The $100K Tax Write-Off the IRS Doesn't Want You to Know | Karlton Dennis DSH #1002

So, when the IRS hired all those agents last year, I think it was 67,000.

Did that impact your business a lot?

No, it has not impacted my business.

What it did do is it made sure that a lot of people started focusing on bookkeeping and accounting.

And for many business owners who are doing their own bookkeeping and accounting, they don't know how to categorize their own expenses.

Yeah, I remember my first year of drawstrip and getting that tax bill from Shopify.

I'm like, what's this?

You know what I mean?

Why do I have to write such a big check?

Yeah, and that's the worst part about that.

All right, guys, Carlton Dennis here today.

Someone I've been trying to have on for a while.

Thanks for what you do, man.

Thanks for coming on.

Absolutely, man.

Please be here.

You help people save money.

I help them keep money.

Absolutely.

Yeah.

And that's a powerful skill to have.

Yeah.

You know, not a lot of people have that capability.

So I think that's why you're crushing it.

I think there's just an absence of tax professionals trying to teach people how to leverage the tax code versus tax professionals that just file tax returns.

Right.

So I'm all about keeping money.

Yeah, because I used to have an old accountant and he knew none of these hacks.

Like I remember when PPP came out, ERC, like he didn't even know how to file these things.

And that's exactly how I blew up.

Right when ERC and PPP loans came out, I got on YouTube and I shared with people how to get the PPP loan, how to get the EIDL loan and how to set up LLCs.

And that's how our brand grew so fast.

There just wasn't any tax professionals teaching people how to do that.

Right.

I feel like the older guys, they learn what they do like 40 years ago and they just don't learn anything new.

Yeah.

And it's okay to just file tax returns.

But in today's day and age, there's just so much information out there.

So if you're trying to help somebody save money in taxes, you got to go study.

You got to go learn all the tricks of the code and be able to deliver it in a way that somebody actually understands it.

Right.

And there's new codes coming out all the time, right?

Yeah, absolutely.

Every year.

Wow, every year.

So they change that frequently.

Absolutely.

Congress can approve something and it goes into effect within a year.

Got it.

So do you have your eye on any new codes coming out next year or later this year?

One of the things that we're monitoring right now is whether or not bonus depreciation will go back to to 100%.

So you've been seeing all these people buying cars that weigh over 6,000 pounds, G-Wagons, Lamborghini Uruses.

Well, you're only able to write off 60% of the purchase price right now.

But if we can get Congress to approve this bipartisan deal that's sitting in office right now, we are going to get 100% bonus depreciation back.

So if you spend 100K on that F-150, you can write off the full 100K, even though you may have only financed it and put $2,000 or $5,000 down.

Wow.

Can you post it on that one?

Absolutely.

Yeah, I bought a G-Wagon last year.

Was it 80 last year or 60%?

It was 80 last year.

Okay, yeah.

I did it last year, December 29th.

See, and that's when business owners need to save money the most right at the end of the year.

So you just, what can I throw money at?

Vehicle deduction helps you out so much.

Bro, the dealership was packed.

Yeah.

He said they sold 10 G-Wagons that week.

It makes sense.

Even G-Wagon on their website or Mercedes on their website will put G-Wagon is over 6,000 pounds.

They know who they're selling to.

Yeah, they know.

I didn't know Eurises were over 6,000.

Yeah, the gross weight vehicle ratio is over 6,000 pounds for a Lamborghini Euris.

When I looked it up, I thought it was under, but maybe I was looking at something different.

Yeah, and you have to check out the model, too.

I think the new Perfamonte Urus is also over 6,000 pounds.

Got it.

And is there a weight limit for jets?

Jets automatically qualify to be

off.

Yeah.

And the cool thing about jets is they're on a lag depreciation schedule.

So right now, you're able to write off a vehicle 60% bonus depreciation, but a jet, you could still write off a jet at at 80% bonus depreciation this year.

So it's on a little bit of a lag depreciation schedule as opposed to vehicles.

Got it.

Yeah, I saw Grant Cardone do that and meet Kevin.

Yeah.

They both bought jets.

And more and more entrepreneurs now are buying jets because it's a way for them to get around.

It's a great tax write-off.

And for many of them, they need to get around without going into a commercial airport.

So I like the idea of buying jets if you can afford it.

So when the IRS hired all those agents last year, I think it was 67,000.

Did that impact impact your business a lot?

