This meeting is being recorded.
That was interesting.
That sounds like an echo, OK. So what's today? June 23rd? So we're just talking about just the, these are probably basic questions you guys have.
I see some of you are are veterans, but that's all right.
Anyone want to ask me something first? I'm going to try to look and see who's got his hand raised.
Gotta list questions, OK.
Go right ahead.
Yeah, so, um.
First question is around us today who had an LLC is own.
First I was thinking you want multiple people, but then I gather later that the PMA actually owned LLC and the ... model people.
So then you don't actually have to multi member LLC because it's single owner PMI, has multiple members, is that correct? That is correct. There are two different ways.
Yeah, You're gonna get to the same legal conclusion. And that is that you've removed property rights out of your state, and you've divested your exclusive rights over the property.
So you've given up the exclusive right.
that way, if someone were to make a claim on you, he couldn't reach into the company because the right is now shared.
So as long as the people that share the right, or the PMA that has the right is an innocent party, they don't have a joint liability, then you've severed that liability severed that wrist, OK?
So if there's a single member LLC, and that single member is a PMA, that's good enough. You don't have to have multiple numbers. It is good enough.
And the difference is that two people, let's say a mother and a daughter.
They can represent themselves or they are part of their own PMA mother. And daughter are part of an association That none of us can be a member of because it were for outside of that? Right?
So they can list themselves as individual members of the LLC and make it a multi member LLC, and when they do that, they will have charging order protection.
That means the court is going to recognize the fact that and a creditor cannot attach the interests of any one of the members unless they both have the same liability. So that really does a great job of protecting you.
Just the same, I can take those two Members, those two people, and I can give them a name, right? Because of their association, I could call it the mother daughter, klub, ..., Right!
And then does the same thing, except that it is not recognized with charging order protection, but because it's an innocent party and it doesn't file tax returns, and it doesn't have any liability.
I mean, I don't I don't I tell my clients, Don't contract to the PMA only contract to the LLC.
Keep the piano only doing one thing.
So you're not going to get charging or protection, but you will get the same everything else?
Which is just as well. It's an innocent party.
Hmm, hmm. Hmm.
I've got Oh. yeah, OK, Anybody else wanted to ask some slightly different error?
Can you hear me? Yes.
Well, I wrote my question in the chat box, which easier to do it that way, I look, OK, so, yeah. So, you're selling property, OK?
Yeah, yeah, OK.
So, you bought some real estate in the end, through a 1031 exchange, and you own it, and, in my non, haha. So, what you can do is, if you want to avoid the Capital Gains tax, you don't need 1031 to do that, because you're not gonna, I mean, you can use 10, 31, it's kinda hard right now because of the expectation of people buying something and go into another deal, sometimes your financing is going to be a problem because I don't want to go. I know. I know. I just want to mention that.
So what you do is, let's say you want to park the money and it's not taxed so you convey the title with a quitclaim deed, to an LLC.
I always recommend LLCs.
Some people like to use a trust, that entity does not file a tax return. It just holds the title to the property.
And while it holds the title to the property and then you sell it, the money goes to that title holder, right? It's the name of the LLC or whatever.
That entity gets a 1099, and the money stays there, so you're probably gonna want a bank account for it, It'll get a 1099, but that's where it ends. There is no Capital Gains tax now.
If you take some of that money out, anyone, you're filing 10 forties and you go in, you know, pay your life bill or something that should show up as other income on your 10th order.
OK, so, I can quit claim this property to the LLC that you set up for me. Correct. Yes, you can.
Yeah. As long as it's not falling return, you're going to get that tax treatment. And the tax treatment is no tax treatment.
So it just makes sure that LLC or that trust does not file, even though it has an EIN.
So, is there any special?
How do I file it? I haven't, you set up the LLC for me, but haven't done anything with it yet.
So, how do I file the documents in the LLC? Special forms running?
OK, if it's registered, is ready to go.
Basically, you would get a copy of the Articles, and use your banking abstract documents that were given to you with the, but the final docs. And then you would open a bank account.
You would need to go first, so all that's done. And then when you want to hold titled real estate, and then dispose of the real estate, you would simply do a quick claim deeds before the sale.
Um, you could, you could, you could do a quick claim deed anytime, but you want to record it before the closing date as far in advance as you can, right. Yeah.
If you try to do it with the closing, sometimes the attorneys don't know what they're doing, and they file it the wrong way, and then, it's a personal game OK, OK, so, quick, quick clip Quick claim Deeds.
The property is out of state, so, I should I, I guess I should use the closing agent who's going to do this.
Yeah, if they'll do it. I mean, it's not in their normal repertoire of things to do. While there's a closing date or you're selling it, they're going to ask you, why do you want to do another, you know, another quitclaim deed. So, what you want to do is make sure that if you already have a contract, like accepting an offer, make sure that your contract is a sign of which it is.
And if it's not on its face, you want to make sure that the buyer is OK with that and they always are, They, there's no, they don't care who's selling it to them. They just want it.
So, you assign your rights to the company.
You're right, the sales contract, but you want to record the quitclaim deed, and I would suggest that you do it yourself because then you know it's done and it goes into the name of the company. The reason why you want to do that is because you're going to document the 1099. They will have no choice, but to give the 1099 correctly.
Yeah. So, they'll, they'll do a new tenant, so their new tenant, and it's gonna go from the LLC to the buyer. Of course, now, people ask me, well, how do we structure this? How does this supposed to look? They're trying to document it a certain way and there's no need to document anything because this is a normal transaction.
A quitclaim deed in this situation is for estate planning purposes where the beneficial interest remained the same, OK, so it's not a sale.
When you do it that way, it is a sale when you sell it to a stranger, OK.
All right, thank you.
