Big Gains in Crypto? Don't Miss These Tax Strategies!

Welcome everybody to a live presentation on 10 tax strategies. Some are okay, some are kind of crappy, frankly, and I got five I love, but they're the only strategies I know of that are going to make a difference. Now, if you've had big crypto gains this month like I have, and it's still flying as, then buy your crypto and pay. Never pay tax on those gains again. I know, again, it hurts. You cannot offset the gain you have now. But when you go to rebuy, I'm giving you a tax tip in advance. Do it in a Roth ira. That's number two. All right, number three, some people are going to say, do an opportunity zone investment. It just got passed by the one big beautiful bill. It's awesome. You can take your gain and go buy a property in an opportunity zone and, and defer the tax. Did you hear that word, defer? Well, guess what? Under the one big beautiful bill, the five year deferral, so you don't pay tax on that gain for five years, only starts in 2027. So if you were to take your gain now and go buy an opportunity zone property, it only defers your gain one year. So we will defer it into next year. So you're going to pay tax in office. And after I got a new tractor delivered and I was like, man, I got to get to the office and go live on crypto. I was training CPAs and enrolled agents around the country on other topics today. So forgive the hat, but you know what, partners, it's an American dream for me. So, all right, let's get on to it. The five strategies that are so so, and I think they're awesome, but they may not help you. They may. And, and then I'll get to the five good ones. But I don't want anyone out there, some influencer to make more of these other five strategies. Then they really have to help you out. So I'm going to go with the first one, and that is if you don't want to sell, don't. Because if you sell now, it's what's called a short term capital gain. There is no special tax rate for crypto. Whether you sell a house, sell Tesla stock, or sell Bitcoin or xrp, you're going to pay tax on the gain. You bought it for $100, you sold it for $1,000, you're going to pay tax on $900 if you didn't hold it 12 months. It's called a short term capital gain. Whatever tax bracket you're in you're going to pay tax on that and not many. Now, I've got the tax brackets right here. My little chart for my calendar you can get on my website, whatever. But if you're single, these different rates are going to range from 10 to 12 to 22, 24, 32%, 35% or 37%. Well, Mark, don't I get capital gain treatment? Only if you hold it a year. So I'm not going to spend a lot of time on this. If you're going to harvest some gains and you're nervous that it's going to go back down, and crypto does that, right? We know it's going to go up and down. Let's get real. So if you're going to take some of those profits, you're going to pay tax on whatever bracket you're in. Meaning if you are single and you made 100 grand this year, you're going to be paying taxes of approximately 22% on your gain, plus whatever your state tax rate is, which in some states could be as high as 10%. So that could be 30% in taxes and you're going to owe it by next April. That's how it works. So if you have gains, you're going to harvest them and you didn't hold it 12 months, you're going to pay tax based on the bracket you're in, which is true. It's calculated based on your income from your day job or your small business. All right, strategy number two. Buy this in an IRA to begin with, buy it in a Roth ira. I know that stings a little bit. You're like, well, Mark, I don't own this crypto in a Roth ira. But you know what crypto investors do? They always buy again. So can I beg of you? If you're going to make 100 grand, a million, 50 grand, and you're going to harvest some profit and you're going to go back into the market when the dip occurs, which it always does, right? Freaking A. Open up a Roth IRA. You could do it at any age, any income, $7,000 if you're under age 55, $8,000 if you're 55 or older. Go open a crypto IRA down in the chat, Kirby, on our different platforms, please put www.directedira.com. you can open up a Roth crypto account today and you can learn more about it. We've got a lot of education at that website. Invest in a Roth ira, then buy your crypto and never pay tax on those gains again. I know, again, it hurts. You cannot offset the gain you have now. But when you go to rebuy, I'm giving you a tax tip in advance. Do it in a Roth ira. That's number two. All right, number three. Some people are going to say, do an opportunity zone investment. It just got passed by the one big beautiful bill. It's awesome. You can take your gain and go buy a property in an opportunity zone and defer the tax. Did you hear that word, defer? Well, guess what? Under the one big beautiful bill, the five year deferral, so you don't pay tax on that gain for five years, only starts in 2027. So if you were to take your gain now and go buy an opportunity zone property, it only defers your gain one year. So it will defer it into next year. So you're going to pay tax in April of 2027. You only get one year off to defer the gain. Now I had to bring it up because it is a strategy. You could take your $200,000 gain on your XRP or your soul, your ETH and go buy a opportunity zone property. There's funds everywhere. You're going to get pitched this, but the gain, you're going to have to pay tax on it in two years from now or less than two years out, 20 months from now. So it's okay, it's there not does not make my top five. Okay, next. Give it to charity. You don't pay tax. Well, Mark, I want my freaking money. I just made money on crypto. All right, so what should I be doing now? I've heard other cps. By the way, I'm a cpa. I'm an attorney, a tax lawyer. I help small businesses owners all over the country. I've got books all over Amazon, podcasts, YouTube videos. Please. I am giving you legitimate strategies here and someone may tell you give it to charity. Now what they mean by that? Let's say you're Christian. I'm a Christian. I'm going to maybe tithe, I'm going to give 10% to my church this year. Okay, well, instead of selling my crypto or having other income that I'm going to give to charity, so I'm going to pay tax and to give my money to my church. Let's say you're going to give 20 grand to your church. Well, I've got to sell my crypto or go earn money to give 20 grand to my church. So the strategy is just give the crypto that's worth 20 grand. To your church. You don't pay tax when you do that because you don't want to sell the crypto and pay tax. Then give 20 grand. Give the 20 grand of crypto to the church and I'll tell you, every freaking church on the planet, we will take your appreciated crypto. Just go into church this Sunday and ask, hey, can I give you my bitcoin? It's worth 20 grand, 10 grand, 100 grand, whatever the hell. Did I just say hell? And talk about charity and church at the same. You can say that hell is in the Bible. It's really in there. It is. Okay, now that's a charitable gift of the crypto before you sell it again. Doesn't make my top five, but it's a strategy. All right? Now the fifth strategy that I think is out there and kind of ridiculous, but you're going to read about it in freaking every Wall street promoted article or magazine is harvest your tax losses. That's how you save taxes. I don't have tax losses. I just bought crypto and made a bunch of money. I don't have losses on stock or other assets. I'm trying to make frickin money. So I kind of give it a little bit of cred. But if you do have losses from the sale of real estate, from the sale of stock, from the sale of a business and you've got some losses over here, there's a good chance it's going to offset the gain of selling your crypto because passive losses offset passive gains. So that would be another strategy. They call it harvesting your losses. Now again, my condolences if you have losses somewhere, but if you want to sell them and offset your crypto gains, then that is another strategy that is number five. Now let's get to the good stuff and I'm going to go to the whiteboard and we're going to freaking do the real strategies, the top five that I like. Now don't go anywhere because I'm just going to turn this around and we're going to get to the whiteboard and start knocking out some kick ass strategies. All right, we ready to go? I'm going to get this light on me here. Okay, we can. I think we can see me, Kirby. We're looking good. Okay. All right, I think I've still got you on speaker here, so I want to make sure I can hear you. Okay. Now the next strategy that I like, I'm going to go with the short term rental loophole. Now I'm going to give you five strategies. Here they are going to. You're going to take your profit, your sale of your crypto, and let's say you've got $200,000 of money and I'm going to say gain. So let's say you maybe had $100,000 that you invested in crypto and it's now that was your investment and now it's worth 300 grand. So that's the fair market value. So your gain is 200 grand. That's your gain. So you really have $300,000 to invest, but your gain is 200 grand. And this is your problem. You're like, mark, I want to harvest my profit, but I don't want to pay tax on this 200 grand. So one of the strategies, this is going to be our number one, is called the short term rental strategy. You don't have to be a real estate professional for this. You can have a day job and it can work wonderfully. So let's go over here and let's talk about it. So what you would do is you would take your 200 grand and you're going to invest it in an LLC. Yeah, yeah.

