0:02 Right, hi everybody, this is John Jay. It’s August fifth. Thanks for joining. You could see more content or privacy fight dot IO. 0:09 There’s some videos I put on, Um, I published on YouTube, the privacy, fight, channel, privacy, fight as one word. I’m adding a helpdesk to … dot com. So t…

Right, hi everybody, this is John Jay. It’s August fifth. Thanks for joining. You could see more content or privacy fight dot IO.
There’s some videos I put on, Um, I published on YouTube, the privacy, fight, channel, privacy, fight as one word. I’m adding a helpdesk to … dot com. So there should be a number and a chat window and a ticketing system. You guys can have access to more information faster, you can also reach me that way.
It’s not set up yet. We’re working on, it should be soon.
Appreciate your patience.
And I hope that on my comments about what we’re going to discuss this this evening or are helpful. And I am sorry about that If it’s a mundane, if it’s mundane. If you think it’s boring, please throw something at me, OK, Let me know, because I just, I’ve been receiving a lot of questions on the subject. And it looks like we have a lot of new people. And some of the people are really smart at what they do. And they’re just kind of new to this concept.
They’re new to Kryptos, and then they kinda get this other information and then there’s like, wow, too much information.
So, I just wanted to take a step back and just review stuff in the way.
I’m gonna review a basic outline of how I recommend things. And also, I want to give some examples. Alright, so, kind of as a benchmark, our guide for everyone to follow.
Alright, so and then, um, just we can ask, We can do questions and answers here.
OK, so, let me just start an intro here, I wanted to answer a couple of questions, and I just got this on an e-mail, a few minutes ago, and I thought, it was really perfect that, I could just, It was, these are great questions.
I mean, this is the kind of thing, So this person is asking me, not to single somebody. I’m not criticizing, I’m just saying, it’s a common question actually.
I noticed some CPA’s on the Internet, some CPAs are saying, OK, so I’m gonna, I’m gonna read you, what, this person is saying, that CPAs are saying, so he’s got two comments or two questions regarding staking.
I set up Spinnaker Wind Ventures, OK, with, with, like, OK, so he set up an LLC last year, OK, And he’s holding as Kryptos and offline wallets.
So, it’s not necessary to use an LLC yet with offline wallets, it’s good when you’re working with third parties, because any, 1099 would come from third parties like Coinbase, not your, you know, whatever, whatever, offline like your ledger obviously.
He says many of my kryptos are also staking in those wallets.
He’s not going to get a 1099, but he says, I’ve heard from CPA’s, that staking rewards should be treated as ordinary income.
No, they could be treated as ordinary income.
Your income is not going to be in gold coins or medallions or shells, or cryptographic coins.
OK, that is not income if you say it is, than it will be.
So, I would change the word should too could.
Not necessary he says, but since I have the tax immunity trust.
and I’ll explain about that, he’s talking about the LLC and the LLC that I recommend, and I know a lot of people refer to it as a Trust Insure, it operates like a trusts, but I just really like to call it an LLC.
There are some components of it that, or like a trust. OK, I’m not trying to be confusing. I hope I’m not, but it is, in fact, an LLC, it is the account holder. It is a limited liability company.
It is written so that any tax liability can be deferred in a way that you want.
So, yeah, I guess you can call it a tax immunity trust, if you want.
He’s asking, does this shield the rewards from any sort of income tax?
OK, so, let’s just say, I’m an imagined that rewards means from Staking, he’s getting a return. So, let’s say, if I’m staking litecoin, I know I’m speaking out of school here. But if I’m sticking litecoin, and I put in one litecoin, and it’s worth 1.7 litecoin’s later, that is not profit.
That is not taxable income.
If I measured in dollars, it’s still not taxable income. If I sell it for dollars, OK, now we’re talking.
OK, if I do it in my name, that way.
The CPA’s telling you to account for it as if it’s paid in dollars. That’s your problem if you want to do it that way.
It is not required, I’m sorry, CPA’s, but you tell me, when I’m required to count an asset and measured in Dollars, then report it as if I received the dollars.
If I’m not used accrual based accounting, somebody tell me that, You guys need to go back to school.
So let’s just take the responsibility, OK?
those of you like me, who are Investors and Kryptos, and let’s think for ourselves and stop following CPA’s on the Internet, OK? Who knows who’s writing this stuff? It’s probably IRS agents or somebody Alright, so he’s asking Do I need to file anything No.
I currently have not filed an reports for the company.
I Understand that. It’s not required do the tax trust, OK, fine. That is correct.
If the LLC that I’ve written up for that purpose, and by the way, this whole thing is about your accounting practice, So if you do it in a CPA, says you will do, you will follow an accounting practice that will lead the LLC into a tax liability. There’s nothing wrong with that. It just cost you more money, and it’s unnecessary.
You can use your LLC as a pass through what that means is it is that money is considered to still be in transit, has not reached a destination where a taxpayer has to account for it.
So even though it gets paid to the LLC, and even though the LLC has an EIN, and even though it gets a 1099, that does not create a situation where the IRS has to reconcile anything.
There’s nothing to do.
So I hope that answers the question. Stop following these guys.
You know, and everybody’s situation is a bit different, so I can put crypto coins, or gold coins, or whatever, in an investment. Let’s call it.
And it can be worth more in dollars, I can have more units of that thing that I invested, Like if I have one light coin now it’s worth 1.7 light coins.
That’s a gain, but it’s not a taxable gain and it’s not a reportable game.
Now, here’s where that would be an exception in a hypothetical world.
That means it hasn’t happened yet, it might El Salvador just passed a law imagined into law declaring that Bitcoin is now illegal tender. OK, If that were to happen here in the States, that’s what would happen. And you would see it if you’re following the Federal Register. It takes like, two years for that to happen.
In the Federal Register, they would, they would publish the proposed change to the tax code, and they would wait for public debate, and so forth. OK, It’s a long process. I haven’t seen it yet.
So, we’re not there.
His second question has to do with crypto transfers and I’m just going to read it as I understand that crypto swaps are not taxed as they fall under the trust. OK, let’s talk about the LLC structure here.
But what about transfers to another wallet that I don’t own, OK, so what does that mean?
Well, let’s say, if I go to the grocery store and I buy some groceries, and I take money out of my wallet, and I give it to the cashier for the groceries, it’s going into another wallet, the till, somebody else’s wallet that I don’t own.
Likewise, if I take money out of my Bitcoin wallet, and I spend it to somebody that somebody else’s bitcoin wallet, what have I done?
I don’t care what structure I’m using.
Spending money is not taxable.
I mean, if I understand this question correctly, I’m gonna read it as I understand that crypto swaps are not taxed as they fall under the LLC provisions. But what about transfers to another wallet that I don’t own?
I’ve also heard CPA State that this is a taxable event. Spending money is a taxable event.
He says, Which I find absurd? But they state that it is a transfer of value. And you have to declare the appreciation when transferring kryptos to a wallet you don’t own. That makes no sense at all.
Come on.
And you have to declare the appreciation.
There is no such thing declaring appreciation. There is no such thing unless you’re doing like a millage tax or real estate, which somehow we let the government get us into, OK, that’s a bit different, that is not an income tax.
Can you please provide any insight?
OK, here’s my incyte: Stop Reading, but CPA’s are saying on the Internet.
I’m not saying you’re silly, OK?
This gets under my skin a bit.
All right, Let’s just be pragmatic, and know that there are certain basic principles here. Spending money is not taxable.
And just because something is worth more in dollars doesn’t mean it’s taxable. Let me give you an example.
If I’m a grocer and I buy prepared goods to sell on my shelves, like Betty Crocker, boxes of cake, cake batter, and stuff like that. That commodities like wheat and corn and sugar, OK. These are commodities, right?
There’s a price and the moment that product is manufactured, there was a price for the commodities that made that product, and it sits on my shelf.
Do I need to account for the change in commodity prices of all the components of all those products?
What does the seller manufacturer have to do that? And if he does, does he have to do it in a real-time basis, or weekly, or monthly, or what? That’s ludicrous.
Just because the value changes in something doesn’t mean anything, look at it this way.
If I own stock, and it goes up in value against the dollar, It’s worth more dollars.
Uh, at what point do I have a tax liability?
You guys know that if you buy stock and you hold it, it’s not until you get a dividend check, correct me if I’m wrong, so as long as there’s no dividend, then or you don’t sell it, well then, there’s no gain.
So let’s use that rule.
All right, so, I’m sorry if I sound like your 11th grader high school teacher, so if I could please?
Let me just go over some basics here. So here’s what, generally what we’re doing. OK.
So, I’m gonna use a limited liability company for the purpose of changed the way I own property so that I don’t have the exclusive right. Therefore, I don’t have the exclusive liability.
And the reason why I don’t, is because it’s not part of my state, Now, that’s on paper.
So, I go from being the owner, to, let’s call it the trustee.
It’s the person who gets designed for everything, that’s the trustee item. I’m not saying, you know. It’s complicated. It’s very simple. It’s an LLC that allows me to change the way our own things.
It also allows me to change the liability.
So that’s why, OK, I’ve a couple, a couple of ways I like doing this, now, The other day I set up a three member LLC for a business and it just works. It worked well for that business.
Most of the time, I do a two member LLC for people that want to get into kryptos is because it’s like a father and son are actual partners. Something one time I did a four member LLC for an actual business.
Um, with a two member limited liability company in the states, there’s something that allows it’s it’s a law that tells a creditor and it tells the court that the company cannot be liable for an individual member of the company. His debts, OK, so his personal debts do not attached to the company because it’s a two member or more, That means it cannot be, you know, two members are not, as a husband, a wife, OK? That’s still what number.
So if it’s two brothers, that’s fine, two sisters and brother and sister, father son, OK. That’s all fine to friends, to business partners.
That is, qualifies this what’s not what’s known as charging order protection.
So, the two members are an association that makes it to where no one member is liable.
His interests are liable for his personal debts so it’s personal debts can never reach into the company. That’s what the benefit of a two member LLC is and we spelled it out that way, member, manager, member manager, or it could be member manager, member, whatever. Somebody has to be the Managing Member.
If, instead of two people, it just works out to where a private membership association or some association that’s not incorporated.
Or if I want to use a trust, I can make that the owner, and I can make that a single member manager of the LLC in either case.
I have an innocent party that owns the company, it’s never going to be liable for anything, unless I get in business with something with it. It’s not going to do anything just like that. your children of, you know, the manure, the minor children you have in your household would never get into a contract with the landlord, OK? That’s your job.
Same thing with the, with the LLC, you’re PMA, or the two members.
Don’t do business together with the world. The PMA doesn’t do business with the world. It just owns the LLC. The LLC goes out and makes contracts, opens, bank account signs, lease agreements, things like that.
Every once in awhile, somebody has to be guarantors. So you gotta be careful on that. I’m not gonna get into that too much. So there’s there’s two kinds of ways to go here.
