Legal Tactics to Succeed In Your Business with Mark J Kohler CPA, Attorney

Hey, everybody, thanks for taking a quick second to see what this live broadcast is all about. I'm your tax and legal specialist. I'm here for you. I want to do some Q and A and talk about legal tactics for you to succeed in your business. You're a small business owner. We love to talk about making money. We sometimes like to talk about tax savings. We never want to talk about the legal stuff because it's boring and it's a pain in the butt. Well, this is your chance to just focus on it for a half an hour. I'm here for you. I'm a licensed attorney and cpa, small business owner, real estate investor, myself, partner in a law firm. I'm here for you. So I'd love you to type up any questions you have about legal issues you might be facing in your business. Try to keep it short and to the point. I've got my team here. They're going to throw out the questions as we get going. But I want to cover. Let me see, I've got my cheat sheet here. Four topics. Four topics that I know will save you money. And so we're going to talk about maintaining your entity. If you have an LLC or corporation, what do you need to do to keep it strong and that corporate veil protecting you? Number two, if you own property or business assets, are they in the name of your business? And how do you do that? Number three, I want to talk about contracts. What should you be doing in your contracts with others? Things to avoid some important things to include that sort of thing. And finally, partnerships. If you're partnering with someone, what's the best way to partner? Now, everything I just threw out is probably a semester in law school or a full day's seminar with fun stories and examples. And I've got chapters in my book on this, but I want to summarize it as best I can in this short time with you. Today is July 25th. It is 3:15 Mountain Time, 4:15 Central, 5:15 Eastern, 2:15 Pacific. This is live. So I want you to bring up any questions or topics you have. This is not something I shot previously. We're listening to you people, so use and abuse me. All right? Also, I'm going to be giving away three different books today for any of you that share this video. So if you can share it on your social media. Social media platform. My team member, Rosalie Phan. Tomorrow morning she's going to raffle off three books. The Business Owner's Guide to Financial Freedom. The Tax and Legal Playbook, second Edition, the Game has changed. Brand new book come out that just came out this week. And then my eight steps to growing and starting a business. Eight steps with over 60 videos, webinars, podcasts, and a workbook that gives you a business plan, a strat plan, and a marketing plan when you're done. This is huge. 99 bucks on Amazon right now. And I'm going to give one of these away today. So listen up, we'll talk about that. And I'm going to announce last week's winners. So I'm here every Thursday, Wednesday or Thursday answering tax and legal issues. So please continue listening. A big shout out to Ryan Shea, the CEO of Entrepreneur, who's out there looking to protect your American dream with millions of business owners around the country. So get your copy of Entrepreneur magazine, sign up for their social media page and their newsletters. I know it'll be a huge resource to you. Okay, let's get into it. And I'm going to be fielding your questions as we go. So number one, let's talk about maintaining your entity. Now, here's what my normal structure looks like for probably 90% of my business owners. We start out with a foundational trust. This is your revocable living trust, will set up to protect your assets if you die so there's not a bunch of lawyers, those blood sucking lawyers taking away all of your assets from your family. Your trust should own your home. Your trust should own your LLC that owns your assets or rental properties. We have a line down the middle. Over here is your sole proprietorship, your llc. And ultimately, as you make money, you're going to graduate into an S corporation. And guess who owns that. You're right. Your trust. I want life Insurance, retirement accounts, IRAs, 401ks, all going down into your trust. This is the trifecta. Your trust, LLC and S Corp. Well, why did we do these entities? An LLC doesn't save taxes. An LLC protects you from. I shouldn't. So anyway, this LLC is freaking awesome. This LLC will protect you if you protect the corporate veil. It's like a blanket that if you don't use you to throw it on the ground, you're going to be cold during the football game this fall. You got to use that blanket properly. So number one is with LLCs and S corporations. And let's make a list here. Maintaining your entity, maintain your entity, Maintain number one. I want you to set it up properly. Guys, gals, everybody out there. One sheet of paper from LegalZoom is not going to cut it. You need an operating agreement. You need bylaws, you need minutes, you need a corporate book, you need stock certificates, membership certificates. And I know some of you are thinking, well my state doesn't require that with an llc. Yeah, good luck with that theory. When you go to court, you ever watch Judge Jude Legit and you got to use it. A lot of people say, well I don't believe in God. Yeah, well go out under the bus battlefield of a war zone and you don't hear anybody in a foxhole saying I don't believe in God. When the bullets are flying, everybody's praying, well when you go to court you need to use that llc and you're not going to be saying, oh I don't need to do that crap. You're going to be up the night before making sure your LLC and corporation is legit. So make sure you do it now before the bullets and the bombs start flying. That's number one. Number two, you need to be doing your annual minutes again. Some of you are going well with an llc. I don't have to do that. Yes you do. You need to freaking maintain your llc. And it's awesome. You can go to Vegas for the weekend, go down to New York, Florida, Hawaii, take a weekend and have your annual meeting. You should have on your board of advisors or board of directors which we set up in every LLC or corporation. Your family, your friends, your spouse, your kids. Maybe not your family, maybe the people you like hanging around with, put them on your board and go have a board meeting once a year. It's a great tax return. Write off and you're going to freakin have it in your board book, in your LLC book, in your corporate book. That's what's going to make your LLC more legit and makes your blanket thicker and stronger. Finally, you're going to use the name of your entity on everything. I want your entity on your business cards, on your letterhead, on your website, and I want it on the contracts. It's not you renting a copy machine, it's your company. It's not you leasing a vehicle, it's your company. It's not you buying a rental property, it's your llc. Your LLC needs to be doing business on the lease agreements with your tenants, not you. I better not see your name anywhere. Now we could add privacy to this and mail forwarding and I don't want your name maybe in the name of your LLC when you're trying to hide assets. So much to talk about here. So that's number one, is maintaining your entity and I'm just getting started. This is a chapter in my book on asset protection. Literally, just maintaining your entity is a whole chapter. And it's fun reading with good case studies. All right, now a couple questions. Let's see. The Next Frontier. Whoo. Little Star Trek fan.