There anything else there I think he went on for a little bit but yeah, it's just an LLC. I mean the fact that it's owned by PMA, that's that's fine. We don't really care about that. I mean, the banks tried to investigate that. But really, none of their business.
Right. Anybody else? You guys working on something? OK, here's someone. Go right ahead, Robert. So I spoke, I spoke to you about this. I'm selling my business, I'm just want to run through what I'm doing and see if I'm following your instructions correctly. So I've been doing business under a certain LLC.
For probably 10 years right, now, I've had accounts receivable.
My merchant account has been set up with one LLC.
I'm looking at my business right now, so I set up a, another LLC. I actually registered it in New Mexico.
I then had to do.
I couldn't set up a bank account unless I did a foreign LLC in in Florida. So I did that. So it's it's registered in Florida right now.
And I open up a bank account. They allow me open up a bank account. So I have a separate bank account with a new LLC.
Per your instruction, you thought you thought it.
What I should do, is connect my merchant account there, start taking accounts receivable deposits in, into that account, the new accounts.
So when the buyers come in and they want to, they want to purchase the practice.
And I do.
I create, I actually created articles using the ones for another LLC that we created, which I probably want you to check out, but it was fun. It was open up. The bank account, Yeah. Yeah, my will.
So I got the bank account open.
My plan is now just to set it up. So I'm taking deposits into the to decrease liability.
Take the deposits into the new bank account which I set that up today. So I'll start taking deposits and therapy. Patch it out weekly into my the one that I've been doing business or batch match a certain amount each week to pay my bills payroll OK.
OK, so that's where I'm at it just a couple more things here. So my, my question is?
When I, when I get to the buyer.
I don't know who owns the business, be honest.
I mean, I own it, I've been doing business under this LLC, but I don't really, that's the thing I'm like. I was going to ask you that question.
I believe so. I'll give you the answer, OK? Alright.
So for what you just said, a professional service, I think, is what you're describing. Right. Yes. So the business is actually your customer list.
The anticipation of the customer coming in the door and paying money, correct? So that's the asset. Is your receivables are your your customer database, OK?
So you're by changing your merchant account, and the way you process payments, and who has the rights over that customer database, because I can tell you I don't have the rights over it, right? But you do. And if you retain rights, if you change the title of them from one company to another, it doesn't matter. You still retain the right to, say, your LLC is the owner of that, all that database. It owns the trade secrets tonight.
So when you move the payment processing over unless you have something else, like if the company owns the real estate on which it operates, that might be something as well, you can do a quick claim deeds on that. But yeah, you move everything over, payment processing, and the ownership through the new to the new LLC, you're changing the accounting practice, because the new LLC doesn't have, doesn't do what the other one was doing. And so make sure that in the contract that the new company is going to be the way selling and make sure the new company has all the rights of the old company did.
OK, the new company, meaning the new company that I just created, the new LLC.
How do, how do I do it? Does that have to be done in writing? No, no, what you're doing is. You're switch over the merchant account, so the merchant account that you have now for the new LLC.
All your receivables, like for insurance claims you have to Dennis up or something. Make sure the insurance claims are paid out to the new company.
So for those, you might, might need to send a notice out. And so the notice might say we did a re-organization. Please remit all payment to someone's home.
Same address. New new W nine, that's how you switch over all the receivables.
OK, So, when I show back this, going to see that, that's who the owner is. So, they're gonna, they would actually write, cashier's check, whatever, however they pay me. They're gonna write that to the new LLC. You want that Yeah, so make sure that the new LLC has the rights to sell, which I'm sure that you can easily establish that.
How how do I establish that to rodriguez an attorney or no.
So, look at that whole collection of what you think is valuable with the company.
But I just told you, the customer list, OK, that's your goal, right? That's your golden state. So, the value that you're transferring over to the new company in the way you do that is change your payment processing to the new company.
OK, so I don't have to change. Like I have a lot of equipment.
So, the equipment, it's, the value is really the customer list.
Usually, equipment is usually a liability, but still there's value there.
So, how is the equipment? Is there, is equipment owned by the company, the LLC, in some way?
I mean it's on the premises, right, but there's no data to the equipment. It's not registered with the state, right?
Like, oh, yeah.
So, the equipment is, what you, so look at your balance sheet and look at how you, like, you've probably taken, write offs for the, you know, what he call it deductions or whatever.
Well, yeah, Over the years, so that Equipment needs to go on the new LLCs balance sheet.
So, really, here's what it looks like.
Your Balance Sheet for the LLC just gets a name change. OK, I have a broker that has inventory and gave a value for the business site.
So, I recently said, I've created a new LLC. I want that to be the owner. I want that. Perfect. That, and you did it, that, you did it.
Here's all you're trying to do is create a, create a path whereby, when you get it a 1099, yeah, it goes where you want it to, You don't want the 1099, and go to the old company, because you're gonna have that tax treatment.
Yes, OK, that's all you're doing.
So, who would send me a 1099? The irises, whoever sent you money, is likely going to send you 1099.
OK, I'm all cash, so, I get, I don't get paid insurance payments, so I'm not going to get a 1099, OK? All right, well, that makes it easier, yeah, OK. Alright. So.
would I get a 1099 from anybody else? Not necessarily, but sometimes whenever you receive money in a business transaction, you should expect a 1099, and that's why you want to have it documented properly.
And even if you don't get a 1099, you still want to document it that way because it's still a 10 99 transaction.
OK, now I might get a 1099 to the old LLC the next next tax season Because that would be the, OK.
I don't know why that where would that come from the buyer?
Well, I'm just saying Because I'm I'm just making this change now, so maybe next year I might get something Where do you think? When's the sale date?
Well, it's I have two buyers right now, So I'm not I'm not sure.
Well, I don't see why you would get a 1099 at all.
