Epic Real Estate Investing - The EPIC Tax Exempt Trust | 533

Episode Date: December 4, 2018

Invest in the tax exempt trust and pay no taxes on your money! Generate big tax deductions! If you're doing it right, you can save hundreds of thousands of dollars! Learn what the tax exempt trust is, how it works, and how you can get the full benefit of all the deductions this year. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Did you know that up to 50% of your lifetime income will be wiped out by taxes? What if you could stop this madness? Isn't it about time you play on a level playing field with the wealthiest 1%? Now you can. Tim Berry, attorney at law, shares here each and every week current tactics and strategies that anyone can implement to hack the tax code. Protect your assets and keep what's rightfully yours.

It's time. for Tax Hacker Tuesday. Welcome to another episode of the Epic Real Estate Investing show. It is Tax Hacker Tuesday with my attorney and friend, Mr. Tim Berry. And on Mondays here at Epic, we show you new and creative ways as well as time on our ways of making money using real estate. And on Tuesdays, we show you how to keep it? Hello, Tim.

Hey, Matt. How are you doing? Doing well. We had a very lively episode last week. Went down all sorts of different paths. And we successfully brought it all around. to you just have to know how to play the game. Yes.

Right? I guess. The IRS and our government has given us certain rules to follow. They've given us a playbook actually. And you just have to be able to navigate it. And the one that has the best coach is the one that wins technically in this game, right? Indeed it is. So coach Tim, what are we going to talk about today on minimizing our tax liability?

talk about the exciting world of retirement plans. Doesn't that sound like fun? Oh, yawn. Especially for all of us, young people. Well, no, it's even more exciting for the young people because a lot of times I'll talk about retirement plans to people. And like you said, I mean, the young whippersnappers, you know, those people in their 20s and 30s, they're going to sleep, they're pouring more coffee. They're just, it's a nightmare for them. but then we start talking about tax-exempt trusts and how they can invest their money and not pay any taxes on it. And that tends to wake them up for some reason.

Okay. So tax-exempt trusts is what you said? Yeah, tax-exempt trust. All right. So give me a practical application or two. How would that work? Well, what you can do is, gosh, there's a lot of different places you can go. You walk in the front door and you say, excuse me, ma'am, sir, I'd like to set up a tax-exempt trust.

And these will work, you know, if you're 18, 19, 30, 35, whatever, no big deal. And so you just walk in there and say, I'd like to set up the tax exempt trust. They have you signed some paperwork. You've now got that trust. And now you can go out and do real estate deals inside this tax exempt trust. Okay. So why is it tax exempt? How does that work?

Oh, because they're set up for your retirement. What I'm talking about, I'm just changing the way these are presented to people in that we can talk now about IRAs. We can talk about 401ks. And most people don't get excited by them whenever we use the normal language, the normal title. But whenever they realize what they can do for them, be tax exempt, then it starts to get exciting.

And not only are they tax exempt, but if you get into some issues, they're exempt from the claims of creditors. Hell, we could even make them exempt from the claims of the IRS if you really get in trouble. And that's the power of these returns. retirement plans. And for the young whippersnappers out there, you know, in your 20s and 30s, thinking, gosh, I've got to wait 30 years, 20 years to utilize these things. Yes. Maybe you don't. Maybe you have parents who are over 59 and a half and they can gain

access to this money. And if you invest properly inside these things, it builds up. Parents have that money. And if you do it with a Roth account, they can take that money out after the account's been open five years and they're over 59.5. And that's completely and totally tax-free money. It just doesn't get any more exciting than that. All right. So if the young whippersnapper opens up the tax-exempt trust, the parents can have access to it if they're of age?

Well, what they can do is they can open up the tax-exempt trust for the parents. Oh, I got it. The parents have a business. We set up the tax-exempt trust for the parents. The young whippersnapper moves the investments over instead of the whippersnapper taking down the deals. It's the parents' tax-exempt trust that takes down the deals. And now whenever they make the money, chances are it's going to be tax-free money. Now they just have to have that account open five years, and they can start taking that money out

completely, totally tax-free, if done correctly. You have to trust your parents. I know, that's a big stretch for a lot of people. Big stretch for a lot of people. But, you know, let's forget about the parents for right now. And that's for the young whippersnappers for the older people like me, the elderly, shall we say, the infirm and the elderly. These tax-exempt trusts, they're great for generating deductions. I just talked to somebody who was last week, the week before.