No, it has not impacted my business.

What it did do is it made sure that a lot of people started focusing on bookkeeping and accounting because at the end of the day, the IRS wants to figure out whether or not your expenses were justified.

And for many business owners who are doing their own bookkeeping and accounting, they don't know how to categorize their own expenses.

So I've seen bookkeeping as a service heighten when the IRS announced that they were going to be hiring those 80,000 number of employees.

Right.

To be fair for the business owners, they're not taught any of this.

No, not at all.

I mean, I didn't learn tax when I was in school or accounting.

Not at all.

Yeah, I remember my first year of dropshipping getting that tax bill from Shopify.

I'm like, what's this?

You know what I mean?

And you're like, why do I have to write such a big check?

Yeah.

And that's the worst part.

Our first one hurt, bro.

Yeah.

Because you spend all that money if you don't know better.

So you assume like you make 100K, you just keep it all.

And that's the part that I try to teach people about entrepreneurship.

It's when you go into business, you make money first, you spend money second, you give money to the IRS third.

Different than when you're a W-2 employee where you make money first, then the IRS takes the money second, and then you're left over with whatever else is left over to spend.

So as a business owner, you have to be extremely mindful around the money that you have in your bank account and how you spend it.

Because at the end of the day, IRS gets paid last.

And if you haven't budgeted for how much you're supposed to be paying in taxes, that's when you can get yourself into a little bit of a situation where you're on the hook with the IRS.

And now you're jumping into another year where you're making money, where the IRS is taxing you, but you're on a payment plan to pay them back for the previous year.

Right.

That's not a great way to run a business.

No, because they tack on interest too, right?

Exactly.

They do tack on interest.

And interest rates are probably absurd these days, I'd assume.

And they keep going up.

Yeah.

It's terrible.

Yeah.

Now, a lot of your clients probably get pitched on moving to Puerto Rico or other countries.

What are your thoughts on that?

My thoughts are is if you can make it happen for you and your family, I mean, that's something to take into consideration if you are making a lot of money.

For most of my clients,

they're more open to moving to a non-tax state, such as Nevada or Florida, versus going all the way to Puerto Rico.

I do have some clients that have moved to Puerto Rico.

Some of them absolutely love it.

Some of them found it to be difficult, especially during COVID situations when they were sick and they were trying to get to the hospitals.

The hospital system works very differently down there in Puerto Rico than it does in the United States.

We kind of have healthcare figured out up here, and they're still figuring things out for what's been communicated to me in Puerto Rico.

So that's where I kind of, you know, really kind of second guess whether or not it makes sense to just jump ship and go down there just to avoid all this tax.

I've heard some nightmare Puerto Rico stories.

Like if you're not in that one neighborhood, it's not safe, I heard.

That's what I heard too.

The gated one.

Yeah.

Dorado Beach.

Yeah.

Yeah.

I don't know if it's worth sacrificing lifestyle for what, 20% savings.

Yeah, essentially 20 to 30%.

They have like a 4% corporate tax.

I believe it's going to eventually go up, just like how Dubai is now at nine percent but oh it's nine now yeah i believe dubai is now up to nine percent because it was zero last year right correct yeah they they incorporated a tax now the uae did that's actually smart funnel everyone in and then start charging tax that's how it starts too yeah which is kind of interesting with some of these proposals between our presidents right it's like um kamala harris has announced that she wants to tax unrealized capital gains um but it's only going to be on taxpayers who have a hundred million dollar net worth and above so it's like they want to land on something right but it's so easy to eventually get that law updated to go from a hundred million to ten million from 10 million to one million right um so you got to be mindful of how the tax system works yeah yeah i grew up pretty democrat so i used to see like tax the rich and used to believe in that stuff but i don't know how i feel about it anymore to be honest it's it's interesting right it's like the more successful you become the more you get taxed.

So what you have to do if you're successful is you have to hire employees and spend money and do things that the government wants you to do to not get taxed, but then to turn around and have everyone vote for you to then pay the highest taxes.

It's just so crazy.

What it ends up doing is it pushes a business owner out of the country.

Now they do start to think about, well, what if I just go to Puerto Rico then?

Now I don't have to provide all these jobs that I've been providing.

I don't have to invest all into all this oil and gas and provide all this affordable housing.

Now it makes the United States and our economy weaker the more we try to tax the billionaires and their wealthy.

100%, because it also forces these guys to hire overseas.