I can have multiple member LLC, or I can use a PMA either way.
It’s it’s an innocent party.
one gives me charging order protection. And the other one, I don’t care. I still get protection both ways.
OK, here’s how, here’s how this works, I take my LLC.
I open an account with a third party.
Maybe it’s a gold bolts service. I put some cash in there by some gold, maybe the goal becomes worth more than I sell it. Well, my account holder is the limited liability company. so here’s where this matters.
The LLC is the account holder and the accounting practice is what creates a liability, the accounting practice.
so that is, am I going to file a tax return for the LLC? The LLC that just sold the gold, or the kryptos.
Am I going to file a tax return? I can’t if I want.
Excuse me.
You don’t have to.
I know this makes CPA’s crazy, but they have yet to tell me or show me any legal duty for an LLC to file.
Now, the reason why an individual like a person that files a 1040, who has done that at least once in his life, if he doesn’t do that again, Generally, he’s going to have a couple of years down the road, collection of problems from the IRS because they’re going to estimate attacks and they’re going to file a return for him.
It’s called a substitute for return, and they’re going to try to collect.
If I form a new person, an LLC that just got formed, let’s say last year, I have a choice. I can use it as a pass through.
That means I can move property rights into the title of the LLC, meaning cash or kryptos or Gold or whatever.
I can sell things and dispose of assets in the name of the LLC and I can decide what its tax treatment will be.
It can be an S corp, I can disregard it.
I can use its asset or income as a sole proprietorship. I can just claim it as my all my money, right?
And I can file on my schedule C, I can choose not to file anything, and I can leave it in the company.
I can leave whatever amount I want there. I can even take out a percentage. If I take out a percentage and I go on vacation with it, I think that’s a personal use of the money.
And that I would report, that becomes my part of my gross income, and what do you call that, part of my gross income. It’s not wages, but you can pretty much call it anything. Whatever you can justify, but really, it’s more like an independent contractor type of income.
OK, my LLC is ready to take profits. I’ve made enough money in Kryptos.
I want to get out of kryptos, but before I do that, let’s say, let’s say I make, I get some, no decent returns, Let’s just say and I go into a stable coin. I let the price come down a bit.
I buy back in, then the price goes up again. So I guessed, right, I made a lot more money. So now, I wanna get out totally. I’m gonna get into stable coin.
Now, that’s just me with a personal account at Coinbase.
Now, I don’t want to pay tax on that on the initial sale of this, on the principle of my new principal, my new Windfall. I went from $100,000 to one million dollars, OK. So I’m going to set up an LLC, and I’m going to open an account at Coinbase maybe that might take a month.
I’m going to transfer my, whatever amount of Bitcoin, or whatever coin it is. I’m going to move that from my personal account at Coinbase, into my LLC account at Coinbase. I’m going from wallet to wallet.
There is no change in beneficial interests, Therefore, there’s no disposition of assets, so there’s no tax liability.
Hmm, hmm, I sell it in the name of the LLC, so I’ve turned it from Bitcoin, into cash.
The LLC owns I then take the cash and go buy house.
So, let’s say I buy a house and let’s say the cache is a million dollars, and I’m, let’s say I took a mortgage on the house, and I put some, I put some money down, whatever that is.
So, my down payment is my personal, it’s going to be my personal money. Here’s why. because I’m going to take title to the house.
I’m going to put the house in my name so that whatever money I put down is my income until I do something. So, I go to the bank. I get a mortgage, I put a down payment, my down payment comes from the LLC cash.
The rest of the money comes from the bank.
So, let’s say I put 10% down.
In order for me not to have a tax liability for the 10%, I put down, I need to put a second mortgage on the house using some kind of lender, like my LLC, or a new LLC or something, and I need to document that. I paid the loan on that.
So that way, I borrowed the money, and for real, it’s a real interest rate and so forth, OK? You would be a second lien holder. You know your LLC would, and then the bank would be the first lien holder now if I just paid cash for the house. Like, it’s a million dollar house, and I paid a million bucks, and that’s clear title.
I would not want to put it in my name. If I want to keep it as clear title, I could just not put my name. That’s very easy to do at the closing. I can also put it in my name, but I still, I would go and record a mortgage. And I would write out a note. And I have a couple of videos on how to do that.
So I’m structuring the disbursement from the LLC as a loan for my benefit.
So, therefore, it’s not my income and I need to document it. I need to document it, That’s it.
Now, I can then sell the home, take the cash.
Um, if I sell the home, I want to make sure that my LLC is selling it, or if I sell it, I want to make sure the lienholder gets all the money, So my LLC is the lien holder.
If I sell it with 100% Lean, my LLC gets the money right, the loan is paid off, um.
Then, I can move it to something else.
So, as long as I’m moving money from here to here to here, and company to company, or company to trust or something like that, yeah, I can still benefit from the things.
It’s buying as long as it doesn’t become my thing that it’s buying or if it does, make sure it’s structured as a loan that’s generally what we’re doing, and I’ve been doing that since the nineties.
I’ve done it more frequently in the last five years.
I should say nothing is changed. There’s no new laws, no new tax laws. I mean, there’s no such thing as crypto tax law as you guys know this.
Let me stop here, if there’s some questions, because I have some more to share with you, But, I just want to cover those things like, keep hearing this. Not that I mind, but I just want to cover it.
You guys won’t have any questions, Anybody?
I do.
All right.
Hi, John.
OK, so I own quite a bit of crypto, but it’s all under my name, and I need to put it on an LLC for structural purposes.
My problem is OK, I know, I just, I joined a little late. I don’t know if you were talking about it earlier?
I need to know how to move my crypto from my personal account to an LLC.
OK? Just go from Wall to Wall, it’s a spend.
Spend it, OK, Do I have to pay taxes?
No, because of it.
It’s not a disbursement and there’s nothing to tax because you didn’t sell it. You didn’t sell it for dollars. And what’s more, this is the most important thing, and this is how I get the IRS to agree with me, that trades between coins are not taxable, because the beneficial interest did not change.
If you still care about the thing, then the beneficial interest didn’t change.
If I no longer care about the thing I just gave to somebody else in it because I got something for it, then yeah, I just sold something.
So that could be taxable, but no, not going from wallet to wallet.
OK, one more question, if you don’t mind.
OK, yesterday, just yesterday, my wife and I, we went to a lawyer, OK, so, together, we own two properties.
And she, just like, most of the lawyers, they don’t have a clue about.
So, aye.
I asked her about crypto to see, if she would be able to put them into kinda trust, or anything like that. She has. No, but she was telling me about the two houses now.
The, the way you would, can I structure an LLC owning the the trust?
For the houses, instead of me personally owning the thrust?
I’m not sure what I’m saying. But that’s too complicated.
I would use an LLC to own the thing, the asset, the property, or I would use a trust OK, all right, now, the third question, if you don’t mind, let me comment one more of the ed attorney yeah, OK? The attorneys not thinking because most of them don’t.
Cryptographic currency is property.
So, you can treat it just like real estate, Whatever he or she can do in real estate, he or she can do, the attorney can do in Kryptos.
Yeah, I explained that are so that’s that’s my third question is would you be able to help me out? Yes. Actually do this work Yeah, because the attorneys are like, Yeah, I mean, OK, yeah. Please let me help you And they’re like, yeah.
and I contact you through e-mail, Yeah. please do that.
Right Or for phone.
However, however you want e-mail, it seems to be the best. Yeah, go e-mail and I’ll look for it.
Yep, OK, I’ll do that.
Alright, thank you. Alright. And then let’s see.
There was tin soldier. I think you were next.
Hey, can you hear me OK? Yes, I can.
OK, so I got to do things.
Got an irrevocable trust. My primary residence for my grandkids, OK? I opened it up in 2011.
I just now I ask for it, because I’m getting ready to sell that property by another crop.
When I filed for the EIN, the letter I got back says, I have to go back and follow at 10 41. from 2012 through 2020, even if there were no wages, no employees or no.
Yes, did you ever file a return for the trust?
No, because there was no income, income is $600, and there was no income.
There was no, no, I mean, it was just held in a trust.
Right, and so that’s what the instruction says, but it’s not true.
If you don’t file, you’ll be fine. If you file and then don’t file, then you got problems.
OK, so items, OK, so I don’t have to worry about everything you want, I don’t think it was gonna be zeros. Anyway.
Exactly. So, here’s the thing, guys.
They just want you to file that first return because it creates an a presumption and it creates a business master file. This is what’s going on at the IRS.
It creates an accounting ledger, Then the IRS will always track it, as long as you don’t create that first accounting ledger by filing a return.
They’re not going to care, but you make sure that use that as a pass through Just account for any personal use of it, And you’re going to be. there will be not, however, However, So I’m getting ready to sell this property and buy another property.
OK, I’m going to take the funds from the sale and put them into the purchase of the new property.
Is there any cap that I’m assuming there’s no capital gains? I’ve gotta worry about, OK, because your accounting practice doesn’t have to create the liability.
OK, so second, the second item is this so I’m going to have to take out a small mortgage.
Along with the funds from the from the trust that I’ve put down, OK, what is the best way to do that?
Just take out a mortgage, find a lender and use the cash as a downpayment and their bank will give you a hard time about where’s the money coming from, and all this stuff, and just say, I’ve been with them already, OK? Because I had to open up a bank account for the funds.
When I sell this property, That’s why I had to get the EIN number, right, so I went to the bank, I did, I did all that, and that’s good. They know what’s going the title company knows, what’s going on, and my broker knows what’s going on.
So, as far as as far as it’s a go, so I’d take money from here, put it up from the trust, put it as a down payment on the new property, and then I’m going to fund it all, 50,000, or something like that.
Yeah, and just a question on the trust, just a yes or no answer: Are the beneficiaries not the same as the trustee?
Correct, I’m the trustee, and then the grandkids are the beneficiary. Perfect.
You’re good, OK? Yep, all right.
Yeah. A lot of times, you just gotta think for ourselves. I mean, yeah. These guys will just tell you to do something and if you don’t know any better, you’ll do and all of a sudden you have a new liability.
Yeah. Well, I thought that I thought the 10, 41 was kind of strange and I thought like you that once I started, I can’t stop it.
So I just want I just want to double-check and I’ve been going around back and forth with the broker and the title company about capital gains on this movement of property, but I didn’t see it, I can’t find anywhere where it was. I just wanted to double-check that. I’m good with that.
That’s right. They’re going to title the property in the name of the trust. Even though I’m taking, even though I’m taking out a mortgage, That’s OK. We’ll do it, That’s great. Sometimes they give you a hard time and so we just change it later. But you could do it at the closing. That’s great, OK OK so let me, so let me ask you this so so let’s let’s say I’ve got the small mortgage, the Hush houses titled In, In The Trust. And something unforeseen happens and I default on that loan did they take the house?
Yeah, OK. It doesn’t matter Holland’s mm, OK so how do I do a co ownership because that’s really so can I split the ownership of this between the trust in myself? Why would you?
