10 Crypto Loopholes The Rich Use To Get Richer

Foreign. Welcome back, everybody, to another episode of the Main Street Business Podcast. I'm here with the amazing Matt Sorenson. We're talking about 10 crypto strategies the rich are using to protect their crypto strategy, to make more money, to save taxes and build wealth.

These are the real strategies we've been actually implementing with clients who have invested over a hundred million dollars and they're doing this to keep more money in their pocket and grow their crypto portfolio. There's a lot of information out there about how to make money in crypto. In fact, there's a lot of misinformation or too about this. But this is the legit strategies. We're real lawyers helping real clients. These are the strategies you need to know and need to be implementing to grow and expand your crypto portfolio and keep more money in your pocket.

Now, these are the types of things you're not going to find out there on the web with all of the background and additional information you need. Because the tax lawyers and the tax professionals that specialize this are not sharing their strategies on the web. We're going to share them here. But once you understand them now, you can captain your ship. You can find the right professional tailored to your set of circumstances, facts, situation, and your off to the races.

Now, Mark and I are business and tax lawyers. We're also crypto investors ourself. But we have a Trust company with 1.7 billion in assets. We have a law firm that's nationwide, helping clients across the country who are also investing in crypto. So we've got the strategies, we've actually implemented and done this stuff. We're going to get into the details here.

Let's dive into it. And we're going to work backwards. Going to do a little David letterman, a little ESPN SportsCenter. We're going to go from 10 to number one. Now on our list, number 10. And this is again, a strategy we've learned over both of us doing over 10,000 consultations, let alone our team that's meeting with clients every day. And when we're collaborating, we've got our network of CPAs and enrolled agents around the country, our tax pros. We've got our ears to the ground here. I guess what you say, we're really trying to learn anything that's out there. So we're going to kick off number 10. May I?

Yes.

With the asset protection piece, often overlooked. Now, you may think, oh, you're talking hard wallet or where do I put my keys? No, no, no, no. I'm talking about you texting and driving tomorrow and getting in a lawsuit. You may be old enough to have teenage drivers. You might have lifestyle or other business. I don't know. But if you have the potential to get into a lawsuit, and frankly, if you live in America and drive a car, welcome to the club. You get in a lawsuit, they can go after your crypto wallets. Well, they won't find them. Really? I thought. We thought this was a blockchain technology that everybody could see. Well, that works for the plaintiffs, too, because when they come after you, when you blow through that crosswalk and kill some kid, they're going to underwear. Penalties of perjury and discovery and interrogatories and all the things that happen in court, they're going to find every freaking piece of crypto you own. And if you don't have it in a structure to protect it from those outside lawsuits. Gone.

Yeah. And the asset protection here is unique. A lot of people think of. All right, well, I'll use an llc. Okay, well, what kind of LLC are you going to use? This is not the same type of LLC you're going to use in a small business or the LLC you're going to use to protect yourself from a rental property. Because think about crypto. I'm trying to protect my crypto assets from my personal liabilities, because crypto itself doesn't create liability like a small business creates a liability. I could have a customer want to sue me. A rental property can create liabilities. A tenant can slip and fall, and they could want to sue the LLC that owns the asset here. Crypto doesn't create liabilities. It's kind of like how we treated other investment accounts or other assets. It's not liability producing, but we know as individuals we can create liability. We can get sued personally. And how do I stop that person from getting at my crypto? Well, we're going to use what's called a charging Order Protection Entity, llc.

It's called a cope.

We typically like to use Wyoming in our office for our lawyers because it allows you, even if you just have one owner of the llc, and this Wyoming LLC has a wallet attached to it. And this could be an institutional account on an exchange, or this could be a hardware wallet. You want to make sure you've got a good paper trail here. Now, if somebody sues me personally, they get a judgment against me personally. Can they get my crypto? Nope. They can only get a charging order against the llc, which allows them to get distributions. If I ever want to send anything out of there. But they can't force me to come in and sell my crypto, which could be at an untimely time when the market's down or whatever. So we love using the COPE for clients that have significant crypto assets that want asset protection to protect their crypto.

