights.
1:02:27
So it’s like, it’s like that extra layer of protection. Like I said, you can use a single member LLC and go about your whole all your fers, just find your whole entire life.
1:02:36
Never have the tax liability for what you were describing here.
1:02:39
But if you’re ever questioned or it’s, it’s, you know, you’re sued or something like that or the IRS wants to come after some money or something.
1:02:46
That’s when you want to have that real separation down at the ownership level of the LLC. That’s what it’s for.
1:02:53
Right? And so that’s why you would have a PMA, that owns the LLC. Then you could be the person that is the manager of the LLC and has no ownership rights in the assets of the LLC. Right, and this, I wanna mentioned. If you guys are, you know, this is all about risk management, This is how I look at it.
1:03:11
So, it sounds like a lot of stuff spinning around your head, like, Oh, you know, this is just comes down to this, when it, when someone asked to talk with me, and discuss their matter there. They want to go over all their stuff, right?
1:03:22
So the first thing I’d say is, OK, look, let’s talk on such and such a date. But in the meantime, write, make a list on a piece of paper, and I don’t need to see it.
1:03:29
Make a list of all the things you have the right to sell, OK?
1:03:33
You have to have the exclusive right to sell it now, if someone else has the right with you to sell it, but you can still sell it legally, that’s on the list, Right?
1:03:41
If you have the right to sell it, it can be taken.
1:03:44
If you have the right to spend it, it can be taken, can be taken.
1:03:48
So make a list of all the things you have, the right to spend or sell, and that’s what we’re going to focus on. I don’t care how much money you owe. I don’t care who you owe it to.
1:03:56
I’m gonna then make it to where all the stuff you have the right to sell or spend is no longer your, right.
1:04:02
I’m going to take those rights away from you, but I’m going to take them away from the creditor, and I’m gonna give them back to you where you have the total control, not the ownership.
1:04:12
That’s the core of everything that I’m doing, and gee, that works great for future tax liability, who knew?
1:04:18
So, let’s talk about And how did we get? So, like, let’s say we take our crypto games, right?
1:04:25
We’re gonna, we set up this LLC, and by the way, to see some questions, you know, hey, where do I get the documents to do that, how do, I know, how do I set up an LLC, but the operating agreement and get the right forms? So, John, you have forms, right, that everybody can use. OK, I do those, but let me let me just share a screen real quick.
1:04:42
I didn’t plan on doing this, but let me just pull up, If I can remember, I put it, and I’m going to show you guys.
1:04:46
I just did a video on this a couple of weeks ago, because I wanted to show you how to develop articles. This is what you’re asking about. How do I get an Operating Agreement?
1:04:55
Because there are certain elements of the agreement we’re not really aware of if we don’t do this normally, So, You want to start with a form? You can go to literally you can go to Legal Zoom, OK, And you can get a copy of an Operating Agreement I would not recommend using that without changing it around a little bit, OK, so let me see if I can bear with me here for a second. Yes, I’m gonna see if I can get.
1:05:19
Thanks.
1:05:21
OK, hmm.
1:05:23
Yeah?
1:05:26
OK, Sorry, guys, wait, I just wanted to see if I can pull this up on time.
1:05:32
No worries Off to think about this for a second.
1:05:36
Let’s see if we can we’re going to have to mute this again.
1:05:40
Yeah, you guys can mute yourself, please. I hate to keep doing it.
1:05:43
Well, OK, So what I showed was, I know I find this, this is an outline of all the items that you would consider in an Operating Agreement.
1:05:54
Now, like I just said, Quick fix, go to Legal Zoom, Rocket, Lawyer, or whatever.
1:05:59
You can see examples of this. In fact, you can Google an Operating Agreement on the Internet. You can even get one for an LLC. You can get one for a single member LLC, you can get one for multiple member LLC, You can get one for a particular state.
1:06:11
If you’re patient enough, you can get all this stuff, OK, and you can just see what it looks like.
1:06:16
Years and years ago, when I started this, this is how I learned.
1:06:18
I read other people’s, and I started modifying it based upon risk I noticed people had over the years.
1:06:25
So what you’re getting is the solution to risk that you’ll never encounter.