Once I set up a self directed ira, an llc, and then purchase a rental property, will I be taxed on the rental income?

Okay, well, the Next Frontier wants to talk about taxes, and I'm here for you, so I will answer that question. So they said if. Now this is cool. We use our little diagram here. In fact. Hey, can you throw me a red pen? Let's throw. Let's do a red pen real quick. Okay, so what he said or she said, the Next Frontier. Thanks, mallory. Is your IRA, that's right here, is going to form an LLC. Very common. We use directed ira.com. great custodian. With good fees. Your IRA opens an LLC of which you can be the manager of. So you're the manager of this llc. Now, you don't get paid to manage, and the LLC is not going to pay for your cell phone. That's prohibited. But you can sign all the paperwork and run this LLC even though your IRA owns it or your 401k. Pretty freaking sweet, right? I got a whole chapter on that in my books. Now, the LLC goes and buys a rental property. And the Next Frontier asked, do they pay taxes on the money this rental property makes us? Is that money going to go to you, the manager of this llc? No. You don't pay any taxes on that money because you're just the manager who really owns the LLC, the IRA. So your IRA can not only buy stocks, bonds, mutual funds, ETFs, all those different investments in Wall street, your IRA can also open up an LLC, start a food truck, a hair salon, a restaurant, buy rental property, storage units, fix and flips. This is the theory or the practice? Not just theory, the technical practice of self directing your rental, your real retirement plan. Sorry, self directing your retirement plan. Got tongue twisted there. So anyway, Next Frontier. I hope that was helpful. Any other questions? Maybe on an asset protection question, Maybe on our topic today. I appreciate that. Okay. This is Jawad. Jawad. Okay, Jawad. What's. What do we got?

Currently owning a food business, solo property shift. About to start a restaurant with a couple of people trying to partner up with other people going into food business centers.

Okay. I love it. Oh, question.

How going into business elsewhere, how should I structure the whole team? Export with satellite llc. What should I pay attention to? What should I pay attention to in the process?

