Congress is Attacking Self-Directed IRAs

All right, you guys are live in 5, 4, 3, 2 and 1.

Welcome everybody, to another week of live tax and legal. I mean, the hour all of you have been waiting for. Saving you money, making you money, protecting it. And this week we're talking about Congress trying to screw up your money. We'll figure that out. I'm here with my amazing co host from the podcast, Matt Sorenson. Usually I'm flying, flying solo on the live, but. Yeah, Matt. Yeah.

And welcome to Phoenix, the directed IRA headquarters here.

Yeah.

So we're excited to be here, of course, talking about IRAs. What better place to do it from than directed IRA offices.

Yep. And this is, it's going to be awesome. So we're going to take your live questions on just any tax and legal business question, as we usually do every week. We're live on YouTube in a couple locations, live on Facebook, at Entrepreneur magazine. Big shout out to them. Ryan Shea, the CEO, thanks for having us. And live up Mark Kohler. Matt. We're live everywhere district, just not on cnn. But that's okay. You want us, you want us here, we're here for you. Please type your questions down below as we get rolling. But first, we're going to talk about this fun bill on Capitol Hill. For those of you that used to watch Saturday morning cartoons, the bill on Capitol Hill, do you ever remember that,

how a bill becomes law?

Yeah.

And it like walks around.

Yeah. Yeah.

It goes to the committee and then it goes to the full House and then it comes over to the Senate and it's to the president's desk. Yeah.

It's like sausage. It goes from the cow, goes from the pig. And you don't want to watch. You just want to go to the store and go, I want a bratwurst. I'm going to watch the Super Bowl. Hook me up. Well, that's kind of how bills work. But sometimes you have to get involved. And this one's ugly, people. We're not talking about Republicans or Democrats, wealthier, poor or whatever. We're talking about your retirement. This, Matt, make it an urgent issue. What would you say?

Well, many people have used a retirement account and put their hard earned money in it as a way to save. And Congress told us to do that. Right. They gave us all these incentives to put money in our retirement account, all these promises on how it grows and how it comes out later when you want to use it later in life when we hope we have a balance large enough to retire on. And a lot of us bought into that. We did, too.

Yeah.

And some of the rules may be changing for those of you that like to self direct it. And that's what we want to talk about and why we want you to get engaged.

Yeah. Now some of you are like, oh, these guys are just talking about the backdoor Roth for rich people or Peter Thiel's Roth or ten million dollars, ten million dollar accounts. No, no, this is for all of you. Now here. Let's just get to the point of why we're not talking about phase out when you make 400 grand. Not talking about $10 million Roths or backdoor mega Roths for big wealth earners. We're just saying there's a bill, in this bill, there's two provisions that talk about how you can invest your IRA that affects everybody, rich or poor. And basically in a nutshell is that Congress wants to say, you know what, we don't want you to get creative with your ira. We, you can just go invest in Wall Street. Whatever Wall Street's selling, that's all you can buy. That's the problem. Yeah.

And that's scary because, you know, whether you're a saver of a retirement account or maybe you're a small business or startup trying to raise money from retirement accounts, maybe you already have, you know, in your business and startup. I mean, we've even done that ourselves. And so these accounts are going to be put in jeopardy. So we want to have investment choices for your IRA where you're not forced to just buy a mutual fund or stock on Wall Street. We want small business to be available. We want you to put your IRA into a small business, invest it in a startup that you think can change the world or and people that you really believe in. And so that's what's at stake of this. It's going to force more money over to Wall street that's already overvalued. Already has. Enough people have already said, I don't want more of it. And over a million people have already decided, I want to invest in small business startups, real estate. And that's what we've been helping clients for years due to.

Okay, now I'm starting to look at the feed already here. You're going to probably want to get that YouTube feed going. We're going to do our best here on location in Phoenix while Corey back in the studio is running this thing. First, Paul says I need to set up a solo 401k recommendation. Please call our law office. Kqslawyers.com you can either do a paralegal setup down and dirty DIY for under 500 bucks. Or you can get an hour with an attorney to help you walk you through why you're doing a solo 401k, how you can maximize it and use it. This bill will still affect 401ks and the ability to self direct them. Right? The LLC will be impacted by 4.

No, actually solo 401ks will not be affected as the bill is written now. Okay, so it's. They use the word specifically IRAs.

Yeah, yeah. So be careful. So if you want to set up a solo 401k, we're hoping these rules in Congress aren't going to affect you at all. So if you have a small business, solo 401k is the way to get around a lot of this. Not that we don't love the Roth IRA in conjunction with the Solo 401K, but check it out. Derek says FDA won't allow it. I don't think the Food and Drug Administration is going to be popping in on the Roth IRA issue. But Derek, I hope the FDA sticks their nose into this and says Roth IRA should be self direct. Bless your heart, Derek. Okay, so we're going to look at the comments as they're flying in here on Facebook and YouTube. All right, I'm just going to answer this question once and for all on what to do about this bill and then we're going to let it go. We don't want to beat a dead horse. I've got a blog article on this, so does Matt. We're out on social media on this. I've got a YouTube video on this. So we've put out enough content and it's down below. All you have to do if you want the freedom to invest your IRA with an llc, meaning doing crypto mining, doing real estate, pooling money with your family members and doing a ira. Llc. If you want to have the ability to do that, you have to email your senator and your congressman and say, please save my Roth ira. Please save my regular ira. Just let me self direct. And there's two provisions you want to tell them. Pull those out of the bill please and tell them that you're a regular American, not worth millions. You just want to contribute to an IRA and self direct it. You don't want to be held hostage by Wall Street, Matt. And I give you a suggested verbiage that you can put in your email and how to find your representative and their email address. Just click on those blog articles below. The content below, it takes 5 minutes and just please save my IRA. Any suggestions on action people can take.

