00:00Have you ever tried to figure out if you need to file an LLC or a trust or how to set yourself
00:04up before price appreciation happens for your digital assets? That's what we're going to talk
00:08about today. So here I have an example. I have the privilege of talking with a lot of people
00:15who want to be proactive and set things up previous to price appreciation. And I do want
00:20to put this disclaimer right up front. I'm not a financial advisor. I don't give financial advice.
00:25Anything said here is for entertainment and educational purposes only. It's how we speak
00:28with your financial advisor before making any investment decisions. These are the considerations
00:33I always look at when having this conversation and you know working through these things with
00:39an individual and helping them look at the options that they have. So their age 65 years old pretty
00:47close to retirement or at retirement. They're still working. They have a W-2 where they earn
00:53$50,000 a year. They are located in Texas. Their relationship, they're currently divorced
01:00unfortunately. But they do have kids and they got grandkids that they want to take care of.
01:05They own their home, which is great. No mortgage. Their objectives are to retire and travel. They
01:12want to have passive income. And they currently have about $80,000 invested in digital assets.
01:16So what would this person need to think through? How could they position themselves to mitigate taxes
01:24and set themselves up previous to price appreciation to make sure, you know, they're going to be taken
01:29care of. In this situation, we're going to have some just thoughts, right? Let's say, you know,
01:40whatever they're invested in, in this next bull run, goes anywhere between 10 and 100x. That's going to
01:47put them somewhere between $800,000 and $8 million that they have from their investments. And they might
01:53also have, you know, a pension or 401k or an IRA. Maybe they've got something else stuck away for
02:00retirement too. But this is kind of their Hail Mary and what they're what they're banking on to make sure
02:06that they have some passive income and they can set themselves up and they really are going to be able
02:09to retire because they're already up there in age. Time horizon short. That's always a consideration.
02:14You know, if they were younger, you know, might be doing some things differently. Do they need an LLC?
02:18Do they need trust? What are the costs associated with those things? An LLC is going to run you somewhere
02:23between $300,000 and $800 to set up depending on what state and what service you use. Trust could be
02:30anywhere from $3,000 to $25,000 depending on all the bells and whistles, what type of trust it is,
02:35where it's established, all those things. If you are interested in working with us to do that,
02:43you can book a time through the site right here. We would love to have a conversation with you.
02:47So, and if these things aren't applicable to you, we are going to make some other videos that should
02:54be listed right here that you can check out. And they may have, you know, your situation that we can
03:00walk through. Here's the considerations. They're single and you get $12.92 million here in the U.S.
03:06that you can move into a trust or an estate or gift into a trust or estate with no tax implications.
03:12If they were married, that threshold would be higher. We get $25.84 million. This is the highest
03:17that the gift tax in the U.S. exemption has ever been. The majority of my lifetime, your lifetime,
03:23everybody else's lifetime, it's been around like less than a million. So with, you know,
03:30political changes coming into office, it's my anticipation that that could be cropped.
03:35You know, after 2025, I think that's when this one ends and there'll be a revision for that.
03:40We'll see where that goes, but up until then, that's what you get. So we're going to play off those
03:46rules. So let's say, you know, hit it big. We get the 100X. Maybe it's an XRP, XLM, Casper,
03:53HBAR, Algorand, Flux, you know, Helium. I don't know what your investment is. This is applicable
03:59for any digital assets. Maybe it's Ethereum. Maybe it's Bitcoin. We'll see. But yeah, so we're
04:07looking at 100X. We got $8 million. But before we get there, how can we make sure that we're set up
04:12to take profits? Because somebody that's looking to retire, let's be realistic. You're not just
04:17going to leave all your money in crypto. You're going to need to take some out to retire. You also want
04:22to deploy that capital in some way. They can produce passive income for you. Maybe you're
04:26going to put it in an annuity or something else that's really stable, hedged, not going to have
04:31volatility like digital assets. And you know that income is going to come every month so that you're
04:35not worried about it. And those opportunities might exist, you know, as digital assets progress.