OK, OK, the sale is going to take place one time. Yeah, and then it's going to be the way you want and move on.
So, it looks like it does nothing changes, It's as if you didn't sell.
Yes. I went from a to a holding company and then you can kind of see just sitting there. Just make sure that you account for anything you take out personally if you take out a paycheck.
Make sure that goes on your, you know, 10, 40 sound OK paychecks or anything that comes out, they go into swag and he was going OK, OK.
Hope that helps you all to that. I'm sure maybe you all might have that situation too.
So what do you got, swaggers Hey, John.
So I'm the Canadian that's running online yoga business. And I'm trying to get my first US. Bank account open with first internet bank.
I've been doing the online application or whatever, and now I'm being asked for sin number, my mom's maiden name, driver's license, all kinds of awesome stuff. My gosh, OK.
So I wanted to just try to clarify so that I understand what the rules are of the US. Banking system when you're talking about opening bank accounts.
The rules that the banks follow is that the Bank Secrecy Act and the anti money laundering rules are as it is, but it has to be related to the business itself.
Your personal information aside from you, being the signer, is your family history. And all this stuff is, That's not part of that. Never! it is here in the state. Yeah.
Yeah, So, I didn't, because I went through the LLC docs that you've made for me, and, you know, trying to understand all of this, But the authorized signatory of an LLC does not need to be a US. Resident. There's no rule around that, is there, Right. There isn't. Don't let you do that and there shouldn't be any more scrutiny than anyone else goes through.
Yeah. I think it's just because it's like an online thing like I'm expecting, I have to call them obviously and talk to them probably. I just wanna make sure that I'm able to talk intelligently sent him Well I just realized that you know you have to think: what does my mother's maiden name have to do with any unless you need it for a password? Well in which case I'll just make up a name that I know.
I'm not actually gonna give you my mother's maiden name. I want to make up a password if that's what you want, You know, for whatever security. But they can look at your ID, and you can get an EIN, of course, from the IRS, as I've got one of those. Yeah, Yeah. So, you've done all that, and you've given your ID and there's already a treaty setup with Canada.
So they shouldn't have any problem at all. It should be just like we're opening an account.
So if you feel like it's too intrusive, ask them what the need is for the, you know, just have a conversation with them and say, how's that?
Like, they might say something like, We want to see a utility bill for the LLC, and I always ask them, Well, why? Why is my utility? Why does my LLC have to have a utility bill?
I just opened the, First of all, you know, what does that prove? I just gave you, basically, all my financial records.
You have my driver's license, my passport.
You know, now what?
So yeah, I would I would call them and talk with them.
OK, an offer to do like a video call with them Yeah, yeah, I don't know. I just more need, you're encouraging. OK, it is frustrating. So just push through it and just know that you can say no to the bank.
Yes. And still get your account open. Because in the way you say no. We should just ask them. How's this relevant?
And then, make them feel self conscious because the person asking just says, when my boss had to ask it and say, Well, maybe you might want to check with your boss on this type of account.
Maybe you're new to that. The one thing I was looking at in our in the documents for the LLC and stuff was, you were talking about gatekeepers and organization formation, agents within the BSA statute. Does it? Do you know what section that? Like? I just thought, well, maybe if I can say that and be like in this section of the NSA thing, use it. There's no need for identifying evidence on, it's in there, That's why I put that in there. So, you guys have, What's the statute number? I tried to look up the BSA online. I don't even know if I'm looking at the right thing to find the quote, I just found your e-mail, and I'll talk about it in there.
Yes, yeah. I put the legal, so you may not recognize it, but I can probably go find it. I'll go look for it right now when you talk to someone else, and if I can't find it. Again, I'll find a lot of times, I do that, so that, it's documented. If we have this situation come up, you can, you can use law and say, where in the law, are you required to do this? I mean, you just don't like me. Or, you know Yeah, yeah, that's that's kind of where I'm headed with this. OK, Cool. I will look at this and then I may pop back in the chat, if I can't find it. All right, Thank you. Very good. Alright, let's go, mayor. What do you got going on?
Basically, building a startup, I just incorporated company, a C corp in Delaware, and we talked about, previously, you know, creating a separate LLC to kinda do not have my shares, basically, transfer WestEd. And, you know, basically use an LLC. As a holding company and only take money from there and pay taxes based on what I pull in and how, how is this LLC is going to then set up different because my understanding, you know, I'm, I'm, I'm getting courses hewn this incubator in, you know, my understanding like LLC. As soon as something comes LLC you that they're telling me you're liable is, of course and you are, You are.
If you file a report or return, establishing the liability, then that everything is liable to that extent.
And, but everyone thinks you're required to do that.
Now, a C corp is required, is a C corp has to file a return because it's a C corp, an LLC can, does not need to do that, but you're always going to hear that from pretty much everyone.
It's funny because a lot of times, I've just had so many conversations over the years and you know, they give the CPA on the phone and the tax attorney and I always ask them, so where is there a legal duty to file a tax return for an LLC that's been used as a pass through and they give me some iris circular.
And so I asked them again. So where's the legal duty?
You know, I mean we have, we have accrual based accounting and we have cash based accounting, and for most of us, cash basis is a way out of there creating a liability by default.
Accrual basis, meaning that like what they're saying, OK, those people that are telling you that are assuming you're going to be using accrual based accounting and they are correct. If you are. That means that when there's a value change at the end of the tax cycle you have to report it and pay tax on it.
If you use cash basis, you don't, OK, so something is it. Is the differentiator, what is the, like, how do we make that differentiation? Is it in the articles? or is it? There's lots of case law.
And I could probably find some regulations and some statues but here's a simple way to understand it, dividends are taxable.
Nobody's gonna argue with that, OK? Profit, that's taxable.
