July 21, 2025 • 14 mins
In this episode of the Directed IRA Podcast, attorneys Mat Sorensen and Mark J. Kohler unveil a powerful and often overlooked strategy for funding your child’s college education without relying solely on a 529 plan. They break down how to combine a Coverdell ESA and a Roth IRA for your children, integrate those with self-directed investments, and potentially achieve tax free growth and distributions.
This episode is for business owners, parents, and investors looking for a smarter tax efficient way to save for education. Whether you’re new to self directing or already using these tools for retirement, this strategy could reshape how you approach college planning and family wealth building.
Chapters
- 00:00 – Introduction to College Funding Secret
- 01:17 - Self- Directed Accounts for College Savings
- 03:35 - Kids Roth IRA Strategy
- 08:14 - Tax-Deductible Methods for Funding
- 12:17 - Legitimacy and Next Steps
Directed IRA Homepage: https://directedira.com/
Directed IRA Explore (Linktree): https://linktr.ee/SelfDirectedIRA
Book a Call: https://directedira.com/appointment/
Other:
Mat Sorensen: https://matsorensen.com & https://linktr.ee/MatSorensen
KKOS: https://kkoslawyers.com
Main Street Business https://mainstreetbusiness.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Welcome everyone to the Directed IRA Podcast.
This is Matt Sorensen, joinedby the incredible Mark J Kohler.
And boy, we've got a specialmessage and a tip for you, a
strategy for you.
Speaker 2 (00:17):
Yeah, no, I am so excited about this.
And if you're clicking on thisas a parent thinking how am I
going to save for my kids'college, I want to know any
possible strategy out there.
And if you're a new listener,thank you for being here.
Matt and I are both tax lawyers.
We've both done our 10,000consultations.
We've got a couple of podcasts,a big presence out there, and
this is a message we talk a lotabout.
And here's the trick thissecret is really a combination
(00:42):
of several strategies.
It's not just a 529 plan.
No, we use a concert of severalstrategies together.
We're going to talk about the529 a little bit, but it's
really about the Coverdell IRA,the Roth IRA and an investment
strategy where you look at, howcan I get the biggest return to
(01:04):
build my college savings accountfor my kids?
And it can be completely taxdeductible too, which is weird.
So we're excited to share thiswith you, Matt.
I mean, that's the way I kindof bring it together.
What's your?
How would you say it in anutshell?
Speaker 1 (01:17):
I would say I would say the secret sauce and I don't
want to bury the lead here isyou're going to self-direct it
and invest that account, thesetax advantage accounts, the
Coverdell account, the Roth IRAand assets you know and believe
in that are going to do betterthan the target fund you have to
do with the 529 or the mutualfund or stock you were thinking
about with the Coverdell.
It's about investing these taxadvantage accounts that you can
(01:40):
use for your kid's college intoassets you believe in that can
grow, and we've seen clients dothis at our company Directed IRA
.
I've seen the expense paymentsgo out to Ivy League schools
where the parent invested aCoverdell for their kids into
real estate transactions hadphenomenal returns on them.
They put them in incredibledeals and then that got the gain
(02:01):
back.
No tax.
The money went out totallytax-free to pay for their kids'
college education.
So awesome strategy.
Here we're going to unpack someof the pieces to it, but that's
what we're talking about here.
Speaker 2 (02:11):
I love the way you said that, matt, because you got
it right on the table at theget-go.
We're going to combine thisself-directing strategy and some
of you have maybe never heardof that and self-directing means
investing in alternative assetsor the businesses and assets
that you understand, that youknow are going to get you a
better return than a Wall Streetproduct and combining that with
(02:31):
the Coverdell IRA, which, yeah,it has a terrible contribution
amount, but that's okay.
A little acorn can turn into abig tree, and so we want to be
using that Coverdellstrategically with this
self-directing strategy.
Speaker 1 (02:45):
Yeah.