Now, we could talk about this strategy for an hour or more, which we have on prior podcasts. And I've got a chapter in my book on the cope. And even here in my calendar, my annual calendar, I could just for Those watching on YouTube, I can hold up a table of how the different LLCs are treated in all 50 states and where you want to go. Wyoming may not be the only choice. We might look at Ohio. We could look at New Mexico. There's 13 Cope states. Where do you live? There's also the Domestic Asset Protection Trust in a couple states that could really accomplish the same thing. But how do you attach your wallets to it? Where do you set it up? How do you set it up? How do you maintain it? This is when you talk to a lawyer. And don't play around on LegalZoom because it's not going to work there. Now, we're not that expensive. We're talking about maybe 1500 to two grand for the entire process, consulting with a lawyer who's going to bring together about nine other issues for you. We don't want to work in a vacuum. We want to build a relationship, and we take payment in crypto. So if you want a law firm that understands crypto, every one of our tax lawyers knows these strategies, knows how to attach a wallet to it, how to protect it, the proceeds procedures. I'm going to leave it at that if it interests you at all. And frankly, if you've got more than half a million in crypto, you got to be implementing something.

Yeah. You should be looking at this, particularly if you have any high risk in your life, a potential for lawsuits. So let's start there with asset protection. I think that was good at number 10, but I want to hit the wash cell.

Okay.

This is a tax strategy that is really critical and is unique to crypto. What a wash cell allows you to do is when the market goes down in crypto, and you. After you've bought crypto, if it goes down, which we were having a lot of clients last year utilizing volatility. Yeah, a lot of volatility.

Yeah.

And in some ways, this works in your favor. Know that you're in it for the long haul. Let's say I bought Bitcoin at. When it was at 60K. And let's say it went down this last year. It went down to what? Let's say was it 25 at some point? Okay, well, I got like a 35k loss there. I can sell it down at 25 and lock in a $35,000 loss there. Well, what the wash sale rule allows you to do with crypto is it doesn't apply. So I can repurchase immediately that same day. And now the market goes up and let's say the Crypto is at 65. Now, I still get that loss, but I don't have to pay tax on the appreciating gain. Now, you can't do that with stock. The stock has that this wash sale rule that says we don't let you sell assets at a loss and take the loss and then immediately repurchase it. There's all these holding rules and time rules of when you can repurchase. And so in crypto that rule doesn't apply. So it's kind of cool because there's this unique ability to lock in losses when the market goes down and then ride up the gain, but just don't sell on the gain on that crypto, then go buy other crypto. So there's a lot of cool strategies there with wash sell that's unique to that. And we've had clients lock in losses last year or even earlier in this year. And now the market's way up, of course, and they're not paying any taxes on the gains, but they're using those losses against other crypto. And there's rules on how you can use losses against other assets. I don't know we have enough time to get into that. But something you can get into with your tax advisor.

Exactly. If you're a regular trader of crypto and we know many of you listening here are just, I'm a buy and long term hold. I believe in crypto we're going to come into that concept as well. But if you're actively buying and selling and trading, you've got to have a strategy for the wash sale. Again, the weird part here is the wash. Wash sale rule does not apply. That's the point. You're like, well, I'm going to use the wash sale. No, you're not. You don't want to use the rule. You just want to know it doesn't apply to you in crypto.

That's the concept. Good qualification.

It's weird. Okay, I'm going to jump to number eight. And this kind of relates again to this asset protection we're going to bounce around some different strategies and points. Here is the hard wallet. The hard wallet is really something very important to the seasoned crypto trader. They've had scams, they've had people get to their keys and rip them off. They've had Exchange go through bankruptcy and disappear. Voyager was a painful experience for a lot of people. This adjustment in the crypto value this last two years also got rid of a lot of nefarious problem causers and so but it was a good learning experience. The hard wallet is something that is very, very important to those that long term position. How do you like to use it?

