U5 – Crypto Profits & Taxes – Part 3 0:02 Hey everybody, this is the mythical Bill Smith here with the legendary John Singleton, Whodunnit. Amen. 0:09 Good, thanks Greg. How’s the weather in your? your wonderful paradise that you live in a really nice. 0:15 It’s like 70 and suddenly, i…

U5 – Crypto Profits & Taxes – Part 3
Hey everybody, this is the mythical Bill Smith here with the legendary John Singleton, Whodunnit. Amen.
Good, thanks Greg. How’s the weather in your? your wonderful paradise that you live in a really nice.
It’s like 70 and suddenly, it’s Uncharacterized sickly warm here up in the north-east 60 I was getting ready to look out, and I looked at my Apple Watch. So 60 degrees. I was like, what?
So it’s actually really nice.
So this has been an exciting series, This is crypto crypto taxi’s, crypto profit in taxes part three, and we’ve gone over some basic stuff. Of course. All of this builds on everything you have in your membership dashboard. So this builds upon the previous lessons about LLCs and different things that you have built up. And today we’re gonna look very specifically at some of the changes that you personally make to an LLC operating agreement and how that could help somebody who wants to protect their crypto profits. So, that’s what we’re gonna get into, there’s a link on the page where this video is, posted, it, says example operating agreement, you can click on that.
and we’re going to be looking at that together. Of course, any questions that you have, if you’re not live on the broadcast with us right now, you can ask us in our, our members only, Privacy Fight Club. Slack chat, you can ask in the discussion section or send a direct message to John and we’ll help you out.
So, take it away, John State. Take a look at all right, and how to approach it. Alright, thanks. Where we got this link is while we were just discussing this before the video, you want me to pull that up now?
Yeah, if you pull the link up, I just, I literally searched for it. I use …, by the way. I don’t use Google, but anyways, it doesn’t matter. You can search for an example, LLC operating agreement.
And so we found this website, FIT, smet, Mall, Bus, Business, whatever.
I’ve never been the Small Fit Small Business. Yeah, I just pulled it up. OK, so if you go to that link, at the very beginning, it’ll say fit small business, and then it’ll scroll down. There’s a link in there for visit Rocket Lawyer. Obviously, this must be a promo site for Rocket Lawyer and Rocket Lawyer is a pretty good service. It has lots and lots of good documents. I use them once in awhile, You don’t need to.
Especially if you want to do something specific for and you already know what you’re doing, Rocket Lawyer is going to have just generic documents. But this is great for what we’re talking about.
So, if you scroll down just a little bit past that little button for visit Rocket Lawyer, it’ll say Free LLC, Operating Agreement templates, And then scroll down a bit further, and you’ll see the very first item here. The bullet point is Single Member, LLC Operating Agreement.
If I click on the PDF, Thank you. Like you lost me, man. So, I’m looking for free.
Yeah, this is my screen, right?
Yeah. Yeah, Yeah.
See, we go up to the to the top … OK Oh, I see it says That. See that right below that paragraph under Free LLC? Operating agreement. Millimeter, right. There’s a single member. Yeah.
Oh, I see I see. So if you click on one of those formats, like PDF or a DO, see the PDF, it will open it up. There you go, there, there’s a generic operating agreement, and this is what I’m going to be working from now. I’m not gonna go through line by line. And this one because I’ve never seen this before. I’m just, saying, I just pulled this up 15 minutes ago, OK. And I don’t care what’s on there, but they’re almost all, they’re so similar, but what, I wanted to show you, the different changes I’ve made, and the ones that I use for different members.
I start out with a core set of them, and then I modify them based on what the member wants to use it for.
You got the idea, the first thing I want to, I want to focus on, and you can follow along on the example operating agreement. You may not find the exact article.
Oh, part by part. Like I’m gonna walk you through but you’re gonna see generally, what I’m talking about. You’ll be able to find it in this example one.
The first part now, OK though the important thing of using a limited liability company this is so important is that you’re divesting your exclusive rights, I’m gonna say that again.
You’re going to take rights that you have, let’s say for a bank account or property rights that are held in a third party like a bank or recorded in the County Recorder’s office.
You take those property rights and move them over to a limited liability company, and what you’re doing is moving those rights over to a group.
Even if it’s a single member LLC.
I say it’s moving it to a group, because all I have to do is change the articles. And I can put 27 members. I can put two members. I can put whatever I want, and I can write up a contract that says, who has what interests.