Exactly.

To save on money.

Exactly.

To save on taxes and everything.

100%.

And you're seeing that with programming right now, almost all in India.

Without a money.

I mean, it's three times the price here to hire a programmer.

And we're cutting costs by going overseas, but it's also weakening the United States economy too at the exact same time.

One of the things that Trump is proposing is a tariff system where he wants to tax imported goods that come into the United States, products, and things of that that nature.

What it would force us to do is it would force us as Americans to make more American-made products to save on cost.

So there's an interesting proposal there of eliminating United States tax, but incorporating a tariff system.

Will that work?

I don't know.

There's a lot to be said about it.

But I can understand his logic around wanting to strengthen the U.S.

economy and entrepreneurship in the United States and provide more jobs in the United States.

I could see that because right now we can't compete with China's prices.

No.

Not even close.

When I was in e-commerce, it was not even close.

Yeah.

I mean, I get it from a business owner point of view.

Yeah.

But at the same time, I do want the economy to be USA-made.

You know, I trust the quality better here.

Agreed with you.

Who knows what they're putting overseas?

I mean, they're finding heavy metals and supplements.

So who knows?

Yeah.

QC is much more.

I mean, I hope it's better here.

Who knows?

That's a whole nother podcast with the FDA.

Agreed.

Agreed.

So what were your first viral videos?

Oh, man.

So, the first viral video that we had on YouTube was how to pay yourself as an LLC.

That went absolutely viral because

no one really knew how to turn around and compensate themselves from an LLC and when to switch over from an LLC to an S corporation to try to save some money on self-employment taxes.

So, I put together this 20-minute video, and it was an accident video.

I was meant to go to lunch somewhere, but the person canceled.

So I just turned on my camera and filmed that video that day.

I didn't even have my microphone on.

I just filmed directly into the camera.

So the quality of the sound was horrible.

But I used my iPad and I just drew out a simple example of someone making $100,000, what it would look like to give themselves 30K and leave the rest of that 70K

subject to taxes inside of the business.

And this video just went absolutely viral because it was just a simple way for somebody to understand how to turn around and give yourself money out of your business and what are the tax consequences of taking money out of your business.

And since then, we've created numerous videos around LLCs, whether it's putting your investment property inside of an LLC or placing your children on payroll through an LLC.

So the topic around LLCs was how we went viral the fastest.

Got it.

Yeah, I've seen the children well.

That one got a ton of views too, right?

Oh, yes.

Absolutely.

So you were recommending parents to pay their children.

I am recommending parents to pay their children because not only does it provide a tax benefit, it teaches your child how to grow up being in an entrepreneurial business.

When I was young, my mom had me picking up staples off the ground inside of her tax practice, but I went from picking up staples to then turning around and answering phones by the time I was 18.

And it was just because I worked in her practice earning a paycheck and I knew the value of money and I knew the value of communication as well.

Got it.

So I think that.

Many children should be working.

And if you have a family-owned business, why not employ your children knowing that you can reduce the family's tax by shifting income to them?

That's cool.

I didn't know your mother was in the space too.

Yeah, yeah.

My mom's the OG for sure.

She was your mentor.

She was my mentor.

She's been in the tax and county space for over 30 years.

Wow.

Yeah.

And was she adaptable like you are?

100%.

Yeah.

Me and her have very similar personalities.

And I would say like my eagerness to focus on tax strategy as opposed to tax preparation comes from her because she was one of the only people that was pushing tax planning at that time.

And that was before we had, you know, Twitter, Instagram, Facebook, but she was pushing for people to focus on tax planning instead of just preparation.

Wow.

So that wasn't even a thing 30 years ago, tax planning?

I don't feel like many people knew what tax planning was.

They just looked at their CPA and thought that when I go to my CPA's office, I am doing tax planning.

But when you go to your CPA's office, you're technically just giving them the documents so they can input it into the software and file a tax return.

So many of us who think that we're doing tax planning might not be doing tax planning.

We're just doing tax preparation.

So my mother separated those two services entirely and sold them at two different times of the year.

Tax season is just between January through April.

Everyone who has a pulse that makes over $14,000 has to file a tax return and you're probably going to a CPA unless you're going to turbo tax.

But outside of the months of April 15th, all the way through December 31st, you're still making money.

That's when the wealthy start figuring out what can I do between now and December 31st to mitigate my tax liability, knowing when I cross over on the other side, Uncle Sam's ready to take some of my bag again come April 15th.

