How Donald Trump Avoids Paying Taxes Legally ($750.00 in taxes!)

many of you are now aware that donald trump only paid 750 in federal income taxes now you may be someone who's getting pissed off or you may be someone like me who gets a little bit excited when they hear about this type of information because maybe you're someone who's curious to figure out what you could do to pay as little taxes like donald trump my name is carlton dennis and welcome back to taxes made simple in this video we're gonna go over the top five tax strategies that donald trump leverages to reduce his tax bill in real time for 2021 let's dive in [Music] the truth of the matter is is that there is nothing patriotic about paying taxes actually it is more patriotic to not pay taxes and the reason why is is because if you start to study financial literacy you'll start to realize that the irs tax code is actually a rule book that teaches you how to avoid taxes legally and the wealthy have been playing the tax game for years upon years and decades upon decades and donald trump is the savviest of them all one of the things that donald trump has done is he's not only gotten his family involved his relatives involved he's gotten everyone in his circle involved to help him reduce his overall tax bill now it's not to say that you can't do the same thing it's just going to require a big level of information and in this video we're going to go over some steps that's going to give us the information so we can start saving tax dollars like donald trump so let's dive in tax secret number one r d tax credit r d tax credit stands for research and development tax credits and just want to make sure you understand tax credit is different than a tax deduction a tax credit is truly a dollar for dollar money given to you by the government to reduce overall tax whereas the tax deduction just reduces the amount of money you're going to be taxed on an r d tax credit is given to business owners who are conducting qualified research and for business owners who are conducting qualified development now the r d tax credit can be upwards to 20 on research and development items which means that you're given money upwards to 20 based on the money you are spending to conduct research and do development inside of your business now donald trump does a lot of research and he's conducting a lot of development between multiple organizations which means that any time that he is spending money on research and development that he can qualify for these research and development credits if his accountants are looking for them not to mention is if donald trump had really savvy accountants then these tax accountants can even go backwards up to three years the allowed limit by the government to amend your tax returns to allocate research and development credits into previous years in which he's already paid tax in return donald trump can reduce his tax bill right now in previous years and he can even leverage research and development credits moving forward reducing his tax bill now this is also something that you can qualify for as a business owner but we need to know what are the four qualifications that stand and justify being research and development so let's go over them all right let's go over the four qualifications to qualify for an r d tax credit qualification number one permitted purpose the purpose of a qualifying project must be related to creating a new or improving an existing business component so what this means is if you're getting into r d you have to be creating a new or trying to improve an existing business component in order for this to qualify as an r d tax credit so what a lot of my clients will do is they'll start consulting with tax strategists or r d tax specialist to make sure that what projects that they're working on are in align with this law number two technological in nature technological in nature just means that the work needs to rely on principles there is biological principles there's engineering principles or technological principles these principles need to be followed in order for you to qualify for the r d tax credit step number three elimination of uncertainty when working on a project there needs to be uncertainty when going about trying to create your desired product and when you're going about creating your desired product or outcome your approach needs to be able to solve a problem and so when i think about this step right here qualifying for an r d tax credit i'm always thinking back to elon musk and what he's doing with spacex right elon musk is trying to get to mars and the different planets so he's doing things that have never been done before right so the method in which he's trying to get there is is uncertain there's uncertainty around his method and since there's uncertainty around his method he's trying to solve problems around that uncertainty so he can make it certain and be a repeatable process of how we can always get to mars or to the moon so anytime he's doing this level of uncertainty and solving this uncertainty piece he's qualifying for research and development credits so what this step is is called elimination of uncertainty and this is another step in which we have to follow to qualify for an r d tax credit and step number four process of experimentation process experimentation means that you've tested out your product you've tested out your process so you can get to a place where you have eliminated uncertainty when you've gotten to this place then you have accomplished all four steps to qualify for an r d tax credit now that we know that donald trump loves to leverage r d tax credits let's go over strategy number two accelerating depreciation accelerated depreciation has to be one of my favorite tax strategies to leverage as a tax strategist because i work with a lot of real estate investors oh really majority of what i do is i teach real estate investors how they can leverage depreciation to avoid their taxable income whether it's income that they're earning from real estate or it's earned income that they may receive from a w-2 job my goal is to try to help my clients leverage the real estate losses to offset earned income but one of the ways in which you can leverage real estate losses is by accelerating depreciation now accelerating depreciation can be done in a number of different ways because there are different depreciation methods but the most popular method that is being used to accelerate depreciation is called the cost segregation strategy donald trump and many other investors are very familiar with what a cost segregation study is it's a tax strategy used by savvy real estate investors to separate the costs associated with components of their property that do not last 27 and a half years for residential real estate or 39 years for commercial real estate and they're choosing to write off these items inside of their property such as the washers the dryers the flooring the nuts the bolts the screws the windows in five seven ten and fifteen years instead of the normals depreciable life of the building so in return we're creating huge depreciation losses on the tax returns now in order to be able to utilize the losses against other income donald trump would need to be spending a lot of time in real estate and managing businesses which means that he would need to be a businessman and he happens to be a businessman and being the fact that donald trump spends a lot of his time managing his businesses including some of his management companies that manages his real estate he might even be deemed a real estate professional someone who can use passive losses to turn them into active losses anytime we have passive losses that become active losses active losses can offset all versions of income active losses can offset retirement income social security income bitcoin income golf course income that donald trump has to see no income that donald trump has any versions of income so the most important strategy is the cost segregation study because it allows for donald trump to constantly accelerate depreciation on any rental properties he has and donald trump got into real estate first let's go over strategy number three nol carrybacks and nol carry forwards now this one