Let me say this just so everybody knows. Mark and I have spent like the last two weeks non stop on this issue. We've been on the phone with congressmen, we talked to one that's like, oh, I know what a self directed is. I bought real estate with my ira. Like, oh great. Obviously that call went very well. You know, we've been, I've been on the phone with other Senate staffers, quite honestly that are like, guys, I don't care. We're trying to cut taxes on the middle class. This is all rich people stuff. This is all rich people stuff. Why am I listening this like no, this is an important point. There's a misunderstanding in Congress that this is only things that billionaires like Peter Till do. They, they are missing the point. That is everyday Americans and even our accounts, you know, 98 of them are under a million dollars.

Yeah.

Most people that are doing this do not have these million or let alone billion dollar accounts. And we're just trying to get an account to a million that we can actually retire on. And so that's the message we're trying to get to Congress. And because if this is the Democrats that are doing this bill, I just want to make a couple points. I'm not, this is not going to be political.

Okay.

Okay.

Okay. Yeah. Okay, sounds good. Do it.

On this bill. Republicans have already said they're voting no. Every Republican says they're voting no on this bill in the House and Senate not because these IRA provisions necessarily, but because of everything else. Okay, so you can call your Republican senator, Congressman and we still want you to write and call, but they're already on the team. You don't need to persuade them. This is a Democrat led House bill. It came out of the House Ways and Means Committee. It's going to go to the full House for a vote. The we've got to convince Democrats they need to understand that it is everyday Americans that use their IRA that want to invest in small business startups and real estate. This is not just something that uber wealthy are doing. And so that's the message we're really trying to communicate is you're actually hurting these people in these two sections that we're talking about today. You're hurting these people that are everyday savers that are just trying to get a retirement account to save on. So that's what we're trying to get up.

All right, now let's hit some more questions. I'm trying to look at lighting here like I'm looking at the lighting and I just think they're like, I'm going to move in close to you. I just want to see what it looks like here. In a minute. Okay. Because I, you know, Marcus is, he's

making fun of my piece.

No, I'm not.

It's not just anybody.

Cannot be normal.

There's anyone in Phoenix just, you know, in Phoenix in the summer you don't go outside because it's too dang hot.

Yeah.

So you get end up pasty white like this. But let me say Mark from Idaho, when it's January, I'm gonna have a great tan and you're gonna be pasty white and scraping your windshield and shovel in your driveway.

Okay.

Tanning bed.

Okay. Now I've got got a question here. This is a good one from. Honestly, I'm blanking. I don't know what that means, but. Okay, here's the comment. How would that have, how is this new bill going to affect people who, who already have things such as real estate and a self directed IRA llc? This is, sit down.

This is where you're going to get fired up.

Yeah.

Okay. And I, I, it's funny, when I started this, you know, we've talked to the lobbyists, by the way, A lot of people are like, just go hire the lobbyist, they'll fix this, guys. I mean you got to do that. But this has to come from the grassroots, like House members, senators, got to hear from people. Here's what the lobbyist told me. He said, when you talk to your clients about this that have already done it, I don't want them to be upset by the time you're doing this. I want them to be mad because mad people go call their congressman and they call their senator. So this may piss you off and make you mad.

Yep. So here's the answer. If you already have an IRA LLC as the bill is written and we're hoping Senate's gonna either pull it out or modify it, make it better, but.

Or you've invested in a private fund or private company or startup or crowdfunding offering.

Yeah. Well, I'm gonna stick to the IRA LLC point. If you have an IRA LLC under the bill right now, you have two choices. One, find a manager that's not you, not your, A lot of people. We have that set up IRA llc. They serve as the manager and they buy real estate. Okay.

That's the fix.

That's the fix. That's one thing you'll be able to do under the current bill. You can't be the manager of this LLC any longer. And you would. If you change the manager. I think as the bill reads now, you'd still be able to keep your IRA llc, right.

As written right now. But I don't want to get to the solution of what you do. We just want to say we've got strategies on maybe how to work through some of these problems. The best thing I want you to know, if you have an IRA llc, you are not going to be able to use it. How you use it now.

Yeah, you're not going to be able to use it.

You'd have.

I'm just saying there's two things. The first one is you'd have to change the manager. The second one is you have two years. Shut it down.

Yeah.

Now I wanted to say that first and freak you out, but I also.

That's what I was trying to do.

Yeah. Remember, I'm trying to be.

I want them to be mad.

Yeah, yeah. But changing the manager may not be an option, you know, like, yeah, hold on. I can't manage my own LLC anymore. Nope. You might have to pay someone. You might not have anybody that you trust that could serve. So that's not a good choice. But. And who knows what the options are going to be. But the point is they want you to shut it down. And so that's why you should be mad. Contact your representative.

And many of you that bought, bought real estate or crypto using an IRL will see, you know you're going to be affected here and you're going to have to swap out the manager if it's you right now, as the bill is written right now, that's what we're trying to do is get these provisions out. Now if you vested in a private fund, a startup, a crowdfunding offering, and you're already in that, you also have two years. You got to get out. Now those are illiquid. Like you can invest in a startup. It's not like I can just go sell it tomorrow on a stock exchange. Like there's a time cycle on those types of investments. It's usually five, seven, ten years sometimes. But you're going to be forced to kick it out. Either sell it or take a distribution which is going to be subject to taxes and penalty within two years.

Okay, now I'm going to start hitting some of these comments in Facebook. Corey. I was over on Entrepreneur Facebook seeing more comments over here on my Facebook. So I'm going to jump over here. You come out, Corey, out of hiding. There and give us a question if we need to. Teresa Cox says communicated with both my senators in Georgia today, hoping everyone with a self directed IRA will do the same asap. These changes will dramatically impact us negatively. Thanks Matt and Mark. Oh she said Matt and Mark. She said your name first, Theresa.

Thanks. Just like the Bible, Matthew is before Mark.

Yeah, that's right. Suzanne says can you please repost in those provisions that you're talking about in the bill. I missed the first part of the live. Suzanne Corey, you can cut and paste those two provisions.

It's in the article but it's yeah

in the feed but it's in the article. Suzanne, everybody, your most useful step would be at the end of this live go to the article and we give links to find your representative and kind of an outline of what you could say in your email with those exact provisions. So if you showed up a little late here, don't stress. Go down to the blog below.