Well, because of it, my thought was, and I might be wrong, if the trust own 70%, and I only own 52 20 percent if I default, they can only put a lien on for what I, what? I had my, my share of the profit no, it doesn’t work that way, OK, their underwriting will not let the bank to that domain will take over it or whatever the value of the Lean is going to uncover the property. It’s hot. Alright, that’s it, thank you. Sure thing.
All right, and Brenda, I think was next.
Did I get that right? Yep. Yep. I’ve high gear that you came in our call the other night on Sunday, I appreciate it. Quick question because we had a glitch in the internet. I didn’t hear your answer. If we, recently, and this current tax year, whatever you wanna call it, your rollover, some of our traditional IRAs into a crypto, IRA and an IRA, LLC, Is that like bad and there’s something we need to kinda change that because it’s not that? It’s not that I just realized it’s still in. It’s a trust, it’s a statutory trust and it’s for tax purposes, there’s a tax benefit to it and that’s what you’re getting And it’s different than the LLC’s that I set up.
Those are not under those restrictions.
Yeah, everybody’s different, but they exist.
Well, OK, generally, putting money and tying it up, or I say tying it up, I’m sorry, I’m biased against the, as you can tell, I’m biased against the IRA thing.
But it’s OK because it’s good if it works in your situation, but you are tying up capital under certain conditions for a tax benefit, and you might be missing opportunities.
So, I don’t know what that is for you. I don’t know if it’s a lot of money or a little money.
If you’re young, just reach out to you and we’ll figure it out. Yeah, we can kind of get a feel for it, like for your situation, based on your rough estimate of your age and what your plans are. And sometimes I just tell people, don’t change anything, and then sometimes I say, you have a better use of capital.
If you sell, pay a penalty, then go into some other asset, but if you have no idea what the acid is and you’re not and you’re close to the age range, I sometimes will just say leave it like it is because and messages develop another investment outside of that trust umbrella.
OK, I call Thank you. All right.
And somebody was saying, he has a question is Daniel, He’s trying to go around the?
Um, he’s trying to go around the verbal one?
You’re trying to do, Daniel?
He’s trying to, He’s trying to go to the chat. What do you want?
Oh, I have a question, I’m going out a W nine for my LLC.
OK, I own part of a company that switched from being Brazil and to the United States.
so they’ve started a new LLC themselves in Delaware and they want me to fill out a W nine and I’d like to own it under my LLC, so I’m just asking how do I fill out the W nine for them, OK, if this is like an independent contractor type of situation, Aye, don’t know that I’d call them an independent contractor. It’s a, it’s actual business, I guess.
Yeah, but are you getting a W 2 or 1099, if you want to send me, I K one, I believe. Yeah, OK, so that’s 1099. All right, so that’s independent contractor. Yes, so you could easily use your LLC as the contracting party instead of yourself individually, and yeah, you want to use a W nine.
So on the W nine on line one, you would put the name of the LLC, skip onto down there at the bottom, you would sign as, give yourself a title for the LLC managing member, vice-president, authorized signatory, and put LLCs EIN there.
But do not put your SSN, OK? Put the address like normal, and that This is good.
You want to give the WI Because that certifies the correctness of the EIN with the LLC, and then that puts the burden on them to pay it out correctly.
OK, yes. Inbox three, which by which one should I check there? I don’t remember, but I’m going off memory here.
I don’t know, OK, OK, so on that one, I believe it would be you just P for Partnership and disregarded entity.
I think of the choices we make on those.
I think I did a video on this too.
There’s a sole proprietor, corp, S corp, partnership, trust estate or it can be a limited liability company that’s not a sole proprietor and that I can put in SP or C as well.
I would, I would use, OK, I’m Unboxed three, OK, it does say, go down to the second line where it says limited liability company, you check, you click that box, and then put P for partnership, OK, on that same line and then, just leave everything else.
No exemption codes and then, put the address, never fill out stuff that’s optional and, yeah, just EIN do not put anything in the SSN field.
Then sign as whatever your title is don’t just sign individually, OK.
That’s all you do, excellent. That’s what I needed to know they wanted it by tomorrow. So this is great. It’s funny how they give you the deadlines.
They, they’ve been, This has been going on for about 10 years now, and they finally got their act together enough.
Don’t want this. Definitely mine.
So here’s what would happen, just for anyone’s curiosity, if he did not do the W nine, what they would do is on his next disbursement, is they’d hold like 30%.
They’ll, they’ll give it to you, but they’ll just withhold it. And if you never did a W nine, they’ll give it to the IRS.
Yeah, yeah.
There’s no profit yet so Well, OK. I’m just saying I want to pay 1% Medicaid.
All right.
So, all right. I hope that does it, Daniel.
Yes. Thank you. All right, sounds good.
Guys, give me one second. Here, I’m gonna read this here.
You’ve mentioned using LLC and blockchain for secure encrypted when Pulse can you advise the optimal structures for the following types: E-commerce, IT, consulting, OK.
So, for any cash flow where I’m selling things and services, I always am going to recommend, for the most part, a limited liability company. because I just, I’m a small business investor entrepreneur. So, I like those.
They’re very useful.
I can be kind of sloppy with them and not mess them up. I can sell them the clients and not met. They can’t mess them up, They’re easily. That’s why I like them.
They’re disposable and they allow me to easily divest my interests without complicated tax accounting or attorneys and share certificates, and all this other garbage like C corp or whatever.
I hardly ever use C corp, so now if I’m in another country, I might use a joint stock company for something, but I really do like the LLC.
Yeah? So, for IT consulting, OK, this is a professional income type business? I have seen, OK, so I look at that, like, a dentist office or chiropractors well, IT consulting, same idea, professional, and an LLC, it’s fine.
Now you’ll get into some licensed professions where the LLC, maybe it’s not permitted. And also, in some cases, yeah, you can’t even be. You have to be a single member LLC. That’s OK, too, so. So there are some limitations based upon different rules. In the states, it’s very minimal.
But in what these examples that you’re giving me, like e-commerce, if I’m going to show a client how to make more money.
I’m usually going to recommend that he pick up an Etsy website, or a Shopify website, through a broker.
And sometimes, you can get those for almost nothing, couple of grand, and you can make a few grand a month.
And those I always have set up with an LLC, and he can have the same benefit, he can move his cash flow in a tax deferred way.
He has control over the any type of liability.
That answers it.
All right. All right. So, let’s see if I can I don’t know the order. I’m sorry, Let me go with Ryan.
Hey. Can you hear me? Yep.
Oh, Hey! Are you done?
Try to make this simple. When you, when you create a wallet under your LLC, or it’s OK to use a current LLC or you talk about creating a new LLC.
It doesn’t really matter, I guess.
Kinda kinda wallet what you’re saying. You want to transfer, you want the LLC to own the crypto wallet, right? Like an exchange like Coinbase.
Yeah OK so the only way they’re gonna let you open an account is if the LLC is in good standing So yeah it’s no recent one that’s in good standing, that’s all that matters, OK. So I have two LLC’s.
I have my, my IT business, I’m just IT hardware broker and I’ve, and that runs my business, but I also have an LLC that we put some rental properties under, would you suggest using that one?
I keep it more simple or my business LLC that has a lot of moving parts to it to do what?
Um, to have the crypto wallet under OK, OK, yeah, you could you can mix a crypto investment with another asset Like real estate or business and crypto investment.
But just keep in mind, It’s a little unusual because it’s almost like Having a business with a bank account Except you have a business or an investment With a crypto account. It’s just that you’re probably talking about an entire crypto portfolio.
So there’s a little bit different there, but there’s so much liquidity with the Kryptos that you’re not really creating a greater risk by doing that.
It’s fine, in my opinion, will probably utilize the one with. We have a few properties under, since there’s not much active. Yeah, yeah. That’s a great way to do it. In fact, I think that that’s even something that you may be able to use to manage risk. because of the way cryptos are, if you’re if you kind of dial it in, you have a tool whereby you can manage risk and one asset. So on, on one balance sheet, you have two assets.
Yeah, OK, thank you.
And before I call on, Anthony, I wanted to answer this one from spending. You mentioned with filing taxes, I shouldn’t use LLC for expenses.
OK, If the LLC is not going to be a taxpayer, then it’s off the grid, all the way, you’re not gonna get any tax deductions out of it. Again, that’s thinking, like, I’m gonna step over the dollars, to get to the pennies, as they say. So, either it’s in the system, or it’s not.
Either it’s a pass through, or it’s not.
So, I don’t know a way to trick that system.
That answers it, OK, and Anthony?
Hey, John, can you hear me now? Yes.
How you doing? All right?
Hey, just let you know a couple of things one, now I’m gonna get you your payment that that issue with the I pay do you pay me back and that’s OK. It’ll get take care of. So I’m working on getting some litecoin I had to get some transfer. To another account. Sure. Question.
I’m trying to fill out the SF four and the type of entity on question 9, 8.
Some of the instructions say, because it’s an LLC mm, If I have a corporation, I need to tell them that I’m going to be filing at 11, 20, 11, 20 S or other. It says it should be Carter called a disregarded entity.
So that was our proprietorship.
Yes, OK, Then if I mark that box, it’s asking me.
What was the other question? I guess that was the only really only other question. So disregarded entity or sole proprietorship and I’m fine with that.
OK, now, thank you for that question. Can I just make comment here? OK, sure, my only my only ambition here, my only purpose on the EIN Application is so that I answer questions with the least follow up questions, so that’s why I have, you do it a certain way, like single member LLC.
OK, that’s makes it make it a, you know, whatever, that’s easiest way to do it, because the application for …
does not establish the tax filing or whatever tax treatment of your LLC, That’s all determined by your accounting practice, what you follow.
Don’t, and your articles, because when I ask for an EIN, all I care about is that the number is assigned to the name of my LLC with the LLC designation on the approval letter.
Got it, OK. After. that doesn’t matter. Because I can change it the next day.
Yeah, OK, Then, I noticed you said, when we’re closer to the end of the tax year, when I get R 10 99 K, sounds like I’m gonna get one. I’m gonna get 3 or 4 of them. Actually.
OK, is that letter available that you write, in response to the 10 99 K available now, or should we wait to get a 1099 K? And it’s erroneous like, it shows that you got some dollars. And he didn’t.
Yeah. Yeah, we can fix it. But we have to do it. We can’t do it ahead of time, We have to wait until the Oh, no, no, I agree, but I mean, as far as getting the letter, Because you said it’s like a six page letter, right?
Yeah, it only takes me maybe a half hour to write it up.
I mean, It’s a form letter I just have to make sure all the facts are right, OK? Wait, wait, wait, wait till I get the 10 99 K And then send you a copy of those and you can fill it all out. Exactly mm, OK. OK. That’s all I have. Thank you, John, Right. Sure, thing, appreciate the question.
And let’s go with the Brian, sorry if I’m not getting these in order.
