ACCOUNTANT Q&A: Crypto Loopholes To Avoid Tax (Legally)

You today we are going to talk about everything. Cryptocurrency, taxation, is it taxed? When is it taxed, how's it taxed? All those difficult questions a lot of crypto owners just want to avoid. And let me remind you, the first question on the 1040 tax return, it's been this way for three years now. The first question under your name is, did you own, buy, transact, sell anything cryptocurrency this year? Yes or no? Penalties of perjury go to jail if you lie. Not Good. So with 60% of Americans now owning some form of cryptocurrency, that question's a big deal. And so if you have questions today about how it's taxed in any way, shape or form, I am here for you. I hold a two day summit on this and we've done our. We're coming up on our third annual Crypto Tax Summit. It's a big topic and I break it down for any crypto trader, tax professional, legal professional. It's a two day event, so this is going to be tight. But I'm here for you live today, here every week, trying to help you better live the American dream. Make money, build it, protect it. Now, I'm a CPA attorney, best selling author, owner of several tax and legal companies in the industry. And I've been doing this for 25 years now. And I love it. I love making money, I love Main Street America. And I want to find every loophole I can to save taxes legally. And it's okay, it's okay to save taxes, people. You're only required to pay the minimum amount. So let's get to it. I want to give you three strategies and then I'm just opening it up here. If you see you can type in a question on YouTube. Uh, I'm here on Instagram x TikTok, multiple platforms. So if I feel the question and you don't see it, it's because it's coming from another platform. That's right. I'm not making up questions here. I'm really live. So I, I'm here with you. So start thinking of any of your questions. But let's start with the basics. And this is super important. So many crypto traders, and I'm going to be honest, some of the young people in this industry, I don't know why they got this information. The IRS will tax you when you sell, trade or buy something with cryptocurrency. For example, I have Bitcoin, I bought it for 30 grand a coin, whatever portion thereof. And now two months later, it's worth 40 grand. And I trade it for Solana. That's a taxable transaction. As soon as I trade any currency for another one, I pay tax on the gain of what it was worth from when I bought it to what it is worth now when I trade it. That is a taxable transaction. Number two, I sell cryptocurrency back into USD US dollar. Well, I think everybody knows if I take my crypto, buy it and then sell it and bring it back to US Dollars, you're going to pay tax on that, too. And third, I can now go use cryptocurrency to buy stuff. So if I have some bitcoin and I buy something with bitcoin, I'm going to pay tax on what it was worth when I bought it to what it was worth when I used it to buy something, the sales price. So those are the three times the IRS is going to tax you. Pretty much every time you move your crypto. Now you say, well, I'm in the same wallet, so. So I'm just going to move from bitcoin to Solana in the same wallet, taxed. Well, I'm going to trade. I'm going to move it from a Bitcoin in one wallet to Bitcoin in another wallet maybe. But if you sell and go to any other type of currency, you're going to pay tax. So you've got to be really careful when you move bitcoin from one wallet to another that you don't sell it and go into any other USD or anything. So you got to be super careful. Now, there's ways to save tax on this and there's three big ones I want to talk about. Let's say you and I've got clients that were buying some sort of token or currency five years ago, ten years ago, and now it's worth a million dollars. They haven't traded it. They bought and hold. So this is the buy and hold strategy. So when I have a client come in and they've got bitcoin worth a million dollars and they bought it for 100 grand, they're going to pay tax on $900,000. It could be as high as 30% or more with your state tax. That's right, 30% or more. Well, it's capital gain. And I don't pay zero. I pay zero percent or whatever. No, no, you're going to pay up to 30% or more when you add your state tax in that Affordable Cares act and it just goes up so the charitable remainder trust is an option we've helped so many clients use. I helped a client just this year save over $500,000 in tax because they take their crypto that you haven't sold yet. You transfer it into a charitable remainder trust and then sell it. There's no tax. The money goes into a trust of which you're the investment trustee. And you can continue to invest it and grow it tax free. And then you're going to get distributions every quarter for the rest of your life based on a percentage, which is based on a table of your gender and your age. The older you are, the higher the percentage is going to be. The younger you are, the lower the percentage is going to be. Because IRS says you're going to get this money for the rest of your life. If we start throwing out tons of money, it'll, it'll, there won't be anything left for a charity when you die. That's called a charitable remainder unit trust. I got videos on YouTube