Yeah. Now those sections, by the way, it's 1-38312 and 1-38314 those are the two problematic provisions that are going to take away investment choices and force your IRA to be basically invested into Wall Street. So 1-383-12-1338314 they're both referenced in Mark and I's articles as is the full bill and summaries of the bill from the House Ways and Means Committee.

Yeah. Gosh.

And I just by the way that bill is 800 pages but we've zeroed in on the two sections that are going to really matter for for your

ira and I'm trying to Corey, look at this speed here. And I I can't seem to scroll past whatever I see so I might

call let me hit a couple questions in here. I've got so says I have a gold bullion in a self directed ira. Would that would I be required to sell no. Precious metals are not affected under the language again as written right now there's this stuff's changing.

Okay Riggin, Ryan Riggin says what is the chance of getting this done and removing the bill now everybody, we're not removing the bill now. This is how laws are made. This is a 3.5 trillion 881 page document. It's going to get passed. The the goal is to remove from the bill or from the law what we don't like. So just keep that in mind. Ryan everybody, don't say don't pass the bill. Your congressman or his senator is going to go what are you talking about? Just Say please remove these two provisions from the bill. Yeah. That's much more targeted. Yeah.

The Democrats control the House and Senate. Obviously Joe Biden is president. He's going to sign whatever they come out with. So something's going to get passed at the end of the day. So we just want to get the provisions that we think hurt everyday Americans that Democrats can get on board with. They're not trying to intend everyday Americans. They're just trying to soak the wealthy. And, and which is fine whether you agree with that politically or not. It's not a political statement. It's just they really are intending to just get this money from the rich. But we're trying to make it clear that you're actually hurting people who are just trying to catch up to the wealthy with a retirement account that they can, they can actually retire now.

I just want to know. I got off my high top chair. We're at a high top table. I feel like Buffalo wild wings is going to serve us any moment.

Yeah.

But. Yeah, six more please.

Bowless some more wings.

I just got off the chair. And you ever have that moment where you get off a leather chair and there's a. And you're like, I really did not just pass gas. I mean that was the.

Oh, did the mic pick that up?

Yeah, I think the mic did it. It was just. It was a squeak of my jeans on a leather chair. I just need it. I want it. I don't need any comments, you know, and Mark having more.

It definitely got the. It definitely did pick it up. I heard it.

It did pick up.

Okay. So I wanted. That was a disclaimer. That was because what I needed is my glasses. And Corey, by the way, I figured out how to scroll through the comments. So we're really rocking here. This is good.

Yeah.

Not that technically challenged.

I did have. Let me ask. There's a number of questions here on the 401k so I get Aaron going.

Right, Mark.

Yeah. Solo 401ks or 401ks are not impacted by these investment sections here. And we do solo 401ks that directed just as a question came up. And at KQS lawyers we have. That's a great option for any of you that are self employed with no employees. Yep.

Ryan. I did not forget my rock star. I already drank it before this on our podcast recorded an hour ago. So brutal.

Now, Ali asked, do you have a template letter we can use to cut and paste representative. If you go to my article and I think Mark's has it too. We gave some sample text to use. You can just cut and paste out of that and kind of personalize it. It'll work best if you personalize. But we gave some sample things that you could say in your article so you could at least cut and paste.

Okay. And by the way, I want to make sure, Corey, that you're catching some of these posts that I think there's again, some. A little spamming or some unauthorized posts here under my name with the author, Mike. Is that correct, Corey?

Yeah, we're. Yeah, we're taking care of it.

It's okay. So folks, if you see a little post that is me talking about COVID 19 or something weird and bitcoin, I've kind of had my personality hacked sometimes. Sometimes that happens on dating sites. Guys will use my image to get more. More winks?

Yeah, more winks.

And then the ladies are like, that guy's good. Hold it. That's not you. You know, so.

Yeah.

Anyway, there's some people trying to get on my feed here.

Somebody catfished somebody off of your picture?

Yeah. Wow.

You know, I've been on a few dating profiles and I don't think I've ever seen that. That's interesting.

Well, I hope you're not looking for 50 year old men on a dating website.

Very true, very true, very true.

Now said, I would like to set up an ira. What should I do now? Sharon? This is a great point, everybody. Just because this bill out there doesn't mean you don't keep using a Roth ira. It doesn't mean you don't keep using an IRA or immediately stop your plans to open an llc. Get going. We've got two years to figure this out. We're trying to get rid of the bill. We got all sorts of options. A lot of times things are grandfathered in. Don't stop investing. Don't freak out and close your account. Keep self directing. We got. We'll figure out solutions to this. That's what tax lawyers do. Yeah.

Don't stop investing. Hold on to the feeling.

Ooh, that's a little foreigner. Is that Foreigner?

Isn't that journey? Yeah.

Hey, I do keep getting a few questions of timeline on contacting their senators and representatives. What would the deadline be for all this?

Yesterday, tomorrow, one hour from now? People, this is in session right now. Lobbyists are looking for feedback. Senators right now are in the middle of this. You can't wait till next week?

Yeah, this is sailing. The leadership in the House and Senate are trying to get this done now. It already went through the committee in the House, only one Democrat in the committee voted against it. Otherwise it was party line vote. So now it's to the full House. And Speaker Pelosi said she wants to have this passed by next week, early next week so the Senate can be voting on it later next week. This is moving rocket fast and so you just gotta get engaged and be fast on it.