1:06:30
Because these are things that I saw over the years, and I work with clients and solve their problem, and then, going forward, I’d have my future clients do this a certain way, right? You include it in the document, that’s right, because you have experienced it and then now you know how to address it in the written language and the instrument.
1:06:46
Yep. So that’s what I would, that’s what I was doing. So, I’m sorry, I don’t recall off hand, but I will get it for you. I can show you the videos on the membership area. In fact, I should probably get you the link to the video.
1:06:56
Would be great. Yeah, so we can do that, all at least. Do that much. Yeah, and, John, a copy of the letter that you would provide to the CPA. I’m very interested in reading that. And if you’re willing to share that with me, I’d be interested to read it so that I can get a better understanding of how it is that you actually explain this stuff, you know, to CPA. The letter that you would send to the IRS or, Or get to the, OK, I’m not going to publish that yet, but I can tell you, I can’t give you the result, I’m one of the classes nice enough to give me his letter.
1:07:24
He redacted his name and stuff, so, but I can show you how cryptic the responses that if somebody comes to you and they say, Hey, John, I’m having this issue, or can you help me? They can then retain you to have you help them do these things, right? Yeah. All I need to see is the 1099. And my only question is: Is it erroneous? Does it does it report more dollars than you actually received?
1:07:44
And in some cases, we had the clients that they did receive some of the dollars on the 1099, so I noted that in the request.
1:07:51
I put that in there, said that that account, that amount was accounted for in form 10, 40. Please see attached, the rest of it is erroneous.
1:07:58
And please correct it.
1:07:59
Yeah, OK, great.
1:08:03
Asked about. You can go ahead, but um, you were asked earlier about re-allocation strategies like with real estate and parceling things out. We can talk about that if you want.
1:08:11
Yeah. Yeah. That’d be great. And it maybe before we jump to that like, this is kind of an interesting question and asks My husband is from Monaco. There are no taxes for him there on crypto. Is it legal for me to cash out my crypto through his bank in Monaco.
1:08:27
You can, You can do that.
1:08:31
Just don’t, don’t let anyone know it from you, make it look like it’s always his.
1:08:38
That’s just a generic response because you don’t wanna use an account and get these benefits like you’re talking about like an in his jurisdiction. They’re not taxing it, It’s not taxable anyways.
1:08:48
I don’t think it is the only country that coins are taxable is El Salvador.
1:08:55
Let me tell you why. OK, Yeah, Salvador.
1:08:57
As you see, you can look in the news annexed Bitcoin or defined it as legal tender in that nation.
1:09:03
So it is just like it’s local currency, and that’s all the government would have to do as is, accept a coin as legal tender.
1:09:12
That’s all it would need, and all of a sudden, Bitcoin would become just like the dollar becomes taxable, because I don’t know any other country.
1:09:19
So it’s not taxable in any country, except El Salvador, and it’s only for Bitcoin, right?
1:09:23
So, but but if you want to do that Yeah, just make it look like his money all the way OK, and how would you do that for example, just transfer the coins and all it? Just moved there Yep.
1:09:35
And then he would take the coins from his wallet put them on the exchange cash them out for the currency in Monaco and Wala you’re good. That’s that’s exactly right.
1:09:45
Yep, OK, great.
1:09:49
OK, so go ahead and go back to the other topic about the property and, and that you’re gonna bring up before I kinda, OK, this is, I’m gonna post here, I’m going to talk about the, the, the allocation strategies.
1:09:59
Yes, OK, video regarding Articles of Association now in this video, I’m talking about the PMA, but you can do this for most organizations.
1:10:11
In fact, you can go look at your own homeowner’s association charter, not the covenant, but the actual Charter. And you’ll see what I’m talking about. All that stuff’s there.
1:10:19
So, let me just put this link here, that’s the YouTube video and in there, you’ll see the document, and you can just pause it, and you’ll see, it’s, you know, OK, so, this is generally what I would I look at, so I still go to that, even after class been with me for awhile, we still go back and say, OK, what do you have the right to spend and sell. So, we get through all that.
1:10:38
And let’s say that the clients acquired some rental, real estate, so we own some rentals, just like your traditional real estate investor and then he has maybe some stock and a business.
