The Wolf Of All Streets - How Rich People Avoid Paying Taxes | KC Chohan, Founder & CEO of Together CFO

Episode Date: March 19, 2023

KC Chohan is the Founder & CEO of Together CFO, a tax advisory firm specializing in tax strategy for high-net-worth families. In this episode, KC shares his expertise on tax planning and provides insights on how wealthy individuals can protect their wealth and reduce taxes. He also offers advice for those interested in tax savings, emphasizing that significant wealth is typically required to implement such strategies effectively. https://www.linkedin.com/in/kcchohan ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/ ►►BITGET GET UP TO A $8,000 BONUS IN USDT AND GET MASSIVE DISCOUNTS ON TRADING FEES! 👉 https://thewolfofallstreets.info/bitget ►►NORD VPN GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/ Follow Scott Melker: Twitter: https://twitter.com/scottmelker Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Taxes #Crypto #Rich Timestamps: 0:00 Intro 1:45 Minimizing taxes 5:17 Charities 9:10 Not selling 10:40 Loans and interest rates 15:15 How much money do you need 21:40 What to do with crypto? 25:25 Own nothing control everything 28:30 Passing generational wealth tax-free 30:00 Trust vs personal taxes 31:50 CBDC disaster 37:50 The cost to set up the trust 40:30 Wrap up The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Warren Buffett donates $32 billion to the Bill and Melinda Gates Foundation, takes a full deduction for it, and then they turn around and go buy stock in Berkshire Hathaway, and they're sitting on each other's boards as well. There's something more awry there, right? The most corrupt thing you'll ever see, if you or I were to do that, would be in jail. The key is that you don't do it as Scott Malka, the individual. It gets a lot worse than that

because taxes will just be an afterthought. It's like an American Express black card. I've also heard wealthy people say that you should die broke. And then they'd say it's not communist. It's no secret that the mega, mega wealthy have complex strategies to avoid paying their fair share of taxes, right?

We've seen reports of billionaires paying $50, $100, $1,000, if not zero, on their yearly tax returns, even though you know that they've made billions of dollars. Well, it's sort of this black box. Nobody knows how it's done until today. Today's guest, Casey Choan, he administers these trusts and complex structures for the ultra wealthy and for people who potentially are not quite as rich. You can learn in this conversation exactly how those people legally avoid paying what you would probably consider their fair share of taxes. This could be actionable for you. Of course, you should consult

a professional if you have questions about it. But this conversation is extremely, extremely powerful. I think that everybody understands that wealthy people in the United States specifically have tax-efficient strategies to make sure that they pay as little as possible. Is that an accurate assessment? Absolutely. It's definitely the ones in the know and the ones not in the know. So for the ones in the know, can you talk about generally what kind of strategies, I guess we can start with the mega rich and work our way down. What kind of strategies are they using to minimize their tax burden? A lot of different things to start off with. Real estate

has always been used very widely by elite rich people, but the structures and the entity types, I think is the key thing here because that's what really differentiates them. So when you get out of like an industry, like real estate as an example, but you look at the structures and the entities behind that, you'll find that it boils down to one main entity and that is a complex trust. Yeah. Can you dig into what a complex trust is? I mean, you're basically implying that it's never owned in their name. They're the, they basically are the trustee of some sort of trust or someone they trust is the trustee of the trust and they're buying it through that entity to minimize the tax burden. But talk about how that works. Yeah, definitely. It gets

into like a huge spider web really, really quickly, right? So it's very complex and there's lots of moving pieces at any given time. But generally speaking, it's something along the lines of a multi-tiered system, a structure that's built that allows them to completely legally reduce their taxes and avoid paying those unless two things happen. One, they dissolve the structure, which creates a taxable event, which they would never really do. There's no real reason to do that. And second, they issue a distribution. Now, if you issue a distribution, regardless of if you're mega wealthy or a regular person or somewhere in the middle, then that creates a taxable event to the person receiving it or the entity receiving it more importantly, because there's ways around even

manipulating that side of things. So there's so many tiers and levels within all of this. And then to cap it all off, you never really need to make a distribution because there's other vehicles that these guys use, like issuing loans as an example. So you can issue a loan and that's classed as debt to whoever's receiving it, not income. And debt is not taxed. So there's levels and many different vehicles within those levels to maneuver all this stuff, not to even mention the charitable component. I'm sure you've heard of the giving pledge with all these billionaires giving 99% of their wealth to themselves in a trust that they fully control or a foundation, sorry, that they fully control.