about it. Love the strategy. And if any of you are sitting on a huge crypto portfolio and you want to sell it, pay no tax and create a stream of income completely asset protected for the rest of your life and you the tax deduction to do it. It's the charitable remainder unit trust. Now you will pay tax as you receive distributions, but you're going to have a bigger piece of the, a bigger pie that's going to be paying you for the rest of your life. So you don't want to take that first haircut. Now the second strategy that I'd love is that of the S Corporation. For some of you that might be creating NFTs, working in the metaverse, creating digital assets, you might be doing crypto mining, crypto staking. If you're generating crypto, you're earning crypto in some unique way. And I own a crypto mine. Love it. You're going to pay self employment tax. You gotta, because you're, you're in charge of this crypto mine. You're going to be the one charged with that self employment tax, that's 15%. Then you have fed tax, then you have state tax and you're not getting capital gain treatment either. So when I have clients that are creating cryptocurrency or digital assets and making gamers that are playing video games, earning crypto, I want that money to go into an S corporation S corp. It's a great strategy to save on that fica, the self employment tax and build it moving forward because you really Have a business. You have a business making earning crypto digital assets. Now the third strategy is you might want to consider not having any tax at all. By using a Roth IRA or a Roth 401k, I want you to take your profits and start funding a Roth IRA and then trading or mining, staking, defi, anything you want inside that Roth ira, Zero tax the rest of your life. It's a tax free atm. Now some of you young people are like, well, I thought I had to buy stock on Wall street with a Roth ira. No, you can buy crypto in a Roth ira. I have it here on my phone. I have an app right here. With it I can self direct and buy any crypto I want right now in my Roth ira. And others are like, well, I don't get it till I'm 59 and a half. That's right. And that's a good thing because go talk to your parents or your grandparents or anyone over age 50. They are freaking out. Do you know 40% of Americans don't even have $1,000, $1,000 in retirement savings. They think Social Security is going to save them. People start trading your crypto now In a Roth IRA, you could have millions 20 years from now. Buy and hold, trade, mine, whatever you want inside that Roth ira. That's my third strategy. Now there's one last. We're going to go to questions here. I want you, any of you that have a question, I want you to bring it. The last thing I want to say, and this is such misinformation. Some people think, well, crypto's not taxed at all, or the irs. If I don't do it, they'll forgive me and then I can pay tax later. Or the IRS isn't going to find me or find my transaction. It's on a special wallet that, you know, cold storage, whatever. They're never going to find it. People. You know what you love about crypto? What I love to. It's the blockchain. It's public. The IRS can see it too. You don't think they can see this? President Biden allocated $80 billion just last year to the IRS to hire thousands of more IRS agents and create groups to go after crypto traders. This is why it's question number one on your tax return. This is it. This is the reality. And if some of you are like, well, the IRS hasn't come after me yet. If you don't report the income, there's no statute of limitations. It's called tax fraud. They can come after you. Ten years from now, when they unravel the blockchain and go, what the hell? You never paid your tax. Yeah. Then attack on penalties and interest. You'll be paying taxes the rest of your life with a lien against your. All your assets. I am so sorry. This may not be fun to hear, but your crypto is just like stock is just like a. Buy a car, sell a car. It's. It's an investment. And you've got to pay tax when you make money, when you trade it, when you sell it, when you exchange it. I'm sorry. Now, I want to give you strategies to save, and I've got even more, because when you have a business, I want to write off cell phone and travel and business and home, office and all sorts of electronics and equipment, whatever to help you in your business. In the cryptocurrency world, we might even buy rental real estate to offset your gains in crypto. So many different strategies, but you've got to start taking it seriously and meet with a tax advisor that understands this. I've got a network of tax advisors around the country, the Main Street Tax Pro Network. You can go to my website and find a tax advisor. I've got a list. I think it's right here. In fact, I'm going to show you. I was just. I was just looking at this today. This is a list of every tax advisor in my network that does crypto taxation reporting. They understand it, they get it, they speak Mark Kohler, too, and they'll help you. So you can find them@markjcohler.com. all right, well, we're going to dive into questions. The rest of times yours. I just want to help you. And if you've got some questions about your crypto and how it's taxed or not or whatever, bring it. Let's talk about it. All right.