1:10:51
So what I would do is I would take the business and let’s just say there’s no, it’s a sole proprietorship just to keep things simple. I want to isolate that from his estate.
1:11:02
His estate is actually whatever he has the right to spend or sell when he’s dead.
1:11:08
That’s your state so I went to take the sole proprietorship out of his name and I’m going to put it to a limited liability company standalone by itself.
1:11:19
Now, it’s not just for estate planning. It’s for the possibility that he’s done so well with his business and it’s a sole proprietorship. It’s very difficult to sell a sole proprietorship.
1:11:29
So what you want to do is package the business. And there’s more to it than just titling things.
1:11:33
So what I, what I also focus on is I, I package proprietary information in the company. Sometimes they do trademarks. Sometimes we have to register things. Sometimes we have to do a contract. Sometimes we have to go back and stamps and documents.
1:11:45
So I package up his whole company, and I transfer the rights over to an LLC, so now he can sell the company if he wants before. He couldn’t really do that. Or it wasn’t as valuable because it wasn’t packaged properly.
1:11:56
So, that’s another part of what I do for risk management, Has nothing really to do with taxes. So, Yeah.
1:12:02
OK, so I would isolate a business from a separate real estate investment.
1:12:08
So, the Real Estate Investment, let’s say it has three properties, I would have one LLC own all three properties and also manage the cash flow, That’s the simple version.
1:12:16
Or, possibly even, keep each, depending, right on the real estate. Keep them in separate LLCs to further, right You can do that if the risks are diverse enough.
1:12:27
By that, I mean, like, here’s a quick example: if I have a single family residential in a nice part of town and a single family, residential and a high crime rate part of town.
1:12:37
I’ll probably have those in different LLCs.
1:12:40
Right, because all kinds of things can happen. Right, Right. Yeah, different risks.
1:12:44
Yeah. Yeah.
1:12:45
OK. Sorry. I think that’s, it’s very, it’s very customer specific.
1:12:48
I mean, I’ve done things like, um, titled each single family residential that the client own, that, let’s say the client on 12 or 10, or 12. I will title each one in an LLC.
1:13:02
In some cases, I wouldn’t even register the LLC, I will just give the name of the LLC, The address of the property.
1:13:09
So, like at 12 10, Elm Street, LLC, LLC, 1858, Baker Street, LLC. Yeah, and I don’t register those.
1:13:18
And all the cash flow from that goes to the one LLC that I have that has a bank account, has an EIN, and does, you know, whatever with all the money.
1:13:26
Now, I can use one LLC for all kinds of cash flow.
1:13:29
I can use it for my business, I can use it for my rental property, I can use it for other assets, and I can pull it all together. It just depends on my willingness and ability to organize and intake and keep track of things.
1:13:42
OK, if I have, in my business, if I have employees and it’s an S corp, I’m definitely not going to mix it with my, my, my rentals, right.
1:13:52
Because and that one, I can choose not to file a return, I can, I can have the same tax treatment that I would use for my kryptos or my gold.
1:13:59
I can defer all the taxes on it, if I want.
1:14:02
Now, now, let’s talk about that a little bit more.
1:14:05
Do you have an LLC?
1:14:07
You’re not going to file a return on, right? So, it makes a million dollars a month, what? You can. Learn this, trying to solve problems. I solved the problem. Then I realized, oh, my gosh. I can, I can re-organize a company that’s making a lot of money and I can change his tax treatment.
1:14:26
And I can do that legally. I can do that, because it’s going to be deferred Y, because it’s a holding company.
1:14:31
If you look in every jurisdiction on Earth, you’ll see there are holding companies. The governments recognize it. Here’s a quick example.
1:14:38
If I have a company that does nothing but owns my mom’s house, and it owns my mom’s house, because she doesn’t want it part of her state nor do my brother or myself, when it part of her state, when she dies, but we want the house when she dies, she wants us to have the house so we want a seamless transition. And she has nothing in her will. She has a will, but there’s like a dollar in it, OK?
1:14:59
So the, the how she’s living in is just owned by this LLC and that’s all it does. Now I can file a tax return. If I want some CPA’s, we’ll tell you to do that. That’s ridiculous.
1:15:09
It just needs to own the title. I can do that in in Ireland, I can do that in the UK. Maybe they call it some different over there.