So my 100% interest today, it can be 57% tomorrow, it can be 23% the next day. Doesn’t matter.
So, when I’m using a limited liability company, the most important thing is how I’m using it.
Not the fact that I have some document, but I want you to understand the things that I’ve changed over the years and that, that are change. That’s changing the way people are using it. I want people to use it a certain way.
So the first thing is, notice in the document, it’s always referring to Treasury regulations, and accounting, and bookkeeping is done in accordance with and compliance with Treasury regulations. And they even put legal references in there. And this also applies to other countries, not just the US.
You’ll see this as well.
So it’s like when you, when you form an LLC.
These standard agreements are written by attorneys and attorneys want you in their association. They want that structure to be within the taxing jurisdiction.
And within all these government organizations they’ve created, they don’t have to be a limited liability company can be just what you see there.
It can be that contract, By itself, it doesn’t have to be registered somewhere in a, in a jurisdiction, like a state or a county or province.
Um, but what we’re going to show you is the, the different provisions that establish, let’s say, create tax situations or create regulatory situations can be removed.
You have a right to contract and so, this is what I’ve shown people over the years. Let’s look at capital contributions.
Now, it says in there, there’s a provision for war, how capitols is contributed and how maybe interest might be paid on the capital.
Alright, so if you had, let’s say you had a professional, like an attorney or somebody write this up, He’s gonna put in there, this guy is going to get this percent, this guy is going to get interests. This member is going to put up so much money. He’s gonna put up so much money every quarter, He’s gonna put it down and he’s going to write it in dollars or whatever your currency is going to be, because that’s going to create a taxable obligation. You will see how this plays out later.
There’s no need to do that, So, what I’ve done is, under Capital Contributions, I just took out any obligation for a member, he doesn’t have to contribute more money. So if he puts in a dollar to form it, fine.
If he puts in a million dollars fine, he’s not obligated to keep on doing it.
Now, if he is, let’s say, the, the people, the members in the agreement continue, and at some point, there’s a need to contribute more capital. Well, then, that can be done with a phone call, right? Or, you guys can make a handshake, or someone can deposit money and give you a receipt, there’s no need to put it in the operating agreement.
So I removed specific obligations regarding capital contributions from the opening agreement. And basically, I make it to where there’s no obligation for any member to supplement the contributions. Excuse me. So is there a specific part here that you would just delete?
You can see this, right.
Well, OK, I’m going to talk about this. Let’s see. Oh, here, article two capital contributions.
Yes. I guess. it’s probably article two? Yeah, so let’s say I’m looking at the example here. Here we go, initial contributions. Remember initially, shall contribute to the company capitalized, describe an exhibit one.
And yeah, you can have that, that I wouldn’t, you don’t have to really change it, but you can make it to where no supplemental contributions are required mm.
Now, notice how it says the total value of such property and cash is, and it assumes it’s cash.
This is not a big deal, but just just keep this in mind, it’s not going to make or break everything. But what I like to do is eliminate cash, eliminate dollars from the agreement.
I only use gold.
Hmm, hmm, it sounds superfluous.
But if I’m using gold, that’s not a taxable thing.
Unless I sell it for dollars, OK, yeah, so if my contract is formed with gold, or kryptos for that matter, then I’m I’m not. I’m out of that.
That association with fiat That’s just one more thing.
So the total value would be measured, and let’s call it gold here. It says cash.
I would take that out and put gold Then additional contributions, no member shall be obligated to make additional contributions.
I would leave it like that see in section 2.2 Yep, All right. And The value of the goal that you put an ounce of gold, but what would you put? Yeah. Would here’s the value of the gold. one gram of gold is valued at one gram of gold.
See, the traffic … you mean? To? My mind, if you want to, you can say, one gram of gold equals one Bitcoin as of this day. You know, something like that.
Use data dollars, and then the other thing I would add into this capital contributions is no interest will be paid for any contribution.
That would be the next thing.
All right, then for allocation of profits and losses, yeah, there will be, We’re gonna allocate some profits and we’re gonna allocate some losses and we’re gonna, we’re gonna pay each other based on what we net, But we’re not going to write that in this agreement E, because we don’t have to.
So, the idea is, and I’m gonna read my note here, They’re not allocated and shall shall be determined for each member as needed.
That way, someone can’t subpoena your operating agreement and say, aha, you’re supposed to get paid on Friday therefore, right? Right?
That’s why I tell everybody, and I know, I know when I tell people that they like, OK, I don’t understand it, but I trust you. Because if someone were to subpoena your operating agreement, the one I did for you, it’s going to protect you.