Your camera is backwards.

Oh, I need to flip the camera angle around.

Yes, Reading it backwards.

Okay, I'm not sure. And here on. Thanks, everybody, for your patience. I don't have. Oh, orientation selection not available while live. Let me see how I can flip this camera. Oh, everybody, I'm so sorry here. I may just have to verbally walk you through these. I'm on what's called restream, so contain half screen picture and picture thumbnail orientation not available to flip. Okay, I'm just looking here, everybody. Thanks for your patience. Okay, I'm just going to have to walk you guys through this. I feel so bad that we don't. We went through a little test here and I don't see on restream how to change the mirror because you want to just. Mirror board is backwards. Mark, can you fix the board? Guys, I'm so sorry. I've got to do what's called the mirror the screen method, which I can do on zoom in a heartbeat, but I don't see how to do this on restream. Okay, I'm going to try one last thing. Oh, mirror. Camera off. Are we good? Are we good? Does this look normal? Talk to me. Is that working? Okay, we're on delay. Hang out, everybody. We've got our $100,000 investment. 300,000 fair market value, 200,000 gain. Here we are. We're going to invest in an LLC and we're going to buy some real estate. Does it look good? We're in business. All right, now I'm going to go back to my. I'm not even going to worry about chat. Okay? We're looking good. Thanks, everybody. Okay, so I'm going to take my 200,000 and I'm going to invest in an LLC and I'm going to buy a property. Now, again, everybody be patient. And I'm going to say this right now. If you're making money in crypto, you don't want to be a one trick pony. I want you to buy more crypto, again, frankly, in your Roth ira. But we want to take our profits and diversify. My crypto investors also own real estate. My real estate investors also own crypto. You see a theme here. You don't want to be too siloed in one asset class. And your real estate write offs can offset your crypto gains. Your crypto losses can offset your real estate gains. There's ways to do this. And now you're more diversified in two different asset classes. So now I'm going to go through this quickly. This is one of the five strategies I think really move the needle. So I'm going to go. I'm going to go quick. You guys can watch this later. It'll be on my channel. I'm going to buy a property for 800 grand. That's my purchase price. I'm going to take my 200,000 for my crypto gains and I'm going to put it down here as a down payment. I'm going to have a mortgage of 600 grand. Now, the beauty of this strategy is that when I go buy this property, there's my property, and I am going to depreciate the building. I get to write off the building. I cannot write off the land. So I'm going to allocate 20% of this purchase price. I'm going to allocate 20% to the land and then I'm going to take. That's 160 grand. And I'm going to take the 480 here. The. Sorry. Yep. Let me see. No, 610 to 20%. Eighty. Eighty, yep. One hundred and sixty. And I'm going to take the remaining amount. Four. I'm missing this here. 200, 600, 440. And I'm going to allocate that to my 640 here. Sorry, guys. I had a different example here in mind. So 540, 600, 640. So I'm going to take my 640 for the building and the 160 for the land and there's my $800,000 and I'm going to then take the building and I'm going to cost seg it. I'm going to cost seg my building and I'm going to get about 40% of that. That can be written off in depreciation. So if I take that approximately and I'm going to do it here, the math when you're doing a live presentation and you guys, you should get under the gun here, it's not the easiest thing in the world to just start rattling off tax strategies and numbers at the same time. So don't beat me up in the chat, please. So we're going to take 40% of that, which is going to be $256,000. Guys. This is under the new big beautiful bill bonus depreciation. I can write off 40% of the building in year one. That's 256 grand. Guess what I have over here. I've got a crypto gain of 200 grand. The 256,000 offsets my gain. I pay zero tax on my crypto gain, gain. Now what do I get for that? Guess what? You're sitting on a rental property now. Now if I turn that, this is a short term rental loophole. I've got to put in 100 hours between now and the end of the year more than anyone else to furnish it, fix it up a little bit. I can use subcontractors, I can use property managers, but I've got to put in 100 hours. Now I own three short term rentals myself. My wife Patty and I own rentals and we've put in our 100 hours. And so you've got to go in, put a little elbow grease and fix up this rental property. But if I have this rental and I don't have to be a real estate professional, I'm going to meet the material participation rule by putting in my 100 hours. Now, on just a typical rental like this, let's say I want to get. Because what you want to get is a 10% return on my $200,000 investment. So you put in 200,000. I want to get a 10% ROI. So that's 20 grand a year. If I can make 20,000 a year on this rental property just on cash flow, this property will continue to appreciate. So I own a