So that's when tax planning starts.

And we're projecting out people's income to figure out, okay, this is how much you're going to be subject to.

Now, what are all the possibility strategies that we could leverage between now and December 31st that would coexist with who you are as a person that we can go target and implement?

And that's tax planning.

That makes sense because a lot of people wait till December, like we were saying earlier.

Oh my gosh.

It's too late by then.

You wait till December to find a tax strategist like me.

That's like coming into the emergency room and you just got shot.

You're bleeding everywhere and I'm just trying to hemorrhage the wounds and try to put some gauze over everything.

But if you come to me in like June, that's like coming in my doctor's office with a nurse in the front.

The air conditioning is on.

You have, you know, lollipops sitting in the corner.

It's much more of a relaxed feeling because we have time to make decisions.

But most business owners are making money.

And by the time they're thinking about taxes, it's late in the year.

And now you just have to go spend the money on anything you possibly could spend it on to try to reduce your tax bill.

That's not tax planning.

Yeah.

I've seen some crazy write-offs.

I saw Bradley made a video.

He wrote off his watch.

Oh my gosh.

That's pretty crazy, right?

He was able to do it?

100 grand.

Okay.

Because he wears it in his videos.

So I guess if you're branding with it, right?

It's hard to write off a Rolex because when it comes to Rolexes, the IRS wants to see that the expense was ordinary, necessary, and reasonable to your business in the pursuit of income.

Having a watch, although it can attract the right type of customers to watch your podcast or attract the right type of customers to your business, it may not be the direct reason why you have made money, why you had the transaction happen.

And it's too hard to try to link a watch to say, well, this was the actual reason that I...

I picked up that customer in Turks and Caicos, you know, when I was traveling this summer.

Interesting.

It'd be a lot easier if you had a YouTube channel where you're educating people on watches and you're carrying inventory maybe you have a couple of paddocks maybe you have a couple of rolexes and you're showing people what it would look like to wear these watches hey guys if you ever have any questions reach out to my team we are the watch people now you have a business of educating people you're attempting to make money because you're putting it on youtube which we know youtube is a google is a search platform but also a place where you can get compensated That is a true business model.

And there have been some of my clients who have gone to the extent of starting their YouTube channels, purchasing purchasing watches, educating people on watch trading as a whole.

And yes, they have been able to write off their watches and carry their watches as inventory inside of their business.

Smart.

So I would be a little bit careful trying to just write off a Rolex and saying it's marketing.

The IRS does have tons of court cases that have cited in the favor of the IRS against taxpayers who have done the exact same thing.

Wow.

Yes.

Good to know.

Good to know.

Okay.

So Iman Godzi, he's made a few videos on his watch collection.

Yeah.

Have you seen those?

I have seen those.

It actually inspired me to buy this watch.

Oh, yeah.

I love that.

So he could probably write those off then.

Iman Godzi is in a special category where he is doing entrepreneurship a little bit different than most.

He's inspiring people from a completely different side of the world.

And where he sits, he's not paying U.S.-based taxes because he's not a U.S.-based citizen.

So he's a Dubai citizen, right?

He may be able to write off watches based off of the laws that are there.

But here in the United States, he's under federal tax law.

And under federal tax law, he has to to abide by code section 162A.

Was that expense ordinary to Iman's business, necessary to Iman's business and reasonable to Iman's business in the pursuit of income?

If he could justify code section 162A to us, then he could take that business expense and business write off with that watch.

Makes sense.

Yeah.

So when I see these cybertrucks fully wrapped and the license plate is custom, like their IG handle or something, are they writing off the entire car because of that?

Most likely they're writing off the entire car, but the IRS doesn't care if you wrap the car or not.

So for all you business owners out there that are thinking, oh man, I should just put my logo on the car or wrap my logo on the car, the IRS doesn't care about that.

What they care about is time.

You have seven days in a week.

Of those seven days in the week, how many days was the vehicle being used for business?

How many of those days of the week was it being used for personal?

Now let's expand that over 30.

30 days a month, and then let's expand that over 365 days.

So we can determine based on the business use, how much of that car you're able to write off.

If more than 50% of the vehicle is being used used for business, you can deduct it.

If less than 50% of the vehicle is being used for business, you can't even write off the car.