So there's a lot of smoke and mirrors about this as well, but a lot of it you can easily track down. So loosely, the structure might be that you have an LLC, which then owns a trust, and that trust is a part of a web of trusts, which all potentially distribute or in some way operate back and forth without ever creating that taxable event that you talked about. You do your business, you do your investing within the trust, and you never distribute back. You give yourself a low interest loan, which you pay back to the trust. Is that correct? That's a perfect summary of it. Yes. So let's talk more about the charity side.

So that's a bit of smoke and mirrors, as you said, which is interesting because the press always sort of praises these multi-billionaires for giving away, quote unquote, all their money. But you just said they're basically giving it to themselves in some way. I know that it is going to charity one way or another. I think a lot of it is, but. A lot of it is. I'm not trying to take away from the actual charitable component,

which good is being done. That's not what I'm saying. What I'm saying is when Warren Buffett donates $32 billion to the Bill and Melinda Gates Foundation, takes a full deduction for it. And then they turn around and go buy stock in Berkshire Hathaway and they're sitting on each other's boards as well. There's something more awry there. Right. And then to answer the question on media, who do you think owns and controls the media in the world? It's all of the same people. So they're never going to say anything anything bad about bill gates who keeps funding all of these so-called projects and like you gotta look a few layers deeper at the amount of money that bill gates has spent on media or in the media funding grants funding scholarships funding newspapers like all all these media outlets are really controlled by the people that fund them so to be clear this is all completely legal within the parameters of the

existing system so there could be one argument that the system that the system needs to be changed we've obviously heard that very loudly from certain politicians. I'm not saying whether they're right or wrong, but as of right now, there's absolutely nothing wrong with this. And I've seen you sort of differentiate between the terms tax evasion and tax avoidance, correct? So tax evasion is patently illegal and tax avoidance is a description of these strategies, which are totally legal. Correct. Yeah, there's a fine line, but there's a big difference. It's usually going to be 15 years or so. But yeah, it's huge because they're like to Bill Gates and Warren Buffett and not doing anything illegal. They just know how to use the system to their advantage. And

Warren clearly said it on an article, I think he was on NBC, and he said, I pay a lower tax rate than my secretary. And it's like, all right, now he's openly coming out and saying that. And it's like, holy shit, that's going to provoke some emotion, but I shouldn't. Then he says, but I shouldn't. It's the system that's not right. And it's like, well, you can choose to pay more in taxes if you want, Warren. It's your fair share. Literally, the way it's phrased in the IRS is pay your fair share. His fair share is a lot less than his secretary's. And so obviously, the trust structure and what we've described is a huge part of that. But also, isn't there an element of where the wealth is held? Right. I mean, there's been a lot of pushback against Elon Musk. He says, it's in it's in my stock. Right. Jeff Bezos, they're holding it in Amazon, Amazon stock. If they haven't realized gains from that, then it's not really liquid wealth. We even saw last year, Janet Yellen and

others talking about starting to tax unrealized gains. Yeah. Yeah. They were trying to, it doesn't make any sense at all, but exactly right. It's back to what we just mentioned a minute ago on loans, right? Because they've got this asset and they're going to take a line of credit against it and take debt against it. And debt is not income. So unless they actually sell and realize that gain, they've got no tax to pay. So they're leveraging financial vehicles and tools and entities and structures because they're playing the game at a higher level than most ordinary people. Not long ago, I had Michael Saylor on my podcast, and he kind of laid out that plan. He has all these yachts, he has this massive stock portfolio, and effectively,

you just take loans against all of those things. He was making the argument that Bitcoin is pristine collateral and should be used for collateral because it could actually be custodied by a bank and held. And he was laughing that his yacht could be on the other side of the world, but he can take a massive loan against it. And it would be effectively impossible for them to take back if he was delinquent on his loan. But you just described even outside of this whole complex system, you can effectively just own assets and never sell them ever. Isn't that really a huge part of the wealthiest playbook as ever? You know, forever, just never sell anything. You wouldn't need to, right? When we're talking about these elite people, they're usually multi-generational wealth, Rockefellers,