1:15:17
It’s still known as a Holding Company all the LLC’s we’re talking about. And all this fancy nus, all this detail.
1:15:22
It’s a holding company, plain and simple. It’s a holding company and by definition a holding company does not have a tax treatment.
1:15:31
Although some holding companies, I noticed in Canada, there’s a tax return you can file.
1:15:38
I believe you can get away with not filing it! I believe that’s legal.
1:15:43
So it’s just a matter of getting used to that jurisdiction. I’d I’d have to go do some more research on things. So, yeah, That’s what, that’s what I’m saying.
1:15:50
OK, so, you can put your crypto gains into an LLC and never pay taxes on that money. You can have taxable gains, interest dividends.
1:16:01
The sale of assets goes to an LLC, and now you can defer the tax and not have more tax liability, zero tax liability for that transaction.
1:16:12
I’ve done that for people that were selling their house a week, a week from now and I conveyed the title for estate planning purposes. Sold the property in the name of the LLC.
1:16:20
The attorneys hate that, because, you know, they have to, like, you can’t do that. It’s not right, but then they’ll agree with it later. You know, the money goes there. Remember the titling of the Transactions? What’s the most important, upfront as the the 10, 99 from the sale? And the proceeds goes to the LLC and its EIN.
1:16:38
That’s why we do a W nine to make certain that the closing agent does not make a mistake or if he does, he’s liable. So, we do the W nine to certify the correctness of the EIN.
1:16:47
There’s no other reason for that, So, yeah, you can do that, You can transfer it. You can sell the property, LLC does not file.
1:16:54
So, the only caveat there is that, you want to make sure you’re not trying to, You’re not trying to trick the system. It’s enough that you’re going to avoid the tax on the gain.
1:17:03
You can still pay yourself some money, pay yourself something, pay tax on it, report it. You don’t need $5 million, maybe $580,000. So what do you do? You’re not paying tax on the 99% of your windfall, OK.
1:17:17
You just have to pay tax on the part that you pay yourself, right? As being the manager of the LLC or whatever. And then basically, you plan ahead and you say, this is what I know I’m gonna need to pay my bills every month or whatever. Go on these trips, whatever it is that you want to do and you just pay yourself that amount and then that’s the amount, Would you actually pay taxes?
1:17:37
That’s right, Got it. It’s that simple, Yep. It really is that simple? Yep.
1:17:41
Yay. So let’s see, also other questions from anybody. Let’s see. I just want to take a quick look through here.
1:17:49
Um, National Wire Transfer to LLC business account, I’m not sure what the question there is, and maybe you can kind of determine why are the money deposited, big fat check. It doesn’t matter.
1:18:01
Use it, like you would normally use it. You can use it in any way, It doesn’t even matter if you put $10 million in there and you’ve never done that before.
1:18:09
It does not matter, the only thing that you’re gonna run into is maybe the bank. I want to hold the money and make some bogus claim that something needs to hold the money for.
1:18:17
Some reason, I don’t know, because they want to trade on the value of the money, but you’ll get the money.
1:18:21
And then just know that the Financial Crimes Network in the United States and every country I think has this, they claim it’s all about money laundering, OK.
1:18:30
But define the FinCEN, as we call it here, may get a report on the unusual transaction.
1:18:37
So, the unusual transaction could be $2300. Or it could be $23 million. So don’t be excited.
1:18:43
If it’s $23 million, you’re not gonna get caught, you know. There’s no investigation and the things you see in the movies, about $10000 limits and $3000 limits. That hasn’t been true since probably the mid nineties because FinCEN gets reports by software and a lot of times you’re getting reports to FinCEN all the time by your transactions that you do on a regular basis. And nothing comes of it because it’s really not a money laundering transaction.
1:19:10
OK, yeah. Like, suppose your boat for $30,000, you put that money in there, that’s unusual.
1:19:15
And FinCEN gets a report, and then nobody cares Right, they’re watching. Yeah.
1:19:20
So somebody was asking, also, let me see this again, two, people are on an LLC and are domestic partners that the court considered them, married, I would have to say, you’re married or you’re not. Gay marriage is where you’re living with, you know, men and women living together.