Okay, Jawad says he's forming a partnership. I'm going to go with a male on that. Jawad, if you're a female, I apologize. I'm just going to go with the gender. He. For a minute. So he wants to form a partnership. He's going to go into the food business and he wants to maybe do a food truck or a restaurant or catering or something like that. That's cool. I don't need to know the details. What he did say was he's going to have partners and how should we structure this? Well, I'm going to jump to my fourth topic today, which is partnerships and how to legally be careful there. And then I'm going to answer the question of specifically how to structure it. But let's just talk about partnerships for a minute. This is so, so important, because here's the deal. You have a bad contract, you're going to have a bad deal. Now let's think about that for a minute. If I'm going to have a bad partnership agreement, I don't care how good this restaurant deal is, you're going to end up failing. You've got to think about your partnership agreement. So anybody out there, if you're partnering with anyone, what does your partnership agreement look like? Your joint venture agreement, your LLC operating agreement, your corporate bylaws? People, do not rely on a freaking napkin at Denny's. Do not try to do this via email. Do not do it via handshake. Sit down and do it freaking right now. I'm not saying you've got to spend $5,000 on it with a lawyer. We give a lot of our clients some basic templates to get started, and then we can review it for a few hours at Most, maybe spend $1,000 if we have to, to make sure you're protected. If we do an LLC, we can do it for under $1,000 and make sure you've got all the right partnership provisions. Generally, some people are going to spend more time on it. We get it, but don't think it has to be expensive. Jawad, do the partnership properly. So the first thing I want to make sure you do is document it. Make sure it's in writing and signed by both parties. I'm in a huge deal with a client helping two clients break apart their partnership message, because they don't even have an agreement. The hundreds of thousands of dollars at stake, no written agreement. So have a JV agreement, have a partnership agreement, have a letter of understanding. That's Another type of agreement you could use. You could have an llc, you could have a corporation. All of these different structures will help you sit down and write it. Now, the next thing is talk about the good, the bad and the ugly. Jawad, don't just sit down and say, oh, if we make a bunch of money, how's we're going to split it? Ask the question, what happens if we have to put in more money next month? What happens if we all have to come in here and work five hours a night? Are you guys going to do it? Are you gals going to do it? What happens if we have to go get a credit line? Who's going to sign on that? You have to ask the hard questions before you go into a partnership, and I'm going to put that. Ask hard questions. Everybody wants to talk about making money, but they don't want to talk about the hard things of losing money. If your partnerships don't have the right answers and your partners seem a little skittish when it comes to the hard questions, you got the wrong partners. And then finally, I'm going to just say this. If someone's pressuring you to move quickly, that's when I want you to slow down. Promise you there'll be another deal next year, next week, next month. Don't feel pressure from any partners, so slow down. And if someone, I'm going to say, do your due diligence on your people that you're going to work with. Do the due diligence on the business deal. Look at the business plan. Run the numbers, people. Be careful of anyone in your church, your neighborhood, your family. Business part club, a real estate club. Just because they're in the same club of you doesn't mean they're not going to rip you off. Be careful. Pay someone just for an hour to look over your shoulders, it'll save you a ton. Now, the structure, Jawad, here's the structure. I'm going to come back to property on title and contracts in just a minute. But here's the structure. If you're doing a restaurant, you have two options. The best option I'm going to start there is you're going to set up an LLC for the restaurant. This is going to be their business right up here, the restaurant. And each partner is going to have their own S. Corporation. That's going to save you a ton in taxes and it's going to allow you. Now, some of you may go, oh, my gosh, that's overkill. Hear me out here. This is going to make Money. And it's going to be doing all sorts of things. But. But guess what? LLCs don't save taxes. They protect you. And define the partnership. If we're going to save taxes, we're going to do it at the S corp level. This is where Jawad's going to be on salary. We're going to have pass through income. We're going to get the 20% deduction. I'm going to write off his home office. His spouse and kids are going to be at the business. Not up here, but down here. Oh, and Jawad's going to also be doing an online business. I have one S Corp. I have one S Corp. Mark J. Kohler Inc. But it owns part of a law firm, part of a real estate project, part of an accounting firm, part of some online businesses. Now, my rentals are over here. See, I put my assets on this side, but. But keep your 1s corp as your parent company, and that's the way to do it. Now, the other option, which is kind of, I don't know, let's kill another piece of paper, is to do a corporation right off of the. Right out of the gate. And I'm only going to do that with husband and wife, parent, child, maybe. I don't want to have an S corp for the restaurant. I want. If there's partners involved, I really want to make sure. But this is an option. You can do it. And I'm always constantly redoing them because they're a freaking mess. So. So be careful there. I don't like it. Okay, Norman, what do we got?

Norman, back to your opening statement. How do you put someone on your board?