They had been paid $100,000 a year for the last four or five years from their business. And in 2018, they weren't going to get a salary at all. they set up one of these retirement plans and they're going to be able to deduct $300,000 a year for the next three years from their business, even though they're not getting the salary. I mean, that's one of those holy shmoli events right there. Interesting. Yeah, so now they could plow, I mean, let's throw out a hypothetical. The business is still going. It has these $300,000 a year contributions to a retirement plan.

business doesn't have the capital to fund those so this guy can be moving in, I don't know, a couple hundred thousand a year into that business. And now let's say the business fails after three years and he dissolves it. If he moved 200,000 a year into it for a three year period, that's another $600,000 in tax deductions he got. So if you know how to work the rules of the game, these retirement plans can be absolutely phenomenal with the deductions that can be generated. Mm-hmm. So does the trust own the, like, the Roth IRA or is the other way around? Well, the tax-exempt trust is just another name for the Roth account or the retirement plan. I just wanted to use a sexier name. It's all about marketing, isn't it, Matt? Got it. Got it.

Come on. Get me the program, man. I know. I totally blew that one. Keep up with us. Keep up, okay? So, well, you could have gone with an even more spectacular name. That one made it really confusing and proprietary. Let's hear it. I don't have one off the top of my head. Oh, I got a fantastic one.

You ready for this? Yes. An epic trust. An epic trust. We could start a whole movement with that, I think. Super. But no, I mean, that's the cool thing of these retirement plans. And I guess going back to the end of the year theme,

the end of the year theme is you can generate big tax deductions with these, literally hundreds of thousands of dollars if you're doing it right and even if you got a just a joe six-pack situation you can still probably plow away 40-50 thousand dollars if you do things right um and let me just share with you a conversation i had gosh maybe two hours ago with the veterinarian this guy's making nine hundred thousand dollars a year and his financial planner had him in something called a simple IRA plan. And with a simple IRA plan, he's allowed to put away 3% of his salary each year. Well, his salary is minimal because most of its investments. So this guy is able to put away, let's say, $6,000 or $7,000 a year, generating a deduction of $6 or $7,000 a year,

even though he's netting $900. And that makes absolutely no sense. So if you're self-employed, if you have your own business and your tax advisor doesn't have you getting tens of thousands, of dollars and deductions for a retirement plan, something's wrong. Something is dramatically wrong. Yeah, I was going to ask, because I know there's a limit on that. I was like, how does that kind of save you a bunch in the fourth quarter? Oh, well, you can set these things up on December 31st, plow the money in, and life is good. In fact, better yet, you can set these things up, and then you can wait to October 15th of next year,

and then you can plow money into it, and you still get the tax deduction for this year. So you've got plenty of time. You just need to make sure things are set up and signed before December 31st. Fantastic. All righty. I like that one. Anything else on the retirement plans? No, I can't really think of anything else right now.

There's so many more aspects we could talk about on these things. But let's just keep it simple and say, if you're self-employed, if you have your own business, consider a retirement plan and make sure it's set up by December 31st in order to get the full benefit of all the deductions. Perfect. Well, thank you, Tim. Yeah, whenever you're ready to have Tim customize your epic trust, you can go to Taxhacker.com, answer a few questions about your situation. Tell Tim what you'd like to have happen. And his team, they'll take it from there. You'll be in great hands. And he'll even give

you a copy of his free book all around Trump's new tax plan, specifically what the press isn't telling you about what they're keeping a secret. So go to Taxhacker.com and we'll see you right here next week. Take care, Tim. You too, Matt. Thanks. That's it for today, as we dream of a tax system that works just for you. But in Until then, you have Tim Berry. See you next Tuesday for another episode of Tax Hacker Tuesday. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.