1:19:41
And for the purpose of, no, what a married couple would be doing, like you’re sharing expenses and you’re acting like a married couple. Maybe you have children, even if you don’t have children, if you’re in, unless you’re like just roommates, right?
1:19:57
It’s Platonic, like Three’s Company. Right? Remember that show. If it’s like that, OK? No one’s ever going to see that as a marriage. But I will tell you that if it’s a man and wife, it is a marriage. I’ve had people call me before and say, I don’t have a marriage license.
1:20:09
I don’t have a marriage license with my wife in the states.
1:20:12
We had one in her country because of the visa requirements and made it easier. But we don’t have one here, but we’re married.
1:20:18
And it’ll be recognized that way.
1:20:19
So, if if that relationship exists and you guys can call it whatever you want, if someone wants to try to challenge you and say it’s a single member LLC, because the two owners are actually married, even though you don’t have a marriage license, they can try to mess with you. They can, they can challenge it.
1:20:36
I’ve never seen that. It would be quite expensive to do that.
1:20:39
Very risky and here’s another thing, Um, the risk comes into the creditor with this.
1:20:44
If the creditor, it gets a charging order against a company, an LLC, and it cannot collect if the attorney makes a mistake.
1:20:52
And he cannot collect for his client by the end of the tax period, December 31st. His client will have to pay taxes on the amount of money he did not collect.
1:21:03
So, how long do you think he’s going to last keep you in that type of business?
1:21:07
Right?
1:21:08
So, yeah, so so be careful about you know, just because you say you’re not married if you live like a married couple, then someone can can make that association OK, and we have another question what if we have our value in crypto coin, where I deposit in a collateralized loan and then transfer the cash value to the bank account as a business? Would that be a taxable event?
1:21:30
OK, how did the transfer take place? What let me think for a second.
1:21:32
OK, so you collect you use your coins to Baro what coins are dollars?
1:21:39
That’s the question.
1:21:40
So, OK, if you if you borrowed dollars with your coins, which is completely something you can do, you borrowed dollar, so if you borrowed dollars, that is not taxable, now, failing to pay the loan back under the terms of the loan that could be taxable.
1:21:56
OK, if you want to look this up it’s called, Imputed Income Tax Liability Imputed Income, so AMP UTD So, check that out.
1:22:06
But if you borrow money that is not taxable, if you borrowed, if you borrowed, well, let’s say you use kryptos, Let’s say you link kryptos Or you let someone use your kryptos and you got dividends and interest on the kryptos. And then they were paid back to you.
1:22:26
Or your account in the crypto.
1:22:29
That’s not taxable either.
1:22:31
Even though it’s dividends and gains and whatever, not until it comes into the dollar. Again, it comes into cash and cash out.
1:22:38
So however you got the cash out, whatever you did to get that increase in value that dollars taxable, but not until it becomes a dollar.
1:22:46
That’s right. So, once again, you have to sell the crypto or the fiat currency, and it’s only when you do that that it then becomes a taxable event.
1:22:55
Yes, correct.
1:22:56
OK, so, let’s see what else we’ve got here and I don’t know how much time you’ve got left, John.
1:23:03
Well, until I lose consciousness. The question actually just popped into my mind earlier: Have you seen the proposed legislation from the Biden Administration regarding the $600 transactions like in your bank account? And it’s What’s as it, is it proposed legislation, I believe that we’re talking about it, right, OK. Sure, So that’s to scare people, and yeah, sure, they can get more sophisticated, more surveillance. I mean, gosh, they have somewhat surveillance already. You guys have no idea.
1:23:32
But that is just, to scare people. It really is.
1:23:36
Because more surveillance, more knowledge of what assets you’re buying doesn’t create more tax liability.
1:23:43
It doesn’t.
1:23:44
I don’t care what laws come into being until until the government says that a coin is legal tender, I don’t care.
1:23:53
It’s not going to matter.
1:23:55
I’ve been saying that, Gosh.
1:23:57
Forever, I’ve been saying it as long as I’ve been doing this work. And even more so now with Kryptos, it’s not going to change anything. And I would love to see a person who could tell me what laws have changed since 2009 when Bitcoin was announced.
1:24:09
What tax laws have changed, right. It’s not.