Okay, people, do not send any bitcoin anywhere from anything. I recommend be careful. Those, those are spammers. It's crap. Okay, now one other okay, trifecta question. Andre says, I live in Memphis, Tennessee and have an LLC that's allowed to have series LLCs. We have nine rentals under it, but they are not under any separate LLCs series yet. This year we opened another LLC to start an active income business and the idea was to set up a series LLC from the mother company. Our current account said that in order to become a series LLC should be formed on a company's tax return. Okay, Andre, I have a feeling you're not consulting with my tax lawyers on our team regarding the series llc. I would recommend you get a second opinion, get an appointment. It might be a month from now. That's fine. We're swamped. It's crazy tax time with October 15th. But Andre, we generally do not recommend series LLCs for an operational entity. Number two, if you have nine rentals under an LLC, but none of them have been transferred to a series llc, under the llc you don't have what you think you have. You've got to follow through on the process. So now, Andre, I'm going to be very, very embarrassed if you say, oh no, I worked with one of your attorneys and they said to do all this. If that's the case, please don't put it in a feed. Email me personally. Markj Kohler.com but you this your question is, sounds like you're either trying to do this on your own or you've got an advisor that hasn't carried you across the finish line and you're trying to do some cool things with a series LLC in Tennessee, but you're missing the boat on how to kind of get it finalized. So if you're working with an attorney in my office, I want to hear about it immediately. If not, get an appointment with us. It's too much to comment in this live, but I love series LLCs. I love Tennessee. Just be careful. So all that. Matt question your go.

Yeah, so Melinda asked. I finally started an llc. However, I was told by two lenders that no matter how much money I make, I won't qualify for a home loan because my self employment history is less than two years. How do I buy a home? Well, there is, that is the mortgage banking related issue. And that's just something every self employed person has to face. I don't care whether you're a self employed real estate person, attorney, doctor, doesn't matter. Like they want to document where your income's coming from and make. And you're going to have to show tax returns. It's not like something you can just show a pay stub for, you know, every two weeks or twice a month and they're like, okay, we understand your income. And so self employment is tricky, particularly when you're starting out. What I would say is save more cash, try to get more down as you're waiting in this two year period. Or look at creative acquisition strategies. See if you can buy a house from a seller that's willing to do seller financing. You know, see if there's a private money lender that will loan money to you. There's a lot of private money lenders. They'll charge you higher interest rates that may loan money to you. But one thing you can do when you look at houses is you can, there's a search function where you can look for seller finance, where the seller's willing to finance the balance, where you put down some money and then the seller basically carries a note and you pay them over time to purchase the property. That could be a good option.

I love it. This is fun having the feeds right here. We're covering a lot. Karen. Karen Klein says, does this new bill in the House now in the Senate affect a solo K invested in a single member LLC that buys real estate? This. No. In the current form of this bill, solo 401ks, you're off to the races, so don't worry about it. Now again, we don't want these provisions in the bill because sometimes at the last minute they'll go, oh, and throw in solo 401ks too. Okay, so still send a message off to your representative. But as it currently is designed, the bill will not cover self directed 401k LLCs, only self directed IRA LLCs. Yep. Okay.

All right, I got a question from Norm on trademarks and patents. Love Norm. All right, Norm's got a question. I'm thinking about applying for trademarks and applying for a patent for a crypto NFT idea I have. Is it okay to do this in my first name and then transfer it to an LLC or better to set up an LLC first. Okay, great question. Now, first, trademarks and patents are different things. A trademark is something you get that's more like the name of the business or a slogan that you use in the business. Just do it. All right, that would be a trademark. Nike with the swoosh mark, That's a trademark.

Okay.

That's a name or a slogan set of words. Or it could be a design and colors included. That's part of the trademark. So if you have a business or think you use an advertising, like for example, one of my trademarks is take control of your retirement. That's. I have that trademarked and it's just a slogan I like to use. Now, a patent, on the other hand, is more of an invention. Okay? You've created a software that does something, you've created, you know, the light bulb or whatever you invented, you have an invention, and that invention you can then go get a patent for. Now, Norm asked a good question on patents. Patents required. Sorry. A patent has to have an individual who is the inventor. So you can't have a corporation or an LLC be the inventor of a patent. You're typically have to have an individual listed. So, Norm, you could be the individual on the patent, but then transfer that to an llc. All right.

Okay, I got one. Hey, as an aside, too, and by the way, that was me getting off the high top again. I can't do it when it's.

Yeah, somebody said that's the spiders are barking. That's what my grandma used to say.

Okay. Now, by the way, someone is commenting as me too, saying kindly inbox us or something like that. I. That's not me. Just FYI, Be careful. Gosh, these freaking scammers that get on your social media. I hate it. Okay, I had a question here from Anthony. I'm a capital contributor. I'm listed or listed. I think he's trying to say listed as the manager. Does this affect us as well? I'm using my LLC to purchase real estate. Anthony. There's a good chance, yes, because any LLCs that's taking money from, let's say accredited investors or your IRA is involved, this is going to affect you. I don't know. I don't have enough information from your comment, but I would include you being concerned. So send a message to your representative. Fair.

Yeah, you're gonna, You're. I'm worried about all those people. We have lots that have raised from IRAs. They're gonna.

Oh, you're gonna love this question, too.

Okay.

Armando says, are we still having the self directed seminar in Scottsdale next month?

Yeah, we are, yeah. October 21st, 22nd here in Scottsdale. Mark and I will be there as well as some other amazing people.

It's, the weather is perfect because in the high 90s, it's, it's the, it's high.

Yeah, it's like, it's between like 65 and low. Low 90s.

Yeah, it's really nice. Come out. It's a two day workshop in the sense we're golfing the first day for charity. Full day on Saturday. We'll both be here. It's going to be a lot of fun. Check it out on the website. Go to directed ira.com or self directed ira sdira handbook.com any of our websites you can sign up.

All right. Amina asked, how old should my kids be before they get them to start working? This is a great question. Really. As old as they can legitimately do something in the business you can pay them for. Now one great strategy of course is just is paying your kids in your own business because you can expense that. Your kid can pick it up and they're under the standard deduction. So they have no tax on it. They don't have to file a tax return. But it must be for legitimate work. And so if you're like, I've got an infant, okay, they're not doing any work. I've got a three year old. What work are they doing in the business? I've got a 10 year old, okay, maybe they're doing something. When my kids were little, once they were about like eight or eight or nine, they would come to the office on weekends and they had to clean the office. I had to do a little of it too. But that was legitimate work. They could do that. I could justify paying them take a deduction, they could pick it up, have no income and you could even throw that income they have into a Roth IRA because they have earned income, which is a great way to help kids start learning how to save.