So now, keep in mind, with thisCoverdell, you can put in
$2,000 a year and that's whereyou're probably like well,
$2,000 a year, how am I going toget that right for it?
How can I?
You know?
How's that going to cover mykid's college?
Well, it's the investment gainsand returns we're talking about
and how we want to build this,and we have clients using
Coverdell's, like I said, forreal estate investments.
We've had clients useCoverdell's for crypto.
You could do a crypto CoverdellIRA.
(03:07):
We're going to get to kids RothIRAs here in a second another
pretty cool strategy but theseunique type of accounts are
accounts you can use to sell.
Now I want you to know, most ofour clients are buying real
estate private funds, startups,small business, crypto with
their IRAs, trying to build forretirement, and it's a very
popular strategy.
We have over two and a halfbillion assets.
(03:28):
We're opening up sometimes 30,40 new accounts a day of clients
doing that, but it's not justabout your IRA and retirement.
This is a way you can fund yourkid's college, yeah, and I was
just talking to a newacquaintance this last week.
Speaker 2 (03:40):
That was like I'm buying and selling water shares.
Two weeks ago I met with aclient down in Oklahoma that was
buying and selling mineralrights for oil rigs that were
moving into their area.
And it could be any realproperty interest, it could be
personal property, it could be astartup.
So if any of you out there arelike holy crap, I didn't know I
could do that, yeah, it wasfunny.
(04:00):
I was around a campfire and Iwas telling someone yeah, well,
hold on, I can only put $7,000in my Roth every year.
Yeah, that's when you pass, goon the Monopoly board.
But holy crap, you can land onboardwalk or park place and hit
it big and you can do it withoutpenalty and without taxes.
(04:22):
So the Coverdell IRA you get toput in $2,000 per child and
then you can take that IRA andput it into an LLC with your IRA
or your solo 401k or an old401k and now you've got an
investment entity that you caninvest out of as the manager of
that LLC and go invest in whatyou know best.
(04:45):
The Coverdell is just a smallpart of a bigger concept where
you're getting 10, 20% returnsor more investing in what you
know.
Now we'll get into the nuts andbolts, but I think that concept
and that process is so powerfulonce it resonates with people.
Speaker 1 (05:02):
Yeah, and I think, whether you're starting a new
Coverdell, you might have aCoverdell already.
Maybe you've got a Coverdell atthe broker dealer or something
you've been doing for your kids.
Those could be transferred overand this is a qualifying
account.
So when we're talking aboutthese Roth IRAs or this
Coverdell, this is the sameaccount you could do at a TD
Ameritrade or a Charles Schwabor Fidelity.
The difference is we don'trestrict your investment options
(05:25):
.
We'll let your Coverdell oryour kid's Roth IRA invest in
crypto.
We'll let it invest in astartup.
We'll let it buy a real estatedeal, the water rights, the oil
and gas, whatever it might be.
These are assets that theseaccounts can own.
You just can't do it at abroker dealer IRA.
So that's what we're doing atDirected IRA with many different
account types, including, ofcourse, the Coverdell.
Now let me hit the kids Roth.
Can I get into that one yet?
Speaker 2 (05:46):
Well, matt let me just at least talk about your
contribution procedure.
If you're a high income earnerNow the current rule is you can
put this two grand in.
But some of you are alreadysmart enough to go.
Well, if you make more than ahundred grand single or 200
grand joint, I can't put themoney in, ah, but grandma and
grandpa can.
So very similar to the backdoorRoth strategy.
(06:07):
And, oh my gosh, if you haven'theard of that, please Google
Sorensen and Mark Kohler onbackdoor Roths.
But just like you can't putmoney directly into the
Coverdale, if you make too muchmoney you can gift the money to
grandpa and grandma, who can putthat money into your kid's
Coverdale at the same locationhere directed IRA and create
(06:27):
that self-directed account andthen combine it into that LLC.