Kennedys, Rothschilds, these types of families, right? That don't have an innate need to sell because they've got so many hundreds of millions and billions of dollars that why would you ever need to sell an asset unless you had a liquidity need or there's something going on in the market? So they're just thinking very differently to regular millionaires, successful people, and then the regular person on the street too, because they've brought up a completely different world to most people. I guess the question then becomes, is that a dangerous strategy for them if there's some black swan event and they can't pay back those loans? Or do they just endlessly take more loans on other assets until they're whole? Well, great question.

And I have to ask one more question is right now loans, you have to presume are a lot more expensive than they were before. I mean, we were in an almost negative interest rate environment before. That's not the case now. Yeah. Great question. So a lot of these loans are issued by their trusts because their family empire owns these assets. And then they issue from the trust to them as an individual or into an entity. So on one hand, they're issuing the loan, they become the bank. And then the other hand, they receive the funds and do with what they wish. So would you ever call a loan on your son or daughter? So they're defaulting against themselves. But there has to be some sort of intermediary,

right? A bank, like if you're holding a portfolio of securities or something to take a loan against it, isn't that generally happening from an institution or? Yeah. In that specific example, it is. And yeah, the rates that these guys get are so low. It's not like on the high street where any normal person would go in the bank and they're going to get at this point, what, 7% to 10% interest rate. These guys are all plugged in with the Morgan Stanley's. And they get given such low interest rates. It's frightening.

The less you need the money, the more they give you and at the lower rates. Bob Hope had an amazing quote like that, the comedian Once Upon a Time, which I can't remember, but it was basically like a bank is a place that'll give you a loan if you don't need it. That's how the wealthy operate. And unfortunately, that's just the reality of what it's going on. And the whole banking system we could talk for hours on is a separate conversation, but for every dollar you put in there, they're creating nine fictional dollars on that. And the whole banking system we could talk for hours on is a separate conversation. But for every dollar you put in there, they're creating nine fictional dollars on that and then leveraging it and then issuing them. So it gets like... If the bank can do it, why shouldn't the individual be able to do it? I guess then is the argument there to be able

to fractionalize and take loans and do the same thing. Well, it's all written in the code, right? This is not something that I'm making up or it's written in black and white and it's been like that. It's just a matter of, can you piece the puzzle together and know how to use it for your advantage? Like Warren Buffett clearly talked about, he's like, I just know how to use the system.

Trump is the same. He was laughing at Hillary Clinton when they did that debate. And he's like, well, that makes me smart that I don't pay any taxes. Then his taxes get released a few years and he isn't paying anything in taxes. He's got billions of dollars in his name, in trust's names and a huge spider web. Even his son, son-in-law is not paying any taxes.

So in the right circles, this is all very common. And actually, the Clintons are set up in exactly the same ways as the Trumps. And a lot of those families are all set up like that. But they just go about talking. Oh, we're doing good. We're doing this. We're doing that in completely different ways. But they're all set up in the same way.

And then on top of that, you get into the insider trade and look at Pelosi as a prime example of this. Hundreds of millions of dollars just sitting on inside of trading information. It's like the most corrupt you'll ever see. The most corrupt thing you'll ever see. If you or I were to do that,

we'd be in jail. But it's okay for the politicians to sit on these committees, trade ahead of news being released, and then say, oh, no, it was my husband. It wasn't me. We don't speak about that.

So we can jump down any of these rabbit holes, but it all links back to these guys are set up in a different way that's ever been taught in the schools to the local regular CPAs and lawyers. And it's kept in small. This knowledge doesn't really get out of the small inner circles, country club crowds, ultra high net worth, family offices, and politicians. I've also heard wealthy people say that you should die broke, right? So that you've basically found effective or efficient ways to pass on the wealth and you technically have kind of nothing by the time you're gone. But I assume that if you have loans

against all of these things, how does that work when you're passing it on to the next generation? Well, it all depends on how the loan is written. So if you write your own loan document, so it could be written off as a bad debt upon demise, or it could just roll over to the next person. So there's no hard and fast rule, but you're definitely not going to be repaying it back. That part is certain. Unbelievable. Okay. So there's no hard and fast rule, but you're definitely not going to be repaying it back. That part is certain. Unbelievable.