Our first question comes from Nathan. He says, how does the charitable trust not get taxed when you're moving the crypto?

Okay, should we go to the whiteboard? So when you create. I'm going to go to the bottom of my whiteboard here. Let me run through the steps real quick. To do the Charitable remainder trust, it's called a crud. So we're going to create this trust, and it's called a crut, Charitable Remainder Unit Trust. Step one is we create the trust. Now, by the way, it's not terribly expensive to do this, and some law firms will charge ten or twenty thousand dollars to do these trusts, which we charge eight grand. We've been doing them for years. We help clients all the time. So you're about eight grand to design this trust that could save you hundreds of thousands of dollars in tax. I just wanted to give that. And by the way, my attorneys are super affordable. Setting up LLCs or corporations for 15, 1600 dollars. You can have an entire trifecta plan built for you. So I just want to say that so some of you thinking, oh, he's selling some 10 or $20,000 boot camp and retainer and all this crap. No, we love our small business owners. We want to be here with you for years. So it's affordable to do these strategies. All right, step one is you create the cred and you are going to be the income beneficiary. I'm going to put income beneficiary and then you're going to have a residual beneficiary. And that residual beneficiary is going to be a charity. So when you create a charitable remainder trust, the IRS has been allowing for these for almost 50 years. Very common. When you create a. This is a charity, it's a charitable remainder trust. Okay, so when you transfer, which is step two, step number two, you're going to transfer your crypto from this wallet to a wallet set up by your trust. Now if you were to do this in transfer it to USD, that's usually your. Because we need to get this to US Dollars. So you're gonna. And then you can go back and start trading it. And there's no tax. But when you transfer that crypto to USD here in this other wallet, normally that'd be taxed, but there's no tax because you're transferring it to a charity. See, this is charity. It's just like you're giving money to United Way. It's. Except this United Way is for your benefit while you're alive. So you're the living beneficiary. When you die, it goes to the charity. Now there's ways to create more money for your family if you want, but step one is we create the charity. Step two is we transfer the crypto into the trust. Step three, you get a tax deduction. Do you believe that? It's usually around 10%. Whatever the value is, you donate in here. So if you put a million dollars in this trust, you're going to get a 10, about $100,000 tax deduction. 10% step. That's step three. Now step four is we're going to start transferring money into your account every three months. You're going to get A payment for the rest of your life. And it's going to be based on a percentage amount of whatever the value is each year. So if you start with $1 million and you turn this into $2 million, you're going to get that same percentage of whatever's in the trust next year and the year after that. So you get to keep growing this tax free, doing any crypto you want, and every year it's revalued and you get a percentage that if you're 40 to 50 years old, male, it's going to be around 10%. If you're in your 30s or 40s or a female, it might be 7 or 8%. And the reason why is women live longer, so the trust has to stay around longer. So it's going to not kick out as much money because it's got to have something left for the charity. That's the IRS rule. By giving it to charity when you die, the IRS allows for this. These have been around for years. Universities have teams of lawyers setting these up everywhere. Now that's step four. Step five, you die, it goes to charity. This is called the Charitable Remainder Unit Trust. Super cool, Very powerful, no tax. All right, next question.

Okay, our next question relating to that is, can you talk to me about the downsides of this strategy?

The downsides of the trust, you got to spend money to set it up, anywhere from 5 to $8,000. On the low end, you could be 10 to 15, depending on the type of firm you work with. You can't do them yourself. They're very complex. Number two, excuse me, you got to maintain the trust. Every year on a million dollars, it's going to be about a 3% administration fee with a third party administrator. You don't pay it to me, there's going to be a third party administrator that maintains it and keeps it compliant with the irs, does reports, tax returns, distribute your money. So you're the investment trustee, they're the operational trustee, I guess, for lack of a better word. And that's going to run about three grand a year. Okay, Next drawback, you get this payout for the rest of your life, which is super cool and it's asset protected. No lawsuit can touch it because the courts aren't going to touch it because whatever's there, it's got to go to charity someday. So you get this fixed percentage of whatever the value is every year. The drawback is it's a fixed percentage. If that percentage is 9%, you can't go take out more money. You only get 9% of the value every year, but it's like clockwork. So some might call it a blessing, some might call it a curse because you're like, well, I want to take more money out. You can't. You break the trust. Now you got back taxes. The IRS is pissed. So you get this percentage every three months, four times a year, every quarter. Gosh. You get to keep investing it and growing it tax free. You can't pay yourself a salary for managing it. I don't know, there's just not a lot of downsides. I guess the downside is once it's in the trust, you can't go take it and go buy real estate or buy a home. You just get that payment every year. I've had clients that started with a million in their crut and they built it up to 3 million. Now they're getting 10% of that every year. So they're getting 300 grand a year based on the value it is now. So as the value change, you get the percentage or whatever that value is. So I guess it's restrictive in that way. But again, it's going to last the rest of your life or 20 years, whichever is longer. So. So if you died tomorrow, it's going to pay off for 19 more years to your family, and then it goes to charity. So you get. You or your family gets this money for 20 years. Pretty cool. Next question.

The next question. After you send the crypto into charitable remainder into the charitable remainder trust and you sell the crypto, is it possible to trade and buy new crypto with the US dollar funds?