Jones, Brian had a quick question I know you mentioned that you have the two different forms of the PMA, and I think it’s treated as almost like a single member, or you have the two member is the two member, also considered a PMA or that is that it can be but, um, it’s it’s what I say. It is like in the article. So if I designated with a PMA at the end of the name, then that’s what it is.
I’ll describe it that way.
If it’s literally two members, it’s literally two members, OK. But the added benefit to the two members, as do you get protection against charge orders? It sounds like! Correct, Exactly. right? The thing I like about two members is.
Any attorney who’s trying to collect any someone, and anyone who’s going to try and make a claim against the company, is gonna if he has half a brain is going to discover sooner or later that the company itself has charging order protection.
And that is going to fulfill one of my first objectives with a client, which is to avoid costs of litigation. So, if I can kind of scare them away or discourage them, that is the purpose of the two member LLC.
That could also happen with the PMA. I’ve yet to see an attorney brave enough to try to challenge a PMA or a double member. So.
For extra OK, and somebody’s asking me on the deferred sales trust.
Um, you’re naming it, you’re naming a trust with an adjective, and I don’t know if I know what that means.
A deferred sales trust, I can make a presumption, so I, the way I look at trust organizations is that they’re either revocable or they’re not.
And then, I’d have to look at the body of the trust to say, Who has what rights and obligations. I don’t know.
So, maybe, you know, part of it comes down to your accounting practices, but then, again, it might come down to the rights set forth in the trust.
So, I don’t want to speak outside of and say, yeah, it’s this thing. I don’t know.
Deferred sales trust. I don’t know what that means.
I’m sorry about that, but, uh Oh, you’re adding more. It’s a method used to Defer right, OK, OK, so lemurs?
Yeah, OK, so this is, I mean, OK. So if that’s what it’s doing, it’s doing the same thing that I’m showing you guys had to do with an LLC, but I’m also telling you that you can do the same thing with a trust.
I know crypto crypto Jay has, he has this revocable trust, and it works perfectly. It’s interchangeable with the LLC, I prefer the LLC. But, yeah, it, your accounting practice is going to make that determination for the most part.
All right.
And Let’s go with the, Greg, please.
And then Janice, next.
Can you hear me OK? Yes.
All right, so two questions.
I’ve got some crypto staking. And I was thinking of ways to have, like, you know, mitigate some, like, normal monthly expenses and things like that in one of the ways, those cards.
So because I know if I put it into the LLC in, Mumbai basically taken just don’t spend it at Wal-Mart or whatever, groceries. That would create a taxable situation for a personal.
But what is gift cards? How does that change?
So like it, there’s, there’s websites where you can basically buy gift cards with crypto.
so then do, what was it?
Basically, you can buy a Kroger gift card for example. Like archer’s All you’re doing there is you’re hiding the use of the money.
You’re still having, Yeah. Yeah, that’s your call, guys. We all do it. You just have to know what you’re doing there, so yeah. I was just curious if that was your property. Because like I never turned it into dollars, because you know, that’s whatever. Yeah. And. Then the other one was, you mentioned, having.
Say, I have money in my LLC, and I go to buy a car, and I write up a basically, you know, use that as my letter by letter.
And you mentioned, you know, really, you know, being thorough, Creating like a payment plan, all that, you have to literally make all of the payments and repaid in full to avoid any kind of taxes, Or what you should do is make sure that you have allocated the money that somewhere sitting around somewhere or it’s available to you. Yeah, you can spend it, but what I would do is have a spreadsheet showing payments.
It sounds ridiculous, but just document that Payments were made. It’s not necessary to do that through a bank account.
But that’s the most common way. So, yeah, you could just have a spreadsheet and then call it, like, the name of the file is the name of the car.
Then when you go, when you go to the dealer and buy it, just, you tell the dealer, Hey, my lender is a worrying over the money, and then write up on a piece of paper. Here’s a name and address and EIN, or my lender.
And then he or she will write up the loan documents and send the certificate to the lender, which could be at your house.
Right? It’s just a name.
But yeah, you could just have some document terrie records just it doesn’t ever audited you.
So that would be asking for like three years of bank statements showing that di deposited they would because most people do that and then you just come in there with a document.
And so there’s no because just the fact that you have a bank account doesn’t make it better.
It doesn’t mean that you’re lying if you don’t have a bank account because people use cash, you know, until cash is outlawed.
Now, um, I haven’t really seen that too much.
I’ve done this for a long time, and I’m sure it happens. I just, it’s not a usual thing.
But it’s good to keep it documented if you want to do it correctly.
Gotcha, OK.
I think it was that Janet was next.
Don’t do that, right.
Yeah, I know, you have answered this before. So I really appreciate your patience. And, but I was looking at Caleb and Brown today to set up an account.
And it says that they want a certified copy.
The operating agreement.
So, is that, Is that something that I’m gonna order from the state of Georgia? Oh, OK.
No, not the Operating Agreement.
OK, so the document, I give you, that says, Operating Agreement on there, that, and just have your signature notarized.
Oh, OK, that’s all they really want. That’s what they call it.
Now, because it’s out of the country, technically, they should make you go through the embassy and doing a post steel. Which is really complicated, but they’re not.
All they really want to do is, have an officer of our court witness your signature and that’s good enough for them, so cool. We don’t have to go to a lot of trouble. So luckily, that’s why I like working on those guys. Just take one. Go to my notary here in Tennessee.
No, it’s a Georgia set up. Yeah, well matter.
And then for the Georgia LLC, you would just get a copy of the articles with the state’s stamp on there and a copy of this because it used to be where you have to get a certified copy, but nowadays they just want the PDF version of it.
Is that where I cannot even find the website to add just column, or let me, Let me, I can do it for you. You wanna give me the name? Do you mind?
Yes, a M, C distribution.
OK, and Georgia?
So let me look it up into, I’ll shoot me an e-mail, if you don’t mind.
Just shoot me an e-mail or a message here and I’ll, I’ll look it up and get right back with you during or after this call.
OK. now is it best to set up the bank account?
Before I try that, do anything with Caleb and Brown. Does it matter? Now you can do at the same time I don’t think they care if you have a local bank account.
OK, I’m having trouble hearing my bank account tapes, so sometimes that happens. You know, it’s funny, somebody said last week that that there be a bow, a application went right through without even any documentation, and then someone said the same thing.
Another person said it last week, so that’s weird. And then I’ve heard horrible stories from boys, so I guess it just depends on, you know, who’s answering the phone.
Asked them, but then I think what happened, and it was too easy as well.
But, I think, because, I had a previous credit card with them, yet asked me, and so, that’s my figure.
I’m just practicing, I also tried with, with …, Community, Bank of Georgia, and they gave me a denial. So, not doing there, But Chase is one, the one I really want, anyway. Yeah.
I also have a credit card with them, and I don’t want us, I don’t want it to attach me to the LLC when I set it up, so I don’t know if I need a VPN or what I need today, but I guess once it gets myself security number, it, I don’t know what that even means. But, there is something going on with the attachment of the accounts.
I would just ask the person I’m, you know, that’s dealing with my account mm. Just say I don’t want them connected.
Like, like, I don’t want that, Tom. I don’t want the convenience of being able to move money back and forth between accounts.
So, OK, Yeah.
OK, I’ll try that, thank you. Alright, sure thing.
So, someone’s asking me, I’ll get to chat next, but someone’s asked me.
Um, for the …
application, it says, Not use the designation LLC among others when entering the name, OK, The fact the entity is an LLC.
Maybe you went down the wrong path, and I’m sorry that I don’t have the exact prompts to tell you what to do, because they change once in awhile.
So we kinda generally have to just do it that way.
I think, but, um, you might want to try again or back up on the menu structure and see it because you want it to be a disregarded entity as an LLC single member and then you should be able to come up with the LLC designation.
Name the fact that the end isn’t C is selected the previous question. However, when it was issued, the LLC did not show OK, so if the LLC designation doesn’t show in the approval letter for the EIN, just do it again.
That happens once in awhile because maybe it’s just the Menu structure.
The ALC, OK, so you mentioned.
Yeah, so it’s just a menu structure.
OK, then OK, so I’ll go to if I could just go to Chad.
There we go. Can you hear me?
Yes, OK. Yeah, it’s another question, actually, oddly. I do have my letter. You were talking about it need to be addressed in the name of the LLC in mine is.
But mine’s also underneath the name of the LLC. It says Chad. Pair, so member.
So somehow, when I went through it, that’s underneath the address, OK? That’s OK. Counting practices.
I didn’t know if there was something else going on there when you imagine if you deliberately wanted to be the sole member. And then the next day or a week later, you amended the articles. And so, again, the articles control who the members. So whatever is registered with the state is what everyone has to act upon.
It’s not, it’s not. So, it’s all set up that way. You go so far as far as the IRS is, just our accounting practices and we know, yeah, it doesn’t affect it all.
Excellent. Thank you. Quite on the Coinbase. I’ve been waiting since the 27th of May.
Oh! That’s not right. You know, I’ve heard some of those. I don’t know what it is. I just think it is.
Yeah, I don’t know what it is. You know. Have you been following up, and ask them what’s going on, and they don’t respond.
Do they just They’re slow to respond?
Yeah, I guess I’ve been trying to respond. They said, responded this ladder of cinema one every month, and I haven’t heard anything yet. Oh my gosh, I didn’t get a letter Yesterday. I guess. Thank you for your time of waiting. Here’s some of the things to look at. In the meantime, oh, my gosh. Well, yeah, it’s been since 27. OK, well, I don’t think that one, you’re pretty patient there, though. I don’t know what else do.
I may jump over to another exchange and get on if you send me. Yeah.
Processor, but I’m hooked up with Caleb and Brown to I’m just kinda been probably the better bet. Yeah. Those guys are real professional, Yeah, Yeah.
Thank you very much. Right, sure thing. Alright, Derk, if you would, please, when he got there.
Can you hear me? OK, John? Yes, sir.
This is kind of a off topic subject, but I wanted to get your opinion.
Children who were born at home, there’s no birth certificate certificate, or social security numbers. There homeschooled action agent record.
All the whole nine yards of a daughter who’s 18, kind of wants to experience or quote unquote, regular job. Yeah.
I’ve encouraged them to be self employed, but no, it’s kinda like, you can’t force them to want what you want.
So, I’m just happy getting any, any ideas I could share? I’ll share my story with my, daughter was 18 or 17, and she got offered a job, and she got hired and she’s just my children, just like, what you’re describing. And got five children. And so, she was so, she got the job.
And when they asked her for her SSN, she said she doesn’t have one and they fired her because they’re idiots. So. I mean, I said, it doesn’t matter what you do, because they’re just not gonna, they’re gonna hire not going to hire you for that. even if, even though they could still do withholding.
It wouldn’t be of any cause.
I told her that I said they’re going to still do withholding but they can hire you with no SSN.