Okay. So I think we all understand that there's massive loopholes and strategies for the ultra wealthy to make sure that they pay as little taxes as possible. How can that or can it help, I guess, wealthy people who are not as wealthy? People have millions of dollars, but can that in any way help people who don't have as much money? Or is there a certain threshold of wealth that you really need to have to take advantage of all this? Because setting up these structures is expensive, right? I mean, it's not like this is cheap. Absolutely. Yeah. So just to put it into relative terms, if you have a family office, on average, you're spending in the region of $5 million per year to run, operate that office. So not many people even would want to spend $5

million just running an organization, right? So there's levels to everything. At the level that we play at, if you're paying over 200,000 a year in taxes, it starts to make sense to set something like this up. It's not going to cost you 5 million a year to run and operate this, but it's not cheap either. You don't ever find a Rolls Royce on sale, right? Or Louis Vuitton or Chanel on sale, because the value of these things isn't just to you. It's multi-generational. And then you compound that wealth year on year. It's very different to go and to pay the local CPA 5,000 bucks and filing your taxes at the end of the year and having one conversation. This is the mentality of getting into a structure like this is just night and day

difference there's a whole different set of accounting principles legal rules administration so it's not even the regular cpas that are versed in this they're not trained in this they're not taught this at school and the same with the lawyers as well So there's only a small amount of people in the whole country that are not in family offices that know how to operate these in a legal manner, because you've got to follow the letter of the law. Also, I have to imagine that there's a differentiation between where your wealth is coming from. If you're a W-2 employee, your taxes are being reported and paid. So I would have to imagine that a structure

like this is of no real benefit. Correct. Yeah. I think, unfortunately, for the W-2 employees, they are in the system right from the off. There's only one real tactic, let's call it, that I know that they could use to efficiently reduce their taxes. And that's to issue a 30% donation of their W-2 salary off the top line pre-tax into a private foundation. And that will help mitigate somewhat. We do have a couple of clients that are doctors and high paid lawyers that do that because it's the only thing that we can do for them, because they're literally the handcuffed, right? So they can't get out of the system at that point. But 30% at 50% tax rate, still 15% saved per year. It's not too shabby when you're talking

about the millions of dollars these guys make every year in a wage. Right. And to your point, it compounds through generations. I mean, at the end of the day, you're talking about tens of millions of dollars, even if it's only hundreds of thousands of dollars a year. And interestingly, I think people will have this perception that Wall Street are the ones who are sort of taking advantage of all of the tax avoidance strategies. But a lot of those guys, hedge funds guys, et cetera, they can't really do this either, right? Because they're getting paid by a company and their taxes are being withheld. So this isn't them. It's not so much them. This is more elite families, private wealth rather than people in the system. And it was so funny you mentioned that because a couple of years

back when we saw the Pandora Papers and the Panama Papers leak, it actually showed people for the first time that the biggest tax haven is right here in America, not in some offshore jurisdiction that most people would think. It's right here in America. And Americans can't avoid paying taxes anyways, right? It's so funny. I'll consistently sort of mention taxes on my shows or something. And inevitably, someone will say, move to Portugal, man, or like move to Malta or something as if all of a sudden the United States government is just going to let me leave and not pay my tax burden. Yeah, it's the worst here because they make you pay globally. So regardless of where you are, if you're a citizen, then they've got you by the by

the short and curlies, as we say in England. But again, it's just about knowing the system. If you know the system and you can set yourself up in a way that can firstly get you away from a W-2 salary, there's no reason anyone should be doing that. And secondly, create that structure. And it is, like you said, it's a multi-generational tool. It's not just thought of as a snapshot, oh, I want to save taxes. That's not the real purpose of what these guys are doing. And they're really smart because in the tax code, it says you have to have substance over form and intent and purpose. They are the two phrases the IRS use. So when these guys are creating all of these structures, the intent