Well I think a lot of people like to say if you don't have your keys, you don't have your crypto. I mean there's a lot of different ways people say that. And so the keys for your crypto, which is how you're going to access it and actually use it is the most critical part to it. And a lot of just leave it on exchange and that could be fine. I mean I get it. There's some convenience to that. Make sure you're using a regulated license provider in that it's no wonder that the voyagers and the FTXs of the world went out of business because they just had a money transmitter license which like the payday loan store down the street. That's what they have to be in business. Okay. Like use someone that's licensed and regulated, the Coinbases, the Geminis and stuff like that on exchange. But if you're like not, not even good enough for me. And I get that, I totally get that mentality go off exchange and there's different wallets you can use. The nano ledger, the tracer, these are basically things where you're storing the keys yourself. It's not an exchange. No one else has control or access to this crypto. You can bring it back onto an exchange if you want to sell it, use it to purchase goods or stuff like that. We do have clients that pay our law firm and crypto too for services. That's a kind of de risking that. Do I want the risk of my crypto being disappearing because I left it at FTX or whatever like that. And so or even some of the hacks that have happened at Coinbase we've had individual client experiences and stuff like that too. Getting it off exchange. There's a downside to that is we also had people forget their nano ledger. Lose it.

Yeah.

Like and. And they don't have the actual little hardware Little thumb drive thing, you know, that's what these things look like. If you're not familiar with it. And if you don't have your hardware wallet, you don't have your crypto either, you know? Yeah, it's like it's in the computer, you know, it's like that. It's in there. So, like, you gotta. You also gotta be careful with that too.

And without offending some of you that are like, you guys are idiots. You don't know what you're talking about. We want. We will fully admit that this is a constantly evolving and changing technology. Hard wallet, cold wallet, cold storage, just, you know, exchange. Do we use Metamask for this and crypto.com for that? And moving money. I know so many of you are far, far more skilled at this movement issue, but our successful crypto traders understand the ramifications of that because you start moving it between wallets. Do you have Roth iras in the mix? Do you have a charging order Protection LLC in the m. Start moving around in wallets. Are you creating a sale that could create a gain or a loss? Just moving money around in these wallets can also trigger a transaction in the eyes of the irs. So we're going to come to a little bit of that as well. But the point being is, number eight, understand your wallet storage and our successful crypto traders do that. Number seven, the charitable remainder unit trust. The crut. This is a hot strategy. There's a lot of misinformation out there on this too. I get some hate response YouTube videos which drive me crazy from. But we stand behind this as a licensed law firm with malpractice insurance, a comfort letter. We design these trusts every day for clients around the country. But the charitable trust in a nutshell, allows you to move a highly appreciated portfolio or 1, 2, 3, 50 coins, whatever, you know, whatever the asset is. But it's highly appreciated. Maybe you did buy some crypto when it was down at 30k or boy, some of these coins that are going 100x so quickly, if you have a gain of 100 grand, 500 grand a million, and we've got many, many clients facing that. That's a big tax bill, federal and state. Well, I trade in another state, not the state I live in. California. Doesn't matter. Where are you a resident? Where do you sleep at night? So there's. The charitable remainder trust is one that can really help you save in tax. We've got prior podcasts and videos on that. What do you want to say about the crt? Matt. I mean it's a big time.

Yeah. It's kind of a more higher net worth. Like you got to, you know, maybe this is a half a million or so type gain. You're it makes it worth it is a little more cost to it and structure that has to go into place. But we've ran into those clients. We've done a lot of those actually and there's a lot of people that made a lot of money in crypto. Shocker with where you've seen values go up and down over the last few years. But I think that's an awesome strategy is just as the crt it's a little if you got the high regain you can use now we got some other stuff where you can make tax free money in crypto with even just a thousand bucks. It's not like I got to be a millionaire to like figure out how to do the tax free. We got the strategy for you too. That's we're going to get hitting that one soon.

Yeah. Yes, yes. This is for those that are in the situation of a high highly appreciated token or coin. It could be even an nft. So whatever you're facing in that situation, get a consultation before you put it back to us dollar. If you change it into another coin, you've now triggered a gain. You've got a plan for this transaction?

Yeah.