1:24:14
And so what do you think would be the purpose of wanting to scare us then Why are they wanting to scare us? They want you, they want you to report, they want you to be scared, not to report and I’m all for it.
1:24:23
If it’s reportable, it should be reported, but you have a choice not to have reportable transaction And some things you can’t avoid, but then that doesn’t mean they’re taxable.
1:24:32
No buying and selling coins between each other is not taxable.
1:24:35
So, there’s a lot of examples of that. So, yeah, it’s going to be.
1:24:39
No. I mean, the KYC. That they’re doing right now, the know your customer process.
1:24:43
I hate that, but how much worse can get? I mean, fingerprint, biometrics, maybe shoe size. Yeah. I mean, I really don’t want biometrics because who knows what they’re going to do with your biometric data, but the, right, kind of have it already almost on your, yeah, I think I think they’re collecting that anyway through our cameras and all that stuff on ourself that you put in there.
1:25:06
All that crazy stuff.
1:25:08
Yeah, I want to make a comment on that because just consider this, y’all.
1:25:13
Your biometric data, among other things, I’m not gonna get into the big, long list of things.
1:25:18
You could do this too, but your biometric data is your private property, OK, you have an intangible private property right to that data, and to the extent also, which by which it’s used, in which I believe you can impose licensing terms on it.
1:25:35
I just want to mention that.
1:25:36
So, if a company is collecting your biometric data, then we should be saying to these companies, well, wait a minute, then you need to be paying license fees, right?
1:25:47
I would establish a license term on public records, and it would be, I can impose it on him anytime I want. And I don’t care about getting paid. I just care about the restriction and use of my private data.
1:26:01
So, and if they violate that, no, you can also impose data retention terms on them, make them liable for protecting it.
1:26:11
Don’t accept their policy, you can impose your own. So I’m just suggesting that, you know, while we’re out in the public, and, yeah, they can take our photo and things like that, and there’s no privacy. That doesn’t mean you can’t put a license restrictions on the use of your private data.
1:26:25
So Interesting, I like it now.
1:26:28
What another person asked Alina asked, what physical address is used when filing for an AI in physical, and registered state, at the LLC address, or home slash convenient address? All right, yeah. Yeah, OK. I tried to make it as easy as possible to open the account. So all I care about there is what the banks look at. So when they see the EIN approval letter, they’re gonna look at the address and see how that matches with your ID. So for many examples, if you don’t care, I would use the address that appears on. My ID, Sometimes we can’t do that.
1:26:58
It depends on your ID. It depends on where you are. You can also use the address for the principal place of business.
1:27:05
OK, for the ones I set up, I have a registered agent, in some cases, I use a registered agent address.
1:27:12
That’s a valid address, but the client is the agent at that address, and it’s not a professional relationship.
1:27:19
So, we may use that address on the EIN application, but your best address, I believe, is the one that matches your your ID, and if you don’t like that, use the principle address in your Operating Agreement.
1:27:31
Yes, because you know on the ID, then, I introduce, present the ID, and then the operator, and you want to go back and present the short form operating agreement. Right? And really, anyone can apply for the EIN, using his or her SSN, and it could be a non signer a non member.
1:27:47
It could be your, know, your grandma. But then when you go to the bank, they’re gonna give you a hard time about this person. Who’s not identified.
1:27:55
It’s just the thing with them. Because, you’re dealing with people that are not informed.
1:28:00
Site, just consider used to doing things a certain way, and seeing the documents a certain way. And then they get uncomfortable, and they don’t, they don’t have them presented in the way that they’re used in.
1:28:10
So, let’s see.
1:28:13
If my parents have a house in California, would it be better to change ownership to an LLC that has them, and my sister’s names on it?
1:28:21
So, when they pass, then if my sister sell the house through the LLC, but keep the money in the LLC to buy another property, would this still require a tax filing?
1:28:31
That would work to avoid the capital gains tax on the sale.
1:28:36
Doesn’t matter the reason for that sale. But, yeah, if you’re going to close out in a state that’s not part of the court estate. Yeah. That’s a great way to do it. It’s seamless. You retain control and it’s a way to avoid probate.
1:28:48
You can also avoid California has the documentary stamp text there as well.
1:28:53
Let’s see.