You don’t have to talk, it’s going to cover it because I’ve done all this. So members, here’s, here’s the, really, this is the killer thing right here, In the allocation of profits and losses, you also want to consider that members have an undivided interest.
So, think of this concept.
If you have property rights, and you put it into a pool with other people that put their property rights into a pool, and then nobody really knows who has what property rights, but somewhere down the line, we’ll figure that out, But it’s not today calculated, then no value can be assessed, right?
So, if no value can be assessed, there can’t be a fair market value and it can’t be determined in dollars and I can’t sell my interests if I can’t sell my interests I can’t be taxed on my interests.
I can’t be levied on my interests because my interests are not established.
So that’s the key thing, is that members don’t have an.
Or they have an interest.
That’s undivided, as of today.
All right, I had a question, if you don’t mind, in the beginning.
It says it’s a single member, do you want to do a multi-member each time? How do you approach that?
OK, I, I set all this up as single members.
With the idea that it’s very simple to just amend the articles and make it a multi-member.
So, let’s presume that what we’re talking about here is a multiple member, LLC, even though I mentioned the single member, but it’s really a multiple member LLC, and it’s a multiple member, not because I say it is it is because that’s how the membership interest is expressed here in the agreement, It’s like it’s a single woman, That’s why when I send you that, yeah, when I send you to the bank, I give you that abstract. It’s the version of the Operating Agreement. It’s the fake operating agreement, and it says single member.
And we know it’s a multi-member, actually, it says multi-member.
It says if it says multi-member, it’s because I want the bank’s records to show that it’s multi-member.
But if I look at the articles, it usually shows single member, that’s how I set everybody up as a single member. But I’m telling the bank, it’s multi member.
But telling the bank anything, or telling the SSA, anything to get your tax number, the EIN doesn’t change the legal rights of the company. It doesn’t amend the articles. So the articles control what the company really is.
So you could tell anybody anything, if they don’t look at the articles that are recorded with the Secretary of State’s office, that doesn’t matter. It’s their problem.
So I just say whatever I need to say to protect the client.
That’s why when some of you asked me, Why is this a single member? And I’m telling the bank, it’s a multi-member, That’s the reason.
And also, if you amend the articles later to add a member, you don’t have to tell the bank. Because if you tell the bank, you amended the articles of Bank of Duke, some crazy thing. Like, it’ll tell you, OK, open a new account, or we want your new members ID, and he has to come in and sign-up it’s. just crazy. So, we don’t need to go there.
At, one of the most frustrating things I’ve ever done in my entire life is, set up multi member bank accounts. Yeah. It’s a nightmare.
Yeah, exactly. What, I think, three times now. I had one recently, where they just, They just shut off the, They, Just, they just completely close the account, and didn’t tell us why.
Took our money, and then said, We owed them, that money. That way, for us this was a there was some. There was some KYC glitch where you take your money. Yeah, no, we gotta call them and find out what what they’re smoking, because there’s a little bit, and there was a little bit of money in the account, and when, and this is all their fault. We didn’t do anything illegal or wrong or unethical. They just were confused. At every level. Every level of the of their their organization was confused about what we were doing. Very simple thing opening a bank account but if you guys Yeah what a nightmare. So anyway, because they’re trying to be police that’s what the problem is You start trying to be policed is up my account. I know, there you go the other thing is great way to put it there, trying to it’s like, yeah, and you feel they are along the way. Do you hire you have that and you’re like, Why do I need that? What is that? When did I become a suspect in a money laundering or tax evasion scheme?
When I walked in the door to open a business account with you essentially and who made you the police? Yeah.
Yeah, so, the other thing is under allocation, we’re allocating profits and losses.
I don T section here, I think you should have, Yeah, I don’t think you should have distributions established in writing in the Operating Agreement, I think distribution should be determined as needed.
That way beta.
Yeah, I would even I would deleted, or I would say something like distribution shall be determined, but not expressed in writing within the agreement, or distributions shall be determined as needed by the members mm.
Pretty simple, Same thing for salaries, salaries, reimbursement, and expenses, it’s common language, an LLC agreements.
They’re not allocated I’m sorry, go back salary’s reimbursements and expenses, OK?
There’s no salary, schedule, no one’s getting paid every two weeks.
Now, maybe someone’s getting paid every two weeks, but we’re not going to put that in writing.