At our office at the law firm, you would speak with Max Merritt. He's our lead attorney of the crypto practice. We also have Darren Charrington in that. So we have a practice group that are engineers in a sense. I mean Darren is a licensed engineer. So we love this technical approach. We have real tax lawyers crypto. So make an appointment with Max or Darren. They'd love to help you.

All right, the, the next one. Let's hit number six.

Yes.

Coming in at number six, the revocable living trust on you're like oh, trust. Now this is your trust for estate planning. But guys, we need to think about how we're going to pass on the crypto. Does your spouse or your kids understand where your portfolio is? They probably know your house, they know your investment properties, they know your business. They might know your retirement accounts and your life insurance policy, but they know where your crypto is. Is it on a hardware wallet? Do they have access to it? Do they have the logins to log in on an exchange somewhere to get it? Do they even know where it's at? Now a lot of the exchanges and stuff, you know, you can have like next of kin or Surviving spouse go there with the death certificate and get access. But it's not easy. We've actually had to help clients do this. Like, we've had to help clients through this stuff. We've also had clients that are like, I don't know, did they have crypto? I don't know where it's at. And so you've got to be planning for this. We're not all going to live forever. If you've invested a significant amount in crypto, even tens of thousands of dollars, don't you want your family to get this? Do they know where it's at? And so passing that information on, revoke a living trust. I'll just give one easy strategy to do it. Put that information in a safety deposit box. Put it in a safe place. Maybe you have a safe at the house for the guns or your other, you know, important precious jewelry or whatever it may be. Get it in a safe spot where your spouse Or John Wick coins.

Where I have my John Wick coins.

What's John Wick coins? I don't even know John Wick.

Keanu Reeves. Oh, my gosh.

Johnny Utah.

We just lost. We're not talking point.

I've not seen John Wick. I've not seen John Wick.

Oh, my word. You a movie to watch this weekend. Right? But number four just came out. Oh, my gosh, they're amazing. I. I know we just lost half of our listeners here, but you want your John Wick coins in your home safe with your estate plan. And let me add to this.

So that's good to know. Good to know. Good to know.

Yeah, you gotta watch it. So with this estate plan, it's not just who knows where your keys are. Who do you want to get those keys? So do you have kids? Are you married? Do you want this to go to your best friend, your parents? Some people are like, well, I'm single. I don't have anything to worry about. You're the biggest mess. Where is your stuff going to go? And is anybody even going to know where the hell it is? And so you can even integrate some charitable planning, but creating your own charity or your own foundation, and you want all of your crypto to go help put tennis shoes on kids in the Navajo Nation. I don't know if the estate plan is really two parts. It's where do I want my crypto to go? And do the people that know where it's at in order to execute those wishes, That's a revocable living trust. Again, 1500 two grand. And it's something that'll stay with you for many, many years to come. And it's going to be hold your real estate and your other investments. So the trust is something our successful crypto traders are doing. They get it. They get that I'm going to die someday. And I've got hundreds of thousands of dollars of potential crypto and I don't want my 16 year old blowing it in 5 years if I'm dead. And they will, they will blow it.

Yeah, they will. We've unfortunately seen that too. Diversification of your profits.

Wisdom.

This is wisdom. And I think one of the great lessons is I really believe that wealth is accumulated through concentration, but it is managed and maintained with diversification.

Say that over again. I like that.

Yeah. Wealth is created by concentrating in something.

Yeah.

Like your focus, your business. You're building a real estate portfolio, you're investing in crypto, whatever it is, you get good at something and you start accumulating wealth.

Okay.

But you maintain wealth and you stay wealthy by being diversified. So, for example, if I'm making all my money in crypto and I've been very successful at it, keep doing that. We're not saying don't do it, but start peeling off some of those profits to some other assets and things. We tell this to our business owner clients that are making a ton of money in their business. Let's start peeling some of this off and get some other assets in your game. Maybe it's the rental property. Okay. Maybe this is contributing to your retirement accounts, which, by the way, can also invest in crypto. You don't just have to buy stocks, bonds or mutual funds. We got more to come on that. But it's building some other areas where you have some wealth outside of this area where you're super concentrated.