Yes, yes, that's what I'm saying. Once you get that money in the trust, you get to keep trading it, keep growing it. You just harvested that huge sale with no tax. Keep building the pie. Make it bigger. Make that bucket bigger. Because every year you get 7, 8, 9, 10, 11, 12. I've had it with clients that are in their 50s. They're getting 14, 15% on whatever's in that trust. And it's going to be invested. You want to grow it, you want to build it. And if you don't build it, oh, that's one of the drawbacks. If you blow it, if you lose, the money in there is gone. So you got to be careful. Some clients are just going to buy mutual funds and maybe an S&P 500 annuity, indexed annuity, who knows to just kind of maintain it. You can do that, but it'll. But it'll dip into corpus and dip into the trust to make sure you get your percentage. Anyway. There's different ways to design these, but that's why they're so complex. There's actually about 25 different versions of trust Crutch. There's Nimkruts, Nim Kratz, Kratz Kruts Lead Trust, and there's a bunch. I love the CRUT because it gives you the most control to continue investing the trust once you sell the crypto. Next question.

What about a dapt? A Domestic Asset Protection Trust.

Great. Adapt. DAPT is a trust where you can put your assets into it and no one, it's very hard for a creditor to touch. Let's do a diagram. So as many of you know, I love the trifecta. This is my client's life. I build these for clients. Our attorneys do every day. So over here is your operations. Over here your assets. Here's your revocable living trust. Your trust owns your home. Your trust owns your S Corp. Your trust owns your LLC with rental property or your crypto or investments. Then you have your IRA over here, you have your Roth over here. You have a day job over here, a 401k over here. See, this is your trifecta. And we want to build a picture for you to build your wealth. So many other videos on this on the web with me teaching it. Please go check it out. Now, Adapt is different than a revocable living trust. So down here is where you have your will and trust, and if you die, where's everything go? Adapt is a type of trust that I might put here. In fact, I'm going to make it a square. ADAPT is a trust that's good in about 15 different states and the beneficiary is still me, but it creates a wall where if I'm in a car texting and driving and get in a lawsuit and someone comes after me for a million dol, they can't get whatever's in the dapt ping, ping. This little wall. And so it's kind of like an llc, but it's not. This Domestic Asset Protection trust is really powerful because it doesn't file a tax return. There's no tax. It's an asset protection vehicle and it would own your home. So you don't own your home. The DAPT owns it. And then the DAPT's beneficiary is your trust, in which is you. So it creates this other barrier and the DAP could own your LLCs. The problem is you're not the trustee of this. Now, you can still use the assets and decide how they're invested. But if someone can sue you and not touch it, that doesn't mean it's really easy for you to go screw around with this either. So I've got articles on the dapt. The dapt is a great strategy in about, like I said, 10 to 15 states. Be careful going into them. They're not terribly expensive. I think we charge three or four grand at the most. But they're going to be for clients that have really, really expensive homes with a lot of equity and they don't want to get sued and lose their home. That's where I love them the most, is for your primary residence, not your crypto. I would, I wouldn't put crypto and adapt. Not usually. Next question, follow up question to that.

What if you pair adapt with a spendthrift trust?

What do you like? Whoever's asking these questions, you're asking about some of the most unique trusts out there. For every thousand revocable living trusts we set up, we might set up two dapps and one spendthrift trust. See, a spendthrift trust is built typically for a handicapped child or a handicap or maybe an adult that's got abuse problems and or substance abuse problems and they can't handle their own money. A spendthrift trust is where a trustee takes over the money that's supposed to go to this person and only dishes it out under certain conditions so the money is protected from the person being stupid or in some say, well, a creditor. Yeah, it protects it from a creditor, but it doesn't mean it's really easy for you to get to and play with. And I'm going to say this, whoever's asking these questions, if you think, oh, you know, own everything, don't control it, it's asset protection, blah blah blah. Whoever the hell is selling you these expensive trusts trying to tell you to use a spendthrift and Adapt, get a second or third opinion. Trust me, I've got 14 lawyers that work under me. If DAPs and spendthrift trust were the next best thing to sliced bread, do you think I'd be selling them to you? Oh, I'd love to make money. I'd like to do that. I like to sell things to clients that make freaking sense. Be careful of a spendthrift trust. If some asset protection dipshit is trying to get you to buy this trust and it's going to hide everything and you, you're going to control it all and la la la la la, if it sounds too good to Be true. It usually is. And I write. I stand behind my stuff. I've brought five books out there. I'm best selling books. I have a podcast with 4 million downloads. I write for Entrepreneur magazine. I'm a licensed lawyer in two, three states. CPA in four or five. I'm not going anywhere. I carry the malpractice insurance. I stand behind what I say. And so if someone's pissed off that I'm telling this asset protection guru, and I swear they're probably trying to sell you this trust for 10, 20, or 30 grand. It's crap, man. I got out of control there. Sorry. Someone's selling crappy asset protection, I just get mad. Sorry. All right, next question. Let's have fun.

In response to that, we had somebody say, mark is the best. So I think people are liking it.

Well, thank you and my fans out there, I appreciate you. I'm just looking out for you, I really am. I want you to come back to our law firm year after year and get your companies done in your maintenance and your trust and all in your LLCs. If I sell you garbage, you're not coming back anyway. All right, next question.