If someone were to discover that, let’s say, someone pulls bank records for the LLC and sees that someone’s getting paid every two weeks, OK? That is actually an agreement.
So, because it’s not written in the Operating Agreement, is an agreement on which they can act. Most attorneys, and I’ve never seen this, in like over one thousand, I’ve never ever seen this, and I’ve done over a thousand of these in 26 years.
They don’t care, It’s too much money to get that information. They’re not going to do that. So I don’t put disbursement schedules in the operating agreement.
Same for reimbursements.
Those are decided case by case.
So, reimbursement would be something like, if I bought office furniture, and then I get paid back for that, If I bought office furniture, probably in deals that I do, I’m going to tell everybody, don’t pay me for it, just throw that in there as my contribution, Right?
Then the company pays expenses, Standard stuff, that means the thing that makes the company liable for everything right soon.
So that way, it’s truly a company and it’s not an alter ego, if you’re paying expenses. Well, then, maybe it’s just your alter ego, right? But if the agreement says, no, no, company is going to pay your expenses, that makes it a real company mm.
For accounting methods, I don’t know. Most people use cash basis accounting. Most people I work with usually has been under $5 million, annual income and below.
Small business and individuals, they’re using cash basis accounting, and so whether or not it’s cash basis, I don’t care.
I would just not put that in writing so that way again, there’s different accounting for different types of methods.
There’s accrual basis and cash basis generally, most of us are not gonna be using accrual basis.
And then I would say that accounting is to be determined for the best use of capital.
So, I will do accounting, and I’m going to do it so that I can figure out how my asset is performing. I’m not going to do accounting, just so I can file tax returns.
I want to find out, based on these two cash flows, which one is gonna give me the best net present value? Or what’s the best discount rate for these two assets? I’m going to buy mm, that’s why I want to do accounting.
Alright. Which everybody knows this has return on investment. Y’all are familiar with that, OK? Cash in, cash out. All right.
Then, OK, so the other aspect is now I like to document the way I’m going to handle certain assets. So specifically we’re talking about cryptographic assets.
And I want to have a provision in the operating agreement that specific, not just for bank accounts, but that identifies a trust when I’m dealing with the LLC is dealing with third parties like exchanges, like Coinbase and the states and the trust already exists. So what I wanna do is I want to declare the trust, but I want to identify the trust.
But we all understand it already exist. But that’s not enough, you have to say it.
You can’t, just like, for example, if if you’re going to go on vacation and expect your neighbor to watch your dog, you can’t just leave your dog on his doorstep. Or maybe you can’t.
I don’t know your neighbor, but to be polite, you got a knock on the door and say, hey, could you watch my dog? Oh, yeah, sure. We talked about this last week. Yeah, sure, I’ll bring them in. OK, That’s a trust because we have expressed that, so when I’m talking about handling assets for the LLC, Let’s write about what that involves.
So the first thing we want to do is we want to talk about the asset we’re handling, the LLC it’s going to be handling and the definitions relating to that asset. So when we talk about cryptographic currency, we’re talking about things like the blockchain, we’re talking about private keys. Public keys are talking about smart contracts, OK.
So what you want to do is to make your life easy, as you except the common industry definitions for these terms. Now, I didn’t even list the terms here.
But basically you want to adopt special terms that are used for this asset that are normally accepted by the industry of cryptographic currency and tokens and assets.
So that brings in everything. So that’s the first part of your trust is to accept the commonly use definitions for these assets.
That way, someone can’t read into it. Something else and, and change what you’re trying to do.
Right? and it’s in it. The other thing is, it’s an objective standard.
I don’t have to go to too much work to do it, I don’t have to be the guy that writes the definition. Because someone could say, Well, you can’t define this. Smart contracts are defined by over there, right? Wikipedia or whatever, right?
Then you want to identify the parties to the trust. Now trust consist of a grantor or a trust or someone who contributes the value. The money, the property. The property rights to the trust.
And then you have the trustee, who owns it, and then you have the beneficiary who has the right to use it under certain terms, and some variation of that.
So in the case of an LLC, an LLC being the account holder at an exchange, the LLC becomes the beneficiary.
The exchange is the trustee.
In fact, why is it the trustee, because the exchange owes the money to the account holder?
That’s it, And can I tell the trustee what the terms are going to be?
No, I cannot, because I cannot tell the trustee what the terms are going to be.
By default, I have an adhesion contract, a contract, that I cannot change that makes it irrevocable.
So I can move money into it and move it back and forth, but I cannot change the terms of how that trustee is going to own that property. We just know that he owns it.