Anthony Day says, is there a good way to withdraw from my 401k without being hit with a penalty? I'm trying to use this money to invest. Anthony, that's an interesting question. I'd recommend you have a consult with one of our tax lawyers. But in general the question is begged. What type of 401k do you have? You should be able to invest within your 401k. I don't want you to pull out of your 401k to invest. Now if you have a current day job and it's a group 401k and you have no control over it. You might just be stuck in that 401k and hell no do I want you to pay penalties and taxes trying to get it out to invest. Just deal with it. But Anthony, there may be some in service rollovers options. Are you vested? Do you have a solo 401k? Again questions I don't have the answers to in this brief format. Maybe make an appointment with one of our tax lawyers tell them what type of 401k is and what type what you want to do and then we want to try to get a solution rather than you pulling money out of your 401k. That's not a good thing. So let's try to figure out how to self direct inside your 401k. That's the goal. Aaron Norris says get with a local bank you bank with. Indie banks are do way more than commercial banks. I'm good with that. And Aaron, we love you love the Norris group. I think that's Aaron Norris we know and love but not sure. And Aaron, I like your comment for everybody Shop around. Banks are at your service. We did a whole show just on watch out for your banker. Be careful what you say. It's not that banks are bad. They're just a regular company. Not all banks are created equally and you're the customer. Shop around. Don't take it as gospel whatever your banker says. And I love independent smaller banks because they can oftentimes provide more flexibility and understand what you're really about. Matt, all you all right.

Grant asks which senators have you worked with who've been most helpful? Well frankly they don't like us to disclose that on stuff like this as the sausage making has happened. But I would say for you guys you need to contact your senator. You can contact other ones that you think may be on the bubble on this that have been in the news like Manchin and Cinema. If you're following the news on this bill in general but unless you're one of their constituents, they don't really care what you think. So but if you're like hey like me, I'm in Phoenix, Arizona, you're my senator, I think about this about the bill that matters. You're a constituent so you want to be focusing your efforts on your representative and your constituents. Yep.

We're grateful to have built some really close relationships with representatives that take what we say seriously. And we've been texting even with some senators an amazing feeling that we're a Part of the process, and we're grateful for that. Aaron said, why did this bill even come up? First of all, Aaron, this is two words.

Peter Till.

Yeah.

Peter Till, 5 billion Roth IRA.

Yeah. Now, first, remember, this bill is doing a lot more than just attacking IRAs. This is a $3.5 trillion reconciliation bill on spending on infrastructure in the United States. There's bill. There's money in here for tax breaks, for middle. For families with kids in daycare. There's energy incentives. There's just money being spent for all sorts of things in the country. It's a spending bill. Covid relief. Still, stuff is buried in there. There's a lot of stuff in this bill. Then a few senators that don't like wealthy people making money in the Roth IRA threw in the kitchen sink, and it's now grabbing some of us that are not extremely wealthy. And Peter Till's $5 billion Roth IRA garnered some attention. So, Aaron, the question would be, why did this come up in the bill? This bill's gonna happen anyway. People are pissed at wealthy other folks that this little provision got thrown in.

Gene asked a question about selling crypto and buying it back. That is a provision, actually in the tax bill that will be restricted. There is something called the wash sale rules that basically don't allow you to sell crypto for a loss and immediately buy it back. Right now you can do that. And through the rest of the year, if you have a loss on crypto and you're like, oh, I want to lock in that loss for taxes, but then I'll buy it back because I know it's dipped and I feel like it's going to go up. With stocks, you can't do that. There's a rule called the wash sell rule that doesn't let you lock in a loss if an asset goes down, if you end up buying it right back. But right now with crypto, you are able to do that. The bill is going to prevent that. Now, this is individually buying and selling crypto, not in your Iraq. So for those of you that are buying and selling crypto, just watch out for that, because that's going to affect a strategy that some people have been using Crypto markets are pretty volatile and have gone up and down, so. And there's other stuff in the bill, guys. You know, you may have heard of 1031 exchanges. Those didn't get in the bill. We're still going to have 1031 exchanges. The corporate rates are going to go up about 5%, individual rates about 2 and a half percent increase on the high end, a 3% surtax on high income earners on top of the rate increase. There's a lot of stuff in the bill that's going to be raising taxes. Most of it's on the wealthy. But there are some areas like this IRAs that we're talking about that are going to affect everyone.

Yep. Question from Pat Spence. Pat Wiley Spence. Hello, Mark. Can you do a series LLC in Texas? The answer is yes. And I just went and grabbed a copy of my book just out here in the hallway. They're everywhere around here. You should have one handy yourself, folks. Look at go to my own book to like get answers. In the back there's appendices that tells you all the series states. I'm going to read these off quickly. Alabama, Delaware, Washington, D.C. illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Texas, Utah and Wisconsin. Now, for those of you that don't know what a series LLC is, it's in the book. I got blog articles on it, Matt. I have covered it in podcasts. You type my name or Matt's name and the word Series llc, you're going to see content study up on. It is for those of you that have rental property, usually more than three, four, five or six properties in a state and you don't want to set up multiple LLCs. It's expensive. So you use the series LLC to get better protection more efficiently and affordably.

Yeah. Extreme Santas commented billions for IRS agents. Yes. There's 78 billion being funded to the IRS for enforcement. Yes.

Yes. Oh, you know what was in the bill?

A lot of IRS employee employees.

Oh, it pissed me off in the bill. It actually says, well, the version, there's all sorts of versions as it's evolving here, but the most recent version was 78 billion to the IRS to go do enforcement on the wealthy. It said, you can't use this money for middle income or low income folks. This is 78 billion to go after the wealthy. I don't know if you're going to be in that bucket, folks, but okay, Bruce says, I know we don't want this to happen, but what does it mean that someone else would have to manage it? Obviously it would affect our income, as would we have to pay them? Maybe. Would they be able to make changes without us? No. Could they sell our property, invest it somewhere else? No, Bruce, Matt is going to be mad at me that I even said that. The point is, in their bill, tax lawyers look for loopholes to help our clients continue to do what they want to do ethically and honestly, Bruce, I'm just. That provision probably won't even be in there. We hope the whole thing's not even there. Don't worry about how to solve this yet. Worry about just getting the provision out.

