Equity and Tax Strategy for Business & Partnerships

So Scott, good to meet you. Yeah, you've been working with Leanne, and you're from Missouri, correct, all right. And your question is, you have a few wealth building goals and not sure where to start. I know where to start. You own five acres of land in Oregon in your name. Yikes. You're a w2

earner, soon to be receiving equity in the plumbing company. We love to see that agreement and help you do that properly. I'm working the plumbing company you're working for. You want so, so you're going to become a partner then, and you're taking it from somebody that is wanting to exit correct, Okay, that'll

be really critical for your tax strategy, which is part of the next part of your question. You want to reduce the tax burden, be more strategic with your investments. Also, you want to bring your parents into the LLC or S corp that you set up as a board of directors of some kind in your company, so you can help

them out and pay them. Where should I start? Come to the table. So where do you start? I mean, great question, very clear and sequential. How much you get? Do you mind saying publicly, where? How much you get paid in the w2

Scott: w2 I am at 112 right now, bumping up to 130 okay?

So the way, so, where we would start is with the agreement of you coming into equity. What is that actually going to look like? Because that agreement is going to define a lot. And what's Do you, I mean, do you feel like the agreement's good? Not good, interesting. I think it's good. Is it clear?

Scott: Yeah, that's a well, the agreement's not made up, but it's going to be 20% equity in the company once a partner leaves. So I'm getting it for free. So I think

it's pretty good. It's good, but how you take it on and what entity? So, like, we would look at the agreement first, because that's that's already in writing and been signed, and then I would give you a whole bunch of other strategy around it. So then you would have a company. Are you

married with kids? The whole thing too? Nope. So it still would be you and a company. And if the company is an S, then you'd have a board of directors. If it's an LLC, and that'll all be based on tax, then they would just be like a board of advisors, because LLCs don't really have that. So you would

have an underneath your company would take that 20% ownership, and then we have a new agreement that we would help you craft, and those that's where I'm very involved in the agreements, and just the psychology of the agreements, the legal stuff of the agreements, and that way you'd use my time, and then you

could just put it through to an attorney, which we have some great Missouri attorneys. I can hand you two of them right now. They're great. So you look at how so first you have a company makes sense. Add the parent has that makes sense. And then what's the agreement between the 2080 and do you know what kind

of company you're going to get the 20% in is an S or

Scott: LLC is an S corp,

it's an S Okay, then that's a new shareholder agreement. So you're going to want supplemental resolutions when it's a partnership like that, because you affect each other more when it's an S corp, versus if it was an LLC and an LLC. So that'll get tidy while that's getting

cleaned up. And like, I would be working with you on the corporate team, the tax team would be right next to you to make sure that that the way that tax treatment comes in protects you for 2025 and as you take ownership, a huge part of that strategy, young man, is the company is going to pay your

company, or potentially, probably another company. I would go into this, I know it sounds aggressive, with two companies, and so the company would be ownership, and then you'd be out here with your parents, and then you would operate better, because you can't operate, say, buy a

vehicle with your 20% owning 80 right? That means the company is going to buy it. So I have another one where you get to buy and then you're employed out here. That would not have you employed by the company. I'd have a company to company relationship and drop your employment. Your Employment

affects your ability to get good health care. Your Employment affects your ability to get an IRA. I mean, there's just a lot about how you're going to be treated if you don't set that. So I would probably do two companies, one that owns the 21 that is going to be paid. Drop your salary, put your parents,

if do how old they are active they want to be. But if they take a w2 paycheck, that's the worst kind of money for them. It's better for them to have either a company or get paid that way too. Are they going to work for this plumbing company at all? Are they going to

Scott: help you? Can we make consulting my dad's retired plumber? So I would, I would say maybe on the consulting side, but great. They just don't have any very much income, and I just want to

help him out. No, that's great. And so he could be paid as a consultant. And so by doing that, it pays him directly, where he can take deductions against it. If you paid him a w2 then he's not he's not deductible. So we're gonna help all the way through on that parent stuff. Does that make

sense? Correct? You guys have a choice. Trust parents and you have trust.

Scott: I want to trust with, I want to start a trust with all the land and their house and everything else,

but, but we're the land actually goes into a company, and then the company's held in trust. So everything's companies and our strategy. And then companies are held in trust to avoid probate, correct? And you could put them in one you put them in with you, then it's really, it's a much easier

strategy, I think, because then you know, upon their passing, it's all you, it's yours anyway. So it just makes that all work. And then you can own the company out here with you and your parents that way. Like, this is deductible. Vehicles are deductible, like there's just a whole strategy, but inside the

company, since you have a partner, it makes it harder for you to navigate the strategy. So you're going to operate most of our strategies out here. Still do a lot of strategy here, but that, since that person's got 80% if they're not willing to play along with some of these strategies, it handcuffs you,

and that's where we see a lot of people that come in with just that, and you got to, have to do something additional. And then how you invest again will depend on your tax plan. And then you'll be meeting with the tax person every quarter going through what you're going to invest in. A lot of people are

buying, you know, gold, silver, cryptos, into the market. That's all capital gain, stuff that is not that doesn't have depreciation schedules. So again, it's a math equation that's pretty defined. Most people don't define it. They just hope that they get a good tax season. It's like, No, you

could have planned the entire thing, right? So it's a pretty active engagement once you come in, but I'll tell you the life. I mean, you're super young, so you're going to have a long life of being able to work this strategy.

Scott: Awesome. Thank you so much.

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