The Wealth Matrix- Worth It or Overkill?
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- Опубликовано: 16 окт 2024
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ABOUT JASMINE DILUCCI, JD, CPA, EA
Jasmine DiLucci has specialized in tax since high school when she first became licensed to represent taxpayers before the IRS.
Now as a tax attorney and CPA, she works with individuals and business owners across the nation to on Tax Planning, CFO Advisory, and IRS Tax Resolution
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Disclaimer: This information on this channel is for educational purposes only and does not constitute professional legal or tax advice.
# #jasminedilucci
She found a really nice way of telling us that it's not for the poor people.
Hey you said it, I didn’t 😂
Yea if your not making close to 5-10 mil. Don't even bother.
@@taxleverage 🤣
@@taxleverage 🤣
@taxleverage that's not for tax purposes tho.
Those are for legal purposes. Holding real estate entities in separate structures and separating each one's liability from each other And from you, and then your personal liability from them in turn
If I was an IRS agent and I saw this complex structure my first thought would be that this taxpayer is up to something and that I should take a very close look at his books.
😂 you have to wonder what is buried under all of that complexity.
Annnnnd you can't. You still have to have a reason to audit. This structure was created for the rich.
@@Here4TheHeckOfIt I mean you could have all of those LLCs and still only file one schedule C.
@@jeremyleonbarlowNo because the trust has its own return and it’s the owner of much of the operating activity from the LLCs below that are single members, assuming they are disregarded. The C-corp also has to file its on 1120.
@@Luciachan23 it depends on the nature of the trust.
Thank you. Finally, an accredited professional informing the public how things actually work
Indeed!!
Not only is this not for regular people, it is exceedingly overcomplicated for almost every small business or small business group of companies. There are a ton of extra costs associated with maintaining this many entities without them all being able to stand alone as functioning entities.
The paperwork and fees involved with this complicated structure is stultifying lol.
Once I get to that income level I'm just paying the taxes lol.
Because it’s not for a small business, it’s for someone who owns multiple businesses. You guys need to stop acting like information isn’t good just because it doesn’t apply to your specific situation. It’s still accurate and it’s still good info.
@Deezfuggin yeabut he's not targeting people that need an LLC, he's a sales rep for a company that charges for LLC's and he's targeting people that don't really understand them he's deceiving people into thinking they are going to be able to manipulate tax laws by just getting an LLC, which his company just happens to magically sell.
@@RTK5357 Great point, I see how that can be malicious then.
It’s not really worth it for large companies. It’s a bunch of busy work to save on taxes and by the time you’re paying off the team of attorneys and accountants, you’d have been better to to have a single trust/LLC relationship or S-Corp. Maybe this works for a single entity that owns multiple different businesses that in some facet do business with each other but for everything else, it’s needlessly convoluted.
I’ve been in public accounting for a few years now and I’m so thankful that you are making videos. Him and Carlton stress me out with their misinformation.
I’m a big fan of Carlton, but you are right, he gives a lot of misinformation.
As an cpa I agree.. those guys give alot of misinformation..
She didn’t say he was spreading misinformation at all, she just said it was overkill
@@evh3811 well it is misinformation because the IRS can come straight for him no matter how many shell companies he stands up. It is insanely difficult and expensive to do what he's talking about correctly and I guarantee that no one who actually needs a setup like this is making videos on youtube to make money. The only people who benefit from setups like this are ultra high net worth.
I literally unsubscribed from Carlton because of her videos.
Imagine what the tax preparation bill would be for all those entities. Further if not done right, the corporate veil will be pierced and creditors can collect against them.
But it makes for a very awesome story at parties
@@KK-pm7ud😂
No doubt his accounting bill is double 😂
It’s easy to get a llc. It extremely harder to get past the operating company. But once a trust is over everything you can’t sue anything but the trust.
I'm a forensic accountant. Trust me, proving all of these entries are alter egos for the tax payer is a price of cake.
I think you're missing the idea. The point isn't to pretend that you're someone else. Any LLC you file you are registering with your legal name. Nobody is under the impression that you're supposed to be hidden with this.
This is done for typically liability and asset preservation reasons; along with ease of trust beneficiary re-appointments. Not to hide “alter egos”.