So if you purchase a vehicle at the end of the year in the last few weeks of December, it's probably easy for you to justify it being business is all you're doing in the last few weeks of the year is just business.

Yeah, the last two days for me.

Absolutely.

I didn't know that, though.

That's good to know.

So over 50%, does that mean you have to drive

like

more than three days a week?

Like, how does that work?

That means that the vehicle has to be used for business 50% of the time or more.

Whether it's being driven or not, it's kind of subjective, but it's really about what the purpose of that vehicle is for.

So if you have your Tesla Cybertruck, but you're working from home and you haven't left the house, it still could be business use, right?

But when are you actually using it personally?

So you should be keeping a mile tracker of some sort, mile IQ, whatever it is, that tracks your personal miles versus your business miles.

And you can literally on these apps just flip a switch, personal business.

that's cool and it'll just track anytime you go over 25 miles per hour it'll just automatically start tracking you i gotta get that up yep we'll link it below um if you can remember the name we'll link it below in the description for people watching absolutely yeah mile iq is a good one cool um is it true the irs will geo-track your phone um they will try to yes in in in intense audits we have had clients Really at the state level who have left California go to other states.

And the IRS will do a couple of things with the state of California.

The IRS and the state of California will audit you to figure out: did you move your doctors, your physicians?

Did you get a new driver's license?

And where are your bank account transactions occurring?

Because if you say that I'm no longer a California resident and I'm a Florida resident or a Nevada resident, you have to be willing to spend six months and one day in Nevada or Florida or any of these states that have no state income taxes.

But California in particular loves to audit taxpayers who are leaving the state of California.

We see so many taxpayers that are getting stock options, restricted stock units that are about to vest.

And before they vest, they just want to leave California before they get all this stock, right?

Let me go to Nevada or let me go to Florida.

But they're playing this game where they may rent a property in Nevada, rent a property in Florida, but they never got their doctor set up there.

They never got their driver's license set up there.

Now the state of California, with the help from the IRS, will start to open up an audit on you.

And what they'll start to do is start asking for your bank account transactions to see,

were you where you were supposed to be in the month of January, February, March?

Where are these transactions happening?

Are these transactions at McDonald's and In N-Out happening in California or are they happening in Nevada?

Let's look at your cell phone.

We can track based off of the cell phone towers where this cell phone has been located.

Wow.

Yes.

So they can pull that information as well.

So if they could track information from my cell phone, they want to know if I have doctors.

They want to know if I moved my dentist.

They want to make sure that I have my driver's license.

You have to jump through so many hoops to try to prove that you're living somewhere else.

You might as well just move to that other location after all that stuff that you've had to do.

Right.

And so if you're somebody that's trying to leave a state that has state income taxes to go to a state that doesn't have state income taxes, please make sure that you do things correctly.

Six months in one day is the rule i would have never thought the doctor stuff yeah like the phone stuff i've heard crazy stories about that but doctors the fact they're contacting doctors is pretty crazy oh absolutely they want to see that you've moved your doctors your dentists things that you are considered to need on an everyday basis so um

did you switch your gym membership um where are you filling up your gas to fill up your gas these are all things that they're looking at wow yes yeah cali's no joke i remember when shohei otani did you see what he did?

Baseball player.

Oh, yeah.

He deferred.

He deferred.

They were pissed.

I love that idea.

That's a great idea.

I thought that was such a smart strategy.

$150 million.

I mean, he's probably saved so much.

He's not going to earn that money as a California resident.

He's going to earn that money whenever he decides to end his contract and then he can move to a separate state and then he earns the money.

Genius move by Shohei.

Because a lot of people, when they sell a company and they live in Cali or a state with high tax, can they do that?

Can they defer the payment?

They're going to pay California state taxes.

Oh, they're going to have to pay no matter what?

They're going to have to pay California state taxes.

You would have to move your business out of California to avoid paying California state taxes.

Got it.

Because California knows that if you earned your money here in California, that they're entitled to a piece of that as well.

And so if you're somebody that has started a business in California and you know you want to eventually sell that business, I would encourage you to move that business out of California, then decide to sell that business.

Absolutely.

You can only defer salaries.

Correct.

Interesting.

even though his salary was like 150 million yeah he's set to make i think north of 150 million on that deal wow yeah which is absolutely nuts yeah shout out to him man

um

all right i see these wild videos i'm sure you see these too about infinite banking oh yeah on social media and it's talk about it all the time this seems too good to be true but what do you think about it i mean it's just a concept around life insurance just telling people that if you have a cash value life insurance policy that you can borrow from your own cash value of the life insurance policy and reinvest it into things that can give you a higher return.