Getting back to the cruts with the crut. Once you die, can the charity you give it to be a family foundation? Charity?

Yes. You can set up your own charity to receive the money when you die. And it's going to be legit. No one gets maseratis and trips to Italy to manage the charity. Trust me, the IRS is all over that one, so. But if you want to set up your own charity, private foundation, and the money goes in there to help put tennis shoes on kids in the Navajo Nation or build, you know, orphanage in Costa Rica. Go for it. Go do it. It's great. Next question.

What method is best in your opinion? First in, first out, last in, first out, etc.

Okay, so what this person's asking is FIFO or LIFO? When you have crypto and you go to sell it, you have to choose. Am I gonna. It's complicated. And the answer is it depends. It depends on the client, it depends on the value, what you bought it for, what you're going to sell it for, how much trading you're doing. I've got different slides on this. We're going to go over lifo, fifo. At my crypto tax summit. I have a whole hour. We go over this with slides and. But what they're basically saying is, let's say you've been buying Bitcoin every year for the last 10 years. And you go to sell Bitcoin. Now, which one are you selling? Are you selling the first one you bought? Are you selling the one you bought in the middle or the one you bought at the end? Which one are you selling? What's your tax going to be? Which one has more gain? Can you. And so this is called the FIFO lifo. And then there's another version too. It gets super complicated. If whoever's asking that question please sign up for the crypto tax summit. Third week of September, we've got cryptotaxsummit.com there's gonna be a virtual and it's for two days in Anaheim, California, just at the Sheraton, right around the corner from Disneyland. Take two or three days, come, go to the conference and hit Disneyland. And at this conference, for general admissions, 500 bucks and VIP is a grand. And very well, if you have a small business, it's gonna be tax deductible. So please come out. And I'm going to be teaching all these strategies with eight to ten other instructors. We're going to have panels. You're going to love it. We'll go over lifo, FIFO there. It's a huge topic. Next question.

Can a 1031 exchange be in a trust? Knowing that almost 40 is tax deferred,

get a 1031 be in a trust. That's the question. That's a question. No offense. Okay, a 1031 is not something. A 1031 is a transaction. It's almost like saying, can you put a sale in a trust? Can you put a buy in a trust? Because 1031 is a transaction. It's like saying, can you put a throw in a trust? What you mean? It's a verb, it's not a asset. Now I'm going to guess what they're asking. A 1031 is when you sell real estate and buy another piece of real estate at equal or greater value. I can sell three and buy one. I could sell one and buy three. There's reverse 1031s, construction, 1031s. I teach three hour classes on 1031s. Okay, 1031 is a transaction. Now, I think what the person's asking is, can I put, can I sell a property in a 1031 transaction and take that property at the end and put it in a trust? Yes, you better. Damn straight. Now, it may be in an LLC owned by your trust. It might go into a trust, but directly. But yeah, everybody, I want everybody to have a trust at the bottom. That's the trifecta Everyone watching right here. You should have a trust. You know, 50% of Americans don't even have a will. They don't even have a will. Holy crap. Do you know there's a multi billion dollar industry of probate lawyers, probate courts, probate judges, all because everybody thinks they're not going to die and they don't write a will. If everybody had a trust, there'd be no probate in the world. So get a freaking trust to own your LLC is own your businesses, own your home, and you can do 1031 transactions in between LLCs, in between trusts. I think that's what they're asking anyway. Next question.

If mining, using an LLC in my S corp, can I lend my personal crypto to that LLC and pay myself a reasonable salary?