If I have an increase in value in my holdings and let's say some stock, that is not taxable if I don't claim it.
As income taxable gain.
If I don't claim a dividend, if I did not receive the dividend money from my stock?
and I don't claim it as, taxable, I am actually using cash basis accounting by doing it that way, and that's legal.
If my stock value goes up and I reported as taxable income, which C Corp will do that, it's taxable.
But an LLC has a choice, so whoever runs the LLC can choose two, not report.
A value change as a taxable event, and even if the dividends are paid to the LLC, for example.
It can also choose not to report, because it can just hold the money. Even though it's taxable.
The tax is deferred, because nothing was done with it.
So the IRS looks at that as an unsettled Funds.
If the IRS, the IRS doesn't care about that. but if anybody were to look at that, like I've used this term all the time. I'm talking to a CPA and I say, Well, what about Unsettled Funds? And they go, oh, yeah, well then, in that case, right, you're right. You know, after three hours is saying I'm not right.
So it's uncertain funds, Cash based accounting, You have the option with a pass through an LLC.
Use dividends as an example, dividends are taxable. But if I, if I didn't receive the money from the Dividends in my hand, if I don't have the right to spend it, put it that way.
If I don't have the right to spend the money because it's still in my stock, my broker didn't put it in my account as cash, if he puts it in my account as cash, I'm cooked.
I gotta report it, because according to the IRS, I would have the right to spend it.
So, and now I'm talking about a personal account.
To avoid all that drama I like to use an LLC, especially for dividends, because then it doesn't matter what they do and I can get a tenant in all the time, it's not a problem.
What was the first cash based accounting? What was the second one is called a cruel.
Cruel means there has been a value increase.
and that happened and there was a value increase at the time of the conclusion of the tax cycle. So for most people, that's going to be December 31st.
So if your stock was worth a thousand dollars in the middle of the year, ended December 31st, it's you know 2000 and you're using accrual based accounting, you gotta pay tax on one thousand.
OK, you decide that mostly, I mean if you're using they'll see you decide that if the C corp you decided that you would use accrual from the very beginning.
And that's, again, that's a choice you make, OK.
And then a cruel, in, basically, my accounting time, I basically decide myself, do I need to document that someone, or, well, OK, by doing a thing or not doing a thing that is documented.
So, you have a balance sheet, and if you're not going to file returns, still do have a balance sheet.
And your activity of doing it that way is going to be one way that you don't need to say, I'm doing it this way. I mean, partners, you might want to make a notation, maybe have a meeting and document the meeting. It was decided on this day that, you know, we're going to have a cash based accounting.
Yeah, case at once, it's too heavy, only one joda time.
OK, so I'm gonna go to that. Good.
Yeah, OK, great. Those are good questions. And also the so there is a Hill re I saying that, right? I'm trying to point out stuff.
You got it. All right.
Thanks. Glad to be here. Um, so I have two questions. My first question for the service where you help set up the LLC. I am not 100% sure I follow the PMA versus trust option. This LLC would be just for crypto.
All we're trying to do is make it to where you don't own the LLC 100% You can.
But to have that bulletproof type, you know, system, you don't want to have the exclusive ownership.
Because then any liabilities you have transferred to the company, they transfer to whatever the company has in its title.
So to avoid that, you would just add a person.
Like, I've had people call me and say, I'm getting sued. My friends had to call you, and I'll ask, OK, so what? You know, I try to figure out what kind of risky has and let's say it's an S corp. He's running a business. He's an entrepreneur.
He has an S corp, is running a dental office and S corp is a good company, um, and he'll be a 100% owner mostly.
Then so I say to them, here's a simple thing. There's two risks you have here. one is being sued and losing, and the other one is being sued and trying to defend it, and even if you win, you still have to pay the attorney to defend the company, because you can't represent your own company. So the cost of litigation and the chance of losing are the biggest risks.
So what you want to do is, we, we eliminate his risk with personal banking and all these other minor things, but when it comes to the company, I tell him to add his brother, Bill, OK, this is simple version. Say, amend your articles and add another person.
It doesn't create a liability for the other person. It does not give him any rights.
And what it does do is give you charging or protection and the reason why we say I'd brother Bill is because brother Bill has no contract or joint liability with that person I'm helping.
So, a lot of times, I can tell people to do that.
Entrepreneurs get this stuff and they could do it themselves. A lot of times, I'll just go ahead and do it, and they'll call me like a year later and say, yeah, man, that worked great, Can you help me set something up, You know, I want to avoid this in the future.
So, I avoid the costs litigation and all this by creating charging order protection with the two members, OK, now that's one way.
Now, the two members give me charging our protection. And two members are also an innocent party together, but they're not seen that way.
There are just two members charging order protection.
If I want a single member, I would use a trust or private membership association or some other entity that has property rights. And the reason why it would have property rights is because it has property rights.
Or because I said so, four, because I act accordingly. There's nothing magical about this.
So, why would I use a PM instead of two people?
Well, maybe my client know, nobody likes them, right? And nobody wants to sign on with him or doesn't have a partner, so, I'm going to use a trust or I'm going to use. Or if he comes to me with a trust already, I might ask them some questions about the trust. Because I make I try to make the least change as possible with a client. So if you already has a good trust, it's working well, and it's serving its purpose. And it wouldn't be a conflict or a conflict of risk management. To use his trust as the owner of the new LLC I'm going to do for him. I'll just write that into the documents, and you already understands how to use it.
So the number one recommendation is setting up the PMA, where there's two people in it, I like that.
I think that has a lot more uses, and if you don't do it to start off with, later on people call me back and want to do like some sort of an estate plan through their ... where I will write up articles at that point.
I don't start out that way, so yeah. There's a lot more things you can do with a PMA.