04:40We might have staking. We might have liquidity pools. We might have other options where you could
04:44deploy some of those assets I just mentioned, and they produce passive income for you.
04:48You're still going to have tax implications with those. And so LLC is probably going to be the
04:53best bet for this individual. They are located in Texas. So that was one of the things that I
04:59skipped over a little bit earlier. Location matters. Texas, Florida, some of the other states don't have
05:05state tax, which is great. The only thing that you don't have in Texas if you're going to file an LLC
05:10there, the regulations toward digital assets are progressive. They do have some laws around stable
05:16coins here and money transmitter license that's required for that. Wyoming tends to be, is the
05:23most progressive jurisdiction in the U.S. when it comes to regulations for digital assets.
05:28It also doesn't have state tax and you're going to get attorney-clied privilege. So if anonymity
05:34is important to you, probably the best spot to file it. That's what we help people do. If that's
05:39something you want to do, you check out the link here to be able to file with us and set your LLC up.
05:45Once you have the LLC set up, you move your digital assets in there. Again, that's something we help
05:50people with. And let's say it goes to $8 million. Here in the U.S., depending on how long you held
05:55these assets, there's going to be different tax thresholds. So that's always another consideration
05:59as well. How long have you held the assets? Have they been purchased within the last 12 months?
06:04If they have and you're single, if you're going to be taking over $250K, you're going to be looking at
06:1135% tax because it's going to be short-term capital gains and that's taxes income tax.
06:16If you're over $600,000 around about, you're going to be looking at 37%. And then again,
06:21you know, if you're not in Texas, Florida, Wyoming, South Dakota, one of these other states
06:25that doesn't have state income tax, you got your state income tax on top of that. So that's another
06:30benefit of the LLC if you're not located in one of those states. So, you know, how do you offset
06:37those tax implications? If you have held it longer, let's say you've held it over 12 months,
06:42you're going to be looking at 20% capital gains, over half a million-ish.
06:51And maybe you just want to pay that. Some people do. Some people think it's simpler.
06:55They don't want to worry about doing all the, you know, things that we do. Put yourself into an LLC.
07:00Maybe it's too much of a headache. I've met with people and maybe this is that person. Maybe they
07:05don't understand it. They just want to ride it out. They're going to wait, continue to buy digital
07:10assets, take profits in their personal name, and then they can move those profits into an LLC or
07:15trust later on and use that to offset tax implications. That's always an option, but you
07:22are going to owe, it's going to be a lot more difficult to mitigate those tax implications if they
07:26are in your personal name. And again, if it's short-term capital gains, those can be pretty
07:31significant. So that's where the LLC is going to benefit you and why that might be a good choice
07:38in the short term if you're setting things up and being proactive. If this person had, you know,
07:44north of $300,000 invested, maybe even less than that. Again, you know, you've got $12.92 million that
07:54you can move into a trust. If they have like, they think they're going to be 100x and they've got
07:58$130,000 invested. Might be looking at the trust. That might start to make some sense at that point.
08:07You know, again, could be cost prohibitive. That's always a consideration as well. They do have kids
08:12and grandkids, so probably going to set up a trust anyway. Might make sense. If they didn't have
08:17grandkids and kids that they wanted to take care of, maybe you might look at a charitable remainder
08:22trust, and that's something you can do after. You have the money, you're going to have to take profits
08:26anyway to set that up because of the way that that's orchestrated and you have to make investments
08:30inside that trust. So anyway, lots of considerations here. These are always things that we look at when
08:38we're helping somebody walk through their options in the short term so that they can mitigate tax
08:44implications and set themselves up for success. Hopefully this has been valuable for you. This is
08:49the first in a series of three videos that we're going to do on the topic with three different
08:53avatars and would love to have you in those videos. So like, subscribe, and we'll see you on the next one.
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