is something that is very hidden in the tax code because not too many cpas talk about nol carrybacks and in a well carried forwards anal carrybacks and it'll well carry forward stands for net operating loss carry forward and net operating loss carry back now what this means is is that you have the ability to carry losses that you've experienced on your tax returns such as from accelerating depreciation taking research and development tax credits right you're right you can use these losses and roll them back into a year in which you've already filed tax returns and paid tax now when you do this what you are doing is you're filing a new tax return and you're recording additional expenses inside of the tax return in which you already pay tax and if you do so that means you're processing another return and giving the government an opportunity to process a refund to you in the amounts that you overpaid in taxes donald trump has amended a lot of his tax returns for these reasons not only to include research and development tax credits not only to include accelerate depreciation but to leverage the losses from the depreciation that he's accelerated to roll them back by leveraging the nol carry back strategy to offset income in taxable years now on the contrary side any losses that he doesn't use any losses that he chooses not to roll backwards two years can now be rolled forward indefinitely that means that any losses that you experience this year in 2021 that cannot offset taxable income can roll over into the next year and offset new taxable income in the following year serving you especially if you're planning on having multiple businesses that are generating multiple versions of cash flow all right let's jump into strategy number four the private family foundation the reason why this is a big strategy is because a lot of wealthy individuals like the trumps the kennedys the bushes they implement their family into their organizations for advanced tax savings the private family foundation is an advanced tax strategy you may have heard of 501c3s this falls underneath that same category of being a non-profit but the private family foundation operates completely different than the non-profit because the taxpayers who own the private family foundation have full control of what that foundation does let's talk more about it with the private family foundation here are the rules anytime you have a private family foundation you can roll over up to 30 of your adjusted gross income into your own philanthropic entity structure that you have control over that's correct so what that means is if i had 100 000 agi i can roll over 30 000 into my own foundation and receive a tax deduction for it now one of the items that we have to realize about the foundation is it's a philanthropic vehicle it is meant for charitable donations and charitable giving but you have to realize something about these foundations a lot of these foundations end up needing to hire employees to work inside of the foundations which means if you have children cousins uncles and family members these could be employees that you hire inside of the foundation that you also pay to work the foundation based on what the characteristic of your foundation is supposed to be doing your foundation can have many different characteristics maybe your foundation is set up to give back to the boys and girls group and your local community or your foundation is uh set up to help distress uh neighborhoods and rebuild distressed neighborhoods you can have various different uh characteristics for your foundation but one thing remains the same is when you do have a foundation the rule is is that five percent of the foundation's value has to go out to some type of qualified charity or 501 c 3 organization which means if i rolled over that 30 thousand dollars into my own private family foundation at least 1500 would have to go out to some type of charity or organization in a check from my foundation now the rest of that money is sitting in my foundation which means it never went off in a check to the irs or in a check to the state if i'm subject to state taxes so this is another way that the rich can defer taxes by also being philanthropic and leveraging family members at the same time by hiring them on payroll through the private family foundation now strategy number five is one that i would recommend consulting with the tax strategist before you even think about setting this up and this strategy is called the off year c corporation the off your c corporation is a unique strategy that we use in my office and the reason why we'll use it is because i have a lot of clients that have s corporations that are starting to make one two three million dollars and so the s corp is starting to become a vehicle where they're taking on tons of flow through entity they have their payroll that they're issuing out to themselves and then they also have their business income that they're getting a flow-through deduction on but it starts to become a point where the s corporation is holding too much income so we start to think for a second how can we set up a way for us to avoid taxes without complicating things well maybe we can set up a management company and maybe this management company does not file tax returns at the same time that the s corporation files tax returns so this is where we look at setting up an off year c corp and off your c corporation means that it has a different fiscal year end which means it files tax returns on a different year in than your existing entity structure and if your existing entity structure pays management fees to the c corporation your existing entity structure gets to record that as an expense avoiding taxes which means you are buying yourself time to avoid taxes on the money that you sent over to the c corporation now the c corporation is a management company which means it has a responsibility to do something which means if you do nothing this income sitting in here you are going to be subject to taxes on it right now as i'm filming this video biden has not implemented his tax proposal yet so the c corporation is still at a 21 federal tax rate so which means if we pay money from our s corporation over to our c corporation we'll take a tax deduction now and we can file our tax returns then we'll have a whole nother 365 days to figure out how to offset the tax liability in this new c corporation that we set up and if we can't then any money that we have left will be subject to the 21 federal tax rate see this this strategy right here to someone who's trying to avoid taxes at all costs sounds very intriguing because a lot of my clients they would rather have that money to go invest in more real estate to create more losses to play this whole game that donald trump plays where we do the cost segregation strategy and qualify for a real estate professional so we can offset all of our income and this is the game that i want you guys to start playing as you continue to absorb my content continue to ask yourself questions is this something that i'm capable of doing can i dedicate enough time to getting into real estate will i be able to spend time to be able to leverage losses can i learn from someone like carlton or a tax strategist so i can accelerate depreciation and leverage r d tax credit because it does require you partnering with the tax professional now i've enjoyed doing this video for you guys today but i'd love for you to do something for me go ahead like comment subscribe if you like this video so i can continue to create more content for you and it'll help out the youtube algorithm i look forward to seeing you all in the next video take care [Music]

Channel: Karlton Dennis

Views: 27,501

Keywords: donald trump, trump taxes, tax savings, trump tax returns, trump tax savings, trump tax bill, tax free, reducing taxes, legally reduce taxes, tax strategy, tax free living, karlton dennis, Trump paid $750 in taxes, Trump tax write offs, Trump tax secrets, Write offs for the rich, Millionaire tax deductions, Millionaire tax strategies, How to avoid taxes like the wealthy, How to write off almost anything, How the rich avoid taxes legally

Id: 9R1YLpk9hP8

Length: 16min 4sec (964 seconds)

Published: Fri Jun 04 2021