I love it. Norman says, all right, let's go back to here. He says, how do you put someone on your board of directors or board of advisors? Let's get the term down first. In LLCs, we use the term board of advisors. That's what we put in our operating agreements for our clients. When you set up your entity with that online service, they probably didn't talk to you about it. You just tried to save money and do it online. I'm not saying that was you, Norman, but that's common. So what we do is on your annual maintenance, when we do your minutes for the year, and if you haven't done it yet, this is a good time to do it. You're going to say, I hereby, as the member of the llc, call the following three to five or seven people on my board of advisors. You write down their names, you have a meeting Usually over Ruth, Chris or Applebee's or Chili's, and you have a little dinner and you say, hey, let me tell you about my business this year. And here's my business plan. Here's my marketing plan. What do you guys think? That's what the purpose of the board is. So you literally can do it yourself. Everybody signs it, and it goes in your corporate book. We charge 150 bucks a year to do all your minutes and create your board of advisors or directors, if you want. 150 bucks. It's called our company maintenance plan CMP. And I'll just give you a quick heads up here. You can go to our website and just talk to Becky Lloyd. So go to KKOS lawyers and talk to Becky Lloyd. That's kkoslawyers.com and Becky Lloyd is the paralegal in charge of our company maintenance cmp. You can call us, email us, and just say, hey, I want to get on the company maintenance program, do my minutes, and set up my board. 150 bucks. Now you can do it yourself. It's done through the minutes. You. You don't file it with the state. You don't give it to anybody. It's an internal document. If you ever get audited with the irs, you have it. If you're ever in a lawsuit, you pull it out. Now with a corporation, you have a board of directors, and we're going to do that through the minutes there. Just like an llc. Board of directors, board of advisors. You're going to do it with a simple meeting while you're breaking bread at melting pot, dipping it in different cheeses. I don't care. Just go out to dinner and do your meeting. Okay, next question. This is Diego. What do we got?

Diego, does each rental need its own individual llc?

Ooh, good. Diego says, does each rental property need its own llc? Now, that's a good asset protection question. And that's going to bring us up to topic number two, which was property on title. So here's the deal. So I've split my business in two. I've got my trust down here. I've got my business over here, and maybe you've got your day job. W2, you've got a small sole proprietorship online. You've got an llc, you've got an S corporation. This is your operational business. Diego says, well, I've got rental properties. And let's say Diego has three rental properties. Well, he's got, I really think, two or three options. Option one. Let's do three options. Option one. Is he could create one LLC and put each property in that same llc. Option two, he could create three LLC and put a property on each one. Option three, he could create one LLC and do baby sub LLC called a series llc. And here's where he would put his each rental in the baby sub. Now let's look at option one and two. What's good about option one? Well, it's cheaper and easier. It's one llc. But what's the con? All my eggs are in one basket. Now, Diego, if these are low income rentals, maybe not a lot of money down, not a big chunk of equity in these, I'm going to maybe put them all on one llc. I don't care. But if you've got a golf course rental, an Airbnb loft worth a half a million, a commercial property, I might set up separate LLCs for each property. Here's the big takeaway. Watch out for law firms or online service companies or some company calling you from Nevada that wants to sell as many LLCs as you want. It is not easy to maintain 10 LLCs for 10 properties. It's expensive. So you've got to look at the cost benefit analysis. And if someone out there is telling you, oh, one sheet of paper is okay, you don't need to listen to Kohler and do all that company maintenance. Ask them this. Will you please put in writing that if I get into a lawsuit and that I didn't do all that maintenance, the LLC will protect me and if it doesn't, you'll be liable for it. They're going to say, bull crap, no one will do that. I'll do that. A legitimate law firm and lawyer will do that. They will stand behind their recommendation because I carry malpractice insurance. But at some bozo Nevada telling you that you don't, as soon as you ask them for that letter of comfort, that comfort letter of legitimacy, they're going to run Forest Run, and I'm going to ask you to do the same. Get the hell out of there. So be careful with that. So don't set up a new LLC for every property if it's not necessary. Finally, in about 15 states, you can set up what's called a Series LLC. Now, at the back of my new book, I have a table in the back that tells you 50 states, which states have series LLCs, which ones have cope or charging order protection, which ones protect you in a foreclosure or a bankruptcy. This is wonderful, great asset right here. And I paid a special research attorney to go through and update this when my new book came out this month so that you have the most current and cutting edge information. You can get it for 15 bucks, Amazon prime or my website or. Or Barnes and Noble Entrepreneur website, whatever. Okay, DL, what do we got?

LLC per diem and claim that payment off their taxes.