Yeah, I just was helping a crypto investor this last year. Take some of the crypto and invest in oil and gas, multi unit apartment buildings, single family homes, Airbnb. There are so much out there that allows you to play the market. Because if you're, if you're a believer in crypto, you know, the US Is jacked. Right. And we don't know what's going to happen with inflation or the next presidential cycle and, you know, doomsday type conversations. And I'm all there. I mean, there's problems every country in the world, but if we're all in on crypto and we don't realize, you know, we can hedge against some of these other problems that could happen in America by putting that Money into, in some precious metals. Maybe I should be buying some gold and some silver, having cash in a safe, and then buying some real estate down the street and creating some other sources of cash flow and income because just look what happened this last year. Crypto took a nosedive. All right, what's your plan? You know, what's the plan? Next time you make some profit, don't put it all back into the same damn machine. Get some other gooses laying some golden eggs. Gooses. Geese.

Geese.

I like.

We got what you're saying. I like that.

Yeah, I was throwing down. You picked it up.

Yeah, I picked it up. It was good. I liked it.

Thank you.

A whole flock.

Yeah, you want a flock of a bunch of geese.

But when it comes to flying, you know, F16s, there's only one goose.

Yeah.

There's not geese. There's only one goose.

As long as I'm Maverick, I don't

want to be Maverick.

What? You're Maverick, I'm Goose.

Goose dies.

I guess he was still dead in Top Gun too, but anyway. But he had Meg Ryan. He had Meg Ryan. I mean, that's worth something. I mean, right? That was the cute, the cute young man.

That's true. I'll be Iceman then or something, you know, I can't be Maverick. I'll be Ice Man. He. Yeah, he, he does die in Top Gun too, though, right?

I don't know. I got. All right, yeah, well, yeah. Kilmer.

Oh, yeah. Anyways, little tangent.

Now, number four, are successful crypto investors, traders, wealth builders, are committed to the long haul. Now you, I mean, can I say seasoned crypto investors, you know what I'm talking about? The Ravel that comes in the crypto when it's running and then runs for the hills when it dives. Right. They're not going to be successful in crypto trading and holding in the long because they're only in for the short term. They're shortsighted. They don't catch the vision that you and I catch. Matt and I believe we know that the US dollar is not great. You know, it's good. I'm not saying the country's falling apart tomorrow and Social Security's gone. I'm not saying that. But there's risks, right? And so cryptocurrency is another important monetization of our wealth. And here in America and in the world, that's very, very valuable. And if you believe in that, you're much more long term oriented. It. You're not just in for the short run. And you get it.

It's just interesting the cycles that have happened. I mean, I got into crypto myself in 2017 because I had so many clients asking about it and I'm like, what the hell are they talking about? So I had to go buy it just to figure it out. Turned out to be an amazing experience because I bought Bitcoin at 2500 bucks way too early. But I've rebought and I've. And even on this last second I kept a lot of it. I didn't sell all of it, but I did sell off some. So I definitely made some mistakes there. Ethereum too. I was in super early on that 2017.

You didn't have the same crystal ball.

No, but I learned my lesson because even when it dipped last year and every a lot of people got out. Even a lot of people. I know I've saw a lot of people that have accounts with us too. They got out and now they're all regretting it.

But I weren't committed.

But I didn't. Yeah, because I'd been through that. I've seen that movie.

You're a committed guy.

Yeah, I'm a commitment guy. And that's what crypto I think is, is Think of it for the long haul. It's still a super new technology, regulations. Then the government's trying to figure it out how they make money on it. Of course they're going to tax it, they're taxing it. And once they get a little drunk on the taxes, they're not going to want it to go away. So we'll see how this continues to evolve. I think you got to look at it as a long term now. Certainly there's strategies and ways to make money on it short term. We see the people doing that. I'm not naive to that, but they're doing short term strategies for the long term. You know what I mean? It's like they're in and they're out. It's like they're still in the market. They're just using short term strategies but with a long term mindset.