So if I go borrow money from my life insurance policy at 5% and then go put it into real estate and I'm earning 12 or 13%, I just arbitraged my own money.

And then I can do this over and over and over again.

As long as I keep putting money into my life insurance policy, the cash side, I keep borrowing from the cash side and investing it into other things that make me more money.

at a bigger return.

And then I'm obviously paying back whatever I borrowed from my insurance policy.

And when we say borrow from your insurance policy, you're actually not even borrowing from your own policy.

You're kind of borrowing from the insurance company.

The insurance company has assets itself, and they will lend you those assets from.

technically your own cash value side of your policy, which you thus can reinvest into other things.

So the whole concept around infinite banking is really just life insurance on steroids.

That's just what it is.

So it's pretty legit then.

Yeah, absolutely.

Okay.

Yeah, it is legit.

Because some people make these wild videos, but the way you described it, it makes sense.

If you have a good investment vehicle to put that money into, you can kind of arbitrage it.

100%.

And the cool thing about life insurance, too, is you have uninterrupted compounding.

So if I borrow money from my life insurance policy and reinvest that into something else, the money that was in my life insurance policy is still growing and compounding at the exact same rate as if I hadn't touched the money.

That's pretty cool.

right different than if i take money out of the market and i take a loan from my own portfolio it's it's completely different right it seems like a lot of these top ceos and companies have a charity aspect too.

Oh, for sure.

Yeah.

A lot of CEOs now are utilizing the foundation strategy.

And it's really cool because wealthy people have been using foundations for forever, the Bushes, the Kennedys, you name it.

The foundation is awesome because you can put in 30% of your adjusted gross income, like cash into your own foundation.

And you don't even have to give all of it out.

Only 5% of what you put into your foundation has to actually be donated to another 501c3 that's not your own.

Wow.

So if I'm sitting on a million dollars, I could throw in $300,000 into my private family foundation.

I'll probably save somewhere around $111,000 in federal income taxes off of 300K at a 37% tax bracket.

And then now I just drop my taxable income to 700 grand.

That 300K that's sitting inside of my foundation, I can choose how I want to be philanthropic with it, but only 5% of that 300K actually has to go out the door in order for me to keep my 501c3 status.

Wow.

This is why the foundation is so awesome because you can shift income off of your tax return into a foundation without having to give away all of that money.

So it allows for you to kind of control your philanthropy dollars in the event that you don't know how you wish to be philanthropic just yet.

That's a no-brainer.

Oh, yeah, absolutely.

I love, I use my own foundation as well every single year, put money into it.

And when I do decide to give back, my foundation is the one that's giving back.

Carlton Dennis is not the one that's giving back.

Wow.

Yeah.

So it's a win-win.

You're helping people.

You're saving money.

I'm saving money.

I get a tax write-off.

And then my foundation gets to deduct its its donation too.

Wow.

As well.

You're winning three times.

Yep.

And here's the fourth time.

If I decide to put on a foundation event, maybe I want to give back turkeys to Skid Row down in Los Angeles because...

That's just something that my family and I are passionate about doing.

I can employ people, including my own family members inside of the foundation and give them salaries for working in the capacity of the foundation.

So not only did I get a tax deduction for the money that I shifted into the foundation, I can now give my family members salaries if they're working in the capacity of the 501c3.

I love wealth building.

Yeah, all the top.

Amazon has this, right?

Yeah, everybody has this.

All those companies.

Everybody has this.

And all these top guys don't even pay any tax.

No, not at all.

I wonder what bracket pays the most because it's definitely not the top 1% people.

Top 1% of people don't have earned income, which is why they don't pay tax.

And I think people miss that.

nugget when we're teaching tax strategy is the goal is to get rid of earned income as much as you possibly can.

If you can get passive or portfolio income, you can pay as little as 0% in income taxes.

There's so many benefits within the tax code for passive income investors and portfolio investors.

You mentioned Kamala's proposal earlier.

Do you think that has any chance of getting passed about the 25% on passive income?

I don't.

I think the unrealized capital gains would not go through.

I can't see that getting passed.

But it's not to say that I can't see

some of her other policies such as

taking away taxes on tips.

I can easily see that one getting passed.

That would be a huge win for the American people.