Can an LLC claim per diem and take that deduction? Okay, DL. Now, DL said, can you use the per diem and write it off in an llc? Now, what he says, per diem, you're talking about usually per diem for travel, per diem for hotel, per diem for meals, that sort of thing. It's a GSA Government Service Administration website. You can go to and you can type in annual per diem amounts allowed for hotel and dining. And it's a great little write off. What you want to do is think about what the per diem amount is. Let me give you the basic answer. Yes, you can write off the freaking per diem amount in your llc. The question is, do you want to? Because you get to take the greater of the actual or the per diem. So say I have a client that goes out to dinner and they go to Mastro's, which is a wonderful, amazing restaurant, and you spend 200, $300 on dinner. It's your anniversary and you talk about the business. I want to write that off. Well, the per diem may only be $80. So you're going to take the actual expense for dining rather than the per diem. Let's say you're staying at a hotel in Chicago for business one night. The per diem is $80 or no, it's probably going to be around $120. But you stay in a Motel 6 for $60. Well, you're allowed to take the per diem because it's greater than the actual. So you've got to look at travel, dining, hotel, all these different issues and talk to your accountant. But if your LLC is doing business, you get to take the per diem or actual, whichever is greater. DL, I hope that helps. It's kind of a complicated question. Make sure you talk to your accountant. Give us a call. Call me, and we can help you out with that if we need it. Okay. Question from Herb. What's up?

Can I lend money From a sole 401k? Instead of starting interest, Can I set up the loan document so that I can give?

Okay, Herb. Anybody want to talk about world peace? Oh, gosh darn it. Thanks, Herb. Okay, Herb said okay. He's got a 401k all right. So if he has a 401k, that means he probably has an S corporation. The S corporation is sponsoring a 401k. He says, I want to go loan someone money and they're going to pay me interest. Alright, you could have 200 grand in the 401k and you could loan it out to someone and you could get interest payments back. And I have a lot of clients that do this. They get interest back plus points and they do hard money loans out of their 401k. Alright, so your 401k can actually give loans to other people. We set up solo 401ks for either 499 or 999. We have special, you know, plans out there on the web. We do the same price. Give us a call. So, Herb. Sorry, I'm just making sure everybody knows what we're talking about. So if you have a small business, you can set up your own 401k and we help our clients do that. You can give loans away and loans out and get interest and points back and that's great. You may not want to buy stocks, bonds or mutual funds. You do loans now, Herb says, going to loan someone money and instead of points and interest, I'm going to get a share of the profit. That's not a loan, Herb. That's a freaking partnership. And see, I talk about this all the time. So if you want to, I've got videos on my website called the Tax and Legal Library where I break down the difference between a lender, a partner and a security. See, think about this. Let's say he's going to go buy Facebook stock with his 401K. That's a security. Let's say he's going to go loan money. That's a loan. Oh, he's going to go partner with someone and get a share of the deal. That's a freaking partnership. So you're going to get a share of an LLC and that percentage is going to pay you. Can you do it? Hell yeah. I love it. You can do it. It's an LLC partnership interest going back in profit to your 401k, but it's not a loan. And anybody out there that's trying to sell you, oh, it's a participating note. They get points, interest and a share of the profit. That's a partnership. The IRS has said it, courts have said it. But some bozo out there, typically from the stage of some real estate club, is telling you that you can do a note where you get a share of the profit. That's called a general partnership. And if that deal goes bad, guess who's going to get sued. Herb, you're going to get sued because you're acting as a general partner representing your 401k in a partnership deal. Be careful. Make sure there's an LLC involved. We've been doing these LLCs for 401ks and IRAs for 20 years. We know what we're doing. If someone says you can do it differently, have them put it in writing that they'll stand behind it. If you get in a lawsuit, and because they're not a lawyer, they're gonna run away. So get it done right and don't cut corners. Can you do it, Herb? Yes. Just do it right. Next question. Mrs. Strong, 180.

My accountant recommended E rather than an LLC with the same S corp pass through part the board minutes. Other part was an added top to dot com location.