1:28:54
Now, if you, OK, so if you sell it, you’re going to have that stamp tax, but but conveying it to the family. So what I would do is, whoever owns the title, if it’s your parents, I would convey it to the LLC and keep your parents on it, with the understanding that it’s for the use of your brother and sister.
1:29:12
And your names don’t have to be on it, to have that control.
1:29:17
That should not be a problem, and the reason why I say it that way, because I don’t want you to run into a situation where the bank might look at that and say, Oh, well, if the beneficial interest did change, you added two more people, even though it’s it’s family, and then you have that nuance, the argument of, Well, it’s a family, and, you know. So it’s just as well to keep the title holders the same when you’re doing this within the family.
1:29:39
Great question.
1:29:41
That was from Sonya. Thank you.
1:29:42
So let’s see, If I wanna make a big purchase, do we have to wait for you to have an opening available on your calendar to talk about? The right paperwork done.
1:29:53
Good question, though. Just, it’s, it’s hard to get me.
1:29:55
I think, in fact, I think we, we we cut off the scheduling after December for right now, And I want to I want to switch over to more calls like we’re doing right now.
1:30:04
OK, I’m going to do that so I can I mean we’re really answering a lot of questions, so this is really helpful to many people. I know and I know Mrs. them one-on-one. And so I will do the one-on-one but I’m going to have to do that manually so I’m going to tell you how to contact me. You can do singleton press at proton mail dot com.
1:30:20
That’s my e-mail address.
1:30:22
You can do ace of coins dot com in the bottom right corner is a helpdesk feature.
1:30:28
The icon is kind of small, but I think it’s blue font.
1:30:31
It’s a graphic.
1:30:32
So if you if you go to the bottom of ace of coins dot com and go to Helpdesk, the other way is and it’s kind of a hit or miss is on Telegram, and Is on telegram.
1:30:41
So if you get me I think my ideas at JJ Singleton try me on Telegram and just see else I’ll schedule something, but um, What I’m trying to do is address as many people as possible. I really don’t like that you guys have to wait for three months. I’m sorry about that, I’m so. Sorry. I try to actually, I try to get people as like from the list. I go to the list and I try to get people and I try to.
1:31:07
I get them now I’m trying to do that. So I might call you, you might be that person.
1:31:10
So If I have time, but I’m on the phone most of the day and then sometimes I just took my phone off because I can’t get things done, so Yeah, but, but uh, do what you can on the scheduling, but try to get me by e-mail OK, so sending an e-mail And can you give that e-mail address again?
1:31:29
Yeah, Go ahead and type it into the chat for us. Do you mind John? Yeah, It’s awesome, OK. Yeah.
1:31:42
So try those methods and then my telegram.
1:31:47
Perfect. Thank you, OK.
1:31:49
Yes.
1:31:50
So another question, LLC or trust, which one is better for the estate conveyance after death?
1:31:58
OK, it depends on your style, really depends on your preference. It depends on what you’re going to do. It’s not the instrument in itself. It’s what you’re trying to do. So if it’s for estate planning, when it takes the thing, I have a state. If you’d like to trust those, work perfectly well, they are mostly interchangeable.
1:32:11
Some of the limitations on the trust are, I don’t, I don’t want to use that trust in business or to take on get financing, or to take on a partner or a commercial lease agreement. I will use an LLC for that purpose.
1:32:24
So if you asked me, though, I’m mostly going to say an LLC for almost everything, just because that’s my bias and I just found it to be the most effective over time.
1:32:32
I did see in the nineties where people were abusing trust organizations thinking they can get out of the tax system and that the IRS was taking their property and ignoring the trust, they have never done that to an LLC. That’s scary. Yeah. They were just stepping right over, and. That was back when I was saying, OK, guys, we’ve gotta come with something else and I would, I would re-organize everything under an LLC, but I’ve never seen them do that to an LLC.
1:32:58
Um, the courts in the States will recognize an LLC, even if the charter has expired, So in many cases, when I set up an LLC for someone, you can open up your accounts and then not renew the charter. if you’re in one of those states, that has to renew it. New Mexico don’t have to renew it. Ohioan Pensive, Pennsylvania do not have to renew their charters.