So, they didn’t want to do that. They fired her, we sued them, and the court didn’t want to hear it.
And I appealed it.
And the court played some game about why it couldn’t hear the case or something. So, I just gave up.
I just, OK, it doesn’t matter anyways because, I told my daughter to go become an employer, and that was about 18 months ago.
And two months out of this summer, June and July, she made already $10000.
She’s 19.
She’s already found a way to make a lot of money, and I guess, you’ll figure out more, So, they will, they will, and they can make a lot more money. If they can.
They can be entrepreneurs, and they can be an employee of their own company if they want.
But they’re not going to be able to work without an SSN. Even though that’s not legal.
The other thing I did for her was we created a certificate of graduation.
And our family was the association from which she graduated. The difference being, It wasn’t the county association, the GED program. The GED is a trademark of the county.
Well, somewhat like that, so we just did our own. And that certificate and her transcripts. She took the test online. The GED, purcell. She got her score and we got the transcripts and sealed transcripts. And she has an envelope.
So, that way, if she wants to go anywhere in the world and try to take an entrance exam for college or something, that would be accepted. So if you have, if you’re in that situation, you can do that.
If you don’t? Yeah.
Um, would I read on, I guess the website? Was it?
She could show that she is applied for the social security number and work up to 90 days, but good point made the request.
In her situation, she would have to have an interview.
No, it’s just, I wouldn’t even go there. It’s up to you, But I mean, obviously you can’t control, they’re going to do, but it’s just like with my daughter, I I recommended that she don’t she does not have a driver’s license. Just my wife, my wife doesn’t have a state driver’s license. However, she has a driver’s license from the country of, or her country of origin.
And my daughter got a license.
It’s an exact license from New South Wales.
You can do this in almost any country, but it’s not in the New South Wales Department of Motor Vehicles. It’s not in the DMV database.
So she cannot use it to drive in New South Wales or probably anywhere in New Zealand or Australia, but she can use it to drive in Europe and North America, and probably South America, with no problem, because there’s no connection there.
OK, so, so she’s pretty much driving around as a tourist, and she uses an international driving permit with that.
So, for now, we’re able to avoid the RFID and all that garbage, I don’t know how much we can, I keep avoiding that.
I’ll look those up. I assume will Bill find stuff online for that?
Yeah, it’s kinda hard to find them. I’ve noticed, we’ve had to look around even harder now. I guess they’re getting threatened because they’re getting more popular. So, yeah, there are companies that will do have a real good job on the licensing, and they’ll use the same equipment that your government. Well, it’s just that, you can’t use it in certain situations.
OK, yeah, so, I appreciate it. Thank you. All right.
OK, and Matthew!
Yeah, I think bringing it kinda down to the basics today was a good idea.
So I was wondering if, maybe, you could explain, or just walk through the similarities and the differences and the use cases between an LLC and a trust and what you recommend to use LLCs for. And what you recommend to do with trust the benefits of each of the kind of the cons of each, and just kinda, you know, just the use cases for each, I may not, not a real long, just kinda one.
Similarities and differences are of each and kinda why you, I guess, I always kinda prefer the LLC. I mean, every situation different, but, you know, going back to basics, just kind of, you know, the basics of both those. Yeah. Great question. Thanks.
The LLC, the LLC is recognized on public records.
It’s easily found on public records and I’d like to use public records to establish property rights because sometimes it can be used to disk or discourage investigations or litigation. So if a creditor looks at that and says, OK, well, I see this is set up in a way where it wouldn’t really help my client to do anything, I’ve accomplished that.
If I use it, trust, whether or not it’s registered, It might invite scrutiny because some attorneys feel like they can subpoena the trust document and break through it, and a lot of times, they’re right. A lot of people don’t know how to defend the trust. And so, there’s a cost to that to that as well.
If you had it written up properly, and you had proper representation for the Trust, that’s another thing.
A lot of people think because they have a certain trust document, they’re really protected, but if they’re brought into a litigation situation, they really need a practitioner, I hate to say an attorney who maybe, hopefully had written that document or who can really defend it properly Now that that’s almost the same for an LLC, but with an LLC, like I said, it should be enough to discourage litigation.
Um, but that’s what I’ve found over the years.
I have seen, and this is where I get like this PTSD type of thing.
I’m biased against trust because in the nineties I saw people abusing the trust.
And I saw what the IRS did in response, which is basically called the trust the person’s Alter Ego, now, rightly so, know, they should have been using it that way. They were They decided they didn’t have to file tax returns. Because they figured titling everything in a trust name was the solution, which is not true. So the trust can be just stepped on, because then it puts the burden of proof on you, the trustee.
On the LLC.
I like it because I have a lot more versatility.
I can take on a partner, I can write in his interest, in the membership. It’s a standard transaction.
His attorney appreciates it, his CPA appreciates it, if it’s a trust, I have a little more difficulty, Because they want to see the trust. They want to see the rights, and, you know, all this stuff, whereas the articles are on the public record for an LLC, and it’s really clean and neat.
That’s just my experience over the years.
They are, for the most part, interchangeable, if you’re just managing risk and wanting to isolate risk, isolate an asset, or income, or cash flow.
Or let’s say I want to take a windfall and then buy a car and not be accountable for the income that costs the car The car was worth? So then I will use a trust to hold the title to the car.
I don’t know if that, maybe that that’s summarizes how I look at it, and there are individually use cases if you want to ask me more specifically, but that’s generally why I use, and the way I do, I do use trust, but I do prefer LLCs.
OK, and I guess to kind of go forward on that, Would you recommend LLCs for you’re, basically, your estate.
And to make sure that, you know, anything you have in that will be given to your children. I mean, I think I kinda know the concept, but just, you know, what, is it better to have things in LLCs and has no, either the PMA as the certified signer, or which you know your kids would be a part of. Or is it better to put your estate in a trust as far as, you know?
If I get lost at sea, like you always say, that they’re, you know, they’re taken care of, and there’s nothing, no, there’s nothing that the state or the government or county, whoever can come back and try to take it from them. I know with crypto, that’s going to get a little easier with seed phrases and whatnot. But as far as still assets, you know, businesses, properties, whatever.
Would you consider one better than the other?
Or does it really matter?
I feel more comfortable with the limited liability company.
I just feel like it’s easier manage.
It can’t be really broken that easily. I haven’t had that happen yet.
With a trust, I’ve seen more risk that is more attorneys feel brave Braver to try to attack it the trust.
Yeah, and for Estate Planning, my first rule is don’t have an estate or don’t have anything in your estate. So I use an LLC for that purpose so I’d like to manage assets outside of my name.
So I look poor on paper or personally I have no net worth or negative net worth And then things that I care about that are going to be to the benefit of my family or whomever else are going to be separated out in an LLC.
I’ve never had a problem over the years with that.
OK, thank you, alright. Alright, Simon.
Thanks for your patience.
Sorry about that. Yeah. All right.
Hey, nice to visit with you, again. John, You’ve helped me out in the past with the LLC.
Um, so, I recently opened up the bank account, uh, and, uh, in the state that I reside in, but we decided to incorporate it for the LLC out of a different state.
So, according to the bank, if I start doing providing a service in the state that I reside, I will need to go get a state register with the state, or some type of business license, so that the bank, who legally take funds, or put them into that account.
So, I guess. Yeah, but you open an account. As long as you don’t do business in the state, that is really interesting. I’ve heard that for, well.
Yeah, yeah, yeah, So like, I got your, your instructions on how to do everything with, regards, to opening up the account through one of the names that you provided.
And I just go, let me passed through their process I was having, there are issues through there, Internet, are the website, the website kept pushing me out, pushing. So finally, I said, ***** it, I’ll just go into the, oh, OK, you know, just go to the branch and talk to the WD. It’s there. Yeah. I was like, OK, this is all the marbles we might have to run after this, I want my good shoes that day, so. So, yeah, he, he asked me, am I going to be doing a business?
In the state, in whichever side, I said, No, all business will be conducted in the state, where we incorporated the, the LLC, us say, well, why are you asking me?
Like, well, if you do them, you have to add, you have to have, registered, also, the LLC or got a business license from the state in whichever side, which is Washington, to provide services in this state.
You won’t need the license, in most cases, but they just want the LLC to be a resident.
So, can you explain that real quick? Yeah.
If you register, if you list it with a government agency, it becomes subject to the jurisdiction of, because what you’re doing is, you’re asking the state for indemnification.
That’s what the registration is for. And that’s why you pay a fee.
It’s, it’s a Commercial Act.
You know, it’s insurance, everything’s about risk and insurance. Right? So, the bank is an association. You want you to be a resident so that it can recognize you.
That’s just the relationship between the bank and the state, OK, yeah, and now, if you wanted, you could probably go online and open your account, know, it probably at another branch, at that same bank, where it’s originally registered, and still access your account for you live. That’s what most people do.
Oh, no, I know, I gotcha. Yeah, I did open it up to the account.
Here are the state which I reside. You know, that’s all good.
I was just because I will be, more than likely, probably pursuing opportunities here in this state. So, I want to make sure.
No, either I can flight underneath the radar. But if I absolutely have to, there’s probably a flag on the account that says, I’m certain transactions, you know, they’ll call you up.
Alright, OK, so then, uh, Would you recommend or advise the, I register the LFC that we created.
There’s. No bank, especially, I mean, sometimes every once in a while, you like the bank because the people are nice or whatever. It’s just, It’s just a pass through, really.
So, yeah, try to open an account at the bank you want, that it considers the branch to be where the LLC is registered.
And then, access the account from where you reside.
That’s because people do.
OK, so, create the, Open Up the Bank Account in the state, where the LLC was created and the internet over the internet, right? Because it access a year.
Exactly. So like, for example, Chase Bank.
You go and look at the business banking online and then it’ll probably ask you which branch of the bank and you just tell it the state on the internet, it’ll go off of that. So you’re actually in the bank branch for that state where the LLC’s registered And they don’t care that you’re calling in from Alaska or Florida or whatever. Yeah, so that’s what I tried to do at Chase specifically, and it just it wouldn’t fly slowly when it finalized. So, I went into the local branch to say, Hey, look, this is going to be out of New Mexico.
I’m just, I’m just managing from here. And then the question came up, Will I be doing a Service Provider Services in the state that I reside in trying to call them up on the phone?
I’ve had come up on the phone, If you can’t do it over the internet, chime over the phone.
OK, they’ll help you, Sometimes they’ll walk you through it on the on the phone, through the Internet, also.
OK, cool. Yeah, let’s try that, but I don’t so much appreciate your time.
And, and let’s see what a Tin Soldier has to ask.
Hey, hey, hey, hey, back to, my back to my air vocable trust property purchase, so.
I was told I’m going to get a 10 99.
Who is, who’s going to get it I think to trust the title holder?
Yep. There’ll be the title hold.
That’s right, if the title holder sells the property, the title holder gets the 1099.
You talk about selling the real estate?