That'll be next. Next month's topic is the dust has settled on this now. What are the strategies? Given what's happened or we don't need to worry anything. It's same game as. Same game as usual, which is what we're going for. That's why we're trying to put the effort into. Let's just get these provisions out, communicate to our congressmen and senators. I spent all day on that. I talk. I've got a call with the congressman tomorrow on the Ways and Means Committee to go over this. That's the committee that brought this bill out. So we're working diligently on this. But it doesn't matter. No matter how many IRA experts call these senators on these provisions or these House members, unless they're hearing from their constituents too, if they're hearing it from their offices and their staff and team. Yeah, we got a little people emailing and calling about these IRA provisions. People don't like it when you screw with their ira. It's kind of like taking someone's guns. It's like, you want to take my IRA out of my cold dead hands. You're going to take my IRA and my investment choices away from me.

Yeah. And Lee Brichter says, are you guys still doing the Masters Dinner in Texas next week on the first? We're trying, Lee. If we cancel it, we'll give you a full refund. Of course. We want to get you word and time for any modifications to your travel. We're trying to get just a few more ticket sales to make it effective and worth it for everybody. So we'll keep you posted. If you live in the Dallas, Texas area, in Texas in general, we've got a workshop on October 2, full day workshop that's happening no matter what the night before. I'm trying to buy this guy a plane ticket. We're going to have dinner and do a little Master's high end self directed IRA discussion. It's going to be a lot of bougie little corporate spoofs and nice stuff and a nice dinner. But Lee, we're trying to still pull it together. Folks, please watch out for these stupid scammers out there. There's not a lot here, but just a couple comments with people talking about Bitcoin that's not a part of the presentation and it's not me. We were trying to stop that through Facebook. When those things happen. Boy. Matt, next comment. What do you got? I've got one for you. Can you take a profit sharing plan and roll it directly into a Roth ira or does it have to go to a traditional IRA first and then convert to Roth?

Well, at most companies you have to send it to a traditional IRA and then you got to do a Roth conversion form and then you got to set up a Roth IRA account. They'll move the money to at direct an IRA though. We have a Roth conversion app because we know a lot of people like to do that. Everything they roll over, they want to convert to Roth. You can do that. We have. It's called the Roth conversion app. So you'll set up that app and what we do is we do all three in one because you do need each of those three pieces. You need a traditional ira, you need the conversion request and you need the Roth IRA at the end of the day. So if you have a profit sharing plan which is generally traditional dollars, this is like a 401k or maybe a pension, that money is going to get rolled out over to. And we receive in a traditional account here. We automatically convert it. We automatically put it to the Roth ira. It's of the app.

Ryan, I love it. You said. I'm still waiting on a call from Chantel. Ryan, I'm looking at a text I sent to you as well. I really want to get with you on this project. I'll leave it at that. Don't worry about Chantel. Text me back. I felt bad about not being able to connect, so I talked to Chantelle about trying to get with you as well. I think we're all playing email, phone and text tag. Kelly says ending 10:31 exchange seems to be back on the table. Also according to the Senate today. Kelly, you're watching Sausage be made on the news and on C Span. Senate is everywhere debating what they think is important. We'll see how it goes. I think what they want to do is limit the amount of dollars that you can roll in a 1031. I think the 1031 will stay alive and well for the less wealthy. They're just trying to get these big 1031s that can be millions of dollars, sometimes billions of dollars in big commercial projects going in a 1031 exchange. So hang tight. I think for the average individuals like us, I mean, the last 1031 I even did with any of my family members was under 500 grand on a family project. So it's, it's, I think we're all going to hopefully be safe. But again, watch the news. It can be a little scary.

Yeah. Jason asked, can a non accredited investor use self directed funds, IRA or 401k to invest in accredited only funds? No. So you only qualify your IRA or 401k to invest in a fund if you personally qualify. So accredited investor is this definition under the securities laws where the securities laws basically said hey, if you make enough money, 200,000 single, 300,000 married, or you have a million dollars in net worth of assets that could be your retirement account, some rentals, you know, savings, you add that up, you got a million dollar net worth. If you either have the net worth of million or you have 200,000 annual income single, 300,000 married, you qualify to invest in certain things that are generally only limited to accredited investors. One of the things in this bill that's totally backwards is they say, well if you qualify under securities laws to invest in it, you don't qualify under IRA laws. They use the whole qualification backwards and said, wait, you make enough money, we'll let you invest. But you make enough money so you can't invest with your IRA. It's like totally backwards.

There's this mad IRAs, they just are

so they like this. It's really. People got pissed off about Peter Till. A lot of people in Congress were really upset that he had a 5 billion Roth IRA. They're like, how do we stop it?

Yeah, so let's stop everything.

Yeah. And the 10 million cap wasn't enough. Let's not let people invest in startups and small businesses and private funds and private companies that are pre ipo.

Yeah. Okay. Couple thoughts, Kelly, Katie, commenting on excise taxes are back on the table or crypto losses for this year. Will I be okay this year but not next year? Here's an important point. Everything we've seen in the bill and I think this is good, this is typically how they're passed. Anything that's passed now will generally go into effect January 1, 2022. So whether it's wash sales with crypto, whether you're trying to do a 1031 right now, whether you're trying to do a backdoor Roth this year or doing some Roth conversions or you've got a self directed IRA LLC now, it's okay, it's okay. We're going to have time this year to finish up our transactions and then we can do strategies Next year moving things around. We're here for you. That's what we do. We get paid to find loopholes. We, you know, it's not uncommon. We'll set up a car wash, we'll set up a little boat, you know, service business in the Ozarks. I mean whatever it takes, we'll do it for you. That was a joke. Okay, Aaron Sloan's what can we do with our self directed Roth IRA that will not be affected by this new bill? Aaron, you keep doing what you want with your Roth IRA for now. We don't know what the new bill's going to affect. What would you say?

