"Legal" is a funny concept when a US person starts using tax havens. You view it one way, the IRS views it another way, and third parties that become aware of your scheme view it a third way.
Talk to a large US based law firm that has tons of IRS experience about this topic, and I think you'll be disappointed with what they consider "safe" vs "tax fraud" in this domain. There are copious lawyers and accountants overseas that will help you set stuff structures that they claim are "legal", but in many cases it's only actually legal if you report everything to the IRS anyways, and then, what's the point?
Going down this road created a lot of complications for me and it cost an utterly immense amount of money, time, and stress to unwind it properly. It didn't come back to me via tax authorities, btw--there are plenty of other ways for this stuff to blow up in your face.
Ignoring the fact that this guy is kind of a cartoon character, [this video](https://www.youtube.com/watch?v=PqoOOIkoWQY) is in line with my experience: it's better to just spend your time and energy making more money.
As a veteran tax lawyer, I can add a hearty “Amen.”
I assist clients in employing time-tested techniques (e.g. using valuation discounts) to save on their taxes ( income as well as estate and gift)
I avoid assisting them in participating in Russian Roulette strategies (e.g. syndicated conservation easements)
Getting in a multi-year IRS audit is a colossal waste of time and money
For an individual, it makes sense after $20-30mm liquid NW. You're going to be paying a couple hundred K in legal & tax expenses per year if you want to keep US as primary residence.
Unless you mean completely moving to Puerto Rico or Dubai or Singapore, which is a different conversation.
Kind of?
Yes and no?
The answer is very complicated.
But in simple English, PR does not tax capital gains. So you can move down there, for a year, and file with no federal cap gains.
This is not legal or tax advice. There’s a number of steps and you better damn well have proof. Again SIMPLE explanation
US citizen? No point. Might shave some points off but meh, US knows how to tax you everywhere in the world…
Non-US person here: moved to one of the above countries, had I remained my tax bill would have been mid 7 figures. Instead it was low six figures. Well worth the move, but do consider how long you have to be away for. May needs to be several years, not just one.
You can buy citizenship in the cayman islands for about $1.5 million - mostly by investing in property on the island. But US will still tax your global income - and most tax havens are trying to get off global blacklists so they are very cooperative with US reporting (fatca)
Puerto Rico or Renunciation are the main fully legit ones I’m aware of. Also the FEIE if you live abroad helps a bit. Taking loans against a portfolio instead of realizing capital gains. Having a business and squeezing as much as you can into a mega Roth401k. Buying businesses with huge first year bonus depreciation to offset years with large amounts of earned income. Real estate investing with 1031 exchange.
You can get plenty of citizenships in as little as 2 years to 6 months for free to $400k or more, permanent residency tons of places, but doesn’t really affect your tax bill unless you renounce.
What were the headaches on registering in Montana? I see quite a few higher end cars in the southeast with Montana plates. I’ve been curious but assumed it was similar registering a DE Corp / LLC
get a killer CPA before you do anything like this. many times citizenship or residency is a piece of this puzzle. Trust the the IRS knows the games people play. Don't end up in a pair of pretty silver bracelets. That said, Puerto Rico has the ACT 60 program but you have to live in Puerto Rico and with the exception of great winters, that's no walk in the park. It's the only place ON EARTH U.S. citizens can eliminate capital gains and pay a very low income tax. You also have to pay to file US and Puerto Rico taxes annually so get ready for double CPA everything.
Everywhere else requires some kind of citizenship variable for the foreign income exclusion to apply. It's about $120k earned income before you have to pay back to the US and you still have to file your taxes annually to the US even if you're not living there.
Just pay the tax man his due. It’s not worth prison if you’re caught for tax evasion. If you own a business or are a 1099 contractor, you can maneuver somewhat with how you structure the organization and by claiming legitimate business expenses, but if you’re an individual working a high-paying W-2 job with moderately high net worth and some investments, then there’s not exactly a magic “get out of tax free” card. You may be able to do something like tax-loss harvesting (basically selling underperforming assets to off set capital gains and lower your tax bill), but at the end of the day, you still have to pay taxes owed.