and purpose will always end in charity. So whether that's the giving pledge, as we just talked about, or any other charitable work, or whether it's they'll buy artwork in the name of charity, that's a big one that they do. So totally unregulated market. I can go buy this post-it note for a million dollars or a banana that's stuck on the wall at Art Basel for 5 million bucks. Or a $69 million NFT. Yeah. So yeah, there you go. What was the Vipul, right? Really nice though. But anyway, $69 million. And then if you value that at $150 million, you can go ahead and buy that at $150 million. Take a full tax deduction because it's an investment out of a trust. Different rules, remember?

So you fully write all that off at whatever value you choose to buy that NFT or crypto, whatever it is you want to invest in. Because the rules are different at different levels. Okay, well, let's talk about crypto because this is obviously a crypto-focused podcast. I would say the bulk of our listeners are in the United States. And there was sort of this notion when I got into crypto 2016, 2017, that it was the Wild West, it was tax-free, nobody cared, nobody was reporting anything. It was the dead opposite, right? I would say that the laws for crypto are more aggressive. If you're trading in and out of altcoins to Bitcoin, you have this endless web of taxable transactions. There's horror stories I have of friends who thought they made millions of dollars and ended up with nothing by the time tax came because the market had crashed.

They had never realized gains into dollars and they owed millions of dollars and had nothing to pay it. So I would say crypto has become the more complex and aggressively taxed asset class in the United States. So a bunch of dudes just moved to Puerto Rico, right? That seems to be like the play is move to Puerto Rico, but who wants to move their entire family to Puerto Rico? And by the way, nothing that you bring with you gets the tax benefit. It's only what you make after you move. But what can a person who's a crypto investor, crypto trader in the United States do to help not get absolutely beaten down by the tax code? Well, yeah, you make a great point. Puerto Rico isn't

for everybody. A lot of our clients, as you know, one of Mark Moss and a few others have moved back to America from Puerto Rico just because they wanted a better alternative and they found one with us. Right. So, yeah, island fever is a real thing. It's small and it's not as tropical, as beautiful as everyone thinks once you're actually there. So firstly that. Secondly, what can they do? They can set up or look at complex trusts because it can be used by people that have a significant capital gain event coming up. Or if they're making a lot of income from a business that would be regularly taxed, it could go through a trust structure.

And that trust structure could help mitigate that tax liability if it's set up correctly. If you know how to operate it and administer the trusts, it's such a powerful tool, so much more powerful than an LLC, S-Corp, C-corp, which are just the regular basic business entities that most people are using. And then if you're trading, then hopefully you're making capital gains on a regular basis because you're a good trader, I would hope. And then again, the rules are different at the trust level. That's the real key important point here. And in the right type of trust, if you're looking at a complex trust, you can defer those capital gains events in perpetuity if it's run correctly.

Can you talk a bit more about that? Yeah, absolutely. So it's tax code 643. I don't want to just come on and not reference anything so people don't think it's real or it's too good to be true. But for anyone who wants to read up on it, tax code 643, and it's section A that refers to capital gains specifically. And it clearly states that if you allocate the gain to the corpus of the trust, then it's not classed as income and it's not taxable. It's only going to become taxable in two events.

One, if you dissolve the trust, or two, if you issue a distribution. So as long as you're not doing those, then you're going to be fine. But the key is that you don't do it as Scott Malka, the individual, you're acting as the trustee of a trust, and it's the trust that owns the asset, not you. So these small little semantic things make a huge difference. And that's really the key between what the wealthy do so well and what the regular millionaires not so well. So maybe when we talk about dying broke, it's not dying broke.