You could, but I wouldn't do it. Let's throw this out here. This is good. These are good questions. I don't mean to be rude. I'm just. Okay, so what they said, let's go to our trifecta. They said they have an S corp and then an llc, right? They said they had an S corp with an LLC that's doing mining. Right? Okay, so we have an S corp with an LLC and then a crypto mine. Okay, so we've got all our video cards here. I think my crypto mine holds about seven or nine cards. So very common. And trust me, the energy cost is not what they scare you with. Crypto mining is freaking awesome. I got my nice hash app right here. I can say every four hours I make money in my crypto mine. All right, now this is a great structure. I like what this person's doing. They've got their revocable living trust. It owns their home. It might own an LLC that has a rental property. They, they've got crypto over here, blah, blah, blah, blah, blah. And then here they've got an S corporation and the s Corp owns 100% of this LLC and the LLC owns the crypto mine. Okay, that's great. You're gonna as you make money, you're gonna have to pay yourself a small salary and we're gonna push everything out as a K1. You have to. And that's good. This is gonna save on fica. If you don't do this and you just do it in a regular LLC, you're going to pay 15.3% on all your profit before you pay state and fed. You're still going to pay state and fed tax no matter what. But here we want to get rid of that tax. So when you have an S Corporation, you're in business. This is good. Now the kind of. The funny part you said was I'm going to loan money to. I think you're trying to say do this. You don't loan it, you just contribute it. You put money in the freaking business. You're like, you don't need to loan. You don't loan money to yourself. It's like moving money from one pocket to the other. It's not worth it. Any accountant worth their salt, they're like, eh, now they might. Anybody trying to sell you a crappy C corporation might do the loan thing. And watch out for anybody that's got a C Corporation, get a second opinion. It's crap for the main street small business owner. And I stand behind that all day long and write books about it. But sorry, I don't want to get upset again. So you would not loan yourself money, you would contribute it. And this is in the movie Social Network. When Mark Zuckerberg and his partners started Facebook, they put money into their Florida llc. It was, if you remember then later in the show Justin Timberlake comes in and is like, hey, let's get a new entity set up and do it right. And then different people got screwed over and long story, watch the movie. But the point was is when they started at Facebook, they just put money in the llc. You don't loan it, you just put it in. It's a contribution. And then you go and you fund the llc, you buy the crypto mine, you start making fricking money, you drop it back in the llc, you drop it into the S corp, you take your profit and along the way you take a little bit of a salary. You don't want to take a salary, but you have to. So don't do this to try to get yourself a paycheck. You have to take a paycheck and I don't want you to, but you have to. So I'm not sure how you're asking the question, but learn about the S Corporation. I've got video after video, get over to Amazon, type in Marc J. Kohler. I've got several books that you would love. Our podcast, the Main street business podcast, 400 episodes. I've got episodes on the S Corporation. Please get over there. You would love it. All right, next question.

All right, what advice do you have for a scalper? Buying and selling crypto constantly and making small profits on every trade.

For any of you that are just traders and you're buying is. I was just Looking on my app yesterday thinking, ooh, I'm going to sell and rebuy because I'm doing it in my Roth ira. I don't pay tax. So any of you that are doing small trades and making profit every day, oof, man. When you download that on Coin Ledger, it's going to be a book. Oh man. And you're going to pay tax on every one of those trades. Your accountant is going to charge you more to do your tax return because it's going to be a pain in the ass. Now that's okay. Go make money. I love it. But wouldn't it be nicer if you did all those trades in your Roth IRA and you never pay tax? Now some of you are like, well Mark, I gotta live, I gotta make money. Okay, then have two accounts. Do one in your Roth IRA and pay no tax. Do the other one to pay the bills and buy groceries and pay tax. It's one or the other. So the strategy I'm trying to say, and this was number three when I started the presentation, if you're trading a lot, trade tax free. Trade Inside a Roth IRA, you can go to directed ira.com and I'll write it up here on the board here. Directed ira.com you can open up a Roth IRA within a half an hour. And I want you to open up a crypto Roth IRA this year. You can put seven grand in it if you're under age 50 or eight grand if you're over age 50. If you make too much money, you do the back door. There's a button you push for that. Don't worry, anybody at any age can do this. You open your crypto Roth ira, your cost to open this is going to be between 300 to 400 bucks. And now you're trading. And every time you trade, there's no tax. Now the platform we use at directed IRA is we partnered with Gemini. And so you're going to have, I don't know, 50 or 70 different tokens cryptocurrencies you can choose from. I do this every day. It's super fun. It's awesome. Tax free. It's good stuff. All right, next question, next question.

Is there ubit u b I t in in a crut if mining or staking?

Yes. You would not want to mine in a charitable trust. I don't think I've ever seen it and I wouldn't recommend it. So what this person is asking is when your charity does business, it's going to pay you bit. For example, let's Say you put all your bitcoin in your crut, all right? And you want to open a restaurant with your charity. You could, but you're going to pay tax out the rear end. And a crut, a charitable entity is not built to run a restaurant. Well, when you go do crypto mining, you're running a restaurant. It's a business. You don't want to do that in a crud. You want to just keep trading, buy and hold. You can do rental property, but you don't want to do construction. You don't want to like build spec homes. You want to buy rentals. So be careful. Don't you know I wouldn't mind in your crut and just trade, buy and hold. Next question, next question.

What about a business trust and a beneficial trust?

Non granted. Is this the same trust question person?

It isn't, but someone else. It looks similar.

Okay, let's bring this up. Business trust. You want to bring up Delaware statutory trust too, while, while you're at it, how about a foreign trust, A spendthrift beneficiary designation trust. Why don't we think of any trust, some asset protection ripoff company is going to charge you 10 or 20 grand to do. Now I will give you this if you're watching today and God bless you. Thank you. And you're worth 20 to 30 million dollars. And you want to start going next level on trusts. Okay, I'm sorry, I take back what I said. You're obviously worth $25 million and you've got to set up these trusts because you're a race car driver chasing fast cars and fast women and you've got all this liability in the world and you're running around with $25 million in your pocket. So you've got to set up these complex, convoluted, expensive, overly complex trusts because you're worth $25 million. You do it. I'm, I'll back off. I get it. Oh, you're not worth even a million dollars and some idiots out there trying to sell you a complex trust. Run away, run forest, run, run, fly away like a bird in the sky. La la la. Next question.