Say it one more time. Mrs. Strong said her account recommended an S corp, not an llc. Love it. And then she said her accountant said the board minutes were an extra cost. Okay, you're going to love this, people. First of all, when you set up a corporation, is that legal work or is that accountant work? That is legal work. You should not have your accountant setting up your corporation. The reason why they're charging you more for other crap is because they shouldn't even be doing it. And I know I'm pissing off some of you CPAs out there, but it's legal work. Should lawyers be out there doing tax returns? No. Unless they have an accounting firm and are trained to do tax returns. You tell lawyers to stay away, don't you? Lawyers should not be doing tax returns. Will CPAs be setting up corporations? No. It's legal work. Man, I'm throwing down today. I don't know what it is. I'm drinking a rock star over here, but man, I'm getting crazy. Here's the point, Mrs. Strong. Mike. Oh, Mike. Oh, he just corrected. I thought it was Ms. Strong, as in Mrs. Okay, this is on Mallory. Mike, don't be pissed, okay, Mike. Sorry, bud. Mike Strong, 80. Because he's benching 180 all the time. I get it. Okay, Mike, here's the deal. Use CPAs for taxes, use lawyers for entities. And I know I'm a little self serving because I'm both. I have a law firm and accounting firm, but I went to school for 12 effing years to do that. So. Use accountants for taxes. Use lawyers for entities. And when we set up an entity, a corporation, it includes the bylaws, the minutes, the corporate book, the stock certificates, and everything. We do it for 400 bucks. If you just want to work with a paralegal, 800 bucks, and you get to work with an attorney. That's it. 400 or 800. So we'll compete with the legal zooms of the world and do it for cheap if you want. Or you can talk to a lawyer, a real lawyer, for an hour. That'll help you set it up, and it includes everything. Now, I don't know what you ultimately paid Mike for your LLC or your corporation. And if doing the minutes separately cost more, I don't care. I care what the total price is. And you shouldn't pay more than 800 bucks with a lawyer setting it up. Now, the next point was Mike said his accountant recommended an S Corp, not an LLC. Well, Mike, I love it. I have videos on YouTube. When should I be an S Corp? Well, if Mike has a business and he's out there making money and he's making more than $40,000 a year, so he's netting more than 40 grand. I want Mike to be an S Corp, too. Mike should be an S Corp, and he can make money off the web, off his books, off drywall, off hair and nails. He's got an S corp that can do all sorts of business. 1s corp in your life, Mike. Oh, you want to partner with me. Oh, and you want to go do a fix and flip or a rehab or open a restaurant. That sounds great. Listen, everybody, Mike wants to partner with me and do a restaurant, and he wants to save taxes, too. Okay, so if I want to save taxes and I'm going to own a restaurant, what entity do I need? I need an S Corp. Do I want 2s corps in my life? Do I want another S Corp with Mark Kohler? Hell, no. I don't want another S Corp in my life. I have 1W2 and 1 401k and my board of directors. Mike's got his own S Corp. Oh, and I have my own S Corp, too. So my S Corp is going to partner with Mike's S Corp and we form an llc. See what I mean? The LLC is for the partnership. The S Corp is for your world. This is Mike's world. This is Wayne's World. They're two different things. So I want two S Corps partnering in an llc. And, Mike, don't listen to your accountant if they're giving you legal advice. Damn it. See what I'm saying? Let the lawyer do his job. On the llc. Let your accountant do the freaking tax return. That's what they're supposed to do. Whoo. Man, I hope you guys are liking this. Man, I'm pissed. I don't know what it is, man. Have we been going really a half an hour? Is it almost up? Okay, let me say this. I promised you four topics. Maintaining your entity, which we already talked about. Number two, we talked about partnerships. Be careful. Do due diligence on your partners because make sure it's in writing. Number three, Diego brought up LLCs, and I said, how many properties should be in your LLCs? Well, what we didn't mention there, and I kind of said I was going to do it, is the property should be deeded to the llc. If the LLC doesn't own the property, then you don't have any protection. If I own the property, I'm liable. If my LLC owns it and I'm the manager of the llc, I'm protected. So you got to transfer title. And you're saying, well, Mark at Freddie, Fannie Mae and Freddie Mac, I already set up my loan and my name is on. Who cares? It doesn't matter. They're not going to call the due on sale clause when you transfer the property to your llc. And Mallory, our paralegal that's over here hiding, and she won't come on camera, said she will help you any day of the week. Mallory, come here. Mallory. Come on. Come on out on camera. You got to meet Mallory. She is our paralegal doing deed transfers all over the country. Tada. Mallory, how much do you charge to do these?

Depends on the state. 150 to $250.

See? 150 to $250.

Yep.

Any recording fee plus recording fees. So if I live in. If I have. I live in California, I have a Tennessee LLC and I have a rental property in Tennessee. What do you do? What do you do? You got a Tennessee property. Okay, I live in. So you're worried about the camera. They love you. Okay, I'm going to hold the mic over here. We have a California resident with a property in Tennessee, and they have a Tennessee llc. What do you do?