Oh, I didn't know. There was I didn't know you could do is an estate plan under a PMA.
I like to do it that way: If if, if an estate planning attorney heard me say that, he would mock me for the next year, But, you know, I do things totally different than a practitioner Would, that's, that's, you know, to law school, so OK. Alright, cool.
I got the second question is since the LLC has to have an EIN set up, how does that work?
Already have an EIN Assigned to me from another business account?
And wanted to set up the LLC for crypto.
So, is that a conflict? Can I have no more than one? Or do I get to make sure the one you're the one you're using? Make sure it was assigned to the business structure that you're using for that purpose. So the EIN for the LLC must have been assigned to that LLC.
The one that was assigned to yourself and the business name is more like a sole proprietorship, I'm gonna guess.
Right? That's, that's what it's doing. Right now, that's fine. Just don't use it for anything else. That's the one thing about the IRS. You cannot use it just like a tag on your car. You can't take one tag off and put on another car, because big trouble. So, your EIN once decided that entity. That's all it's for.
If you need a new entity, get a new EIN. And the EIN is only for banking purposes. There's no legal duty to get an EIN, it's just the banks don't like you if you don't have one.
You can have more than one, no, you should only have one ion for one structure.
I'm just saying the banks won't open an account for you unless your account holder has an EIN.
And if you don't use a valid E I N, what will happen is at some point of the bank me to let you open the account.
The account may be such a backup withholding backup withholding. You don't want to get into that situation.
That's why we get a ....
All right, so that's why I guess I'm not hundred percent following, so, um, to go through the LLC for crypto.
And when we get to the EIN situation, does that mean I have to use the one I already have, or do I need to setup?
Another EIN is you're using an LLC for Kryptos and you have an account, right? A bank account.
Well, I don't have.
This is, these are free questions, because I haven't got that. You're going to Yes, if you're going forward with a new LLC for crypto investing, and you register the LLC, once that's done, get an EIN for it.
And then use that UI and approval letter with the LLC charter to get your account open.
And it would have to do a different ..., a new LLC. Yep. Gotcha. All right. That's what I needed to Clara. That's all I got. All right. Sounds good.
Sure thing, Robert, what do you got?
J: J: So I think my situations probably a little different than than most of the folks on here. I'm in a situation where I need to get an LLC structured for a freelance business that I have, and I needed to set up as quickly as possible. And, I mean, I've done some research on trust, done some research on ..., and watched a bunch of your videos, regarding all this stuff. And I got a sense from one of the videos that I watched from you, that, that it might not be possible to structure things the way that you're talking about.
And for me, actually, to be able to get paid, from the structures that you're talking about, setting up without, without incurring a tax liability situation. Or you made some comment on one of the videos that made me think that that that what I need, which is to get paid from an LLC, actually. You know, I need, I need money coming in, if you know what I mean. Yeah, and so, but a couple of comments on 1 or 2 of your videos made me question whether or not that's actually possible with what we're talking about setting up the hypothetical. So let's say we set up an LLC for the purpose of reducing a tax liability on a business, a professional service. And let's say that your living expenses are roughly $80,000 a year, and the LLC, the professional service, makes about $80,000 a year.
So that's all going to be taxed. I don't care how you do it. Just don't double tax yourself, right. So just claim all the LLC's money as you're on your 1040.
The purpose of the LLC, though, is to count for a situation where, let's say you make one point two million dollars, and you still only need the $80,000.
That's what you're gonna pay tax on, reasonably your living expenses.
That other money, that 900,000 just sits out there, and you can re-invest it before it's taxed. Because it's a separate out of your state, you haven't gained it yet.
I, sir, OK, OK, that makes sense, OK, OK, so then, the short answer is, yes, it is possible for me to get paid for now. Let's see. Did you want to buy a car, for example? Let's say there's a bunch of money sitting out there in your LLC, And you just pay, you know, all your living expenses. But you want a new car. You can have the company, by the car, and you can title it, however you want, If you put the title in your name, Just have a lien holder maybe make it your company. You could do that, too, That way, it's not your car, or if it is your car, you borrow the money.
So it sounds really if you just bought the car with the company money and you kept in your name and did put a lien on there, then it would be seen as your income that you didn't report. And the worst-case scenario is higher. So just say you underreported.
Let's make it personal property. at that point Basically not. Yeah, They would just say that's your income even though because they're gonna look at the purchase of the car as a dollar transaction. There's no way around that. Even if you gave the seller gold, They're just gonna say, It was worth dollars. And then they're going to say, You should have reported that.
And they're right, OK, OK. And then my next question is, again, a bit of a different situation. Probably the most folks here. And I'm spending most of my time due to circumstances down in Guatemala as opposed to being in the US. where I have residency or citizenship. I guess I should say, OK.
Obviously, the LLC is going to need its own bank account. I'm looking to avoid going back into Crazy Town USA in this crazy time. So, is it possible? Do you know it kinda going to set up a bank account for the, for the business remotely? Or am I going to need to go in and show my face and shake somebody's hand and all and all that and what jurisdiction in the states?
Yeah. And in the US, OK. Yeah. If you have US.
ID, you can do it online.
OK? That's another thing I wanted to mention. You don't if the bank tells you to Domesticate your foreign company, you don't have to do it.
Just open your account over the Internet and you'll get around that.
It's OK that if you'd domesticated but you don't need to. You don't need to do with the bank tells you. When you get my documents in the bank tells you do something beyond what I told you. You probably don't have to do it. I mean, I'm giving you everything, so just it's OK if you do.
But, yeah, if you have US credentials, just do it, and they wouldn't even know that you're out of the country, unless they're looking at your IP address. And maybe, and it's almost seamless right now, you can just call them, and it makes it look like you're in the States.