So you’re proud of being able to find ways to help the government steal peoples money. Weird flex
What do you mean? 😂😂
@@abetterfuture4787he’s not saying your hiding. He’s saying an LLC(or any structure) is worthless against the IRS or any government entity if they don’t deem the structure actually needed. They will just pretend it doesn’t exist and come for you anyway.
She so smooth…makes me what to be a tax professional. Guys at work talk about this stuff but we barely make any money.
Besides the good info provided in these videos I also love the actual lawyers/accountants that drop into the comments providing additional context and relevant info
I love your videos. I like the concepts of all these crazy tax loopholes are creating, but your honest criticism humbles these ideas and it makes me feel better.
Estate Planning attorney here… I’m assuming this is an irrevocable trust? Because if not, that trust has zero asset protection, and that’s a horrible way to set up your assets.
The LLCs (and any insurance) provide the asset protection. The RLV is solely for estate planning. Irrevocable trusts tend to have even less use cases than this system. DAPT’s are cool, though
@lc9991x I doubt you are going to be able to school an estate planning attorney on the efficient structure of an estate.
@@briangasser973 Maybe. I think I have a good chance of schooling an estate planning attorney on asset protection, though. Two different things, and of course an estate planning attorney thinks the solution to everything is an irrevocable trust. Just like the guy in the video, every expert thinks the most complicated setup is best for everyone (it also has the added benefit of costing the client the most money). Law of The Instrument: A carpenter always sees a nail.
The vast majority of people are best off with a will and revocable living trust for estate planning, as almost everything can be designated and customized with an RLT. For asset protection, the vast majority of people are better off with properly structured LLCs (for business owners) and good insurance rather than irrevocable trusts as the specifics of irrevocable trusts that actually provide asset protection are very precise and it’s hard to change your mind once you’ve set one up (they’re called “irrevocable” for a reason). Unless you’re worth at least 8 figures with a diverse portfolio (as in business ownership not just a big brokerage account) or are interested in a DAPT for your personal home, you probably shouldn’t even consider them.
@@briangasser973that mindset is why you'll never get anywhere
I think these structures are more meant for asset protection against creditors than tax benefits. Basically making it hard as hell to bring everyone of these to court, one entity filing for Bk .. etc
Yep. Nobody wants to sacrifice and put in 80 hour weeks for years, only for one incompetent employee to cause someone harm, and that have that person sue you for all you're worth.
Any claimant, not just the government, can go to court and "pierce the veil" of the corporations. Someone who sets up this kind of structure has to be very careful that they are properly maintaining the separately defined functions of the corporate entities and not playing "fast and loose" with them. Otherwise a creditor can go to court and argue that it's not a real corporate structure and collapse it to a smaller set of entities or even a single person, just like the IRS would -- up to a judge to decide if the veil can be pierced.
@@reallyreason6354 That plus the fact that there is absolutely no reason to structure your income like this unless you are personally bringing in millions a year or have a massive estate. I can guarantee that a dude who has to make youtube videos for a living is not making enough for this structure to make sense.
@@reallyreason6354 Exactly... especially this dopes assertion they all push "management fees" up to the holding company.
@@reallyreason6354Yeah a single LLC is all that's need for the asset protection.
The management fees is funny also.
the admin costs on this would be pretty heavy - agree that it is overkill for probably 90% of all people.
Yes! Thank you for finally bringing to this platform true and verifiable information that we so desperately need!
As your tax accountant, I thank you for overcomplicated things.
Your videos are really good. Keep it up! Very helpful tax info etc.
I really like these videos because in the past when I've seen the miniature videos that articulated all of this really intrinsic and multifaceted approaches to structuring, it's always seemed, like you said, overkill. I'm happy to hear that my knee jerk reaction was correct.
I own 6 rental properties.
At first, I wanted a trust to hold 6 separate LLCs for each of these properties.
That would limit my liability for each property and ensure everything gets passed down to my kids easily when I die, without probate headaches.
But, then I realized that this is already overkill.
The LLCs are a hassle and extra expense to set-up. Then, I have a monthly fee for each of them.
Meanwhile, I already have liability insurance for each of these. That's required by mortgage companies and still good to keep after they're paid off.
That's more than enough to cover any real possibilities of liability.
You aren't likely to get some million dollar lawsuit from a single family rental, unless you're really screwing up.
If you have a large apartment complex, then yes an LLC would make a difference.
But, on 6 individual rentals, that isn't necessary.