Yep. And then buying a new one. So what do I do with it? Forced me to file.
OK, OK, so it’s just a moot point. Just file, file it away and forget.
Yeah. if a non filing pass through that you’re using if there’s a trust or an LLC gets 1099 just, I like, I like a scanner with my computer. If I don’t get it by e-mail. And then I just keep it as a record.
It’s kind of nice to get that, Yeah, you don’t have to file a return.
OK, cool, that’s it.
All right, thanks, Kate.
And then it looks like copper.
OK, so I got a, actually, a one service based question for you, and then one little technical, more technical question for you.
one is, I know you’re super busy. We scheduled an appointment of probably about three ish months ago, or so it’s kind of in a few weeks, at the end of the month, we’re really looking forward to it.
OK, to set up this whole thing, we have crypto we have Caleb and Brown now I just I thought I’d reach out because there’s about 7 or 8 of our close friends and family who are looking for the same exact thing.
OK, how I reached out via e-mail but I know you’re getting slammed with with e-mails and stuff.
Do you think, is there a way to kind of tap? Do you think we could tackle this as a group, or is it, I mean, you know, I’d prefer, if you guys are open to it, I am, too.
And if this goes for anyone, I would, I would love to do a Zoom call and get your group on there. Or if it’s just yourself individually, I record the call and I’ll, I’ll do anything. I’ll show you anything.
I will show you how I prepare the documents, I’ll show you how I created online with a state so that you can share it with your group, and you guys can learn how to do this stuff.
Let’s do it! That’s awesome. Yeah, you just let me know. I’m sorry, I have to wait too long, but let’s make it worth it then. Oh, yeah, 100%. All right. Cool, so Caroline, for everyone else, I’ll make sure they’re available. If you, and I, if we just do a recall, fine. But if you, if you want to bring everybody on, there are some people, And, you know, they can ask their questions, and then it’s recorded.
All right, All right, cool.
You know, John, the second question I had was for, I’ve seen a lot of these like collateral based loans for crypto.
So, if we have a personal crypto right now, gonna get moved to an LLC.
Now, if that LLC, what’s that, to take out a collateral based loans and not kashyap? Right?
So that that Caledon Brown account that LLC Caleb and Brown account was able to take out a collateral then rolling the collateral along, too.
Let’s just say, real estate investments by a few properties, um, wall.
Once it comes.
Once a day, or rehabbed, that we want to do cash out.
How does that work? Does that work? Yeah. It just took borrowed money, it doesn’t matter what the collateral is. It doesn’t matter kryptos involved, like, borrowed money, OK? And, and you bought into an investment and made some money on it.
So the question is, Who is the investor, right?
So, the investor is the one with the liability, so if you want to have a pass through situation, you can use an LLC as the investor, Someone has to be the borrower.
I don’t know how the loan contract is written, so I’d have to see who’s the guarantor and things like that. I don’t know who’s writing and all that stuff.
But someone is the borrower.
And then likely the investor.
Then there’s profit.
You borrowed money like an investor does and you bought an asset.
You made returns on it and you would have that liability just like anything else, unless you pass it off to an LLC. And that would means you can control how you want to treat that.
Nothing OK there. It would still be profit there if there, if the property is weren’t sold, like if they wish list. So, so, are you referring to the cashflow as As the profit? Yeah. I mean just because the property value goes up doesn’t mean there’s profit.
But if you, if you sell it in, you know, dispose of the asset, whoever owns it would would get to have the liability.
Just like always.
Just, there’s nothing different just because you have crypto’s as collateral doesn’t really matter. That can be gold is collateral, real estate. You borrowed money, bought an asset and then made a profit from it. So the question is who did that? If it were me, I’m gonna use a limited liability company in that transaction.
Now the lender may insist that it uses my personal name and credit file as a guarantor on it which like a bank will do.
I think you can get around that, though, because of the way that the waste, there’s the underwriting or the thinking behind using kryptos for collateral. So, you may not have to be a personal guarantor, which is kinda cool.
Because, so, are you saying I’m Kryptos the crypto alone, right.
I mean, if they’re not gonna, if the lender’s not gonna make some individual human being with an SSN, the guarantor, like Oh my God how account, that’s awesome. Yeah. Yeah. Then you are clean and clear of any obligation there, you’re not the borrower, truly, your LLC is the borrower if you want it to be. And then that’s the investor and the borrower. And it makes the profit, and it’s just nice and clean. Yeah.
Cool, and, and, and whatever profits are made via that LLC, would be claimed, if they are cashed out, or maybe it’s alright if we yeah. I don’t know. if you’re going to get a 1099, but you might the LLC, you might get a 1099, if it’s not filing, then that’s of no consequence of its filing. Then you just report 1099. Most of the time, you’re not going to be filing. Most people are not going to be filing.
Right. Either empty. Really. And for the and for, like, a monthly rent, let’s just say is, are those rents get past get to are those rents good to go through that pass through LLC, or should they go through another LLC, or should they go through another LLC? I like titling my real estate Investments.
How it’s needed to be titled, but I also like, consolidating the cash flow from the investments into one LLC, one balance sheet, copy that, so, So, so you would say, one LLC, would it be two separate LLCs?
In terms of this Yeah, one could be a title holder and one could be the actual banking facility. You could have an LLC that just holds the title, that doesn’t even have an EIN and our bank account. Registered company. Yeah, OK.
OK, All right, great. Hey, John, thanks so much older. I will say, Yeah, looks forward to it.
Thanks forward to thanks. All right, OK, and before I get to John here, just one second, I wanted to look at, Marco. He said, So you’re saying that to use an LLC address?
OK, I want to get into this too: when opening the account, When you go to open an account online, they always ask for your zip code Right off the bat.
Use LLC, zip code, bank account.
Yeah, they’re asking for the seiners Zip Code or the the account holder, give them whatever they’re asking for, and yeah. They sometimes say, What? is there a utility bill for the LLC? And I say, No, that’s a silly question.
Of course, it’s a brand new company and by the way, I have a utility bill, it’s a brand new company. Why would it have a utility bill?
No, it doesn’t do anything yet.
So you can usually get past that.
That gives us a hard time a little bit, because sometimes we’re we’re a resident in another state, and the company’s over here, and we can usually workaround that.
I hope that answers your question.
Like, I hope I’m not confusing you, I’m sorry.
OK, let me go to John, and then I’m gonna, hopefully not confuse you, but I’m gonna talk about something that keeps coming up.
John, if you would, please, what do you.
Yes. So anyway, mine’s a little bit of a convoluted thing and thanks so much for doing this job.
I, I have a longtime C corp that I’ve had for, I mean, probably going on 30 years now. And, you know, once did a lot of business through that mainly as a in sales and, and so forth over the last number of years.
I’ve mainly just run a little better business through, you know, doing some, you know, personal and business coaching while I’ve done other jobs and so forth. But what I’ve done is I’ve racked up over the years a lot of NOL carry overs.
Again, that corporation, I mean, to the tune of between loans and different things, running other expenses through it to the tune of a couple hundred, uh, two to $300,000.
So, I got introduced time, you know, at my one-year anniversary of getting into kryptos and the thought dawned on me down.
You know, as I went, I thought well why don’t I start trading some of the kryptos in that C corp.
And then if I have a windfall at the end of 2021 or into 2022, sometime wherever that happens, where I could apply those profits against those? And I at that point I didn’t have any idea of the kinds of things, you know the kinds of approaches that you have and so forth. I’m just thinking wow, why not take those windfalls I am looking at, you know, I am looking at running some business now, doing some crypto consulting and running that business through this. I mean, it’s kind of a mm C, The C corp under my name LTD has been around now for a long time.
And so I thought, well, I’ll just, I’ll just start putting some money into that, doing some of that. So I guess what I’m wondering is that Lygia, well, what I do, I need to know what do I need to do?
OK, Well, you said NLM Carriers that means these are like accumulating Lean, liens, or claims.
For data, these are accumulated expenses, you know, things, I’ve loan to, the business expenses that the business has paid out. And so there are carryover is where I have filed returns, business through my accountant, returns every year, over all those years, in some years. You know, mostly you’re you’re you’re filing all of these expenses and so forth that went against the business.
So those continue to accrue you know, as a um, no as sort of a credit. So I’ve got two ways of taking these.
So if if I were to start let’s say I did have a windfall of several hundred thousand dollars, I could then run those into the business. Pay myself back in the form of loans.
to me personally, OK.
As well as the loans I’ve made to the business and that was, that was my strategy.
OK, and that would be, probably, in my opinion, a good idea, if you’re, So you’re going to take something that’s performing well an asset and put it on the balance sheet of your C corp, and then you would offset some of the liability.
Am I saying that? Right?
Generally? And that will just make your balance sheet look better, and I would do that if I intended to sell the company and it was going to sell for, you know, pretty good price. I just wanna make it look good. legitimately, I would put it, you know, the asset on the books.
That makes sense, but generally, I mean, if you’re getting by, and you’re, Your accounting is working in your business is working.
And so you have this accumulating liability and it’s functioning. I don’t see why, I would cure that.
I don’t know, but the benefits are there.
I would prefer to keep the new asset. I just discovered That’s making a bunch of money.
I would like to keep it over there instead of putting it into a liability and getting absorbed into the liability I don’t know what that what you are.
How that looks good or better, I don’t know why.
Well, again, my thought was, is that, no, it would just be a way to take those profits. And they, they wouldn’t be taxable, in a sense.
because what I’m going to do is, is take those, those profits from the mm, those trades and so forth, and then pain pay myself personally out of the corporation, back in the way of, you know, loan repayments.
So, those are gonna be coming out of the business and because their loan repayments to me, they’re not taxable and they’re just they’re going against the the profits in the business So, That makes sense. I mean, that’s a traditional way of doing it.
If it’s me, I just have a different way of looking at it.
I would just keep the asset where it is, and I would roll it over into my next investment, and I wouldn’t use it to absorb the liability, so I can take it out by paying a loan, or taking a loan, or something like that. But, but like you’re describing, I think your thinking is perfect on that.
But you can do, you can go either way.
And if you think that the crypto’s are taxable, they’re not, you can roll them over.
You can, you can have a different tax treatment.
Well, I’m thinking, I could maybe do both. in a sense where I’m going to have more than enough to not just pay myself back, but there’ll be more that could just be kept, as you’re saying in, in there. And continue to roll those over and appreciate.
That’d be fine, I yeah, you’re not going to exhaust your entire holdings there. Yeah, that’s fine.
I don’t see a prompt that I think is creative.
It’s a good opportunity.
And there’s, somebody told me about a tax form that you can.
You can.
You actually transfer over from yourself personal holdings into your business.
But I don’t know if that would look funny to the IRS.
And I’ve never used a form. I’ve never had a client use a form.
I mean, I don’t know why me maybe maybe that is use I’d like to know what that is because you can convey something of value into something else As long as you retain the same beneficial interests, it’s not taxable. Anyways.