Transfer it into the LLC at the Tennessee.

Okay, and how much do you charge? And what's a recording fee in Tennessee? Approximately. What do you guess? About 110 bucks. So for $260, your property in Tennessee is now deeded to your LLC. Now you're protected. That's what Mallory does every day. She's transferring hundreds of these, isn't it fun. I love it. It's so exciting. So call KQS lawyers and get Mallory now. Get off. Get out of here. Okay. All right. Now. Okay, that's Mallory. We're working here together. We're a team. So she's one of our paralegals here that helps people do all their deed transfers. Number three topic was contracts. If you're going to do a deal, get a contract, get a JV agreement, get a partnership agreement, get a letter of understanding. We set these up with clients all over the country. I have lawyers that will give you a contract, and you can play with it and then send it back. And then we talk to you over the phone. We want to keep the cost down as best we can, so make sure your contracts are always in writing. You know what? Some people go, well, an email works just as well. Sometimes it does, sometimes it doesn't. Sometimes you don't want the email. Not just an email or a phone call. Okay, last couple questions. We got Saluto. Saluto.

What deductions can you take for an annual meeting held while traveling abroad?

Okay, Saludo says, what deductions can I take for an annual meeting while traveling abroad? All right, this is fun. Let's do it right here. Okay, first of all, when you do an annual meeting traveling abroad, you could write off the travel, which what I would say when it comes to travel is, that is airfare, my hotel, Uber, Airbnb. It could be baggage fees, it could be valet, it could be rental car. All this stuff is travel. Next, you get to write off meals. Meals is going to be 50% of whatever you spend, and you can take 50% of the greater. Right. We talked about per diems. You get 50% of the actual or the per diem, whichever is greater. So per diem or actual, whichever is greater, I'm going to take meals and travel. Also, you may have conference fees. You may have rental of a hotel conference room or something like that. Maybe you're going to attend a conference, but I want to write off travel and meals. Now, here's how it works. I know what Saludo is thinking. Okay? He's going to go to the Bahamas for 10 days. No, I cannot write off your annual meeting in the Bahamas for ten freaking days. Saluto. But I can write off the day of the meeting, the day you travel, and the day you travel back. Now, if you're making 100 or 200 grand in your business, I can write off more. If you're only making $5,000 in your business. I. I Don't want to have a big write off there because it could draw attention. So let's say I've got my weeks here. 1, 2, 3, 4, 5, 6. There we go. There's our weeks. Now, let's say I travel on Wednesday. So this. Okay, we're going to do this Sunday, Monday, Tuesday, Wednesday, Thursday, Friday, Saturday. Now, let's say I travel on Thursday. So this is my travel day. Is that a write off? Yes, it is. It's my travel day. Then I'm going to have my meeting on Friday. So there's my meeting day, and I take my board of advisors and we get in a room and we talk business. Fair enough. It's legit. Then Saturday, I travel back. I get to write off all three days. Now, here's where it gets good saluto. Let's say I do business on Monday. I only get my one meeting day because I can't abuse that strategy. But let's say on Monday I do some more business. Let's say I go to a conference, I go check on my rental property, I go meet with a customer, I go meet with a vendor. So I literally do business on Monday. Ooh, this is a special IRS rule. I get to travel back on Tuesday and write that day off, too. So I write off Thursday, travel day, business Friday. I get stuck in Vegas on Saturday and Sunday, and then I do business on Monday, travel back Tuesday. You get to write off all six days, 100% of travel and 50% of meals. Boom. See what I'm saying? That's pretty freaking sweet. I talk more about that in my book and also on my different videos at YouTube, so you can go check them out. And I'm going to do one last question. And this is Debbie. Debbie, what do we got?

What is the tax advantage of having your LLC funneled through an S corp?