It's owning nothing. It sounds like. You're basically everything that you would theoretically own is actually owned by this entity and therefore you're you're broke you have nothing are there people who would use this because they were afraid that they might be in trouble with the government or law enforcement or something and they don't want to own anything they can't be yeah they can't be taken back or clawed back but But not even that. But if you just think of a scenario where you're making a lot of money,

let's just use a doctor as a scenario, because it's really easy for people to vision this. If you're a doctor and you've got multiple practices that you own, you've got a huge target on your back because people are just going to assume that you have a lot of wealth now. And they're going to target you. They're going to do lawsuits. They're going to do all this shit that they shouldn't be doing, but you know,

we can't control the world that we live in. We can control ourselves. So if this doctor has no assets in his or her name, the target shrinks drastically because the first thing these ambulance chasing lawyers do is to go run an asset search and see, is it worth suing this guy? Because they'll take the claim for no money down for the person who's going after it, because the lawyer is the one that wins in the middle. So they'll take a case that they know the person has a lot of assets in their name that they can go after. Even if you settle out of court, you're still going to be spending hundreds of thousands on that settlement. It's not worth it. So if you don't have anything in your name and you're a ghost, those cases disappear. No one's going to come after you. You are protected from the external

threat. And to go one level even higher, God forbid you fall out with your spouse and you have a divorce. If your spouse is not listed on that trust as a trustee, they don't get any of those assets either. So it's not only used as an external protection, it can be internal as well. So there's many different levels of asset protection by appearing to be a ghost and owning nothing, but controlling everything. That's one of the quotes from Nelson Rockefeller that he said many years ago, and it still rings true today. Oh, nothing but control everything. It makes a lot of sense. The example of the doctor is really poignant because even if there's a, I guess, could be a legitimate claim,

but assuming it's an illegitimate claim, the lawyer is just not going to go after the assets because it's going to cost too much and be too difficult. So I'm assuming that litigious lawyer could know that that person is wealthy, even if the stuff's not in their name. So are they just choosing not to go after it because it's going to be too hard? It's going to be too costly? Absolutely. The way the lawyers look at things is called a settlement value. So they'll do a rough calculation based on how many assets you own, what the value of that is, what the likelihood of the case closing is versus just a settlement and what their percentage is. And if that settlement value to them isn't high enough, they'll just move on to the next one. Yeah.

And this is at this time in this country, I mean, it's so litigious. People sue everyone for everything and you're allowed to do that. So I would say even just listening to you talk about this, that has to be very attractive to anyone who's in any risk of a suit, even if they are, I guess, a W-2 employee or something like that, just to have the assets out of their name. Yeah. And again, yes, depending on how many assets you have, it's not a cheap undertaking. You shouldn't just do it for one purpose. It's got to be part of a longer plan. But yeah, for that purpose alone, just to protect yourself from a defensive standpoint, it's worth its weight in gold. And then when you layer the other

things on top, like generational wealth, you can transfer the wealth to your heirs completely tax free, regardless of right now, there's an 11.5 million limit on gift taxing, right? But all of that goes away with these trusts. When you look at families like Kennedy's and Rockefeller's and Rothschild's, they don't worry about 1111.5 million limit for passing on their money to their heirs or their jets or their yachts. It's all held in trusts and entities. And it's the trustees and the beneficiaries that get to use those assets because it's worded that way in the document. And so anything you're doing for a beneficiary effectively is tax-free because it's not for you as a person. You're acting as a trustee for the benefit of the trust.

So then let me ask you this. Within the trust, are there things that you can write off that you would not be able to write off as an individual? Yes. i'll give you a specific example because i don't want people to misinterpret what i'm saying so let's use a house as an example right let's say you've got a house and you want to put a pool in the backyard and the pool here in california it's going to be 100 grand minimum right that's not cheap um so if you own that house as scottalka, the individual, and you put 100K pool in, you're not going to get a big tax deduction for that. Maybe there's a couple of grand that you could get together, but the vast majority of that is not going to be a tax deduction. If that asset, that house is owned by the trust or the right type of trust, a complex trust, then you're doing a capital improvement on that house. And because you're increasing the value of the house, you can take the full $100,000 as a

deduction compared to personally, you can't. So there's an actual tangible example of the way the legal rules and the accounting rules are different at this complex trust level under common law compared to an LLC at the city in statutory law. So as long as the check is being written by the trust for this pool and the pool and the house is owned by the trust, then it's effectively a massive tax write-off instead of a massive cost burden. Yeah, because it's an investment expense. We're investing in growing the value of the asset for the benefit of the beneficiary for the trust. We're not doing it for the house that Scott lives in and has a good time with his family and kids, right?

