How Can I Sign Nevada Banking Document

How can i industry sign banking nevada document now

what's going on alex here and today i'm answering questions from the youtube comments and these questions have to do with establishing a business entity outside of the state of california to do business in the state of california will that provide any sort of tax benefits and can that serve as a way to avoid california income taxes so let's take a look and first one is from cobra commander and goes as follows mr efros love your videos i do as well thank you so much have a question i live and work in los angeles but california is not business friendly you could say that again can i open an llc in nevada to avoid paying all the fees and costs and taxes from california what do you recommend all right this is a good question and this is one that's often brought up because california is indeed not business friendly why because for llcs for example you get the privilege if you're doing business in california of paying an 800 annual minimum tax just for the privilege of having an llc in california on top of that if your gross receipts exceed 250 000 in a particular tax year you're also going to be looking at paying the annual llc fee which begins at 900 on top of the 800 and can go up from there so you may very well be paying the state thousands upon thousands of dollars just for the privilege of doing business in california and with that along with other penalties and taxes and bureaucracy red tape that's applicable to doing business in the state it's logical that business owners are going to try to circumvent or avoid some of these taxes if they can possibly do so and unfortunately california saw this coming all right and it all has to do with the term doing business all right and i'm gonna explain what that means here we take a look at this ftb franchise tax board website having to do with limited liability companies and specifically you see a bunch of topics here but we want to know more about doing business in california so let's take a look so in terms of doing business in california california defines doing business as quote actively engaging in any transaction for the purpose of financial or presuming area gain or profit an llc is quote doing business if any of the llc's members managers or other agents performs activities in california on behalf of the llc regardless of where the llc otherwise conducts business in addition an llc is doing business in california if it is a non-registered foreign llc that is a member of an llc that does business in california or it is a general partner in a general limited partnership that does business in california so these rules can get quite a bit technical and we don't have to get into all of the specifics right now but just know that the phrase doing business can be wide-ranging in its application let's take a look at some handy dandy examples though and you'll find out that this is a bit of a funny coincidence here so paul is a california resident and a member of a nevada llc do you think that they saw this coming quite possibly the nevada llc owns property in nevada the llc hires a nevada management company to collect rents and provide maintenance paul has the right to hire and fire the management company he occasionally has telephone discussions from california with the management company in nevada regarding the property he is ultimately responsible for the property and oversees the management company paul conducts business in california on behalf of the llc and the llc must file form 568 and pay all those applicable taxes and fees you can see here that there is a limited amount of involvement that paul has arguably that he's using the management company based in nevada right nevada management company and all he's doing is having some phone conversations to discuss the management of the property and oversee the management company even with that level of involvement he's conducting business in california behalf of the llc in this situation it doesn't work out in the favor of the taxpayer let's look at the second example rachel is a california resident and member of an oregon llc the oregon llc has a retail store in oregon rachel uses a california address for the llc's tax filings and a california accountant to prepare the llc's taxes rachel conducts business in california on behalf of the llc you can see that even when it doesn't seem like you're doing business in california these elements of management and overseeing the operations of a business can in fact mean that you're from an income tax perspective doing business in california and california is very aggressive about this stuff and you can see that they very much see it from their own perspective in terms of you're likely doing business in the state unless you could prove otherwise unfortunately that that's really how it's structured if we keep it real here let's look at example number three sarah is a california resident and a member of a texas llc texas does not have an income tax so similarly to nevada someone could say hey i'll form my llc in texas and i'll do business in california i can avoid all those taxes let's see how this scenario plays out the texas llc receives royalties from texas oil wells sarah maintains a california business bank account and secures financing in california for the llc's texas investments sarah believe it or not conducts business in california on behalf of the llc the llc must file form 5-68 so you can see in all three of these scenarios it just so happens that california wins all right so you can see this area they don't play games they want to make the case that everybody's doing business in california unless you could prove otherwise essentially it comes down to that now with that said going back to the question i would not attempt to do what's outlined here because california will get you all right and if they can prove that you were doing business out of the state then you're going to be hit with the penalties and interest and it's important to remember that you still have to register your llc in california if you're doing business in the state even if it's a foreign meaning outside of the state of california foreign entities so if you have an entity registered in a different state you still have to register that entity in california as a foreign llc then you can conduct business in california all right a lot to keep track of but at the end of the day don't get the idea that you can form a business any different state and circumvent california taxes they've seen this coming they know all about this game and unfortunately it does not work on top of that you may also have filing requirements in that other state depending on whether or not you did business in that other state and so forth so many times this creates a lot more complication from administrative perspective so the only reason why you would want to organize your entity in a different state and conduct business in california is the possible legal benefits and those have to do with let's say delaware is is very much friendly towards corporations so you may form an entity in the state of delaware and then do business in california