Why the Rich Pay Almost Zero in Taxes (Legally)

We have a lot of, especially on the tax side, we have clients in there and they're like, And I'll just say this, and I appreciate it, like, hey, I don't want to pay any taxes ever.

And we had this really funny situation of like, before they're getting ready to sell, I'm like, hey, you go show some profits sometime your tax return, otherwise people aren't going to believe your EBITDA.

You know what I mean? They're going to be like, you need to show something to get a multiple to sell your business.

But then you run into what can we do to help either defer or outright not pay taxes right off of the game? For those who are listening, why don't you dive into that a little bit more, what you're talking about, because there are some really cool strategies, especially in real estate, perhaps in oil and gas, of where you can find ways to, at a minimum, defer that gain for perhaps your business sale or doing other ways to defer sales.

Why don't you go ahead and talk about that?

Yes, there's a lot to talk about here.

So I am a tax strategist.

I'm not a CPA, so I'm not giving anybody specific tax advice to give that disclaimer.

So consult your own professional or get a referral to one of our tax strategists that we refer people to.

But basically, there's some real amazing things.

I was paying about a 25% effective tax rate when I was a medical sales And then I got down to about a 1%, and it would have been zero, but because it's California, they take their pound of flesh.

So how did I do that? It was through something called the real estate professional designation.

I talk about this in my book.

You can learn about it online on all different places.

But basically, if you or your spouse, so it can be your spouse as well, put in 750 hours a year, and it's got to be 51% of your working time, you can use losses or depreciation from real estate investments against your ordinary income or your spouse's ordinary income.

So I've seen this, it sounds kind of like that.

I just said a lot there, but basically what it is, if I invest a hundred thousand in a real estate deal, often some of these deals produce, you know, 70, 80, $90,000 in passive losses.

What that means is there's no, or depreciated losses.

There's no actual losses.

It's just that you take them this year and you defer them to future years.

So it's a way you basically kind of continually kick the can down the road.

So that's one strategy people do.

We can get more into that if you'd like.