00:00Welcome back to the series. This is going to be the third and final video discussing the
00:04different considerations that you might have when you're deciding what to do in the short term here
00:10to mitigate potential tax implications and set yourself up for long-term success
00:15if you do have a decent holding in digital assets. So again, you know, these are some of
00:21the considerations I've written here. This is just a general scenario. Nothing here is financial
00:25advice. It's all for entertainment and educational purposes only. Always consult with your financial
00:30advisor, estate planner, CBA before making any final decisions. So we'll get into it. This individual
00:37is 32 years old. They have a very high income. They live in New York or California. You know,
00:44$300,000 a year. They are single. No family, no kids. They set themselves up pretty good.
00:52They rent an apartment in New York or California. They do not own their home like some of the other
00:59people that we've talked about before this. And their objective is to establish and set themselves
01:05up so that they can make sure that they are in a position once they do get married to set their
01:11family up for generational wealth and creating a legacy. Their current investment in digital assets
01:17is $150,000. And so, you know, longer time horizon than somebody else that's a bit older in age like the two
01:25previous videos. You know, if you're 45 or if you're 65, if you've got a protracted time horizon, this person
01:32doesn't necessarily need the income today, right? They can hold these digital assets for an extended period of
01:37time, wait for the appreciation to happen. So their immediacy of action to set things up
01:44probably isn't as great as somebody that might be, you know, looking to leverage the assets to reduce
01:50income faster or, you know, might be looking to retire sooner. This person's a bit younger. So
01:57high income, the consideration here that may play into why they would want to establish an LLC or a trust
02:05now are two things. So again, they've got $150,000. This is all outside. It's all non-qualified assets.
02:14It's not an IRA or a 401k or another investment vehicle. This is in their personal possession
02:20that they've made these investments. And then the location where they live. So California and New York,
02:26New York in particular, inhibits your ability to purchase a lot of different digital assets. It's
02:31the most stringent financial jurisdiction here in the U.S. Those two states have the highest state taxes
02:35here in the U.S. So with that consideration, this person may want to set up an LLC. If they're going to
02:43continue purchasing, they believe that the assets, let's say they did 100x from where they're at,
02:48they're going to be looking at 15 million. That is above the gift tax threshold here in the U.S.
02:53of 12.92 million. You're probably going to want to keep a portion of the digital assets that you have
02:58in your personal name in an LLC, you know, moving into an LLC outside of a trust just because, and I think
03:06I mentioned this in another video, when you set things up, paying taxes on the income earned by the trust
03:13is cheaper to do at a corporate level. So it's often nice to have some type of management LLC or
03:19corporation that is paying the taxes on behalf of the trust to allow the assets that are invested in
03:25the trust to continue to appreciate and be traded with no tax implications. They compound much faster
03:31in that vehicle if it's done that way. So, you know, if this person just left it as is, let's say
03:37they did get 100x on their investments, you got 15 million, maybe they do move the 12.92 million
03:43into the trust. They keep, uh, what would that be? 3.2.1 million left there in the LLC. They can put
03:53that to work in some capacity in order to generate income. Same thing with the assets in the trust,
03:57and maybe they use all of the income in the LLC to pay the taxes on behalf of the trust and allow
04:02the assets there to continue to compound at a significant, faster rate. Um, anyway, so let's
04:08pull it back. Uh, why would they set up an LLC in Wyoming or trust in Wyoming? Uh, what benefits
04:15would that have? Well, for this individual, they're not married yet. So setting up a trust now can be
04:19very, um, advantageous to make sure that they're not going to be commingling those assets with whoever
04:25they do marry later on. Um, you know, obviously you want to have a good prenup lawyer. That's
04:31something that we can help you with the digital extension group when the time comes for you. Uh,
04:35if that is a necessity, we have great connections there. Uh, but if you are going to be able to,
04:40you know, get your things into a trust previous to the marriage or even entering to that relationship,
04:44you, you're really mitigating any of those risks for other people's ability to,
04:49you know, maybe come into the relationship with poor intentions. Um, you know, things happen.
04:55I'm not saying people have poor intentions. I'm just saying that there are gold diggers out there,
05:00men and women, not just on the female side. Um, this obviously I didn't designate sex here.
05:06This could be a male or female, uh, that's making this income at this age with these investments.