I did still set up the trust, though.
I love watching your videos and calling out these fake gurus out there, thanks!
What's fake here? She just said she thinks this is too complicated for the average person
It's also too complicated but some people make these structures to keep anonymous at least from non-IRS people.
Holy s*** that's a mess, as tax preparer I don't even want to do those paperwork 😅
People who have these structures have professionals manage the whole thing.
You are fascinating. My favorite channel ❤ is a gift. Very grateful for you
This dude’s attorneys love him.
Love your videos! Thanks for putting the right information out there!
Formalities? How and when do they collaspe it? When and how is it over kill? What is that level of activity in business for it to work well?
If you have to ask it isn't for you. Depending on how much staff you have for admin I'm looking at over a million in profit a year. Revenue at let's say 20 million.
Great vid. Very costly. Very time consuming and it might even not work even if you follow formalities
There is another reason we do this structure, and that is protection. I have two to three degrees of separation between myself and my businesses so that if someone wants to try and scam a lawsuit then my personal information is not accessible and I can not be sued personally.
Do do do, just me over here filing an amended complaint on a veil piercing theory because some other jackass thought doing this would let him run up a half a million dollars of unpaid invoices and get away with it....
@@ericfleming5522what he said went over your head
What she said is exactly what I was thinking...the IRS will look at all that and just say, yeah you own one company....break it up all you want, but we're still going to take our taxes out of it.
There you go! Tell it like it is! This strategy is very complicated and actually brings the IRS to audit because its design is to copy those that make the rules! Great content!😅
It’s a nightmare to manage so many entities. Filling fee to keep these active along with cpa fees to fill reruns nullify the advantages of keeping kids on payroll, unless you have millions and millions of transactions changing hands!
I haven't seen a video where all she says "call your attorney. " I'm waiting for that one. 😊
Listen to her wise and smart . Thank you mam!
Well true. I'd rather do this and be super safe than do something that's not going to be favorable toward the government and get me in trouble later
I am an attorney, I confirm she is absolutely correct.
This actually works so she is awesome by telling people it’s too complex for the normal joe to understand
This is outrageous complexity. Our tax code sux!!!! Could you give your opinion on the state of US tax code?
Can you explain the formalities? I have a client like this
I appreciate your content a lot🌹. Do you recommend having a holding co. for active investing and a holding co. for passive investing, or is one holding co. good for both? Thanks!
The ending just felt wrong 😂
In Canada, holding companies can only be owned by natural persons. A holding company cannot be owned by another holding company or a trust.
-not a legal or tax professional, just someone who looked into it briefly once.
There is overhead on structure. If you do not have the volume required, you cannot do this. Most people cannot even afford to retain a lawyer and accountant. If you can generate money to staff at least a dozen people, maybe you can start. Your thoughts?
It's too complex for anyone not really wealthy enough to even care for creating youtube content. Like that guy.
So just follow the formalities. Make the IRS happy
Unless you are the son of a politician doing business overseas...
No one hides because of these structures. It’s about legally protecting you from liability as well as your other assets. One asset goes bankrupt the others won’t follow suit if they’re separate entities.
Can you explain what are trusts and when one would want to use one?
Could you break down the amounts viable for each entity to give us a greater understanding?
Piercing the corporate veil ie collapsing the structure
I enjoy your channel. ❤
Would some of those activities include having monthly board meetings, keeping minutes, and having someone besides yourself as an employee, so that they could not otherwise breach the corporate veil?
Lots of formality as you stated… plus lots of unnecessary complex accounting. And then tax returns for each business every year. Not to mention possible quarterly returns.
Missed you a lot on this video
To pull this off u need to hire at least a couple of ex IRS agents and smartass CAs. That itself will cost u so much that it will cost less to pay the taxes.
Therefore best way is after u reach a certain point in wealth its better to not profit from your business and rather recover the capital u used to operate the business and one the capital returns reinvest and grow the company. Put all your expenses in the company name and don't draw salary.
Want cash ? Theres instruments that banks use to give u loans.
Always : thank you.
Can you recommend a structure for a family buying investment properties? At what point is an LLC worth it, and do you need a trust, etc? Let's say from 1-5 properties and then 5-10?
You should seek legal advice with a large purchase than relying on a RUclips Short for guidance.