And then that basically those are your players, the trustee, the beneficiary, and the grantor.
And then what’s the property? Well, the property is the the token, the cryptographic currency, the token coin asset, and let’s be specific here. All right?
The language we’re using, OK, so when we talk about blockchain tax, immunity trust, remember this is just a marketing term. this is not legal language.
This is the name that identifies a business trust.
And this business trust has been specifically written to handle relationships with cryptographic currency exchanges.
Right? That’s why you can’t use it with stock or gold or your private vault. That’s irrelevant to use the trust for that because you own it. It’s in your possession. There’s no trust, right?
It’s not titled. It’s like we said last time.
This has to do with when you’re going in and out of dollars, essentially is what matters. It’s in your wallet. It’s in your possession. That’s the beauty of crypto. You control it. It’s anonymous. Yeah, yeah, I can’t be anonymous, right. And so this is the trust itself. This blockchain trust is going to exclude.
Paper wallets, private wallets, gold, stock, cars. Everybody wants to know, can I use this for my business? No, it’s only written for cryptographic currency. Because there’s a special relationship there. Have you ever bought gold that has private keys?
You buy the Gold and put it in your hand, right? Although, it will be kinda. Cool. So this tape thing goes with, and I didn’t exclude our friends in the UK and Canada, OK, you guys are using a limited partnership. Now, I believe we can use an LLC there, but I don’t think it’s necessary. The limited partnership, same idea, you don’t want to make established criteria for the use of the money and the obligations and the rights of the parties. I think you can avoid all that.
I mean, I know you can avoid all that, because those decisions, as to who gets paid when, can be decided on the fly. Can be site, decided every month and can change every month and I would recommend you do it that way.
Because what’s being taxed is the fair market value of the thing, and if you can’t access a fair market value, it can’t be taxed moreover, if you’re using a limited partnership.
Even if you’re using an LLC in Australia and New Zealand, you’re using it the same way we do here. We’re just diminishing your interest in it.
So, I’m assuming in those countries, Canada, UK, Australia, New Zealand, I’m assuming that you have to file a tax return and report something.
When I do it here in the states, I know that no return, it has to be filed for that thing. We’re doing the account holder, OK, I don’t know that yet for those other countries, But I do know that I can diminish the value, and I know that a reasonable number is 80%, and what we do is we just, We set up a foreign company and it’s just as easy to do it. Here in the States. You can do it pretty much anywhere.
We just set up a foreign company, which is a legal person, and make that the majority owner, shareholder member of your structure, whether it’s an LP or an LLC.
In the case of a limited partnership, and I’m not saying limited liability partnership, I’m not saying limited liability company, I’m saying limited partnership and also LLC’s in Australia, New Zealand.
We’re making the company here and like New Mexico. We set up an LLC in New Mexico.
We make that the 80% owner So we’ve created a legal person That’s a foreign person under the foreign tax Treaty that doesn’t have a tax obligation.
Now, I know, um, I’m seeing here in Canada, where we have to register the LLC, that’s foreign to get a license in Canada, and that’s fine, I don’t know how that’s going to play out yet, but I still see that we’re able to diminish your interest in it.
So at the very least, we can diminish the canadiens interest in the, in the UK.
resident interest to 20%.
At the best, I think we can eliminate all of it. And I’ll show you more later as we go, but we have to do this step by step.
OK, So I only want to do things that I know I can do to start out with?
And again, The limited partnership, and still, the LLC, those can, and should be operated as pass throughs. Now I know there are people have different ideas of what pass throughs are pass through the here’s the way I use it and evidence for 26 years. I put cash into an LLC, I can put anything in there, I could put a dividend, but profit, I could put the title of the real estate, It doesn’t matter.
It’s not a taxed thing.
It’s not a disbursed thing, I’m not going to take a profit now, if I take some money out for myself that’s different, I’m going to report that it’s taxable.
But the rest of it, the core of it, I’m going to move it into another asset.
That’s the whole idea. That’s all we really care about for most of us.
Then, here’s a couple of general ideas and you can ask me some questions, I guess, if you want to, if we have any questions, but, the, in the end here, I want you to understand this.
The tax cannot be paid in the thing being taxed.
It’s not taxable.
If I can’t pay the tax in Bitcoin, Bitcoin is not taxable and I can tell you right now, Bitcoin is not taxable anywhere on earth.
What’s being taxed is the unit of currency you’re dealing in.