rental property and the mortgage is going to get paid down under my little Airbnb contract and I'm going to rock it. So 20,000 a year. I want to make sure that I'm generating about 7,100amonth in rent and I'm going to have a mortgage of around 4500. I'm going to put in costs of 1000 and I'm going to net 1600amonth. Now, guys, that's, this is rental property. It's going to vary. I was talking to a friend of mine that has a rental property in Park City, Utah. He's renting it out for 1200 a night. I have a rental property that will rent maybe sometimes 200 a night, sometimes 500 a night. Now on this, if I get 80% of occupancy, that's 24 nights a month. If I can do $300 a night, I'm going to get my 7100. So now I'm creating 1600amonth in cash flow times 12. There's my 20 grand. I am now getting a $20,000 rental income a year from my crypto gains that I paid no tax on. Now that was quick. I promised you. I deliver the real strategies. I own short term rentals. I see clients do this. You can buy short term rentals, get a 10% cash on cash return, and that doesn't account your appreciation and you got a tax write off. In this example of over 200 grand. That, my friends, was my next strategy. That was number six. Now I'm going to go over to another one that I love. This is called the intangible drilling cost deduction. It is a tax strategy and oil and gas. So let's go back to our list here. I want to go through everyone here. I love the Vibe board. Isn't it fun? Okay, so our deal is we're trying to get rid of a $200,000 crypto gain. Number two, I'm going to do an IDC, an intangible drilling cost strategy. So what I'll do, let's come over here. So what you do is you take your 200 grand and I'm going to invest in an LLC. I love REI Energy. Kirby, my PR manager here. So put you put, put a link into that. I actually went, if you watch the show Landman, that's what I'm talking about doing. In the last episode of the season of Landman, his son is going out and getting people to sign up with him to do an oil and gas deal. That's what he's doing is an idc. So in this llc they're going to raise money from investors that are going to go out. And the idc, this oil and Gas LLC partnership, is going to go out and essentially invest in some oil rigs, several of them usually in a strip. I went down to Oklahoma last month and went through a number of oil rigs. It was super cool. I feel like Billy Bob Thornton, frankly. It was freaking awesome. Now what happens in this is because of this oil and gas investment and bonus depreciation and the big beautiful bill, the typical situation is 90% of this investment is going to come out in depreciation write offs. That depreciation comes to you as an ordinary loss on a K1. This is legit. Look it up. It's been for years. This is not high risk. Oil and gas is freaking awesome. What is beautiful on a lot of the REI Energy deals, they're getting a 10% to a 20% rate of return on your original investment. So you're making that same $20,000 from a short term rental and you're not out working on the oil rig. Then their exit strategy, in three to five years, once the oil is producing the different wells, they're going to sell out to Chevron. And the goal is to get a 2x return on your investment. So you're going to get your 200 grand back plus another 200 grand, plus the write off and an ROI of 10 to 20%. Now this is an investment. All investments have risk. There's other oil and gas companies out there doing drilling projects. But here's the takeaway. It is called an IDC. An IDC, intangible drilling cost investment. The gain from this $200,000, you're looking at about $180,000 write off with an IDC. So a $200,000 investment in IDC over year one and two, usually in the first year, is going to give you that type of write off. You paid zero tax on your crypto. That's my friends with strategy. Number seven. Boom. All right, I'm going to go to number eight. Let's, I want to come back to real estate in a moment, but let's do the Charitable Remainder Trust. Many of you have heard of this. It's called the crut, the Charitable Remainder Unit Trust. I've been doing these for 20 years. They're common in real estate sales, business sales and crypto gains. Now what does this look like? So what you do, if you're going to sell your crypto, we got to get going quick because step one is we set up the crude that's usually going to take a week or two. So if you're looking at selling in the next month, as these gains are going on, you want to be prepared. You cannot sell your crypto without having the CRUT set up first. So this is a trust. That's step one, you set up the trust. Step two is you're going to donate your crypto that is not sold. So you're unsold. Crypto is going to go into the crud. When you donate your crypto into this trust, you get a tax deduction. It's usually around 10%. I'm going to put this over here, IRS tax deduction. And it's going to be usually around 10% of the value of your crypto. So let's say you got a million. Now when you're going to do this, you got to have at least 500 grand because you're going to have some costs involved. You want to make sure this really works. Well, if you just have 50 grand or 100 grand in crypto, I don't think this is going