@briangasser973 Yeah, I'll end up there, but i like to narrow stuff down a bit so i can pre research.
Every single property gets its own LLC especially once it has equity. Maybe a couple properties if they're next to each other.
Get a good operating agreement for the type of property you buy and just reuse it.
Each one has its own account all rents go into that account.
Quick books and turbo tax has your back.
@sparksmcgee6641 thanks, i do the bank account part for rent and I'll get the rest set up. I appreciate you.
Thanks for your input.. this seems like a lot!!
Can you explain this more? Like what to do mean formalities? Isn’t why that’s set up to formally document everything out in the open? Like unless you’re rich enough, the irs can collapse it? How? Where?
You cannot reap the benefits of corporate structures unless you’re actually a bona fide corporation. I’m not a tax lawyer, but if I remember my Corporations class correctly in order for a wholly owned subsidiary to be classified as a distinct bona fide corporation it has to maintain fully independent corporate structures-as in, and independent board of directors who act solely in the best interest of that corporations who are not merely acting as a division of the parent organization, for example. If your wholly owned subsidiary just acts like an extension of the parent company, it’s not actually distinct and may not be able to benefit from its status as an independent corporation.
@Lineofdefeat if the business doesn't do anything, like have any economic activity, what's the purpose? If the answer is shelter money - they can say "nah"
How much activity and business does it need to be?!
So what should normal people with corporations do?
Most normal people are W2 employees and have no business trying to setup some corporate structure as part of a hare brained tax avoidance scheme. Like the video OP says the IRS can simply go “lol, what corporate structure?? That’s YOU” and go after you
Run the corporation. Look into a employee retirement account that allows the employees to buy the company in their ROTH 401ks so you can sell tax free.
THANK YOU
What level of activity would you say is good to start looking at this structure?
So what do you suggest for a startup ?
This does seem like overkill. While each of these vehicles may be valid in and of itself, each needs a legit business purpose to exist apart from merely avoiding or lowering tax- which becomes a harder case to make if you're doing all of them at once. Or as a colleague of mine once said: "pigs get fat, hogs get slaughtered."
Why do you assume everything is about avoiding tax? Have you ever consisted liabilities and asset protection?
1. Woman is correct. 2. Trust/LLC 1 -10 million in assets is solid. Make it a asset protection trust in a state that's going to be protecting you. Nevada for example.
3. If you set it up like the man in the video. Every year, tax and accountant fees going to be extra. Not to mention bookkeeping.
At what dollar amount per year would you recomend setting this up? I currently have 5 properties in socal, kids, a few legitimate profitable businesses, but haven't really felt it's time yet based on how my cpa talks about it. But nothing definitive. I'd like to hear your thoughts.
What’s the best way to setup LLC for your house and small electrical business so they’re separate and secured
What level of income would you have to be at for this to make sense?
Jasmine is the purpose of this setup to avoid being sued instead of trying to devoid the IRS?
@@shaneclk9854 parts of it. But an LLC to pay your 5 year old a salary so you don't pay taxes on it isn't for liability.
does it mean forming so many legal structures would be considered as an ethical business practice?
What does it mean when the IRS can collapse the whole thing??
I mean I’m not poor, I have a high paying job and would like to structure something better like this, possibly open a small business to the side. What would be a better way?
You sont have enough to need anything like this. You business goes into a LLC.
You have you're lawyer create the LLC with an operating agreement for your business type, you open a bank account with the LLC and it writes a check to pay the lawyer.
You keep a record of the money you put into the business. It's called a cash account, that prevents you from paying tax on the money you put into it.
Congratulations you now have a business.
BRB, I got to go have a meeting with myself and instruct myself to record minutes.
He is paying a lot of money to accountants and lawyers to manage and file returns for all of these sub organizations.
That might not be enough to survive scrutiny. Different states have different rules, but in some wholly owned subsidiaries can only benefit from their distinct corporate structure if they maintain their status as bona fide corporations. If a wholly owned subsidiary is actually just operating as a division of the parent corporation, without due regard for corporate structures or its independent fiduciary duties, then that can lead to “veil piercing” even if otherwise properly filed and incorporated.
Even setting aside that you have to prove that they're all functional entities, All I can think of is how much time and money it would cost just to operate this even in a purely tax savings capacity. To set this up as a normal income earner or small business entrepreneur is so unwieldy it completely negates any savings you would make from it, if not lose you money from all the accountant and legal bills you would rack up maintaining the thing.