And I think, think there's a fair point here too, I'll just say it briefly, is that our successful crypto traders also understand that the fly by night tokens that were just blown up on Twitter, because I have a cool name, those types of tokens and coins are not going to be around for the long haul. And are these tokens or coins built on the Solana chain or the Ethereum change? Do they, do they have a useful Utility or purpose. And our successful traders are a little more, have a little more foresight. Not that you can't, you know, write a sweet little gig of on a Snoop Dogg coin, you know, this weekend. That could work. Now, number three, two and one. Number three, what do our successful traders do? They track their transactions. They're going to use a software like Coin Ledger that is going to track all of their transactions on all their wallets and they report it to the irs. And they understand that the IRS is not stupid, that this is blockchain public information. And the IRS knows that too. And so they've realized three things. One, if I sell my crypto to US Dol, I'm paying tax. If I trade my crypto for another currency, I pay tax. Well, Mark, I didn't liquidate. I just took my bitcoin and went bought Solana. That's a sale, that's a taxable transaction. Or third, you use crypto to purchase something or in a transaction, so that's a sale as well. Well, I never really converted US dollar so I don't pay tax. Yeah, you do. You sold it. Understanding these basic concepts is critical and our successful traders understand that. So stay committed to tax reporting your accounting. Get familiar with a software program that can handle all the wallets you have. Because the number one question on your 1040, literally number one is did you have transactions with cryptocurrency? It's a little more long than that, but it's the first box on the 1040. You lie on that, penalties of perjury, you're going to jail. You don't think the IRS is going to make an example of someone soon? Ooh, yeah, they are on this.

Yeah, they are on this. They definitely want to make a lot of examples of people, not just one. And so we know you got to be in compliance with this. And I do think in general, as a rule of thumb, our most organized clients have the most write offs. They track this stuff the best. And this wash cell where we talked about earlier, using some of those losses to offset your gains. This saves you money on your tax return. This keeps more money in your pocket. It's not just about being compliant and you know, watching out for the IRS because you don't want the criminal division knocking on your door because that's who they send on the crypto stuff. They are super freaked out about this and think the people not reporting this or doing something nefarious, they're not just reporting it. So you want to be super careful on this. And I Don't know if you heard, but there's a lot more IRS agents now than there used to be. Really?

Yeah. Apparently $80 billion worth.

Yes.

They hired some people so you know, they're hiring.

Kind of a buzz kill there. But important.

Important. All right, number two, number two, which I love you introduce this. We're now we're to this some kick ass strategies here. You got to save the best for number two. And number one. Yeah, I mean if you're going to watch Sports Center. Yeah, you want to see, this is

the alley oop here. Yeah, this was the. They threw it down. This is like the home run out of the park, you know, some guy

reaching over the wall and catching that baseball. You're like, how did he do that? You know, this is. Okay, number two, this is it.

Number two, the blockers. Now, there's different ways to do this, but we basically want for everyone who is a. You're doing crypto mining, might be doing some crypto staking. You have a different tax strategy than someone just buying and holding crypto who might sell it and have capital gains or even someone doing short term trading where they have short term capital capital gains.

And let me say this clearly. Number two is using the blocker entity for ordinary income transactions with your crypto.

Yes, yes. And so this is individually we want to use an S corporation. This is blocking taxes. When we say the blocker strategy, what it's doing is in that scenario, it's blocking some self employment tax. If you're making 100k doing crypto mining and you're just letting that go on your schedule C or you're letting that go through an LLC just right onto your 10, 40, 40. You are going to overpay probably about $9,000 in taxes. If you use an S corporation instead, you will save $9,000. Which one do you want? You get to choose.