to work. We like it at least at 400,000 in crypto, million dollars of crypto or more. So I've got this million dollar crypto that's probably got a huge gain of 600 grand or more. Well, I don't want to pay tax on that. So when you donate it to the crutch, you pay zero tax, you get a tax deduction in this example of 100 grand. Then step four, the crud. And guess who the trustee of the trust of the trust is? You. So you get to be the trustee and you're going to sell the crypto tax free and all $1 million goes into this crutch. All right, now you're like, okay, Mark, now what? Well, based on your age and your gender, the IRS has a huge table that says this CRUT is going to pay out for the rest of your life based on a multiple of how old you are and how long they think you're going to live. If you're 30 or 40 years old, it might be 7 or 8%. If you are 40 or 50 years old, it might be 8 to 10%. If you're 50 to 60, it might be 12%. It could be 14% the older you get. So based on your age, this trust is going to pay out for the rest of your life, whatever the value is every year, that percentage. So it's going to, you're going to be step five, get a payment for the rest of your life. Asset protected guaranteed. Now you may go, well, mark, that's only 10%. Guess what? You get to keep step six investing in passive assets. You can buy more crypto, sell it, never pay tax again on it. You can buy real estate. So you keep investing. You get to keep investing the rest of your life. And every year it's revalued and you get a payment every quarter. Now you do pay tax on the quarterly payment, you pay tax on this. But what's beautiful is you have a bigger pie. You never pay tax on the original sale. And any trading that you do in the future, you don't pay tax on that. Completely asset protected. Now at the end, when you die, whatever's left goes to a charity of your choice. That would be. Where are we at number seven? So the charity gets the money. You get payments for life. You get a tax deduction to do it. You pay no tax when you sell it. And the CRUT is a machine that's completely asset protected from any type of lawsuit. Okay, so my friends, that was number three, the crud. Now I'm going to do number five. Number four. Number five. Now number four. What I like about number four is for you business owners out there, I'm going to put this in a whole other category. For if you are a small business owner, which 40% of Americans now have a side hustle, 25% of Americans are fully entrepreneurs. So if you're a business owner and some of you may be wanting to start a business, this could fall into this category. Number four is in your business, you buy more equipment, maybe even a car, a truck, I don't know, you buy more equipment or assets to scale your business. So let's see what this might look like. So say this is you. You've got a business. What I like to do is a trifecta. So this is your operational business. Maybe it's an S corporation, maybe it's an llc. And now you're going to take the gains you had over here on your crypto, your crypto gains, and you're going to invest them in your business. Now, are you going to pay tax when you sell your crypto? Yes, you will pay tax, but it's not due until next April. So what we're going to do with that money between now and December 31st is we're going to take those gains and inject them in your business. So let's assume you're already making money. Let's say you're making 150 grand a year in your small business. Hopefully you're doing a salary split. So you got 50 grand in a W2, you got 100 grand in your K1, all right, so you're making 150 grand. Well, this $200,000, same example of crypto gains. You're going to take that 200 grand and pop it in this S corp and maybe go buy again more equipment, vehicles, a tax deductible asset. And what are you going to use again? Bonus depreciation. So I could use this bonus depreciation. And because you contributed money into the S corp, you've got basis to do this. So you're going to put the money into the S corp and let's say you go buy two more vehicles, more equipment for the restaurant, more ovens, more machines, maybe it's a trailer for your construction company, I don't know. But you spend 200 grand, you can write that entire 200 grand off as an expense and it's going to flow out and offset the gain. So you have this 200,000 that turns into an asset that makes you money and you get a write off. So you pay zero tax on the crypto. So if you're a business owner, this is your free money from the banks. Think of it like a bank loan. You're going to take the 200 grand, sell the crypto. The tax you're going to pay is going to be offset by the asset that you're going to buy in your business that's going to make you more money. Now I don't want you to go buy some stupid F350 and a trailer. That's not going to make you money. No. Use this as an impetus for your business and strategic plan to take your business to the next level. And you get a write off 100% to do it because it's an operational business that you materially participate in. That's number four in my last five strategies that I love. These five strategies are the ones that I think move the needle. These five strategies, these are the big five