we've had our YouTube channel for over 3 years you guys have learned LLC training from me S corporation training Advanced entity structuring but you've never got to see how I structure my entities in today's video I want to show you guys how I structure my entities for tax savings but more importantly how I structure my entities for liability protection one of the most important things that I've done is educate other individuals on the purpose of having their entities structured completely by whether or not their operational entities or their asset-based entities this formula here or structure
I like to call the T formation but shout out to Mark hohler he calls this the um the trifecta Mark calls this the trifecta because Mark teaches on separating your operations your assets and having everything being owned by a trust typically a revocable living trust but as you guys can see here I have a bunch of bubbles on the screen so I'm going to start to make this all make sense for you on the left side of the page I have my operations with the top of my operation being an S corporation part of the
reason why I decided to establish an S corp is because as my businesses started to grow it made sense for me to pay into payroll taxes on how much I was giving myself from the business as opposed to paying into self-employment taxes on my business's entire profits now I have a couple of businesses I actually have three single member llc's that are all 100% owned by my S corporation which is tax Alchemy these individual llc's all do different things I have a crypto mining company where we have minor set up I run an education business
and I have an insurance business and each of these businesses are separate and have separate liability and they all flow up into my S corporation which is tax Alchemy where I do my tax Consulting outside of having a tax consulting company I also have a C corporation and this C corporation strictly runs events because I have income that flows from this LLC up to this S corporation and these other two llc's up to this S corporation I'm only paying taxes one time here in this escort but before the end of the year what I'll typically
do is I'll move money over into my events company which creates a tax deduction for my S corporation and because my events company operates on a different fiscal year end than my S corporation I'm able to receive a tax deduction for the income that flows up to my es Corp and my C Corp will file a tax return on a later fiscal year end not to mention the C Corp is at a 21% flat tax rate with an S corporation this goes all the way up to 37% so there's about a 16% difference on the
income unless I decide to take a salary from that SC Corporation but to finish out the left side of the page here one last thing that I want to share with you guys is that I have a private family foundation with the private family Foundation we decided to set up a 501c3 underneath the private family designation which allows for my family members to be on the board of directors as well as me and my wife and I have all of this flowing over to our revocable living trust the reason why is God forbid if something
were to happen to me I would want my daughter and my beneficiaries to be able to receive my assets including my business without that process of probate coming in the way to ruin everything if you're somebody that's watching this right now you're probably wondering well this seems a little complex what about Carlton saving money on taxes this is a part of how I save money on taxes because having a private family Foundation allows for me to roll over 30% of my adjusted gross income into a philanthropic entity structure that saves me money on taxes having
my three llc's owned by 1 esor S corporation allows me to flow the income from those three llc's to 1 es Corp so I don't pay self-employment taxes on each individual LLC I only pay payroll taxes at the S corporation level having a C corporation that's operating in a different fiscal year end allows for me to shift income over to the C corporation that's an events business and this events business can then spend the money down on a different fiscal year end so this is how I structure things on the operation side but as many
of you guys know I also own real estate and I own real estate in Texas I own real estate in California and I own real estate in Florida but in Texas what I love about Texas is Texas has specific laws to Series llc's so instead of me having to formulate LLC number one LLC number two LLC number three for each of my duplexes that I have in Texas I formulated one series LLC in the state of Texas that means I have subsidiary bank accounts associated with each of these properties and it's almost as if they're
sitting in their own individual llc's but they're all underneath one series LLC and to make this simple for you if something were to happen to property number one I wouldn't want anything to happen to property number two or property number three in the state of Texas but I also don't want to have to file tax return number one Tax Return number two and Tax Return number three in the state of Texas so I created one series LLC in the state of Texas which allows for me to have sub series underneath it to separate each of
my properties this series LLC is owned 100% by my Wyoming partnership company that I have between me and my trust now this series LLC that's in Texas is 100% owned by my Wyoming entity and the reason why I have a Wyoming entity is because I really want to have anamin I don't want people to know that I own that LLC in Texas and I don't want my ten to ever figure out who is managing these properties so I have a Texas LLC that is owned 100% by my y oming parent company in the state of
California I have a 10un property here as well as a duplex my California properties are inside of one California based LLC and that California LLC is owned 100% by my Wyoming parent company and last but not least I have my property in Florida and with my real estate in Florida I've set up one Florida LLC which is a single member LLC and that Florida LLC is also owned 100% by my Wyoming LLC this right here this structure on this side can continue to grow if I buy more rental properties I'm going to set up more
llc's based on the state that they're in or if I'm buying more real estate in the state of Texas I'm going to go ahead and add on to my series LLC that is already established in the state of Texas going through the process of setting up this structure allows for me to do two things one it allows for managers and members names and information to not be listed online it allows for me to be able to use a virtual address and most importantly it gives me charging order protection with this entity we call them copes
charging order protection entities because it provides me with inside liability protection and outside liability protection God forbid if my tenant slips and falls inside of the investment property they can't come after my personal assets God forbid I get into a car accident driving personally they can't sue me and have me liquidate my investment properties inside and outside liability protection is extremely important and unfortunately certain states don't provide charging order protection in the particular state that you have your investment property in This Is Why Real Estate Investors will go through the process of establishing parent companies
that manage over all of their holding companies or own all of their holding companies like mine in Texas California and Florida so that way I have that charging order that I'm looking for that liability protection my name and my information isn't being held online and the last step is just to make sure that I link this Wyoming entity to my trust if I don't link this Wyoming entity to my trust what ends up happening if I were to pass away is my children would inherit my properties and they would not be able to receive a
step up in basis Step Up in basis is the most important wealth building tool as it pertains to owning investment properties if you believe in transferring assets to your children you're going to establish a trust and you're going to transfer ownership of your interest in the Wyoming LLC or your entities that own your properties over to your revokable living trust this way God forbid when something happens to you these assets go directly to your children they will get a step up in basis and not have to pay capital gains taxes on what you owe nor
will they have to worry about the probate process and wait 6 and A2 months for those assets to be released to them so they can figure out what to do with your estate this is how you build wealth right and although this is how I structured my entity this is not how you should structure your entities every single person is going to have their own tax plan and the reason why is because every single person has their own living situations maybe you have children maybe you don't have children maybe you do have a wife maybe
you don't have a wife maybe you have a husband maybe you don't have a husband maybe your spouse qualifies as a real estate professional like my wife does maybe your wife doesn't qualify as a real estate professional so depending on what your overall strategy is we'll determine how we wish to structure your entities for taxfree wealth hopefully this is giving you more information in regards to why people do the things that they're doing with their well seas in corporations and why I've chosen to structure mine like this but this is only a small picture to
how I save money in taxes if you're interested in learning more about what you can do to incorporate some of these strategies that I talked about today into your tax planning I would encourage you to join our community below and be sure to schedule a consultation my team will determine if it makes sense for us to put together a sample tax plan for you to see how much we can save you before you decide to engage that's all I have for today's video If you enjoyed today's video go ahead and like comment and share this
with one other person that is Building Wealth by formulating entities I'll see you all on the next video