Yeah, door number one or door number two. Now this includes staking. I know some of you are like, well, I've been staking. I've been making a bunch of money in staking over the last five years. I just said it and forget it. Yeah, the IRS doesn't look at it that way every time you're compensated in a staking structure. Now we know that there's three different ways of doing this. You might be the node operator, you might be delegating, or it could be custod. Custodial staking. Custodial staking, not a problem. You're still paying income tax as you earn that. But it's Short term capital gain, a much, much lower tax rate. But when you're earning tokens or coins or any sort of compensation with your staking program where you're a little more involved rather than just the custodial and you guys that are staking, know what I'm saying? In that situation, the IRS treats that like a business and you are going to be paying a bigger tax bill. So we have many of our successful traders using the S corporation, which is a whole other conversation. And when you call up the law firm to up your cope or your CRT or your revocable trust because you got a phone call to make, everybody, this is not just watch and learn and these 10 things and then forget about it. There's an action item here and that is make a freaking appointment with a tax lawyer that understands crypto. Because if you don't have these 10 things dialed in and understand them, you're exposed. So when you have that call, say, hey, by the way, I'm staking, do I need an S corporation? But there's another blocker out there too. Yeah.

For any of you, you using IRAs, and we're going to get to this one next. But if any of you using retirement accounts to purchase crypto, that is when you're doing mining or any of the staking we're talking about, there can be a taxi retirement account called ubit. We want to block that. We actually use a C corp in that. Now we've shot other videos on this. We have a lot of our content that gets into this in a top 10 list. There's no way we can cover that topic. But just know you can use a retirement account to do mining and staking. Mark's IRA does crypto mining.

Mining, yes.

And we're going to talk about how it can just buy and sell crypto, which is what I've done with mine too. And we're going to get to that in a minute. But if you're doing crypto mining, which you can do with a retirement account. I know it sounds crazy. I know, you're like, I've never heard of that. Well, it's true. You can do it. We've got other videos on how to do it. We are going to use a blocker C Corp, because it blocks this tax called UBIT that could otherwise be due.

Yeah, I love it. And you can also stake inside your Roth IRA and which is going to be the creme de la creme. Sorry, we're just all these spoiler alerts of our number one strategy but you can also stake with a retirement account. But I'm going to just tell you, just custodial stake. I know you want to get more involved in staking. You're killing it with staking in your personal life. Fine, run it through an S Corp. But when it comes to your ira, to go after staking without a block or C Corp is almost a 40% tax rate. And we're not even talking state taxes. It's just not worth it in your IRA to really go hard after staking. Stick with custodial. You're still making something, but it's tax free inside a retirement account. So go that route if you're going to. Going to number one.

Number one, much, much awaited.

Yeah. By the way, before number one, I've got to show you. Did you see what I got from Rockstar?

I. I did see, yeah.

I am now sponsored. Well, sponsors a little loose. Yeah. But they are sending me gear.

You were collaborating with Rock?

Collaborating with Rockstar. Because I'm a Rockstar tax lawyer. Now. There's a new Rockstar out called Rockstar Focus. I'll let you, you know, have first taste Rockstar. I just want to give you a shout out. We love you. Hmm. We love you, Rockstar. Okay, number one.

All right, number one. Now we are focused. We're gonna bring you number one. This is using a Roth ira. This is a strategy, sitting in plain sight. The Roth ira, we people know it, to buy stocks or mutual funds. But, guys, your Roth IRA does not just have to buy stocks, bonds, or mutual funds. It can own real estate. It can own small businesses, private companies. It can own crypto. This is what I talk about. We have over $100 million of clients that have used primarily Roth IRAs to buy crypto. Why would they use a Roth IRA? Well, let's say I bought 100,000 worth of crypto on my Roth IRA. That's now worth a million. I sell it for a million. What tax do I pay? How much tax is due on that in a Roth?

Zero. Can I do a pen drop? Zero.

Zero.

Boom.

What if I want to pull that money out of retirement once I hit 59 and a half, do I pay tax on that?

No. Zero. Okay?

It's called tax free, baby. Tax free is what we're going for. I can build and grow wealth for the long haul, right? This is retirement account. Maybe some of you are in your 50s, it's a little bit closer, but for a lot of us, we're building for the long haul, and I can do it In a totally tax free way. Now, if I made that same $900,000, I bought 100,000 worth of crypto that went up to a million that same, you know, $900,000 gain. Well, I'm not making 900 grand. Actually, I did not make $900,000. I'm paying federal tax of 20%. Maybe I'm in a state with 10% tax. So I'm at a 30% tax on the 900,000 grand. Like what did I actually make? Maybe 600, 700 grand is what I made.