for me. So drumroll please, number five. And I said this for you, the business owners out there. This is going to be a self rental, all right? Now you do not have to be a real estate professional. You do not want to have to go buy a bunch of rental property. You don't may not want to do a short term rental. So what this is going to look like is this is you. Here's your trifecta again. You've got your operational business, maybe an S Corp, you've got 50 grand in W2, you got 150 grand in a K1, you're making a couple hundred grand total. Maybe your spouse has a day job, whatever. But you and your business, you rent from someone. Do you rent a warehouse? Do you rent an office space? Do you rent a building of any sort? Industrial manufacturing? If you have an operational business and you're paying rent to a third party. If you're paying rent to a third party, stop. The tax code now allows under the big beautiful bill and bonus depreciation again, you don't even have to be a manufacturer. You're not bringing freaking business back from the foreign country or anything. You're just a regular contractor, a dentist, a doctor, an engineer, a lawyer, a restaurant owner, a landscaper, a salon owner, but you're paying rent to someone else. So we form an llc. You set up a. You buy a new building. So you're going to use the 200 grand. Remember, we have 200 grand that we're dealing with. You're going to use that as a down payment to buy a new commercial building space. It doesn't even have to be a building. It could be a condominium building. This is a condominium ICE building I'm in. Now. You can buy space in a building and you're going to go out there. The SBA has a wonderful 504 loan and others where you can buy a new commercial building space doesn't even have to be a building. It could be a condominium building. This is a condominiumized building. I'm in. Now. You can buy space in a building and you're going to go out there. The SBA use even this, this 200,000 or less as a down payment to go buy a building. You're going to rent to yourself. So if you have a small business, I'm going to buy a building with my crypto gains. Go get a. I'm going to go get a SBA loan. This is. The SBA is built for this. They have loans built for business owners to go buy a building to rent to themselves. So now you're getting a tax deduction to pay rent to yourself. You're getting a tax deduction and you're. This is amazing. And the rent comes back to you. Tax deductible. You're to claim that rent. That's fine. But you're going to guess what? Take this building and we're going to depreciate it. We're going to carve out $200,000 of depreciation between now and the end of the year. So you're going to go shopping for a new business building for your a new building for your business, whatever it may be. And we're going to carve out 200 grand in depreciation through a cost segment. And this is a dash for election. You do not have to be a tax professional. You do not have to be a real estate professional. You do not have to put in 100 hours of remodeling. This building is owned in the same percentage 100% by you. 100% by you. This 469 AF6 IRS dash for election whatever it's in that code 469 now allows you to write off 100% of this building over time or accelerate the depreciation and offset your crypto gain. That my friends is the last strategy here that I think is legit. The self rental to yourself, buying more equipment in your already established small business charitable remainder trust and IDC and oil and gas. You can also be in the business as Billy Bob Thornton is and a short term rental. These are off setting. Guys, this is my final point. You want to offset the gain you're going to have in crypto. You want to either put it somewhere where you don't pay the tax or use the money to create an income producing asset. Let's not be stupid with the money and I create more income, get a tax write off and offset the gain for my crypto sale. Now some of this was complex. I went through it quickly. I get it. I have a podcast, I've got books, I've got a great website, I've got a YouTube channel with hundreds of videos and most importantly I have a team of affordable small business Main Street America tax lawyers and an army of accountants under our Main Street Tax Pro network. These are enrolled agents, CPAs and tax advisors, accountants, bookkeepers, payroll. Everybody in our Main Street Tax Pro network supports our tax lawyers doing a tax plan. Or go through the tax advisors and get a tax plan. But I start somewhere. My link below is to the law firm kqslawyers.com make an appointment for a tax consultation in the next week. You can get in with one of them. Get over to the network, get to my website marjorie kohler.com go check out the network. They're all speak Mark Kohler. We all speak the same language. These strategies for crypto are taught in my Main Street Tax Pro certification and my tax advisors know these strategies too. Now this was not recorded. This is live. I'd love to take a few questions if you want. I know this has been maybe longer than expected, but this is real info that you need. This is real critical quality, right? Correct info. Kirby, do you have any questions you wanted to hit?