@@taumctauface1886 i imagine a lot of these videos are just posturing on paper for their audiences to sound like they are providing advice. They don't actually do it
Who said it was about taxes?
@NikoBellaKhouf2 "so I can pay my 5 year old children and save tons on taxes". It's fraud
Can they collapse the company if it's offshore? For instance you set it up in Hong Kong or Fiji for example?
Can you recommend advisors in Delaware that are reputable? Thank you.
So the question bags what is the level of activity
If you're a high earner let's say 2 million plus a year
And you want to move that money to create a zero tax base
Is this still overkill?
Income is income and the IRS will want its taste. You can setup whatever corporate structure you like to avoid tax but as she says, if you don’t follow the formalities to a “T” in terms of legitimate business purposes the IRS will go “lol what corporate structure?” And come after you
That passive and operating income really should be separate and owned by the family trust. It doesn't cost very much to setup. So the structure isn't over kill but the number of LLCs maybe overkill and could be expensive. We just don't know enough of what's in these entities.
Depends on your state. Some have series LLCs where you pay one time and get to open many separate LLC's. It was designed for real estate investors. You put each property in a separate LLC with its own bank account, etc. If one property is sued, the rest are protected.
I think we’re all getting good at reading your facial expressions when you’re skeptical or impressed 😂
What do you think it makes sense for someone that wants to sell info products to the US market from abroad? 🎉
How does all this work work in the UK? Can someone tell me how to do all of this in England?
How do you do it right then?
I wish i could have a sit down conversation with you on all what someone would need to know.
You can. She does have a company. It's just a matter of if you want to pay her rate or not.
Most people dont watch her long format videos. She covers a lot.
So if I work at McDonald's this isn't necessary ?
Well I operate a small media company known as a family FB subsidiary and a transportation company with assets known as a 91 Suburban aka shagging wagon and a Pontiac Transport aka the school bus! What’s the proper Structure to take advantage of the Tax deductions?
The IRS knows about these things but the simple fact is they create the stuff for rich people and that's all it is to it. It's not for poor people or small businesses it's for wealthy people and people that have a lot to lose
All these holding companies do is give lawyers fat fees. Depending on the nature of business, you can be paying extra sales and entity taxes that wouldn't be necessary of the structure was more simplified.
Wait, who else was on headphones?
When the man was talking, the audio was pretty good but when she started talking, 80% of audio was in my left ear and 20% in the right ear.
In my experience,when you discover oil in your backyard you drill and produce it yourself,you don’t share your tricks
Can also tell a range you charge for someone from this medium wants to come for face to face initial consultation
U r the best.
But what is the level. What is that threshehold
A trust is taxable, if your using to attempt to shield against tax you can get into some hot water.
He's more worried about asset protection
Lex Luthor really knows his taxes
So if the operation is not big enough, you might end up paying more in admin costs than the actual tax burden you tried to avoid
'The IRS can collapse the entire structure for you!..'😂😂😂😂😫😫
So first you must have a lot of money, then you can use that money to exploit the system and avoid paying taxes that are intended to raise revenue to provide basic services to the populace, which will end up degrading those services over time and lead to the eventual suffering of millions of people because you didn’t want to pay your fair share after earning your money within the system built on tax revenue in the first place. I honestly can’t think of a nice thing to say about guys like this.
Please elaborate a little more for the uneducated. What kind of extra costs would be associated with this set up . What kind of income would you need to actually benefit from this ? Just say you would need to be earning at least 1 million dollars etc. Also what do you mean by saying "truly following the formalities"? Could you tell folks what actually would be allowed as a income for your kids. How much has the IRA allowed to pay a 15 yr old working for their father? The child would also have to pay income tax on that money.
So in other words, he’s right, but you don’t want to fully admit to that
He’s not. As she points out, this strategy:
1.) Is overkill (the effort and cost associated with establishing and maintaining this structure is unlikely to be worth whatever marginal tax/liability benefits that come from it), and
2.) may not survive scrutiny (a single person administering personal property through a half-dozen LLC’s can easily run into trouble maintaining the bona fide status of each of those LLC, with mistakes potentially collapsing the whole structure in a lawsuit or audit).
What part did she fail to admit?
I need your firm to help me structure my taxes.