But you're acting as a trustee for the benefit of the beneficiary. Okay. So I want to circle back to crypto a bit. I sort of described this horrid tax code situation for anyone who's trading or investing in crypto. First, was that an accurate assessment? I mean, from the outside looking in, is that me in my echo chamber complaining? Or from the outside looking in, would you say that it's a very difficult to navigate as a crypto investor or trader? It's really difficult. Like you said, it started off as the wild, wild west, and they're just still trying to figure it out. There's all these new rules and legislations that they're talking about and trying to clamp down on, but nothing's really

been released yet. Like we talked about off air a minute ago, there's new proposals coming out from Biden, but nothing's been formalized. And then when they come out and say stupid things like we're going to tax unrealized gains, it just scares everyone. It's like, you can't do that. This doesn't make any sense for you to do that. I mean, taxing unrealized gains is so insane. It's hard to fathom. How do you tax it today? And then next year, you're still sitting on the same stock. How do you determine whether you tax it? If it goes down massively, they literally break you and make you bankrupt because you had to pay in a bull market and you held the stock into a bear market.

It's insane. And then to top it all off, they are testing their own five USD cryptocurrencies and seeing how that could all play out in these different scenarios. They don't really talk about that. They release a little bit of news here and there about it, but they've been testing these for years now. So there will be a shift at some point, my prediction for whatever it's worth in the crypto world, that the US dollar will be phased out and it will be replaced by a US crypto dollar. I don't know how, when, or the mechanism that they'll use, because this is pegged globally. We can't just make a knee

jerk decision like El Salvador did a couple of years ago and get crushed because it's going to have global ramifications. And more importantly, they've got to control the money supply. And how do they do that in a crypto world versus right now where they just go to the Fed, which is a non-government entity, and they just say, print us some more money, please. They just press print. And okay, now you owe us the interest on these trillions of dollars. And it's like, hang on, you're not even a government entity? What's going on here? Well, anyway, I don't mean to digress. No, no. I mean, we talk about central bank digital currencies on the show and with my

guests all the time. They're so terrifying and nefarious. I mean, think about your taxes. If you have a central bank digital currency and a government wallet, they just take your taxes right out of the wallet before they tell you. They have perfect control. Not even that. It gets a lot worse than that because taxes will just be an afterthought. They can switch you off from being bankable. Doing this right now in China, this is crazy. Like, hang on. I'm late to work.

I crossed the street. I ran a red light. Boom, boom, boom. My social credit score is going down. And you could get to a point where they literally turn off your bank account and control the money like that. That is the scary thing. I think there's already been reports that the money that comes into your wallet has to be spent in a certain amount of time and on certain things or it can disappear. So basically,

just make sure you stay broke. You can buy this much and you can use it for groceries, whatever, but in two weeks, it's gone. And then let's say it's not communist. But do you really think that could happen in the United States? I do, by the way. 1,000%. Not that I think it's actually happening because that technology that the Chinese are using has been sold to other countries around the world. Scary. And so, listen, I think a lot of people will listen to the beginning of this conversation and say, that's a scam, man. Like they're ultra wealthy. They should not get away with this. It's crap.

They should pay their fair share. And I'm not making a value judgment on that at all. But then when you circle to the end of the conversation and hear what's likely to come from the government, wouldn't any reasonable person do whatever they can to protect their wealth? 100%. It's down to you to protect yourself and use the system to your advantage, the same way the elite people are using it. And you can sit there and cry and moan that it's not fair, but life isn't fair. You've got to figure it out yourself or have a team of people that can figure it out for you because you're responsible for

that. Like it's all good and well pointing fingers, but if Warren Buffett's going on national TV and saying that he pays a lower tax rate than his secretary and no one's saying anything about it, president Trump's leaked tax returns say he pays nothing 750 this is like crazy stuff then there's an article by pro publica i always refer to between 2014 and 2018 they did a true tax rate of five billionaires it was buffett gates musk bezos and Bloomberg. And it showed that the highest one was Elon Musk at 3.28%. Everyone else was paying less than that. Yeah. And I think there was a famous case, maybe in a ProPublica as well, where they showed that basically Peter Thiel had utilized his IRA to invest in Facebook stock at pennies and had grown his IRA to billions of dollars.