Yeah, we have a couple good ones if you're willing.

Yes. I love it.

Okay, first one is what is a good crypto tax reporting software that you use?

Oh, we've got a great connection to our Koinly. Is it Koinly that we have a relationship with? I love Koinly. Now, everybody out there what this means. Should I talk about that just for a minute, Kirby? So when you invest in crypto, just like me, at the end of the year, there's a form that is generated. You're going to put in your 1040. I won't get into the minutia. You're not going to prepare that form. You don't want to prepare that form. Even if you have thousands of transactions with altcoins, hard wallets, unique off the grid wallet. In a normal exchange like Coinbase or Gemini, wherever your crypto is, you have to report it to the irs. Your gains. There is no special tax rate for crypto investors. There is no spec special crypto tax treatment. I'm sorry, there's not. And if you say, well, the IRS doesn't know what's in my hard wallet, I exchanged it for a different coin. It's the public, it's the blockchain. The IRS has task force already out there going into the blockchain, which is public and matching up transactions. They will find you. Your wallet is never entirely secret with the irs. So just deal with it. The number one question on your tax return is did you buy, sell, acquire, transact, anything in crypto this year? You go to jail if you lie. Deal with it. So go to Koinly. I love Koinly. There's a link down here in the different platforms. Go to Koinly, open an account. You just upload or link your wallets and they produce the tax report you need. Then make an appointment with one of my tax lawyers, get his tax strategy plan. We'll get you with an awesome tax advisor in our network and you can start doing tax planning now. I know right now in chat. I've got tax advisors in my network talking on chat with you right now. Lawyers of mine are on the network right now with you. We will help you come up with the strategy. Great question, Kirby. What's next?