So if I sell bitcoin for dollars, yeah, that should be taxable, especially if it’s in my name.
If, if I sell it into an LLC, it’s at least reportable. It doesn’t mean it’s taxable, Depends on my tax treatment because I have 12 ways of treating the tax in an LLC, so until I choose what that is, it’s not subject to the tax, right?
I know that’s like, circular. Like, oh my gosh, are you going in circles here? But if the thing, if they cannot tax bitcoin, if they can’t, if you can’t pay the tax and bitcoin is not taxable, I mean the same thing for gold. I mean, imagine if gold is taxable, fine. I don’t have a problem with that. Can I pay the tax and gold?
Well, No, I have to spend dollars.
But if they said, yeah, you can pay the tax and gold, what do I have to do? Do I have to like, shave off a bit of my gold coin and send it to you? Or do I have to go buy some other gold with Fiat, and then pay you that? I mean, it it doesn’t make any sense.
The thing being taxed is the government banking fiat? Yeah.
Then of course going for coin to coin again, it’s not subject to the tax for the same reason because there’s no disposition of assets going from coin to coin, But if I file a report under penalty of perjury, and I say it is well then they’re gonna agree with me. They’re gonna say find your litecoin go into bitcoin then back to litecoin, where you made more litecoin.
That’s taxable. Great. And then how is it taxable? Not in litecoin is taxable in Fiat?
That’s the general idea. You have determined the value. I mean, it’s obviously just doesn’t work.
If I had a, let’s, like I said before, if I had a gain in kryptos, am I required to go get Fiat currency to pay the tax? No, I’m not.
Because what if I don’t have any, just have kryptos, well, then it went one day when I get it, then fine.
Well, then, what does that tell you? It’s not taxable until you pay it till you say it is. Right? So, anyways, but this, this is the basic structure. So you wanna go through a general operating agreement, get rid of all these preset obligations that, you know, the system put in there and just make it a pure contract between you and the members. The sole benefit of is for the members to make a profit and move on. It’s not to serve the tax agencies. Great. Which is how these things are written. Yeah, that’s actually a great way to summarize everything you’ve been saying, which is, Get rid of the unnecessary obligations in the contract mm.
That’s crazy, and, operate that way.
Yeah, That’s very cool. All right, anything else you want to add to that before we wrap it up for today? Know, that should do it, we’ve got one more session for crypto profit and taxes. that we know we can add forever. since we got a. Lot more to talk about. Talk about, we got one more session next week. Make sure, if there’s something you want us to cover. Get it in, that Slack room, let us know. Tag John, tag me, especially John, and we’ll get it in there.
Also do want to, say, trying to help you understand how this stuff works, and how to do it on your own. If you do want to have a consultation with John, you can get that from our site.
Just as consultations here, I’ll share my screen again, consultations right there in the upper right hand corner.
And click on that.
It’ll take you to this page, or I’m in the process of updating this page, so it might look different, But you get the idea, and you can book that anytime and John can help you directly with with?
With, your, your issue, so let you know about that. Alright. This is great, very helpful stuff, thanks, John. Alright, and hey, Happy Thanksgiving everybody! We’re bad Thanksgiving. Yeah. All right, great. Awesome. All right. Take care, everybody.


1. Bill Smith and John Singleton host a series on Cryptocurrency Profits and Taxes, focusing on protecting crypto profits through changes in LLC operating agreements.
2. They use an example LLC operating agreement available on the FIT Small Business website and guide viewers on how to adjust it for their needs.
3. They emphasize the importance of an LLC in divesting exclusive rights, which transfers property rights to the LLC, providing asset protection.
4. Singleton recommends removing any obligations for members to contribute additional capital in the LLC operating agreement.
5. He suggests changing the currency in the agreement from cash to gold, a non-taxable commodity, unless it is sold for cash.
6. In the agreement, it is advised not to specify member profit shares or salaries, keeping the agreement flexible and less prone to legal scrutiny.
7. Singleton encourages setting up LLCs as single-member entities initially, as it’s simple to amend the articles to multi-member later, if required.
8. For accounting methods, the advice is not to specify any particular method, allowing flexibility for different accounting situations.
9. They introduce the concept of a “Blockchain Tax Immunity Trust” which can be part of an LLC or a Limited Partnership, and can be a trustee, beneficiary, or grantor.
10. In a unique approach to prevent tax obligations, they suggest setting up a foreign company as the majority owner of the LLC, thus diverting taxable profits to the foreign entity.

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