Source: Dinar Daddy’s Tidbits
URL: http://feedproxy.google.com/~r/115/BKGb/~3/xjdFg_FBhsM/

Dear ____________,

I do not know your name. However this is my business address and I am a guy and I am an attorney who for years did asset protection planning, business structuring and I still represent a handful of very wealthy clients who are now all dear friends around the globe.

This morning I finally gave up and decided to write someone to let someone know that there is a lot of very poor advice going around concerning the avoidance of State Income Taxes. I see it everywhere. “I have a plane on standby to fly me to Texas” etc., etc.

All I can say is if someone believes they can simply pop down, over, sideways to Texas, Florida or any other of a handful of states and avoid State income taxes in their own state where they; 1. Live, 2 pay bills 3 Paid taxes last year and have not moved from their residence. Then these folks are smoking some good stuff and that is a fact. Flying to Texas or any of the handfuls of states for folks to “cash-in” will not avoid state income taxes. However let me say this Texas will be glad for them to come, use their hotels, eat at their cafes and pay the hefty tourist tax and sales tax. The reason being to fall under the no state income tax in Texas and other states you have to be a resident of that state. You have to have a home there, you have to have a driver’s license, and you have to be registered to vote. Texas has to be your domicile. And this all takes about 60 days if you push it. Other non state income tax states are the same.

Whoever is spreading this stuff it is pure “fertilizer” and that is the honest truth. I cannot believe people are so suckered into this stuff they all take a step of faith, make an investment and then they all start believing some so-called “guru”. It is horse fertilizer and that is the truth. I challenge folks to go visit their Tax attorney/CPA, take money with you and pay them a couple of hundred dollars because they do not work for free and you should not expect them to. They worked hard for their degrees and their knowledge that is what they get paid for. And I assure you as sure as the sun is going to come out on Saturday they will say the exact same thing I have just said above. It is a bunch of horse fertilizer to con yourself into believing otherwise. The fact is if you choose to live in a place like New York, California, Washington State, and God forbid Illinois. You deserve what you get as you chose to live in that high tax state. How do you think those states pay for all those glorious services? You are a resident of that state. So folks need to get a “reality check” Go ahead do the right thing get some professional advice. I am lying or I am dying and I know I am right. I have to counsel people every day from various states and around the world about how things are handled here in the states.

I do not even live in Texas. I did 6 months ago, now I live in Oklahoma that has a top rate of 5% income tax. I cannot avoid it, I live here, I have a home here, my kids go to school here, I vote here. 

Anyway I had had enough of the horse fertilizer and my problem is I actually do care about people I have a conscience and if people do not believe me then please be a “Good Steward” go get a professional opinion from a tax attorney or a CPA in your state. If whoever they choose is worth anything they will tell you the truth.  Pay them they are worth it!

LLCs – these are pass through entities. If you spent money to set one up in your state you have avoided nothing, even if you set it up in Nevada. Come 2013, April 15, every dime that flows through that entity will be deemed as income to the Member who holds the shares or Membership Certificates. It is taxed the same as an S-corporation. It all passes through to the tax payer at the taxpayers rate.  You can control some of it coming through as W-2 Income and the rest as dividends but that is all you can do.  No magic trick here.

Additionally, putting your money through a TRUST that is not a Charitable Trust will be taxed at the highest rate in the United States. Revocable Living Trusts do not avoid income taxes, Business Trusts in Massachusetts do not avoid income taxes – you try this and you might as well paint a big bulls-eye on your hiny because the IRS will see the red smoke and nail you for trying to avoid income taxes.

Charitable Remainder Unitrusts work. However very strict rules and you certainly do not want to set one up until it is time because the minute you set it up the Trustee who should be independent has a duty to maximize the interest earned and therefore they would sell your IQD to fund the trust whatever the rate is because the Trust under federal law has to pay out between 5 and 12% of its income to its income beneficiary. Yes you can kill all tax with one of these babies. However lots of strings attached and you lose control. I would rather use this as an estate planning device along with a Charitable Lead Trust.

The conclusion is pay your tax, but be smart. See a CPA or Tax attorney after you have cashed in. Have them give you an estimate of what you will owe. Set up a tax account and put the money in that account and have it invested in something safe. Municipal Bonds that will earn tax free income. U.S. Treasuries something safe. Have the interest poor over into your other account and make your quarterly tax payments. This is being first a “Good Steward” and secondly “As wise as a serpent and as harmless as a dove” and you are doing what Jesus commanded, ‘Rendering unto Caesar that which is Caesar’s.” Again this safest course of action. Why go out there and make this investment, hit the mother load and then blow it out of sheer ignorance. Sure you can probably afford the tax penalties and interest you will get hit with if a person plays it stupid. However is that the right thing to do? Get a stiff neck out of sheer pride? Pride does come before the fall and that is what it is to ignore laws in your various states.  Ignorance is bliss!!!!

I know I have been rather brutal and blunt but again no one has ever accused me of giving poor advice. It is good solid counsel from someone who believes and is accountable to a higher authority and that is not Uncle Sam I assure you.

Do the right thing!

I remain,

With warmest regards,

Mother, Esq.

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