Okay, we'll get away from that and let's get to.

And I don't mind. I am so glad. Who has ever asked these questions about trusts? Because you're reading something, you went to some conference, you've got some asset protection company that is trying to sell you hard. Be careful.

Okay, Nick, what advice would you give to an 18 to 20 year old kid, presumably one just starting out with,

oh my gosh, an 18 to 20 year old kid. Oh my gosh, this is gonna be good. Okay, let's grab my laptop. We're gonna have fun here. I love you. Okay, you are going to go open a Roth IRA. I just showed it here on my iPad. Directed ira.com. you're going to open up a Roth IRA and you're, I'm going to give you the math on this. You're going to freaking love it. Okay? You, you're going to put into this Roth IRA approximately $600 a month. And you're like, Mark, I don't have 600amonth. You can make 600amonth working two weekends on Uber or DoorDash. You can make 600. You can go clean a dentist's office two nights a week and make 600amonth. I was a janitor for seven years, going through college. I would work through the night cleaning restaurants and office buildings and then go to class at 8am without sleeping. If you want to make money, if you want to be rich, you got to work hard. It's not easy. It's not easy. There's no get rich quick scheme. And I'll tell you this. You're going to be scrapping the rest of your life and it only gets harder. So if you want to be rich, you got to do things that other people don't want to do that aren't rich. And one of them is finding out how to make 600 bucks a freaking month. I swear you could go any doctor's office in town. Hey, can I clean your office on a Wednesday night and a Saturday? I'll clean your toilet and vacuum and empty your garbage. Please. I'll do it for $500 a month. It's called being a janitor. Go mow lawns. Go put up Christmas lighting. Go shovel snow. You can do this, Please. Now let's run the numbers. I'll do it right now. I love going to calculator.net. it's one of my favorite websites. It's linked on mine. And I'm going to go down to the investment calculator and I'm going to put in $7,000. Oh, this is going to be good. $7,000. And I'm going to. You're 20 years old now. You're just going to stay committed to this. I promise you. You're going to, you're going to love me. You're going to send me Christmas cards the rest of your life. I'll probably be dead when you get There. But here's the deal. You're going to do this, you're 20 by the time you're 50. We're going to do this for 30 years. Trust me, this will be so easy once you get it on autopilot. And you're going to take that $7,000 and start investing it and self directed it. Buy crypto with it. Buy crypto. If you bought bitcoin right now for $600 five years from now, what do you think it's going to be worth? Right? Okay, you're going to put in $7,000 every year. And you're going to do this for the next 30 years at the beginning of each year. And let me tell you what you're going to have. Oh my word. Yep. Starting with $7,000 a year, that's $500 a month for 30 years. And I'm just going to give you a 10% rate of return. I think your crypto, My crypto wallet this year is already at 40%. But that's me and I'm an, I'm an idiot. But I'll give you 10%, $1.4 million tax free. Tax free the rest of your life. Now if you're really 20, you'd have 40 years because you'd wait till you're 59 and a half. Oh yeah, it's crazy. Goes up to $3.7 million tax free. Okay, let's do it for 20 years. And I'm gonna give you 15%. I think you can make 15% on your crypto. Million dollars. 20 years. Done. That's what I would do. So any of you that are under age 25, I just made you a millionaire. Get a side hustle job anywhere selling crap on ebay. I don't care. Make 5 to 600 bucks a month, drop it in your crypto, Roth IRA, and every month, buy $500 of crypto every month. In 20 years, you'll be a millionaire. And that's just, that's just 500amonth. Guess what you're going to do? You're going to go to college. You're going to get a cool business started. You're going to work somewhere and get a 401k. You're going to buy your first home. You're going to buy a rental property. You're going to be a multimillionaire by the time you're 50, 40 people get going. Do it, do it, do it. All right, a couple more questions.

When do you personally stop funding a Roth IRA or transition into spending other than saving.

When you're 98 years old, you're always funding your Roth. You're always funding your Roth. But when you turn 59 and a half, you can pull it out tax free anytime you want. Anytime. Millions of Americans have no retirement at all, you want a wake up call. You start talking to your parents, your grandparents, your aunts and uncles and go, hey, how much do you have saved up for retirement? They're going to get sick. They're going to be mad. Be careful. Buckle up. Half of Americans don't even have $100,000 saved up for retirement. All they've got is Social Security. It's scary out there. So if you're under age 30 and you can start saving a little bit now, it's a life changer. And you can start pulling out money when you're 59 and a half. And some of you are like, well, I need the money now. Sure, do it in another account. This is your future account. Now you have your now account. Have both. Have both. I'm not saying put all your money in retirement. Holy crap. Just do both. Do both. Next question.