Yeah, so let's just say the bill as signed goes as currently drafted, goes into law. What will not be effective? Well, you could buy real estate directly with the ira. You can't use the IRA llc. You could do an IRA LLC with someone else as the manager. You could do notes. You could invest in certain private companies as long as it doesn't require an accredited investor. You can buy precious metals. You could still do crypto right out of the ira. The IRA will see again is you can't be the manager. So you got that quirk. So a lot of the self directing still can happen. But you know, people doing an IRLC for real estate or crypto is a big piece of the self directed industry right now. Us and a lot of our competitors also people investing in private funds. I mean we have thousands and thousands accounts, I have probably 10 or 20 accounts a day that invest in that stuff here. And those are going to get, those are going to get closed out. So this can have far reaching effect. And that's why we're trying to get vocal on it now because we don't want to restrict that. If anything we want to open it up more.

Okay, Celie Ramos says asks a good question here. Okay, so I can understand Congress. They want to dip into our self directed IRAs. Okay, everybody take a breath. I know it can be complicated. Let me just say this Congress right now, which is democratically controlled, wants to basically prevent the super rich from getting super, super, super rich. Which I, I, I may even have concerns with that myself too. Who needs $5 billion in a Roth IRA? Fine. But here's what Congress is doing. They're not dipping into your Roth ira. They're trying to say right now they've gone too far and said you can't make too much money in your Roth IRA because they're upset at the super rich. We're trying to let them know, hey, Us little people, we want to catch up. We want to self direct our Roth IRA. I'm not going to make 5 billion, but I'd like to make 500 grand. Maybe I can make 5 million if I get lucky. Congress let me keep self directing. They're not trying to dip into your Roth ira. They're trying to stop letting your Roth IRA be too successful because they're mad at the super rich. So what you're telling them is let me do my thing. Stop. Cap the super rich at a certain level, fine. But don't stop me from being able to invest. Yeah. Also I got my little blue check mark next to my name. This is really me. I just said thanks for participating, everybody. So if you don't see a little blue check mark by name is not me. Watch out for those scammers out there. Someone said, can you give me a link on contacting Congress? Yes, it's down in the description below. There's a link to Matt's article, my blog article. And there you can find the links to your senators, your representatives, and some sample text to what to say. Lee Richter says, hey, you better. He says, I can still make it. Let's hold our masters event. If it's just you, me and Matt, we'll have a great time. I'll bring the rock star. Yeah, we love Lee. Oh my gosh.

Yeah, probably would be.

Yeah, it'd be good. Do you have a question? Okay, go ahead.

Solar asked, is there an app you can recommend for your LLC minute? Oh, I think you might have just given us a great business idea, Solar. For your single member llc, should we create an app to do your minutes on your LLC or corporation? Well, we have a company maintenance program. It's a cmp, not an app. Okay. It's called Company maintenance program where our staff will renew your entity with the state and do your minutes on an annual basis. If you get over to KQS lawyers, look for company maintenance program. We offer that to, you know, any clients, clients and enemies we've set up. And we have, I don't know, 7,8000 clients that on that program and a whole team of paralegals that help keep you up to date in a safe and safe in a affordable and efficient manner.

Yep. Okay. I love it. Okay.

Just also safe.

Yeah. And just a couple more questions and then we're going to wrap it up today. Athanas. Athanas says, what's your view on converting to a C corp for state purposes on a pass through entity? Some states have allowed this very Interesting. I've always learned something new that's we lecture our attorneys every week that keep learning. I have never heard of an entity, I'll be honest. Scout's honor. Never heard of an entity that's a C Corp for state purposes, but an S Corp for federal purposes. Thanis, if you. Athonis, if. Whatever. Sorry. If you'd like to send me an email on where you've seen that, I would love to hear more about it. I normally don't want to C Corp anytime, but the state or otherwise. But anyway, check that out.

Some people have asked what the name of the bill is. Just, you know, it's been called the Build Back Better Act. It's. It doesn't actually have a name, but the Biden administration is called the Build Back Better agenda.

Build Back Better.

Yeah. Triple B. Triple B. Yeah, the 3B. And some people call them the House tax bill. House Ways and Means Tax bill. It's got different names.

Okay, Katie says, and this is good for everybody, if I set up a backdoor Roth this year for the first time, because I'm going to make more than 200 grand as a single person. God bless you, Katie. You rock. Or will it be worth it if I want to self direct the funds? Yes, Katie, it'll be worth it. Everybody. You should. Every young, young or old, rich or poor. I want my clients funding a backdoor Roth, a regular Roth, a 401k Roth, as much as you can afford every year. Even if they shut down some of these backdoor methods next year. You want to do it this year, by the way, Katie, you still may qualify next year. They're going to put income limits on who can backdoor. They're not going to say no one can backdoor. They're just going to start saying, well, if you make too much, you can't backdoor. And then it'll be adjusted for inflation and hopefully a new Congress or president in a few years will take it away and let us get back into the party. So just be patient, Katie. You keep going, girl.

Yeah, right. Now, the back door, like a regular Roth contribution. Mark and I just did a whole podcast episode on Roth contributions and fixing them if you messed it up. But you know about like 130 grand for a single, you start phasing out on whether you can just make a regular Roth IRA contribution. So you do the back door. But the back door is still going to be open for people up to 400,000. So there's a lot of people who are can do a regular Roth but they're going to be able to backdoor because they're in this window up to 400 grand. So and then of course over 400 grand, the backdoor is getting shut, locked, bolted. You're not able to use it.

Ryan says, can you explain how I can become an accredited investor under SEC rule change? Something about holding insurance or life license.

Oh yeah.

Do you have something to say on that?

Yeah, yeah. So certain licensed professionals kind of qualify as an accredited investor.

Is this under the new bill or current law?

This is current law. This was a, this was an SEC regulation change. It just came this last year. So it's maybe three, six months ago. So and I wrote, I have an article on Entrepreneur on that actually. So you go check out the article, article at Entrepreneur. But that I don't think it applies to insurance but it is for like registered investment advisors. Certain financial professionals that are licensed by FINRA typically are ones that are getting able to qualify as an accredited investor even though their income or net worth doesn't qualify. They qualify under license.