We have another question from Kenneth. I thought there were income limits on a Roth ira. How do I put gains into a Roth. It's my income.

Oh, I love this question. I'm going to repeat the question. What? How do I put money in a Roth ira? I make too much money. People, it is a lie that you have that you cannot put money into a Roth ira. The income limits, I will tell you here. This is what some of you have been told. Let me just pull it right out in my calendar here where I put all the rules. Okay? To put money. This is good, everybody. To put money in a Roth IRA this year, you can't do it if you make more than 165,000 single or 246,000 married. Filing joint. Wrong. There's what's called the backdoor Roth. You can Google it. I've been teaching it for years. I'll show you how it works right now. So everybody here. Oh my gosh, this is Roth beta chi. Everybody wants to go to the Roth beta chi party. This is the Roth party. They are buying and selling crypto tax free. Oh my gosh, this is the tax free party everybody wants to go to. And they say to come in the front door. If you want to come in here, you can't come in. If you make too much money, there is an income limitation. So to put money. Guys, this is so cool. You're going to love this. To put money into the Roth IRA and invest tax free. If you make too much money, you cannot go in the front door. That's the truth. But there's a back door. Well, this is a side door. We're going to say it's a back door. Here's the back door. This is called the back door Roth. So what you do, we have been doing this for years. I have a backdoor Roth. What you do is step one, you open a traditional Roth. Anybody at any age with earned income could open a traditional Roth. Now, because you make too much money, do you get a tax deduction? Number two, you put your $7,000 in your traditional Roth. Do you get a tax deduction? No. Because you made too much money. Well, Mark, that is a dumb idea. But the cool part is on day two, you can convert your traditional Roth, I mean your traditional IRA, to Roth. any age, at any income level. Peter thiel has a $6 billion Roth. Mitt Romney, who ran for president 10 plus years ago, has a two at that time had $100 million Roth. We've got clients with nine figure Roth IRAs that make a lot of money. So what you do is you put open your traditional Roth, then you contribute your money into Your traditional Roth. By the way, your kids can do this or all of my kids have a Roth ira. Any of you that own a small business should be funding your kids Roth IRAs when they help work in the business. That's a whole other topic. But then you convert your traditional to Roth. You can do this in three days. Go to ww.directed ira.com I am a founder of this company. My partner Matt Sorensen is the CEO. He has the best selling book in the country. On this, we have our podcast, the Directed IRA Podcast with hundreds of downloads and we teach this. You can find it and a show on the backdoor Roth. You will love it. It is so fun. So you can have a Roth. So the bottom line is get your Roth IRA set up. It's amazing. There's your answer. I don't. Okay, Kirby, maybe two more questions.

I have to ask this one because of your outfit today.

Okay.

What? Oh, sorry. Okay, here's the question for the one big beautiful bill. The salt deduction is capped at 150,000. Income, single. Is this AGI gross or magi?

The phase out for the salt deduction if you make too much money and then it drop. So it could be up to 40,000, as much as 40,000. The SALT deduction, it phases down to 10,000 if you make too much money and it's based on your AGI, your adjusted gross income. Now I want to give you guys what's called the salt workaround. For this is a cool way to get around salt. It's what I do. For those of you that have a small business, if you have not if you don't have a small business, I can't work around. But if you have an S corporation and you want to deduct salt, which is your state and local taxes, anywhere from 10,000 to 40,000, that phases out. The higher it can phase out and you're stuck at 10. Now what SALT stands for is state and state and local taxes. So what this means is property taxes on your home. And if you own an expensive home and have a big mortgage, you're going to max that out in a heartbeat. You may even have taxes on your car, your vehicles, property taxes, local, these local taxes that will add up and you get capped and you can't write them off. But here's the trick. When it comes to your state income tax, you pay for it over here. So it's called the pass through entity tax or the SALT workaround. Congress knows about this. They almost limited it in the final bill. And then they said, no, we're okay. So what you do is you write off your state taxes inside your S corporation. You could write off $100,000, I don't care. And then you only use salt for your property taxes. And if you phase out, you phase out back to the 10. But the point is you get to write off all of your state income taxes in your S corp and it flows through on your K1 onto your 1040. So I hate to tell you, some of you that don't own a small business, it's okay. You got other benefits. You may have matching 401ks at work and a great day job you love and benefits. But if you're a small business owner with an S corp, we want to pay for all of your state income taxes out of your S corp, write it off here, and only save salt for your property taxes. But it does phase out and it's based on your AGI. And by the way, yes, I've got my mason jar here. I am not kidding. I came from the ranch straight to the office today, got a new tractor today. I was so excited about it. Can't wait to get home and drive it around until dark. And I went to the cupboard here at the office looking for a glass. And I'm not kidding you, the biggest one I could find is a Mason jar. I thought that was kind of classic, but that's my American dream. Living on a farm. I grew up on a farm in Washington State, and then I've been working in California and Phoenix for years. And I'm ready to get back to the dirt and the roots. And I love my career, my job, my wife, my life. I couldn't be happier. Okay, last question. Kirby, I'm rambling well on that.