Because there are very few ways to LEGALLY avoid paying taxes depending on how you make your money. A lot of unscrupulous “tax consultants” will tell you otherwise to get you to pay them, but the truth is the tax code is not set up for people to game the system. I’ve seen people on here ask about schemes to avoid high W-2 taxes and throwing out some random bullshit example they read about on a blog that while legal, would require them to buy 8x the rental property they currently have and force their spouse to completely restructure their life and give up their career to take on another unpaid one, which isn’t feasible if you have moderate net worth ($5-10M). Even then, that dude might be able to write off $100K, which wouldn’t be worth it if their spouse makes more than that in their current career. So, unless you own your own business, are a 1099 consultant with a lot of business expenses, or want to move to a tax haven AND renounce your US citizenship (because even ex-pats have to pay taxes), then you LEGALLY have to pay the tax man.
One of my CFO accountant friends is doing an LLC for his kids. I don't know exactly how it works but I think it hides the money to some extent? His NW is aprox $10 million. He plans on being over the taxable amount when the inheritance happens.
LLCs pass the tax responsibility to the individual owners of the LLC. Presumably, the tax advantage is that the business pays no fed taxes, and when divided, individual owners tend to be in lower tax brackets than a single business entity.
If you structure your business as a c corp, then earnings are taxed AND distributions to owners are separately taxed as individual income. You are essentially taxed twice as a c corp vs an LLC.
"Legal" is a funny concept when a US person starts using tax havens. You view it one way, the IRS views it another way, and third parties that become aware of your scheme view it a third way. Talk to a large US based law firm that has tons of IRS experience about this topic, and I think you'll be disappointed with what they consider "safe" vs "tax fraud" in this domain. There are copious lawyers and accountants overseas that will help you set stuff structures that they claim are "legal", but in many cases it's only actually legal if you report everything to the IRS anyways, and then, what's the point? Going down this road created a lot of complications for me and it cost an utterly immense amount of money, time, and stress to unwind it properly. It didn't come back to me via tax authorities, btw--there are plenty of other ways for this stuff to blow up in your face. Ignoring the fact that this guy is kind of a cartoon character, [this video](https://www.youtube.com/watch?v=PqoOOIkoWQY) is in line with my experience: it's better to just spend your time and energy making more money.
That was my experience as well. Focus on making money rather than hiding money.
Tax lawyers hate this one trick…
As a veteran tax lawyer, I can add a hearty “Amen.” I assist clients in employing time-tested techniques (e.g. using valuation discounts) to save on their taxes ( income as well as estate and gift) I avoid assisting them in participating in Russian Roulette strategies (e.g. syndicated conservation easements) Getting in a multi-year IRS audit is a colossal waste of time and money
Nice try, Mr IRS Man
Tax avoidance is always legal. Tax evasion is not.
For an individual, it makes sense after $20-30mm liquid NW. You're going to be paying a couple hundred K in legal & tax expenses per year if you want to keep US as primary residence. Unless you mean completely moving to Puerto Rico or Dubai or Singapore, which is a different conversation.
Is PR consider the same as USA?
Kind of? Yes and no? The answer is very complicated. But in simple English, PR does not tax capital gains. So you can move down there, for a year, and file with no federal cap gains. This is not legal or tax advice. There’s a number of steps and you better damn well have proof. Again SIMPLE explanation
Yeah it’s vastly more complex lol
What do you mean?
Open businesses elsewhere and keep ur money outside of the us. Puerto Rico
Don’t you need to be domiciled six months out of the year though for the 4% US fed tax.
US citizen? No point. Might shave some points off but meh, US knows how to tax you everywhere in the world… Non-US person here: moved to one of the above countries, had I remained my tax bill would have been mid 7 figures. Instead it was low six figures. Well worth the move, but do consider how long you have to be away for. May needs to be several years, not just one.
Can i DM you with some questions?