Yeah. Yeah. Well, I've got a VPN. Anyway, so, yeah. Don't tell them you're out of the country, because that's going to be different world. Yeah. Yeah. Yeah. Well, I'm looking to set it up there, in the states, Anyway, So, so, that's, that's not an issue for me. my, I'm kind of leaning towards Arizona just because that's where my parents are. And so, I have somebody there that can deal with anything in the event of any, any nonsense. Yeah. Yeah.
The other thing about Guatemala's, it's a great jurisdiction, because they don't want to deal with the SEC and the IRS, so, but they love your money.
So, they won't give you a resident ID that is not your legal name.
They will just, If you talk to the right people, you can get. Yeah. Yeah. You can be one, Delta, is. If you want. Yes, the, the arrangements down here are.
There, definitely, there's definitely corruption here, but there's honesty in it and that everybody knows that just, do whatever you want to do things and have integrity.
OK, ironically, Dance's, exploits everybody.
Yeah, this system is more honest. It's all bad and under the guise of, of, you know, protection and all that nonsense in the States, But it's all way more dishonest. Yeah, so that's yeah. Everybody knows what to expect here. So OK, one last question. OK, what are we talking about in terms of timeframe to get, to get this going? If you need something fast, I can do it, if you give me on telegram tell me that I need to know the name and address whatever, if you know that, let me just work that up, and I can get you the articles right away, OK. Awesome, I will definitely hit you up on telegram. I've already spoken with Telegram via the via the one of the crypto groups that you're in, so I'll hit you up on their excellent again. And I'll mentioned that I was Robert Henri from this call, I'm EndNote here.
I'll tell my assistant and don't have a record of being a real fast, so OK, yeah, OK, Yeah. Awesome. I think that's all I had, Excellent, appreciate that.
Right. I think Piquet, you had another question?
Yeah, I just don't want to time, OK. You just, OK, try to be brief, because there's another one. Yeah, yeah, exactly. So, I know, you talked a lot about, like, it's just transferring assets. You're, you're like, interests.
So, know, you're interested in this. You transfer that you should and that, So it's not a scale because you're sort of both, Yeah.
Does that mean that?
Um, someone tries to call you on that.
Let's say, someone wants to investigate for a reason, OK? If you do, you have to have documentation to prove that super simple. You have Mom.
Is there a document that lost out how your piano is formed here is in it, and what it's for and all that, and you have to show that to prove that it was, OK? So, here's what, let's say someone said, now, that was a fake transaction, so what you would do is say, OK, Show me how I don't care about it.
You show me what evidence you have that someone else cares about this thing, and I don't.
So put the burden of proof back on them. I don't care if it's the IRS or the FBI.
You're never going to have to prove all these things, but no, you're not going to have to show them the anatomy of your private documents.
The fact is, if you still retain the right to sell it, ultimately, whether it's because you're on the Board of directors for your LLC, right, or you're the trustee, then you retain the beneficial interest as a matter of record, shows up in the articles.
So it's very easy to establish without going into, like, delving into everything you've done privately.
You never have to unearth the oldest private things you've done with your family and your partners and all this stuff, right.
So just being scheiner, really enough without showing any further documentation.
Yeah, the fact that you have the right to dispose of the property and it's not in your name is the best of both worlds.
The only time you'd run into the situation like that would be very seldom do I see this, but it's quite expensive for a creditor. The IRS will never do this to you. Since then, doesn't do this.
Um, well, FinCEN might be the worst one if there are going to do it, but it's unusual.
But creditors who are not banks typically banks will not waste money in litigation to do this. But a creditor who's somehow like, is offended that you didn't pay the commercial lease agreement it over or whatever.
He might sue you and then he would spend the money to investigate your relationship, to a corporate asset to the question that your personal interests are not separate from the corporation.
So that's why I tell my clients to do things a certain way and how I write things a certain way so that way if that creditor, where does subpoena your operating agreement, even if you didn't review it or talk to me about it, first you send you, send it to them.
It would already defeat what he's trying to do.
I write these so that there, there's no connection to the personal, that's the limit of what you'd experience. But typically, you're not going to be in that situation.
I'm talking like, I've done like, I know thousands of these for 30 years. Very seldom have I seen something, does the client really did something bad if that's coming up.
And a lot of times, it's because the client did something bad and then came to me afterwards.
Yeah, that's a good question. It's not a it's a statistically it's not a risk. Your biggest risk is going to be not knowing what to do with your cash and cost of litigation.
That's what I see as the biggest risk for people, not even taxes.
So, another one I think you can answer pretty quickly, OK.
So, let's say I'm I don't have a business I'm a regular, you know, W two wage earner.
But I could potentially have my living expenses be lower than the income.
When I want to try to get my employer to switch to a 1099 contract and then they pay the LLC and then I 10 million payments from LLC to me. Is that how that works now?
Not at all. Now, once you have a W two situation, you cannot escape unless you are no longer in a W two situation.
Even if your employer does the right thing, it says, You know what, we don't need a voluntary withholding agree with you.
Ultimately, the IRS is going to say, oh, yeah, you do. It's just gonna work out that way. I've been there, done that for so long, I try to win that one, and they just won't, they won't recognize the fact that wages are not paid to people. They're paid to, Congressman.
We're not gonna, I'm not gonna win that one.
And you don't need to I mean, it's telling you, if you're in your late forties, and I'm going to tell you, if you're having this question, you should probably be an employer, meaning that you should be the business owner, and then, you should do the thing, you know, instead of trying to be a wager.
Currently in a really good spot, OK, and, you know, be a wage earner.
I mean, it's cool to work for people, especially if you love what you're doing, but have something on the side, and have an LLC and nice cashflow, nothing says, you can't do that.