It’s just like buying stock that’s not taxable.
So, if I, if I have the exclusive rights to something and I move it over here, it doesn’t change anything.
How do you define beneficial interests?
So let’s say I, I bought as an example, one Bitcoin, personally, that I had bought, and then I want to transfer that one Bitcoin into my, uh, C corp.
What would that look like?
Do you still care about the Bitcoin that you transferred to your C corp?
Yeah, you can trade it for something like a boat, right?
Yeah, so, as long as you care about it, it’s, it’s still, you’re, you’re still benefiting party. No one else cares about it except you. So, therefore, the bit beneficial interests have not changed. That’s how you would know.
So, no problem transferring it in and it wouldn’t, it wouldn’t look like the IRS would think that I was, quote, doing something to you are doing something to avoid taxes. Yea, it’s OK, yeah. Yeah.
I was, I was trying to think of a more nefarious term, but laundering money, whatever. They would like to see that. No, that’s not loading, but that’s not That’s nothing mean.
If somebody wants to challenge it, I would ask them how there’s a disposition of assets, how that falls into the category of disposition of assets.
It’s either a list of assets or it’s not.
And if it’s not, it’s going to be and an exchange or conveyance for estate planning purposes in which the beneficial interests remain the same, either one.
Otherwise, I should probably talk to you though, at some point about how to structure things moving forward, maybe in a different way. So, you know, solve. Maybe look you up on how to says, it sounds. Would, I mean, just on the face of it.
Would I be better off setting up LLCs and different things to again, have different levels, different walls?
OK, I’m I’m pretty biased as you can tell on the LLC. But these are with the mind that I’m not going to have employees. I’m not going to collect workman’s comp and things like that or if I am right if I would do that with an LLC, I would turn it into an S corp and file returns for it.
Just because it makes life easier and it’s probably required at that point because of the nature of how you’re getting all this stuff.
So, but yeah, I mean, so that, if I can manage cash flow in an asset, in a way that I can defer the taxes, I think an LLC is the best tool and I can control whether or not I have exclusive interests. I could do that with a stock company, too.
I haven’t done that very much.
It might get kind of messy.
I don’t know that I can actually do the same thing with a C corp that I can do with a flow through an LLC.
OK, so, yeah, I kinda, I’ll give an example. Let’s say, I work with a chiropractor. This is a typical example, and he’s an S corp files. A 255 with his return has employees, and all this stuff is getting taken down by the IRS. He’s getting till, take their living, all his income.
So I’ll set up a new LLC.
It’s not going to file a return. It’s basically a payment processor. He can be the owner.
Then I reroute all the payments.
I rewrite it as a merchant account, check processing insurance claims all the way to the new LLC, cuts off the IRS immediately, and then the IRS has to come and sort of make a deal with them.
That strips the company.
Now, he can still pay his bills, but it’s out of reach of the IRS legally, even though they can see what I just did, but he’s still going to pay taxes on the money he needs to pay himself, and as employees, and all that bills.
But, I’ve severely limited and thought that cut off the IRS, and then they have to actually get my client’s permission to make a payment arrangement.
And that depends on what his net worth looks like, and if you give me enough time, he’s going to have a really negative net worth.
Yeah. That’s great, yeah.
See at all, so. It’s not a trick.
Yeah, that’s awfully Good of you, and I need to do some things I think with you proactively, but reactively in a case like this if the IRS did come.
Are you, is it something where somebody can come to you, and hire you to give them help in if they questioned that avoidance of, uh, tax is somebody that was transferring assets into their corporation.
Yeah, now, OK, many years ago, years ago, back in the nineties and early two thousands, I have gone to audits in meetings with the IRS. It was because of the things my clients had done before they came to me.
The arrangements I set them up with, to get them out of the situation never generated that same situation, so I never had to go back and represent something. I did.
I could do that.
Um, I could appear as a Power of Attorney and all that. I don’t have the professional qualifications, but that doesn’t matter anyways. I can still do 148. They don’t care. I cannot represent someone in court, but then I’ve never had to do that either.
Um, yeah, even if you just get the tips, like, I just saw a thing where a man represented himself in Alberta, Canada, and it’s going to totally change the game on this whole colvin, farce, the fake pandemic. Yeah, I saw that page. You see that, Oh, yeah, that was amazing! But here’s how, you just did it all himself, right? And he’s totally changing, Going to change the world. Right? That’s right, it really? well, yeah, yeah, Yeah, it’s pretty cool. So we can do that. I mean, so I’ve been, I’ve been to probably over 100 audits with the IRS around the country. I used to fly around the country, and I would stay at the Client’s house for a couple of days and I get them through it. A lot of times people would call me up, Here’s a, typical I used to get.
My friends had to call you because I’m gonna go to jail. Like, wait a minute, What did you do? Well, that the iris sent me a summons and sediment few letter. So, so I would literally go there if I could drive there or fly there or whatever. Sometimes I do by phone, and I will stand there next to them in district court.
And I would, I would just tell the judge, Your Honor, Yeah, he screwed up, but I’m talking to him, and if he could just let me give me a chance. I’ll fix it.
And I would talk to the Department of Justice and say, look, guys, if you just let me just get this fixed, OK, I’m sorry to bother you. And the judge, like, yeah, please get out of here, You know? So, I’ve done a lot of those before, and certainly I can do it. But I haven’t had to do that for a long time. Most. the most recent case I had was an audit that took place. It started before I got the case. I got the case I ended the audit. The Iris didn’t like what happened, because I always give them.
They’re same stuff they already have, right?
And it looks like I complied.
And they always agree, and then they don’t agree later, and then they went to the DOJ, And the DOJ went to the court and said that the taxpayers use the Fifth Amendment.
Fascinating. Yeah, which we didn’t do that, of course, And I took a transcript of the audit because I knew that they would do that, and I suspected they would.
And so, I give the judge a copy of the transcript, and I think the IRS agents forgot to tell. Forgot to tell. Yeah, J, Whoops. Dry that, totally.
Yeah, so they just dismissed the case, like poof, right?
Yeah, so, um, I am adept at handling the audits, I’ve never had to clean up the mess that I created, hope that never happens.
I try to keep it clean and simple and the first objective is: Avoid costs of litigation, which includes wasting your time. I look at that as costs of litigation.
Yeah, but if what I do creates an iris investigation, I should probably quit and go get a landscaping job somewhere.
All right, that’s just good to know. What are some of the options. And, you know, it’s a little bit of a convoluted thing.
Well, thanks so much, and I’m actually giving some thought to moving down to Florida, and, uh, what, what part of Florida are you in what? I’m near UCF and the north-east Side, just outside of Kissimmee.
Gotcha, very good, I just talk into some guys that are down in that neighborhood. So, well, great. Thank you so much. Sure. Thanks for the questions, I’ll be back at you. All right.
Alright. And looks like Janet?
Hey, John. I just had one quick question. Since you have a daughter with no social security number, you probably know what. I have a couple of girls that have helped me with different work as a contractor that is near me and don’t have social security numbers.
Go ahead. We actually have a lot of families here in Tennessee that, for whatever reason, they have chosen not to do that for how much.
Yeah, eight mm, but for myself, employing them, what is it, or is that going to be a red flag?
CPA told me, said that they can applaud for on their no need. What are you doing? Are you, are you filling out some sort of W twos or something? W fours.
Now they’re not W two employees, they’re 10 99, OK?
Let me educate your employer, your CPA, OK, OK, 26 CFR site or regulation here, Title 26 of the Code of Federal Regulations is 26 CFR, Part 301. Zero point six one zero nine.
Dash one, sub paragraph, lowercase C, titled Identifying Numbers.
It’s one big fat paragraph and here’s what it says, I’ll summarize it for you.
It says that if a payor is going to send money to a payee.
It should ask for an identifying number, a social security number.
If the payee refuses to disclose an identifying number, like an SSN, or it says he he or she doesn’t have one, the payor is required to tell the payee that disclosure is required by law.
Now, that part of the reg is false because it’s not required by law, It just says, you have to say it.
And if the payee still does not disclose the number, for whatever reason, the pay or then have to complete an affidavit, so stating.
Hmm, hmm.
Now, there used to be a penalty in like, I don’t know, maybe the fifties.
They kind of gave up on it because it was known as a de minimis non cure at leks, failure to de minimus failure, which means the law doesn’t concern itself with trivial matters, OK.
So the penalty used to be $50 under Section 1372, if I get that correctly. And it’s waived because it’s a, it’s a de minimis failure. So not having an SSN and or not disclosing one even if you have one, is not a penalty for anyone and it’s not required at all.
So, you can do a 1099 and you would put all zeros on the form and you can keep on doing the same accounting function as you always do.
OK, because I don’t want to get in trouble, and I don’t want to get in trouble. She will not. Nobody will get in trouble and your CPA needs to be educated.
Go look at the law.
OK, and by the way, on the on the credit, if you guys need this, you can say like my daughter didn’t have an SSN and you don’t need one to have credit.
So I just set up a credit file for her, and all you need is a nine digit number, and there’s a little process to follow.
It’s not complicated I’ve seen you pocket at mm hmm, OK. Yeah. Anybody wants?
OK, great, thank you. Alright, sure thing.
OK, guys, Well, thanks for giving me the floor. I’m gonna, I’m gonna keep you all on here if you want to stay here, because I’m the same for some more things, but if you don’t want to stay on, I’m still recording it. I’m gonna post it soon.
What I wanna say is, on the LLCs, the address we’re using does not matter. Now sometimes it’s kind of nice to have it documented. If you choose to have a principal address, maybe you just opened a mailbox and you just have to use it, that’s perfectly fine.
Maybe there might be a reason why you want a principle address on the LLC. If, if I set up the LLC in a state where you don’t reside, I’m gonna get an address over there. For the registered agent address, I’m going to use my client’s name as the registered agent unless you tell me not to.
It’s of no consequence to anyone and now I do it that way because my client doesn’t have to pay annual fees to the agent.
If you are running an enterprise like a business on the internet, I sometimes recommend getting an actual registered agent where you’re gonna pay like $100 or $150 a year.
Now, once in awhile, a client insists on having an actual paid agent, that’s fine. I can find you an agent for the first year, They don’t charge you anything, the first year, they might charge you $25, so there are some of those things going on, but that’s how I set these up. I have my reasons for doing that.
Again, the address does not matter, but sometimes you may want to do it. where you receive mail.
That’s even important, is where you tell people to send mail.
The only mail you’re gonna get usually when you put a principal address on your registration for your company is soliciting you for services.
For the most part, anything else these days is usually digital and you control that. So, when you open your bank account, you just tell the bank or mail should be sent, Or, what I would tell them is, what most people tell them is, Just e-mail me, whatever.
They’ll do it.
You can even use an address that’s not on the documents, for the most part. I think they’ll do that.
You can have a total different mailing address than what’s on the documents.