And I think both sides have already agreed that that would be a great policy.

That'd be a big one for Vegas.

Oh, yeah, for sure.

All the tipped workers here in Vegas, man, imagine not having to pay taxes on any of that.

That's our whole economy in Vegas hospitality.

Yep.

That'd be crazy.

Yeah.

It would boom.

Yeah.

Skyrocket.

Man, this is an important election.

Yeah, it is an important election and the most important election.

And you're in Cali, so are you in LA?

I'm in Orange County, Newport Beach.

We're kind of like a little pocket.

Yeah, I know where you stand.

That's all you had to say.

Oh, man.

LA is hard for me, man.

It is hard for me, too, bro.

I can't be there more than two days.

I can't be there more than two hours.

I typically go there just to eat something and then I'm back out because if you get trapped in LA, bro, the traffic, everything, it's all about timing going to LA.

It gets too dark, then you have people tweaking out on the side of the streets and stuff like that.

It's like, what's going on?

Yeah.

And you've seen how it's gone downhill since you've grown up.

Did you grow up in OC or?

Yeah, I grew up in OC.

So being within arm's distance from Los Angeles, I've definitely seen how Los Angeles has gone downhill since COVID.

And man, I'm praying for Los Angeles.

I'm praying for San Francisco because I love California.

I believe in California, but we have a lot of work to do to get California back to any form of greatness that I know it can have.

And so I'm hoping that it starts with, you know, more policing.

I believe in funding the police and getting the right type of law enforcement on staff and then better education for sure.

Absolutely.

Is OC hurting pretty bad too?

Not necessarily.

OC is thriving good and well, but they are starting to get some of those break-ins and burglaries because you're starting to see some of the people from San Francisco, LA County coming into Orange County, some of the thefts and robbers that were terrorizing LA County or trying to figure out if they can pierce into Orange County.

But in the area that I live in, very protected,

very safe.

You can't shoot there, right?

You can't shoot break-ins?

Can't, yeah, no.

So that's tough.

Yeah, it's tough.

Yeah, you're absolutely right.

The gun laws in California are absurd.

Yeah, that just doesn't make me feel safe.

Like, why even have a gun at that point?

Yeah.

You can't even shoot anyone with it.

You literally get in trouble for owning your own gun in California.

So, yeah.

So nuts.

Did you see the James O'Keefe video on the IRS?

No, what did he say?

He exposed them, man.

You should check it out.

I would love to see it.

How did he expose it?

So allegedly, I don't want to get us in trouble here, but he found out the IRS has access to view bank accounts.

Interesting.

I mean,

when you file your tax returns, you're putting your direct deposit information on there if you want to receive a refund.

So, I mean, the IRS does have access to your account routing number and checking number, but access to view your bank accounts.

Like the balance.

I did not know that.

Yeah, well, allegedly.

And he's saying basically a lot of these government agencies have been infiltrated and they're weaponized against like certain people.

Wow.

That is wild.

Which is scary.

I would need to watch that.

I'll see that video.

Shout out to James O'Keefe, man.

He's doing God's work.

He just did a crazy documentary where he he illegally crossed the border and filmed it all.

Yeah, so he went to Mexico and said, I'm going to do this.

This drops this week.

The movie premieres in LA.

I'll try to get you in this week.

But yeah, he illegally crossed the border on a train, filmed the whole thing.

Wild.

And showed how easy it was.

I would love to see that video.

I mean, you got to.

That's going to be powerful.

No, it's going to be huge.

You see all these numbers, but when you can actually see it with your own eyes and see how easy people will wake up.

100%, man.

The amount of drugs that are coming into our country and illegal immigrants is at an all-time high.

And this has to stop, man.

We have to solve this problem.

I mean, dude, I'm not even trying to start up shit, but when I go to Home Depot now, there's like 100 people there.

Yeah.

Like looking for work.

When I was growing up, it was not that many people.

Yeah.

I remember this too.

It was crazy.

Yeah.

Well, Carlton, it's been cool, man.

Where can people potentially be a client of yours and check out your content?

Absolutely.

We're Carlton Dennis on all social media, all brands.

You can visit our website at www.taxalchemy.com.

If you're looking for tax planning help, tax strategy help, we are your people.

Love it, man.

The link below.

Thanks for coming on.

Absolutely.

Thank you.

Yep.

Thanks for watching, guys.

Check out the links below.

See you next time.