but that has nothing to do with an income tax benefit you're still going to be subject to all the california taxes so on and so forth but it may be that from a legal perspective you're looking to take advantage of some of the protections available to you based on the state level and delaware or any other state may provide those benefits i'm not an attorney this is not legal advice i don't know but from an income tax perspective there's no benefit in registering your entity in another state doing business in california because for all intents and purposes it's as if you registered your entity in california from day one anyway all right and i got another question here to thank you for the question cover commander i also love the username i must say let's take a look at this next question this is from sauz master a all right and this person asks the following what if you have actual out-of-state license plus a vpn on your cpu and do business that way finesse okay i'm gonna give you a for effort nice try i like the creative thought process but what you're describing here is that you are getting a business license outside of the state you're getting a vpn which is a virtual private network and the purpose of a vpn generally is to hide the origin or source of internet traffic on your cpu so basically you're using a vpn to hide the fact that you're doing business in california i'm assuming and do business that way can you do that and is that finessing it no so here's the thing the states are very aggressive about tax collection they can't print money like the federal government can and with that this sort of setup may very well not work out in your favor and actually have an anecdote to prove that point you may be familiar with an entity known as silk road and silk road was a marketplace that was established in the deep web or the dark web whatever you want to call it essentially people could buy anything drugs weapons this that and the other and the whole idea was none of these activities were traceable because they were using bitcoin everything was encrypted they were using dark web all this fancy fancy technology to try to obscure sources of money who the buyers are who the sellers are so on and so forth and the fact that they were using bitcoin meant that it was very difficult if not impossible to track a lot of these transactions so you think wow what can the authorities possibly do about this because you have this network that is very difficult to track you have all these users that are trading money for drugs and weapons and all this stuff and the idea was that it should be impossible to trace who are we looking at on this wikipedia page this is ross ulbricht and he is the founder as much as i understand it of silk road of that dark web site and what's the big deal about him he is looking at double life imprisonment plus 40 years without possibility of parole so how did he find him he's working in this encrypted dark web with bitcoin transactions very difficult to trace very difficult to track how is it possible that he's in jail now well the story of silk road and how this person came to be caught is fascinating and there was a documentary i believe it's called deep web right here 2015 documentary which if you haven't seen it check this out it talks about how they actually found the identity of this person and came to arrest him and wouldn't you know that it was actually an irs agent who identified the founder of the site being ross albert and this irs agent let's just take a look here gary alford was the one who led authorities to shut down silk road interesting how that works out right it's the tax people that somehow solve a lot of these issues a lot of these problems what that's saying essentially is if they caught ross ulbricht they'll catch you as well very good chance all right so don't take any risks with vpns this that and the other and try to circumvent the tax laws because they will find you especially if the amounts are significant enough for example ross here had about 28 million dollars of net worth at the time of the seizure of the silk road the bigger the amounts the more the authorities are going to be inclined to dig around and find you but at the same time even for small amounts fraud is fraud and i would stay away from that idea completely all right as a side note it is kind of fascinating how they actually came to arrest ross albrecht because they needed to catch him with his laptop open signed into silk road the website as the administrator and they could not give him enough time to push a kill switch to lock his computer and log him out because if he has time to press one button theoretically these agents that were tracking him knew that that could kill their entire case so what they did was they tracked him down to a library and this a spoiler alert if you want to watch the documentary you want to pause the video now watch the documentary come back it's fascinating how this all came together but i'm going to spoil basically how it all went down he's sitting in a library typing and these agents i believe it was man and woman start arguing very loudly in a different area of the library so they tried to distract his attention so all of a sudden instead of typing on his computer he looks away to see who's arguing what the commotion's all about as soon as he looks away the agents swoop in they grab his laptop before he could touch it and grab him so that they had the laptop still logged in as the username that he had dread pirate roberts was his name on silk road he was the administrator the head honcho their their big man so to speak it was kind of like nabbing al capone really but the crucial point was that laptop was still open and logged in and that's how they managed they set up this whole scenario to distract him and that's how they found him but anyway the point is that technology is not necessarily your friend in terms of addressing income taxes because when this stuff goes bad it goes very bad and it can potentially ruin the rest of your life i mean this guy ross for all intense purposes could be some sort of genius you know he could have possibly applied himself to many great and wonderful things but he's as far as i understand it never going to leave prison again take that as you will but my recommendation don't play games with income taxes everyone has to pay taxes at the end of the day unfortunately we don't like it but many times it's easier to just bite the bullet pay the tax and go on living your life instead of getting a situation where you've created a much bigger problem than the tax you would have paid to begin with okay with that said thank you guys for your questions i appreciate it and if you guys have similar questions or questions about anything in terms of financial planning income taxes drop them in the comments below and if it's compelling i'll make a video just like this one to provide you guys with guidance and some good answers with that said if you enjoyed this video hit that like button subscribe to the channel share this video and definitely watch out for more videos because they will be coming with that said hopefully this was helpful thanks for watching