Just a little clarification. Asking for a little clarification. Is there, isn't there an income limit to the to fund the Roth ira?

Oh my gosh, I am so glad you asked. We're going to go to the board. Someone said, hold up, Mark, you make too much money. You can't do a Roth. Peter Thiel has Peter Thiel, one of the most wealthiest people in the world has a 6 billion dollar Roth IRA and he can put his $8,000 in his Roth this year again. Well, my accountant told me I can't put money in because I make too much money. That's because your accountants, dumbass, and they're not a certified tax pro. In my program around the country, helping real Americans with real true strategies. And this isn't even high risk. This is normal. So let me show you how it works. You may want to get into the party at the university every wants to go to called the Roth Kammakamma party. So here's the Roth party and if you want to go in the front door, you want to go in the front door. All right, this year this is my March Kohler calendar you can get on my website. It's freaking awesome. 25 bucks and it's got all the data you need. Tax tables, what state's best for whatever. You'd freaking love it in here. It says page two, the Roth IRA phase out to go in the front Door this year is 161 grand if you're single, 240 grand if you're married. That's right. You can't go in the front door and get into the Roth party if you make more than 161 and 240. But you've been to college, you've been playing around, you know, parties. There's always a back door. There's always a back door into the party. So the back door here is you're going to go around the corner and you're going to go into the party through this back door. And it's called the back door Roth. And it's a two, three step process. Step one is you're going to create traditional IRA and fund it and put in your $7,000. Now we'll hold it. Mark, back to my table. It says if I make that much money and I put money into a ira, I don't get a tax deduction. Why would I put money in a traditional IRA and not get a tax deduction? That's stupid, Mark. Yeah, that would be done. Oh, didn't you hear? There's step two. Step two is on day two, I'm going to turn around and convert that 7,000 into a Roth IRA. Well, Mark, don't you pay tax when you convert money to a Roth ira? Not if you didn't get a tax deduction in the first place. So there's no tax deduction here, there's no conversion tax here. And on day two, you have a Roth IRA with $7,000 in it. And this is what the rich do every year that have good advisors that know what the hell they're doing. It's called a backdoor Roth ira. Google it. I've got videos on it, I've got podcasts on it, I got books on it. The Roth IRA is alive and well as a backdoor strategy. You'll freaking love it. It's wonderful. You can do it. I hope clients do it every day. And in fact, @directed ira.com, where I was telling you to go open your account, we have a choice. You can say I want a crypto backdoor Roth ira. You literally have a product for it. I mean, is that mainstream? But someone told you that doesn't know what the hell they're doing, that you can't do it. But I want to let you know you can go in the back door. The step three of all this is you self direct it and you go buy crypto. You can't buy crypto in your Fidelity account. You can't buy it at Scottrade or Merrill Lynch. They'll sell you a fund that owns crypto. But you can't buy dogecoin or whatever you want to buy in a Fidelity app. But you can@directed Ira will let you buy any crypto you want. Boom, bada bang. All right, everybody, let me just say this. Come to the crypto tax summit. If you're going to play in the crypto world, you got to know how it's taxed. You're the captain of your ship. Some of you already here have already indicated your accountants don't know what they're doing. That's okay. No one's perfect. There's bad plumbers, there's bad accountants, there's bad contractors, there's bad accountants. Come to the cryptotaxsummit.com, check it out. You'll love it. Number two, if you need a consultation, just meet with any of the tax pros in my network or one of my tax lawyers. Pay them for an hour, pay them for a trifecta, and get your plan. It can be as little as 1500 bucks for a total plan or pay them for an hour and go help me. I'm getting advice that I need to set up a business trust or a spendthrift trust or a beneficial trust or a Delaware statutory trust, or adapt. Oh, my gosh. Get a second opinion. And you got to pay sometimes some money to get good advice. If you're getting free advice, it's usually worth about what you paid for it, so be careful. Down below are the links to my law firm, our network. Come to cryptotaxsummit.com I would love to have you there. Was there another announcement I'm missing? Nope. I think that's it. I was just looking at my notes. Down here, people. The American dream is real. It's hard out there. Costs are up and we can't cut costs. Sometimes food, groceries, travel, transportation, it is what it is. So let's make more money. Let's go make some money and do it tax free. Save on taxes. You can do it. I'm not going anywhere. I'll see you next week for another live. Please get over to Amazon, my podcast, my books, and I will be right by your side. Getting rich. Sleep.