1:33:16
Now annual fees, Either somebody’s asking me here and opening it in Alberta, An LLC, Now, and in Canada, the LLCs, R OK, they’re not recognized. But the banks will open accounts there, so they are recognized, but not officially.
1:33:33
You don’t need, You don’t need an attorney.
1:33:39
OK, she’s telling me, you have to have an attorney.
1:33:42
My suspicion is you don’t. I’m gonna look at this individually after this call, so if you would have some patience, I will go check this out for you. But you’re gonna run into this in the states to where you’ll be bullied into believing or being told that you have to have an attorney.
1:33:56
And that’s not true. Sometimes it’s useful to have an attorney. But most of the things we do do not require an attorney.
1:34:02
There’s a thing going on in North Carolina, I believe, where the statute makes it look like you need an attorney for a real estate closing. And this is a lie.
1:34:09
It might be South Carolina. This is not true at all.
1:34:12
It’s only that the statute pertains to professionals involved in a real estate closing when they’re giving legal advice, to avoid giving legal advice.
1:34:23
or that those professionals have to have an attorney because the nature of their business involves giving legal advice, but the actual property owner, and then buyer buyer. Seller, they don’t need an attorney for what they’re doing.
1:34:34
I didn’t mean to get off to find that one. But I will look at your Alberta situation, OK.
1:34:39
Awesome. Awesome, thank you so much John and then so let’s see I went ahead and re posted the addresses, because it was it posted just direct message to me, so I did that OK. I think we’re good and hey guys any other questions before we drop off the call.
1:34:59
Anything?
1:34:59
Anything Bueller. So you know that one love that one. Let me see what they see it several times already they’ve seen it I love it, I love that.
1:35:13
All right, guys, I think that’s it. John. Thank you so much for your time.
1:35:17
And I know our group is so excited to work with you, if there is a way to make sure that you, you have time on your calendar, or if there’s something I can do to be somehow like an intermediary and help my group and connect with you, that’d be great. And we definitely look forward to working with you in the future. Thanks so much, likewise. And if you want to mention your group, again, I’m sure my people, maybe. Yeah, so I appreciate that.
1:35:43
I’m going to type it in here, star seed adventures dot com.
1:35:51
And that’s our website. And so if you go to the website, you can join our Cosmic Crypto Trading Group.
1:35:57
And we have a telegram group, it’s only $44 a month, guys.
1:36:01
It is a really fun group of super high by people who are really wanting to do great things, and we actually get a lot of crypto predictions from people with spiritual gifts. So psychics, and people that have spiritual connections, that way, people that get dreams, I, I get dreams about crypto sometimes, Right before they go up, and it’s really cool, and we share all this information with each other, and it’s a really fun group, and we’re having a lot of success, and seeing really amazing crypto gains.
1:36:32
So if you guys would like to be part of, you know, our group. It’s like a family in there, were super supportive of one another, And we’re really having a lot of success with crypto. And it’s really fun. So again, star C that ventures dot com and it’s The Cosmic Crypto Trading Group and it’s on telegram only 44 bucks a month We’d love for less or more of you to join us. And again, big fans of John Thank you for your help, John, because We are so excited that we’re going to be needing your help very, very soon.
1:37:01
Looking forward to working with you guys and just if I want You can do this on Thursdays OK, in the evenings and we’ll change it maybe once in awhile, But if you go to ace of coins. There’s that group on telegram and all it is is an announcement.
1:37:13
You might get one message a week there, and it’s talking about this call OK. Well.
1:37:17
We might we might add another call, so you guys yeah. We would love to do it, John is whenever you want. I’ll jump on with you I love doing this stuff It’s fun. For me.
1:37:27
I’ve got you know my my legal background. I’m transactional.
1:37:29
I did commercial real estate for a few years, corporate finance, for a few years. And, you know, just generally been a contracts writer for years and years. So, I love this stuff. And that’s why I get so excited to just chat with you, because I know what you’re talking about. And it’s fun to kind of, you know, help the audience understand, you know, this amazing expertise that you’ve developed over the years, and how can really be helpful for us to achieve these goals. So, thanks again.
1:37:56
Right, Thanks for joining, everyone.
1:37:59
All right, guys, thank you so much. Thanks, John.
1:38:02
Bye!