So they suddenly, notice, when you change from So if they don't see, how do they notice, if you, OK, ..., and then, and then they hire some other consulting company, are they know that you're working for that, can solve that. But there has to be a W two situation no matter what. If what you're doing is, OK, there's 20 common law principles of employment. This is with Iris Does. This is back in their internal machinations. OK, if you go read their manual, which I don't recommend. You might lose your sanity. The Internal Revenue Manual will tell you what they look at. So they're saying they're not seeing a W two. What they're seeing is you work at a place, and you will have a supervisor and you have an hourly schedule and you can be fired for not showing up. And these are all the traits and characteristics of it being an employee.
So, whether or not the employment contract is outsourced to an employee leasing company, that would just alleviate your employer from actually having to deal with all the paperwork, and then he wouldn't have any employees.
You would just have a 1099 situation, he would, But your employer would now be the leasing company that leases you back to your employer.
So you're not going to avoid a W two just because you are engaged in employment by their own standards.
My employment from them to my consulting company, I form And then they outsource to the consulting company.
You could probably do that and be OK.
if you control all of that, you should. you can probably do that.
I don't see a problem with that, OK.
Yeah, if you can have them Yeah. I've seen. But you can just, Yeah. That would alleviate them a lot of paperwork. That's the sales pitch, You know, That's the way to get them. I've done a few of those. Yeah.
Sure, I mean, that's a legitimate transaction. I mean, if the accounting person for the your employer current employer approves it, more than likely, you're never gonna have a problem with the IRS.
Yeah, I'm not, I don't work for like one million person companies, It's a small group, so, I can arrange for them to sure, find me, and then hire a consulting agency that I run instead that, you know, not necessarily, obviously, link to me by name, OK.
Is this like IT work?
Yeah, it is IT work. OK, you're gonna be fine.
Yeah, if it's janitorial work, maybe if it's answering the phone, they'll eventually get caught. But yeah, you'll be fine with IT work.
That is an outsourced, easily outsource thing. Yeah. Most of my career is actually working through LLCs and I totally screwed that up and went back to W two Works OK.
Well, we learn yet.
That's cool. Yeah. But that'll work. And let me just go onto the next one here, Omega.
I think you had something we can come back.
Actually, you know, I have not thought about crypto for a long time, but I think Hillary mentioned, and I'm like, oh, OK, I mean, I have crypto and I'm planning to sell some this next time around, then this L C that we're planning to create for my startup business.
Can I use the same LLC for this crypto purpose, or would I need separate LLC for crypto holding ultimately their vote?
The answer is yes. And yes, so, so look at it like this kind of a threshold question. So, I can have a company, a business, and I can have employees and all these other people interested in my company partners and all this. And that company can also have a crypto account, just like it has a cash account at the bank for the man's cat.
But the difference is So I look at a crypto account just like my regular bank account for my business, the thing that you're talking about those now, you have a crypto portfolio that's not just your operating capital.
So, if you're the sole interest party in your company, no problem.
Right, but you don't want to take your whole crypto portfolio management with a company that you have two partners that don't care about your Kryptos, right? Now, you put your personal crypto on the balance sheet.
So there's that limitation.
But if you have 100% interest in both, Thiel's going on, there is no problem whatsoever.
And here's why, because Kryptos are so liquid that it would be very easy to move them around if there's any claim at all that takes months and months and months to perfect a claim against the company.
If someone were to sue the company, for example, mm, Yes. So you'll be fine, especially in the very beginnings, it'll be fine. Now, if you have an older company and there's a lot of things going on and lots of liabilities, you know, when you put a portfolio in there, it's still very liquid.
But just realize there's a higher probability of a claim being advanced into a court or something like that. Or maybe a tax consequence or something like that.
Hmm, OK. Yeah, I like the reach out to you about this if you can help me get this LLC.
I really appreciate it Sure thing, yeah, Again. I think telegram is the best way to do it fast.
I Met my my assistant does a good job is just sometimes she's got a whole list of things that I buy I can kind of but in the list if you get to me All right Yeah, do that and telegram.
And then I want to make sure I didn't miss anybody on the chat See Exchange OK Gemini once I buy crypto through Gemini.
I can I can put the criminal hard wallet then Yeah, yeah, that's a great idea. When you go to the exchange and you move money into an exchange.
I mean if you want to keep it private and these those guys can't see what you're doing just by a stable coin or one coin and immediately go into off off the exchange and then allocate how you want and then reverse it when you come back. if that's what you're going to do that is a way to do it.
Let's see here ..., thanks for the answering that for me private membership association and then Yes, good. Crypto exchanges like Geminate will charge a fee to remove crypto off their exchange. There's no fee to send them from your ledger to your Gemini right.
Yeah, but they want a fee on the upside. So, there's always a cost to doing things. I just sent money to do something in dollars, and I pay a percentage on that.
I mean, we're all having to deal with that, so.
All right, and then let me, Robert has been Robert Henry, he's been waiting a while.
Do you wanna, Yeah, just just another quick question. Oh, sorry, I'm getting a lot of feedback there.
Regarding the setting up a bank account issue, you had said that, that, generally, you can do it online. I generally prefer to deal with credit unions and such the same kind of thing, I should just be able to go on the website and opened up a new account and, and, and submit documents and shouldn't be any big deal even if I'm not a resident of that state. Any issues with that, or Yeah, you can, credit unions are really based upon their actually private membership associations credit. So, our bags, but credit unions, especially they have more criteria, they want residency, they typically don't like businesses or trust. Now, some do.
And so, yeah, you may, you may have to be walking in the door and dealing with a credit union.
Sometimes it's worth it, So, I wouldn't be able to tell you, but I can say, statistically, that people have more, there's more difficulty with the credit unions overall.
So just, I mean, just know that that's there.