Um, I guess, maybe I should start text. I don’t wanna go too fast. There was 1 1 example, I want to give you guys something.
one example is OK, and I’m just addressing things that have come up in the last couple of weeks.
So I know there’s a lot of the habit of people, too, have this in mind when you’re looking at getting a windfall.
Many people want to be excited about paying off debt and so that’s fine.
You know, maybe you look like the hero to your spouse or you can sleep better at night or something or whatever.
I just recommend that it’s a good use of capital, or a better use of capital, to instead of paying off a mortgage, to use a set off, and I know somebody got probably explain this to before, but I want to do this recording. So, I just really recommend, if it’s a personal liability, like a mortgage, Here’s an example. A person comes to me and says, Hey, I’ve got $100,000. I was going to pay my mortgage. My friends had to call you. He said you might have an alternative better idea.
I think it’s a better idea.
Here’s the example.
I take 10% of your 150 or so willing to put into a liability that’s guaranteed to give you negative returns.
If you could just give me 10% of that, I will show you in about an hour how to acquire some sort of cash flow.
It’s different for everyone, but let me just say, I can pick up a Shopify website that makes me two grand a month. Let’s just say, for 15 grand, which is actually way too much money, for that deal.
But I could take 15 grand, and I can purchase a cashflow asset to then use, to make my mortgage payments.
OK, that’s what I recommend. it’s a better use of capital.
A couple of rules I follow.
OK, people ask me all the time: Do I can I add another person? My spouse’s put his or her name on the LLC in case something happens to me. Yes, you can do that, it’s not necessary. The reason why you would do that is if you needed the banks permission or authority, or to show the relation over the property, the account holder, the asset to a third party. This is not necessary.
You don’t need third party permission to access accounts. Especially bank accounts, an example is this is where I would just use credentials.
So let’s, let’s say, for example, I’m running a company and it’s running one million dollars a month and I’m the seiner, and then I disappeared, lost my mind or whatever.
And so, my wife wanted to step in my shoes and do something.
Well, I would make sure that she has access to the credentials. What that means is she would know how to login to the bank account on the Internet. In fact, she probably would do that. We’ve been doing that for me anyways, just as a kind of a service like to help me out and handle stuff.
So, the credentials are the key thing that allow you to do things without going through the court system and probate and getting permission from the bank. If you just give someone access to the credentials in a secured way, let’s say if I set up a company and I’m signing for it, and I don’t want my wife to have access to it for security purposes.
Let’s say, but meaning that if my wife has access to it, that just is one more person that can be used in a situation or could be maybe create some sort of accidental disclosure, right? So the less people to know that better, if I have a one step process that my wife has to follow to go get, the credentials, great, that means, my wife knows, if I disappear, she can go into my vault, she knows where to get the code.
She’s memorized it, and she can open the Vault, go in there, there’s a book, a ledger. It says, OK, do this thing, and I, she gets access to it. Another example, very simple, as I get a blank check for the corporate account.
I use it as a bookmark. In my favorite book, the Bible, whatever. I put it my closet, wherever it is. My wife knows to go there, open the book. There’s a blank check.
Write out an amount.
She can go look online sandwiched money’s there. She and clear the funds in another account, OK? There’s all kinds of things to do. You don’t need to add another name. I know it’s nice now.
Some people think that they’re excluding their spouse if not adding their name.
I would just suggest you have a conversation with them, or her, and say, look, the credentials are more important. They’re more secure.
I’m more than happy to add a spouse, or whatever, but I just kinda, you know, recommend against that. The other thing is.
make financial decisions based upon return on capital.
This is really different than, like, I should say, my dad used to do shop on. He would shop on interest rate based on his credit score, because he had really good credit, but he had no net worth.
And he got really good rates which he bragged about all the time but he had no net worth.
So he was a really good borrower and a really good consumer.
And he can use to laugh about that.
Anyways, I wouldn’t make decisions based upon what I’m going to make return on capital. And my first objective would be to get my principal back as soon as possible. And that’s what you would see as the rule of 72. I know you guys are aware of that.
Also, I wouldn’t make a personal, or I wouldn’t make a financial decisions based upon my personal credit, or what I believe that is equity in my real estate. Now, when it comes to business, real estate, where it’s an investment, yeah. That’s a useful tool.
You want to have an appraisal or an assessment, or someone look at your balance sheet and make a determination so they can get loan money and keep on investing, and for business investment and business investing, it’s, in my opinion, better to have a little bit more debt than you would have personal debt.
So, for example, if I have a mortgage, maybe I have an 80% mortgage in the beginning. Or maybe it’s a 90% mortgage and I want to pay it down it, and that’s fine, So I would pay it down.
But when I got down to the 25% mark, or 45% somewhere in that area, I would keep it like that. Even if I start paying it down, I would keep the debt on my personal home, somewhat in there, like a 30% somewhere in there. If I’m going to buy an asset, like an apartment complex, or a hotel, or a duplex, or even a single family for rental purposes. Single family residential. I would have more debt, I would have more than half like 70% or 80% debt on there if I can get it, OK. Because that’s, that’s a good use of your capital.
And then also on interest rates.
Interest rates, again, it’s just, it’s, it’s a liability that can be managed with an asset. So I’m not trying to shop for the best interest rate again.
I’m trying to shop on, I’m trying to look for the best return on capital, so I would, I would rather take a deal where I’m gonna get a better rate of return over here, where my internal rate of return is gonna look better, but my interest rate is not as good.
Because 1, 1 thinking is, if it looks good, like that, it looks like I made a good decision.
And if I want to take on a partner or I want to get loan money or I want to sell the company, they’re gonna, It’s gonna look better on the balance sheet.
So, I really that’s, in many cases, what I want to see, what I want to show, and I want to see that what I’m looking for.
So, I just want to mention that again. I know I’ve said it many times.
Is there anyone that wants to ask anything, sorry if I talk too fast.
Sometimes, Matthew, I just ate today.
I don’t know if you guys notice, I eat once every two days, so I had a huge Cuban breakfast net for like five people, and I finished off with two shots at the keynote this morning around 8 30. So, yeah. I’m on fire.
I’m fired up. I’m going to go for a bike ride after this.
Any more?
Any more questions?
Hey, here’s an interesting word I haven’t heard in a long time, Deprecating.
Oh depreciating. OK, I misread it. Depreciating rental property for awhile.
Now, move, Move the rental income to an LLC.
Can I do this or should I do it?
Yeah, so the rental properties are not yet into an LLC, they will be by the end, OK?
So you ever have a rental property, it’s an investment and you’re managing the cash flow in some way.
I don’t know if you have a property manager or not, It doesn’t matter but imagine having a property manager that then begins to receive the cash flow.
So, the property manager can be a third party or the property manager can be a new LLC, you can arrange how the cash flow gets managed any way you want.
So, that’s a legitimate transaction.
Yeah, and the truth is I only eat a meal every two days. I sit for 90 minutes.
I eat like a horse, I eat enough for five people, 6000 calories or some craziness.
I had a pound of meat, £2 of fruit and whatever else that I can fit in my stomach and I usually drink a couple of shots of whiskey or something good, you know.
And then, uh, and then I just suck it up for the next two days.
And then, like, right now, I have a glass of saltwater, which I’m just about finished, and that’ll be the only thing I will have, until probably Saturday morning.
All right. Did I outlast you guys?
All right.
Well, thanks so much. I appreciate your questions. I think they’ve been very informative for other people.
Same kinds of questions. Everyone’s asking you what you’re going to keep going.
All right. Now. You don’t, OK. I gotta think of something.
Yeah, I don’t know. I think I got it. I think. I got it, by the way, one last thing.
You asked if you have New York residency and you’re somewhat limited, bye your ability to get around in these accounts with kryptos.
Caleb Brown is really friendly with this. If you give them plausible deniability OK, you give them like a document that shows you’re trying to lease a property in Florida.
Are you you created a declaration of domicile? And, by the way, guys, this is not a trick. This is a legal process. It’s done all the time to change residency immediately, instead of waiting for a period of time, or having to move to a place. You can do a lease agreement, you can do a W two. It’s not as easy to do a W two. You can do a declaration of domicile.
And if you have a New York residency ID, Calera brown will open your account still.
If you can show them a lease agreement from another state, that gives them plausible deniability, I imagine.
All right.
Thanks, guys, I appreciate your comments.
Following up on your reck for the using for e-commerce, OK, IT consulting, how would I work for other countries, OK?
So this is interesting.
I like this question, OK, so I described how the pass through works in the States if you want to do something for Canada or the UK.
And I know, because I’ve done a little bit of research here.
You can do it for many modern countries throughout Europe, Canada, UK, Australia, New Zealand. What you’re going to look for, is this, OK. People in Canada, I just did this the other day, and I think I did this for the UK.
The term you want to look for on the Internet is a holding company.
The holding company is used exactly the way I’m describing for an LLC in the states. And yes, you can do that in Canada. Now, my suspicion is this.
They’re going to have you do a file, a tax return, That should be OK.
Um, sometimes there’s a tax rate, but it’s based upon the payment of dividends. And if it’s truly a holding company like you’re holding titled a real estate, then there doesn’t need to be a disbursement of dividends. You guys can come up with some other, you can be creative on that. So therefore if that zero, right? What’s what’s a rate? Whatever the rate is times zero is still zero, right? So you can use a holding company.
So look for your country like in Canada You will see lots of articles by attorneys over there explaining this Hope that helps. I know that was short answer.
Alright, Preciate comments, guys.
You’re welcome.
Appreciate your participation.
I’m going to stop the recording.
Thanks, guys. You have a good night. Enjoy your weekend!


1. John Jay conducts a live chat on August 5, 2021, discussing privacy issues and clarifying tax-related concerns surrounding cryptocurrencies.
2. He posits that returns from staking cryptocurrencies like Litecoin are not taxable income unless sold for dollars.
3. John argues that the current taxation system, which treats transfers to another wallet that the original owner doesn’t control as taxable events, is absurd.
4. He explains the benefits of a two-member LLC, where each member’s personal debts cannot touch the company’s assets.
5. In the context of making profits from cryptocurrencies, John advises converting profits into a stable coin when market prices are high and buying back when prices drop, prior to exiting the cryptocurrency market.
6. One participant asks how to shift their personal cryptocurrency holdings to an LLC for structural purposes, prompting a discussion about the benefits and procedures of setting up an LLC.
7. John details the importance of not creating an initial accounting ledger when trying to avoid IRS tracking, instead recommending using the LLC as a pass-through entity.
8. Questions arise about the best way to set up a crypto wallet under a business LLC and the potential complications of merging crypto investment with other assets like real estate.
9. The dialogue shifts to the subject of taxes on the sale of real estate held in irrevocable trusts, with John explaining that the trust, as the title holder, would receive the 1099 form.
10. The session ends with a discussion about the future direction of participants’ business structures, with John suggesting that it may be more beneficial to set up LLCs for greater control over asset management and tax treatment.

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