Okay, good question. Debbie says, thanks for throwing me that softball. Debbie says, what is the vantage? And we'll wrap it up on this. What is the advantage of an LLC taxed as an S corp versus just a freaking llc? What's the difference? Well, let's do the math. We'll do it really quick. I also have a whole video on this on YouTube, maybe four to five minutes. And I have a chapter in my book on this, so you can study up on it. But let's compare an LLC or a sole proprietorship, because that's really what it is, or an S corp, and you could have an LLC taxed as an S corp. So you've got these two options. Now let's compare apples to apples. Let's say I'd make 100 grand. That's cool. I sold 100 widgets at $1,000 each. Or I had a hundred thousand this, 10,000 this, whatever. I make $100,000 and then I spend 25 grand on expenses. Cell phone, travel, dining, home office, computers, laptops, auto, blah. I spent 25 grand and I net $75,000. Alright, okay. You guys okay with that? I've got my two different entities, I've got two different bank accounts, two different Einstein. I make 100 grand here, I make 100 grand there. I spent 25 grand on expenses. 25 grand on expenses. Same expenses. You don't get extra write offs in a corporation versus an llc. I get the same freaking write offs and I net 75,000. This is what I'm going to take home and put in my pocket. Okay, what am I taxed as? Oh, I'm going to go to red on this one. Okay, well with an LLC or sole proprietor, I've got to pay self employment tax right out of the gate. That's called Suda Fuda. Fica. It's called the F word. Fica, 15%. 15% on 75 grand, that is $10,000. That's 15% what? $10,000 for the F word. Fica. Fica, I hate that word. Now then I've got to pay state and federal tax if I'm in a state with state tax. So I've got to pay fica. State and federal. I hate it. Oh, but not with an S corp. Here's the cool part. With an S corp there is no fica, there is no Obamacare, and there is no self employment tax. Oh, I said that. No fica, no Obamacare and no corporate tax. Woohoo. And you're saying, mark, I can take that entire 75 grand and not pay any fica. You're smoking something. You're in a state with recreational marijuana. You're nuts. There's no way you can do that. Oh, but there's a catch. It is true. You've got to take a little bit of a salary. Now I have a whole payroll matrix in my book and on my videos on YouTube and on my website I have a whole 30 minute video where I walk through this whole thing. You can go to my website and check out the tax and legal library. Lifetime membership. I've been doing it for 10 years. All those videos are updated regular and you can watch them over and over again every time I update them. No extra cost. So here's what's cool. I take my $25,000 salary, I pay my FICA and then the rest comes out as pass through K1. So now I escaped 15% on $50,000. What? That's $7,500 in savings. So this is why. Listen, I'll finish on this. Every dentist, doctor, engineer, cpa, accountant, lawyer, restaurant owner, plumber, electrical contractor, we're all S Corps. That's what we are. We're all S corporations. Every dentist, orthopedic surgeon, eye doctor, we're all S Corps. Brokers, realtors, agents, you all are S Corps. If you make more than 50 grand a year net, the S corp saves you more than it costs and then some. Get out of the freaking LLC and get over to the S Corp. You can call my office, you get an attorney for a full hour, tax attorney helping you for 800 bucks. Set up your whole S corp in any state in the country. Now I'm not an infomercial. Shop around, go somewhere else, I do not care. But don't go to a frickin website and do it click, click, click. I saved $300, I saved $4. And then call me up and go. Now what? Mark, you're going to be right back where you started. Be careful doing it online and going the DIY route when you don't know what the hell you're doing. So start your first entity with a tax lawyer at an office like ours. Weekly newsletters, weekly videos helping you. Then next time around you might be able to do it yourself. Be careful. Alright, I want to tell you the winners of the books were last week and I'm going to give away three new books now. For any of you that share this video got financial freedom, went to Crystal, Karen Dodara and then Manny Salazar won the tax and legal playbook right here. That was Manny. And then Daniel Barrio Jr won the financial freedom book. Sorry Daniel, I didn't mean burrito, I meant burriero Burero. Thank you, Daniel. Forgive me. Okay, now I'm going to give these books away in the morning and last call in two weeks. I'm going to be in Hawaii doing a self directed IRA summit. You can come over if you're in Honolulu, Hawaii area. I'm going to be on the north shore and I'm also doing five workshops around the country this fall. 150 bucks right now. Early bird special, 150 bucks. I do lunch, I give you a workbook, I'm there with you for six hours and you can answer questions and I only do intimate groups of around 80 people. They sell out every year doing Philadelphia, Seattle, Orange county, and Chicago and Honolulu. So find the dates all@markjkohler.com it's down below. It'll be typed up in the messages there. Markjkohler.com and register for one of the workshops. You get a recording of it and you get unlimited access for another six months. Button blah. The bell. Whatever, everybody. Thank you. I'll be here next week. And maybe we'll just do Q and A on taxes next week. I don't know. Something cool. But. But every Thursday or Wednesday afternoon around 3 or 4 O' Clock Mountain, I'll be here. And if you're on my newsletter, you'll get little updates of where they at every week. Thanks so much. Keep living the American dream.