For anyone who doesn't know, you're supposed to be able to put in like $6,500 a year, right? I mean, is the cap for a Roth IRA. So it's all about using the tools available to help you out the most. And quite honestly, no one's going to teach you what they do because it doesn't benefit them in leveling the playing field. They want to keep their secrets for themselves and for their buddies. And they don't want everybody to know that. And why would they? They don't want you and I to be using the same things that they are so that we become richer quicker and then can catch them up at some point in time.

Okay. So let's get into some brass tacks. You obviously do this, right? I mean, this is what your company does to some degree. How expensive is it to set up at the most basic level? Because I think there's a lot of people listening and still don't understand, can I do this? Is it of a benefit? What would it cost? I mean, it varies like anything, but generally speaking, it's a six-figure investment. So it could be multiple six, just depending on the complexity of what it is you're looking for. And everyone's different,

right? Every family is different. Everyone's needs are different. So generally speaking, it is going to be a minimum six-figure investment. Do you ever see, have you seen, I'm not talking about the future, have you seen the IRS or anyone come after these structures? Does someone who has one more likely to get audited? Yeah, the IRS comes after structures and abuse all the time. The key is to make sure you're not abusing the trust and you're following the rules and regulations. So there's a lot of charlatans out there that will set up a trust for you and charge you something ridiculous like five or 10 grand.

If it's too good to be true, and if it's too cheap, there's definitely a reason why, right? There's a reason why family offices are paying $5 million for this same type of structure. And that same $5 million is not going to be the $5,000 value. So make sure that whoever you go with, whether it's us or any other company, that you do your due diligence, that they have a legal opinion letter. They've got

private letter rulings and kind of Supreme Court cases that back up precedent on the way they operate because everybody does it slightly differently. So it's really down to reading the documentation and doing your due diligence. That's the most important factor. And as an example, part of my CPA team are ex-federal auditors. So I hired people that were on the inside that know it better than anyone else. So we've got to- Have you had any clients have issues with the government at all? Not since we've worked with them. People have been audited in the past. They come to you because they've had problems in the past.

Yeah. Once they get into our structure, it kind of helps them because it's really transparent. Once you get on the other side of it, There's no gray areas in terms of, hey, the money's coming here, there, there, and then it vanishes offshore or in a jurisdiction that nobody knows. It's all very traceable. I think, again, I'm speculating, but I think that's why we touch wood. We haven't been audited yet. That makes perfect sense. So before I let you go, any final thoughts, anything I might have

missed in this conversation that people might find interesting? I just find this so fascinating because I've never heard someone just lay it out on the line so clearly. This is what rich people are doing. They're not really paying their taxes. It's totally legal. You could do this too. Final thought is that it's like an American Express black card. People know it exists. People know it's happening, but they just don't have access to it. And really that's the whole purpose of my company is to try and level that playing field between the wealthy individuals that have made some money and doing well, and then the elite billionaires that have been doing well for generations. If we can help the wealthy millionaires and turn them into billionaires over generations, then that's really successful for me.

Well, hopefully they can turn you into a billionaire on the way, right? Well, the more value you add to the market, you get paid in value, right? Absolutely. An incredible structure. So where can people follow you add to the market, you get paid in value, right? Absolutely. An incredible structure. So where can people follow you, get in touch with you if they're interested after this conversation? Yeah. The website is Together CFO.

You can see it on my jersey there. So Together CFO.com. And then my YouTube channel is The Tax Bloke. As you might have picked up, I am from England. So The Tax Bloke on YouTube. And Together Cfo.com is the company name and the website. I have a feeling you're going to be getting a lot of calls. So get ready. Thank you, man.

I really appreciate the insight. This conversation kind of blew my mind, to be honest. Even I have a superficial understanding, I think, that this all exists. But seeing it uh laid out so clearly is really interesting all right thanks scott thanks casey that's dope