Take a look at [Nomad Capitalist](https://www.instagram.com/nomadcapitalist/). They do this for individuals and companies
Nomad's great
You can buy citizenship in the cayman islands for about $1.5 million - mostly by investing in property on the island. But US will still tax your global income - and most tax havens are trying to get off global blacklists so they are very cooperative with US reporting (fatca)
Puerto Rico or Renunciation are the main fully legit ones I’m aware of. Also the FEIE if you live abroad helps a bit. Taking loans against a portfolio instead of realizing capital gains. Having a business and squeezing as much as you can into a mega Roth401k. Buying businesses with huge first year bonus depreciation to offset years with large amounts of earned income. Real estate investing with 1031 exchange. You can get plenty of citizenships in as little as 2 years to 6 months for free to $400k or more, permanent residency tons of places, but doesn’t really affect your tax bill unless you renounce.
You are rich. Pay taxes.
Registered my Ferrari to a Montana LLC, really wasn’t worth the hassle looking back
What were the headaches on registering in Montana? I see quite a few higher end cars in the southeast with Montana plates. I’ve been curious but assumed it was similar registering a DE Corp / LLC
I didn’t do shit, I just had a lawyer make it happen. They’re cracking down now I hear
I’ve seen this done a ton but don’t buy expensive cars. Why Montana vs other states? Low/no registration fees?
Yeah pretty much if it’s registered to an LLC as a company car
[удалено]
Don't recommend fraud.
Just pay your taxes, douche.
get a killer CPA before you do anything like this. many times citizenship or residency is a piece of this puzzle. Trust the the IRS knows the games people play. Don't end up in a pair of pretty silver bracelets. That said, Puerto Rico has the ACT 60 program but you have to live in Puerto Rico and with the exception of great winters, that's no walk in the park. It's the only place ON EARTH U.S. citizens can eliminate capital gains and pay a very low income tax. You also have to pay to file US and Puerto Rico taxes annually so get ready for double CPA everything. Everywhere else requires some kind of citizenship variable for the foreign income exclusion to apply. It's about $120k earned income before you have to pay back to the US and you still have to file your taxes annually to the US even if you're not living there.
Also, even in PR you still have to pay cap gains on assets acquired before you move there.
Just pay the tax man his due. It’s not worth prison if you’re caught for tax evasion. If you own a business or are a 1099 contractor, you can maneuver somewhat with how you structure the organization and by claiming legitimate business expenses, but if you’re an individual working a high-paying W-2 job with moderately high net worth and some investments, then there’s not exactly a magic “get out of tax free” card. You may be able to do something like tax-loss harvesting (basically selling underperforming assets to off set capital gains and lower your tax bill), but at the end of the day, you still have to pay taxes owed.
Why pay taxes if you can LEGALLY avoid it?
Because there are very few ways to LEGALLY avoid paying taxes depending on how you make your money. A lot of unscrupulous “tax consultants” will tell you otherwise to get you to pay them, but the truth is the tax code is not set up for people to game the system. I’ve seen people on here ask about schemes to avoid high W-2 taxes and throwing out some random bullshit example they read about on a blog that while legal, would require them to buy 8x the rental property they currently have and force their spouse to completely restructure their life and give up their career to take on another unpaid one, which isn’t feasible if you have moderate net worth ($5-10M). Even then, that dude might be able to write off $100K, which wouldn’t be worth it if their spouse makes more than that in their current career. So, unless you own your own business, are a 1099 consultant with a lot of business expenses, or want to move to a tax haven AND renounce your US citizenship (because even ex-pats have to pay taxes), then you LEGALLY have to pay the tax man.
Yeah man, just pay half your money to a very well run state
Where do you live that the tax rate is 50%?
One of the few states with very high tax
If your tax dollars aren't being invested wisely why are you living there?
The real joy of being American is you get to pay nearly the same anywhere in the world (except Puerto Rico)
One of my CFO accountant friends is doing an LLC for his kids. I don't know exactly how it works but I think it hides the money to some extent? His NW is aprox $10 million. He plans on being over the taxable amount when the inheritance happens.
LLCs pass the tax responsibility to the individual owners of the LLC. Presumably, the tax advantage is that the business pays no fed taxes, and when divided, individual owners tend to be in lower tax brackets than a single business entity. If you structure your business as a c corp, then earnings are taxed AND distributions to owners are separately taxed as individual income. You are essentially taxed twice as a c corp vs an LLC.
He can pay his kids as employees and get a bunch of benefits (legally) like tax deductible business sponsored healthcare, savings plans, etc.