Now. This is a perfect last question. What type of entity would you possibly set up for a horse ranch to be run as a business?

Oh, my gosh. This is a legit question, all right. A legit question came in from somewhere that said, what entity would you set up for a horse ranch? Let's maybe up in Yellowstone. I'm going to start investing in horses. Those are called cutting horses, by the way, in that Yellowstone episode where that horse would like, you know, drive that cow around it. It's totally separate business from rodeo. Rodeo. And you're roping, you're riding bucking broncos and blah, blah, blah, and bull riding. Those are cutting horses that would go chase that. That cow. So if you own a horse ranch, cutting horses are the most valuable horses to own, not the bull riding. Not the roping horses, it's cutting horses. In that episode, you know when they're talking about million dollar horses, you're like, yeah, that's bs. That's just Yellowstone. No, over here on the fairgrounds in this little town in Utah where I'm at three weeks ago was a horse auction and these horses were selling. The cheapest one was 50 grand. One sold for 1.2 million. Horse ranching's legit. Isn't that funny? Okay, now let's say you're going to have a horse ranch. Let's going to say you're having a cattle ranch. You're going to do farming. Here is the strategy. Never, ever, ever own the land with the same business. So we want to put the land, our Yellowstone ranch, in an llc. The land is always separate because I want a firewall so that if anything goes wrong in the business, they can't touch the land. If you own a restaurant, I want the building in its own llc. If you own a building for your business, it'll be in a separate llc. We always want our assets over here, so we're going to put our assets on this side of the equation. Llc. Llc. Llc. And guess who owns these. Llc? Not you, but your revocable living trust. Your trust is going to own these LLCs and even own your personal home. Your home might be carved out over here on the ranch. And who owns it? Your trust. Now we get to the business. Your horse ranch or horse breeding business is going to be owned by an S corporation. You may start it as an llc, but then we're going to make an S election. Your dental business, S corp. Your restaurant, S corp. Your hair salon, S corp. Your landscaping business, S corp. We my accounting firm, law firm, S Corp. And your trust owns the S corporation. Your S corp rents the land to run the breeding and horse training business, the dental business, the realtor, the landscaper, the electrician. We're all an S corporation. And then we rent our building to ourself. We rent anything we need, real property back to our S corporation. The beauty of the trifecta is this. S Corp. LLC. Roth IRA. Roth 401K. Your LLC owns the building or the rental property. Your S corp runs the business and it all runs into your revocable living trust. And down to your 1040. Your S Corp contributes to the 401k. Your profit from crypto or from your real estate can fund your Roth IRAs. You pay your kids and your spouse and yourself out of your business and they all form their own Roth Rent our building to ourself. We rent anything we need real property back to our S corporation. The beauty of the trifecta is this S Corp. Llc, Roth ira. Th iras. Their Roth iras. Then buy crypto or real estate and the profits from your crypto and real estate fund the business and buy more real estate. Guys is all tied together. When you have a coordinated tax plan, you don't have to be rich to get wealthy. You have assets, you have operations, you use tax preferred vehicles and you invest in what you know. Crypto real estate business and you build your American dream, people from the heart. The American dream is real. You can build your business, you can invest in what you know. I'm Mark Kohler. I love the American dream. I'm not going anywhere and I'll see you every week on my YouTube channel on my podcast in. You can find me in the network at our law firm. God bless America. Keep living your dream. Roth 401k. Your LLC owns the building or the rental property. Your S corp runs the business and it all runs into your revocable living trust and down to your 1040. Your S Corp contributes to the 401k. Your profit from crypto or from your real estate can fund your Roth IRAs. You pay your kids and your spouse and yourself out of your business and they all form their own Roth IRAs. Their Roth IRAs. Then buy crypto or real estate and the profits from your crypto and real estate fund the business.