A license. And anybody interested in that just go to the SEC website and that's Sierra Echo. Let's see. Charlie. Sierra Echo, Charlie.

Yeah, that's not the SEC football conference. This is the securities and Exchange Commission. And but again I do have an article on entrepreneur. If you're on Entrepreneur now, just type in Matt Sorensen is one of my last three articles. You can see the details on. I do have the professions they noted. I just can't remember them all. I don't remember insurance being one though.

Oh, and Abigail, I love your question. She says should we rush into transferring our IRA into a self directed IRA before this bill gets passed. Abigail, I am glad you asked that. The only time you, I'm going to say it this way first you only transfer your Roth or traditional ira, whatever IRA you have to a self directed IRA when you have something that you want to buy that a self directed structure would be necessary. If you're enjoying just buying stocks, bonds and mutual funds, leave it where it's at. Now we have a crypto Roth IRA structure at directed IRA here if you want to buy crypto assets, which almost is arguably a self directed strategy because Wall Street's not providing it. But don't rush to go self direct anything unless you have an investment that you kind of have in mind. Now sometimes it's good to get into that position as you're out shopping because you want to be ready to go. But this law isn't going to say I don't Know how to say like, you don't want to rush to go. Do it because this law is coming. Do it because you want to invest. We'll figure it out later.

Yeah, yeah, no, I totally, I totally agree with that. And like, you know, a lot of people aren't ready for it. They don't have a deal and a lot of opportunity. They're still kind of getting enough in there to just save. So it's okay.

There's.

They're saving, investing and self directing. Okay, you gotta save, save your money. Just learn how to invest it, even if you're just buying the S P500 or something. And then there's self directing and taking it to the next level. There's some questionnaire from DM. I've seen a number of questions about 401ks. Where can I find a trusted company to set up a solo K? You're looking at it.

Type it in there. We have lawyers.

Yeah, you can we set them up there. Contact us. We do solo ks and have been doing them for over 10 years.

Yeah. And find people. There are websites out that are like, you can set up a self directed 401k here with us and the solo 401k this and the solo 401k that. If they're not providing, maybe the offer for a consultation with a real lawyer to explain why you're doing it, how to manage it, what to expect, how does it fit into your structure. Please just don't go, click, click, click and set it up. And then call our office and go, what did I do? Because it can oftentimes cost you more fixing what you did just with a click, click, click. Kkoslawyers.com We've got two options to help you get the right 401k with an attorney consult. In fact, we're doing a special in a couple months if you're not in a hurry to help you get the right 401k.

The wills he asked, are crypto, IRA and 401ks risky under this new bill? No, our crypto accounts are, you know, we do them here at Directed. You can do crypto, IRA, crypto, 401k. We link through Gemini. Those would not be affected. Now if you did an IRA LLC to do your crypto, which a lot of people, early adopters, doing Crypto back in 2017 when we started helping clients on that, like you may have an IRA llc because that's really the only

way to do it.

You may need to make some adjustments if this bill passes. But again, our Recommendation is contact your senator, contact your congressman, do your part. That we're all trying to do collectively here to let them know this is a bad idea. It takes away investment control from everyday people.

Okay, and this will be my last comment then. Matt can throw one down. Is Angie says, I think New York is like that. New York lets you have a C corp. Well, for federal purposes, you're an S corp. They don't let you do that. They make you do that. And I hate it. What I'm trying Amethyst or that says Minnesota let you elect to be a C corp at your state level. Okay. That doesn't mean it's a good thing to do. I hate C corporations 99.9% of the time unless I'm doing some unique healthcare planning. So I'm Angie, I know New York City makes you be a C corp even though you're an S corp for federal purposes. It's not that you get to elect to be a C corp in New York. And I would never freaking do it. So thank you for letting me get upset because I hate the C corp strategy. Okay, Matt, final words.

Yeah. Okay. Well, this is. Someone asked, what is the name of your podcast? Jennifer asked. We have two podcasts, the Main Street Business podcast, which is more just tax legal. A lot of stuff that, you know, Mark's doing here on the live. You just give us, both of us with where that's, you know, going to turn you off. I don't know. And then we have the directed IRA podcast, which is more for self directing. Some stuff we're talking about. Which, by the way, I saw another question here. I thought self directing was about picking what stocks you want to buy. That's not self directing.

That's part of it.

That's you're picking what stocks you want. When we say self directing, we're really talking about my IRA can buy real estate. I'm not talking about like a REIT or a big corporate tick or something tick or something we're talking about. No, the duplex down the street. Your IRA can buy that and get the rental income and receive the gain when you pay it off, like, or when you sell it. So, like that's what we're talking about here in self directing is taking Main street assets, Real estate, startups, small business. Those are assets. All that. Yeah.

Mine you can buy cows in your ira. You can buy mine. Crypto mines in your ira. Now, Kazusa, I'm sorry, I'm going to do one last one. I already have a self directed IRA account with you guys, but not doing anything yet. Can I still buy stock in the stock market or should I transfer it back to a regular crappy IRA with Wall Street? No, no, no, because Zusa, we have that option. If you're like, I just want to buy stocks for now.

Yeah, you can. Like you have a brokerage option. You can just buy a mutual fund or buy the spy by the S&P 500 or you want to buy Apple,

whatever you want, transfer it over to crypto. Even you can say, I want to buy a little crypto, a little S P500. You can do both. So we want you to be safe here investing what you want to invest, even if it's Wall street. But have the option within a phone call or website interaction with our team who are amazing. You can make a change quickly when your account is over here into Wall street or self directing or crypto, Gold, silver, whatever you want, you got it. All right?

Okay.

Okay, everybody, thanks for being here. Part of a live next week we will be here at four o'clock again. We've got lots of workshops in the fall. We got our Phoenix workshop on self directing. Check that out on our website. Also be in Dallas, Chicago, Orange County, Honolulu and a virtual broadcast early in December. These are all about year end tax plannings. We're going to have something to do with this new bill. So you want to stay tuned. Thanks everybody. See you next week.