OK, Then, based on that, would you have a recommendation for, for, I always choose a bank that has services I want.
I mean, if they want to make it difficult for me, I'm, I'm gonna get, you know, I'm going to be stubborn and sales just go somewhere else.
OK, you know, I'm busy, I don't have time to educate you fools.
So you have to kinda play it like that, OK. All right, OK. Great, thanks. I'll message on Telegram.
Thanks. All right. And rubber Davis.
Yeah. Just one more question, Do I have a DBA?
So, the number one LLC that I've been working under is doing business under another name.
Um, I'm guessing that I shouldn't change that through the sale, I don't know if that's correct.
But if I'm gonna make the sale, somebody buys the business, um, I'm not sure, I'm not sure overlay to make certain that 1099 is documented correctly that it's not documented for the taxpaying company.
You want to get around new name, new EIN, your LLC, break. Yep.
Then, after the sale, I'm not going to be using the original LLC, so I would just dissolve that company unless you want to sell the company to. I mean, sometimes you can add that in as a value add or price it up, or that books come with it. You know, sometimes that's worth a lot of money.
If the books, I mean, that's worth in my mind, if I'm buying a company that has regular books, I'm ready and running with credit.
That might be something to think about if that hasn't come up yet. And if you don't have a business broker, maybe you may want to talk to one. About how to document the books.
Value in showing regular income, and That right there is a great way to get a nice Dun and Bradstreet account for the buyer and that may be something of value add that you can say, hey, look if you want my books, also.
And the company, you know, all of the articles, right, That's worth X dollars?
OK, so, the original LLC that I would still, the second LLC that I created would be.
They were the sale would be made to be sure, Exactly.
Same as what we discussed, OK, just just know that, um, regular business income is worth a lot of money and credit at least.
I work a lot when you deal with other parties. So, one of the big things I look for, if I'm going to buy something is literally the balance sheet.
Yeah, I don't care about the website, I don't care about the address, and then the guys, cool. Who cares? I just want to be able to take the balance sheet that's two years old, that has regular cash flow.
It doesn't have to be a lot of money, it could be 50 grand a year, but regular cash flow is going to do wonders for me in the first three months of my operations, OK?
Yeah, that's good point. I mean, yeah, That's another thing, too.
I mean, when you want to talk to a broker, because there are things in your business that you don't even know, are worth a lot of money that you're just going to include and you don't realize.
For example, proprietary data, if it's labeled properly, it's like describing something. If you can describe it, it can be then evaluated.
Yeah, right. If you can't describe it, well, then we can't really place a value on it. But if you describe intellectual property, for example, or trade secrets, something you've figured out.
Yeah, because in your profession, that, you know, it makes it gives you an advantage, Or Or maybe it's a way, you advertize that. You came up with a slogan, or something right, that that can be packaged as an asset. Or something of value that goes along with it.
It's not just your, Know, your customer list.
Yeah, I mean, that is huge. intellectual property, especially, OK.
This is we can go on for hours. If you take an infomercial, you show that it converted X mm hmm man. That's a whole separate price in itself.
OK, that's an upsell, if I'm selling my My company.
OK like the company. Would you like the infomercial that goes with it? Yeah. Yeah, great asking. How to revamp the infomercial? There are some bright. And show them the conversion rates and all that.
Document everything and you can, and so if you talked to a broker, say, Now some brokers don't understand this, so brokers that understand intellectual property valuations and property rights.
If they can show you how to document and go through, things you've done in your company and if it doesn't have documentation, go create it and label it as proprietary data.
Yeah, label it. It has more value than it was just scattered around and bunch of papers and some files.
Yes, OK, I've got a whole list, that's a big subject, I mean, we could spend an hour or two on that.
All right, that good.
I hope this helps everyone hearing other people's no questions and answers.
And I will look for your telegram messages.
I'll make a note here.
All right, guys, will the recording be sent away? Our e-mail is over.
Say that, again. The recording, Yes, I'm going to, I don't know that all.
I'm going to have to e-mail it to you. I will have to e-mail it to you.
So I will do that. I have each of your e-mail Addresses. So that's what I will do.
Yep. Sure thing.
I appreciate y'all, I'm gonna end the recording now, I think. Go ahead. Thank you, OK, very well. Thank you, appreciate it, you guys have a good night and job, everybody.
1. The discussion started with the concept of an LLC and PMA. If an LLC is owned by a PMA (Private Membership Association), it’s considered as a single member LLC which serves to divest property rights and protects against claims.
2. The discussion clarified that a mother and daughter, for example, could represent themselves as individual members of an LLC or part of their PMA. This structure provides protection from creditors unless all members share the same liability.
3. When creating an LLC, it’s recommended to contract only to the LLC, not the PMA, to minimize liability.
4. Regarding filing documents within the LLC, it was suggested to use a copy of the Articles and banking abstract documents provided in the final docs, then proceed with the normal transaction.
5. The LLC’s value, especially for professional services, is its customer list. To transfer this value to a new company, the payment processing should be shifted to the new company.
6. There’s an explanation of the taxation of dividends, profits, and the increase in value in holdings. Tax is applicable on the increase in holdings if one is using accrual-based accounting.
7. Risk mitigation in case of litigation was discussed. The recommendation is to add another person to the LLC or set up a PMA to reduce the chance of losing in court.
8. If someone is interested in crypto investing, they were advised to set up a new LLC, get an EIN, and open a bank account using the EIN and the LLC charter.
9. Discussing living expenses, the advice was to use an LLC to purchase significant items like cars, as the title can be in the individual’s name but the purchase can be made from the LLC.
10. In the case of a subpoena or investigation, the operating agreements should be written in a way that there is no personal connection to the corporate assets. This shields personal assets in case of legal issues.