05:11And, um, you just want to protect yourself. And that's really what it is. You know,
05:15you just want to mitigate risk and set yourself up for success. Um, so with the amount of income
05:20that this person has, um, their investments in digital assets and their situation, they have a
05:25lot of different options. Um, if they did have the income and the means setting up a trust now
05:32is likely a really good option for them. Again, you know, price point on that's going to be somewhere
05:37between $3,000 and $25,000, depending on where they set the trust up and all of the bells and
05:42whistles associated with it. We often see people here in the U S setting things up as a Wyoming
05:48digital asset protection trust. We have capability to help you with that. If that's something you're
05:53interested in. Um, but you know, and the LLC, why would they want to do that? Well, that would
05:58mitigate, uh, the potential date taxes that could be involved and would allow them the capability to
06:04have much more ease in purchasing the assets, um, through an account established in the LLC's name
06:10versus, you know, especially if they live there in New York. Um, you're probably, again,
06:15going to have to have a VPN that broadcasts to Colorado or Wyoming or wherever, um, a closer
06:21spot to where you filed the LLC. Um, but in doing so, you know, you would be in uninhibited in your
06:28capability to purchase other assets or, or create exchange accounts that you might not have the
06:34capability to do there in New York. So just some of the considerations for this individual, um,
06:41that they really have a wide variety of options because of the level of their income and their
06:46position, uh, versus some of the other people we discussed before, you know, they don't have kids
06:51yet. They don't have a wife yet. They don't have a mortgage yet. They may not have a ton of other
06:55debts. Um, they're just earlier on in their life and their journey. And again, um, they can have a
07:00higher risk profile, um, or their risk profile would be leaning more toward high risk versus, uh,
07:09somebody that might be closer to retirement, wanting to make sure that they have wealth
07:12preservation versus, versus wealth creation. So they can take more risk with their investments,
07:17um, and set themselves up for the longterm. And if they lose it, then they have a lot of time to make
07:24it up, uh, because they do have a high income. This individual would also be considered accredited
07:28here in the U S. If they had had that income for two years, they would have the capability to get
07:32access to, uh, private equity and those types of investments. Um, they obviously, and they may have
07:39other accounts, you know, we didn't discuss that here. They might have, um, you know, 401k or other
07:44investment accounts in other places. They might own real estate outside of where they rent. Uh,
07:48they could have other assets that qualified them as accredited if that amount was beyond a million
07:52dollars. Uh, cause obviously, you know, they don't have equity in a home because they rent. So
07:57anyway, if this is you, if this meets some of the criteria, uh, again, would love to work with you,
08:05help you establish an estate, be proactive with your digital assets here in the short term.
08:09Um, you have a lot of options in comparison to some of the other people.
08:14Uh, you could even just live this, leave this in your personal name. Um, again, the only
08:19consideration there is going to be, um, the ability to take profits when it comes time. You're not going
08:25to be able to reduce those tax implications. Uh, this person might've held these digital assets
08:29longer than a year. If they have, there are long-term capital gains. If they purchased them in the last 12
08:34months, it'll be short-term capital gains, uh, when they do liquidate those positions.
08:38So you just got to be cognizant of those, um, you know, those decisions. And again,
08:43because they already have such a high income, uh, and they are located in those states,
08:46it's probably really, uh, in their best interest to go ahead and establish at least an LLC
08:52outside of those jurisdictions so that they can use the income that they are going to cash out if
08:56they are going to take profits. Uh, again, longer time, time horizon, they may not even take profits
09:01this cycle. We'll see. Uh, but if they did choose to do so, that's going to put them in a really high
09:06tax bracket because of their income already. Um, unless it was long-term capital gains, and it's
09:12going to be, you know, if you're over 550, uh, you're going to be looking at 20% of those. But again,
09:18uh, if some people, it's up to them, they may just want to pay that and go on about their business,
09:23not worry about it. If you are concerned with mitigating tax implications and making sure those
09:27assets are protected and the income that you receive, uh, is going to be, you know, fostering
09:32this generational wealth like this individual, uh, an LLC here in the short term would be kind of the
09:37minimum criteria. And because of their income and their situation, I think a trust would probably be
09:42in their best interest. So went through a lot. I know it's like drinking through a fire hose
09:48on some of these. Uh, if you need to watch it again, please go back and do so. If you have any
09:53questions, comment below. Let me know if these are helpful for you guys. We're happy to run more
09:57situations and create other series like this. Uh, if you do want to schedule a consult with us,
10:01you can do that right here. Uh, and if you want to check out other videos in the series,
10:05that's going to be right here. Uh, and with that, let it go. If you haven't yet,
10:10please like subscribe and we'll see you on the next one.
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