You got Affordable Cares Act, Obamacare on top of that. So it's brutal. Now here's the deal. I know especially you young people are going, I don't want to put this in a Roth ira. I hate Wall street first. A Roth IRA is a vehicle. You get to choose what you want in the backseat and you get to drive the car. So we're not talking about Wall Street. We're talking about a Roth IRA structure that you will never pay tax. Tax in. Number two. I know what you're saying. Well, I don't want to wait till I'm 59 and a half. Fine. All we're saying is, and we don't want you to wait till you're 59 and a half either, have two trading accounts this year. You can put seven grand in your Roth IRA. We have a crypto Roth IRA in a partnership with Gemini, with a custodian with your Roth IRA in three hours from now with crypto buying crypto on an app on your phone, never paying tax. Take the other 70 grand to do it individually. I don't care. But people, when you feed that 7,000 into a Roth every year, you're trading in it. You know you can do a 10 or 20% ROI on that crypto account, right? And especially over the long haul, you know what that Roth is going to be worth in 20 years? We're talking millions. It's called the Rule of 72. You start looking at your ROI, doing a crypto Roth on top of your personal investing, do both. And that's what our successful clients do.

Yeah, and you go to direct. IRA.com we have a specific crypto IRA account app where you can set this up, this up. Our team can help explain it. Of course you want to book an appointment, talk to someone about it. But this is not something you're going to go get at Fidelity, guys. I mean, Fidelity is actually doing a little bit of crypto staking on an institutional level. Or I say crypto custody. So they're probably a bad example. But TD Ameritrade, you can't buy crypto there. All right, but so it's very hard to get this structure. We've streamlined it. We figured out we did it in connection with Gemini, who has an awesome exchange. We've had a great relationship with them because they're regulated, they're licensed and all that. Now you can also go off, exchange you if, if you want and do what's called an ira. LLC strategy. This is again one of those things. Mark and I have done videos on this webinars on this. We've got hours of content. There's a whole chapter in my book, the self directed IRA handbook on how to buy crypto with your retirement account, which by the way is from 2018 and still the strategies hold true exactly to today.

And let's go next level. I want to give a shout out to our crypto grandma. She was at our workshop a year and a half ago and very active on our podcast and a lot of our webinars. Cryptogramma, over 70 years years old, front row of our conference and saying, you know what? I'm going to buy and create Roth IRAs for all my grandkids. I want my grandkids to catch the vision of this because I'm 70 years old and when I was 20, I wish I would have had this opportunity. So as a parent, as a grandparent, you can start funding a Roth IRA and make multiple beneficiaries or you can say to your grandkids, I'm open up a Roth IRA for you. Here's your gift this year. Let's go buy some crypto. And they can't touch it. You can set these up so that 10, 20, 30 years from now that crypto Roth that you helped them fund is now paying to take care of their retirement. Because you that are older know how scary it is. Pass on this vision, pass on this opportunity to your own children.

Love that, Love that. So that's number one using the Roth IRA. This could also be a Roth 401k by the way, for any of you solo 401ks, you can do this with a health savings account, a covered L account account for your kids education. We've had lots of clients do that. Like man, by the time my kids college age in 10 years and they're investing in this and we know we don't have a crystal ball, we don't know that you're gonna make millions on this. I mean we're saying if you believe in it. If you invest in crypto, if you've had success in it, this is a strategy to use where you to keep all the money, where you don't have to send some of it to the irs, into the state, you keep it all.

Were we supposed to start with that disclaimer? Buyer beware. Do your own research.

Whatever wouldn't hurt.

Hey, this is education. You know, you invest in whatever the hell you want. You want to do oil and gas exploration, you want to do first trust deeds on properties being flipped by contractors. You want to buy rental property, you want to buy crypto. Whatever it is, the IRS is going to tax it and someone's going to try and sue you and take it. What are you doing to protect yourself with what you're investing in? That's what this show's about. That's what we're about. And we love Main Street America. We love what the American dream is all about. Learn it. Captain your own ship. We're not going anywhere. We'll be here next week for another episode of the Main Street Business Pod podcast.