So do not be misled by youraccountant who may go you make
too much money to do a Coverdell.
Hey, your accountant is notgetting the real story that you
can gift money and go in througha backdoor method, just like
you can with a Roth IRA.
Some people are like well, Imake too much money to do a Roth
(06:49):
.
No, you don't.
Anybody can have a Roth andthat's called the backdoor Roth
strategy.
So just know the Coverdale isavailable to you.
You can invest with it.
And then Matt no-transcript.
Speaker 1 (07:04):
Kid Roth both cool, don't pick one or the other.
This is not a competition, theycan both be cool.
The kid's Roth IRA Now thething on the kid's Roth IRA is
they have to have earned income,all right.
So if you're business owners,you own a rental property, you
should be paying your kids.
Get them involved in thebusiness.
If they can make seven grand ayear, by the way, you're
expensing that in your businessanyways, taking the deduction
(07:25):
for it.
Your kid's picking it up andnot even having to file a tax
return because they're understandard deduction.
It's not even taxable income tothem and they're dropping it
right into a Roth IRA.
Now they could also be workinga summer job or something and
spending all that money onthings that kids spend money on,
but you're still throwing inthe 7K because they had that
much money in their income.
So that's the one caveat onthis kid's Roth.
(07:46):
They must have the earnedincome.
But you can establish thataccount for them, you can help
them with it.
You can have the responsibilityon the account until they hit
the age of 18 or the age ofmajority in your state.
But the nice thing about thekid's Roth IRA there's a number
of things about it is one we cango invest it in all these
things we're talking about withthe Coverdell and self-directed
IRAs in general.
(08:06):
Your kid's Roth IRA could beinvesting in those types of
investments, helping them grow,teaching them about what it's
investing in.
But one thing about the RothIRA you're probably like well,
matt, that doesn't sound great.
How has this helped my kid incollege?
This video said college.
Well, the investment gains andreturns in a Roth IRA you have
to wait until you're 59 and ahalf.
But the seven grand a year youpop in there.
(08:27):
Let's say you've done this forfive years for your kid.
They're 13 and they're startingto work in your business and
they do it for five years untilthey're age 18.
They've got 35,000 ofcontributions in there.
Maybe the account's worth 70.
Let's say it's doubled overthat time.
Well, that 35,000 ofcontributions you can pull out
whenever you want, no penalty,no tax Contributions to a Roth
(08:49):
IRA can always come out and thenlet those gains be something
left in there that they cancontinue to invest and grow and
have a head start with the RothIRA.
That part they're going to waituntil they're 59 and a half.
On you get an incredible headstart.
Meanwhile, this money they'vebeen putting aside the seven
grand they're able to pull outfor college or other education.
Frankly, to start a smallbusiness, there's lots of other
(09:09):
qualifying things.
It doesn't have to bequalifying frankly, they can do
whatever the heck they want withit.
But let's help them dosomething smart with it, like
college startup business,something like that.
Speaker 2 (09:17):
You know, and I love the way you framed that, matt,
because you got my mind racinghere and I'm like okay, I want
to emphasize two points that youmade that I really like.
The first one is that you wantto create a tax-deductible
method to somehow fund the RothIRA and the same method could be
(09:38):
used for the Coverdell.
Grandpa and grandma may begreat board members for your S
corporation or small businessthat you own.
So when you have your annualboard meeting, grandpa and
grandma are participating inthat meeting, giving sage wisdom
and advice, which parents loveto do, and you're getting.
Oh, can I compensate you $4,000for being on my board this year
(10:01):
and would you be willing toaccept that and you may choose
to fund my child's Coverdalewith that payment?
Speaker 1 (10:10):
Now Grandpa and Grandma will get a 1099.
Speaker 2 (10:15):
Mom and Dad get a 1099 for $4,000 for serving on
the board.
Drop it on a Schedule C and I'msure they're going to be able
to find a proper deduction fortravel, dining, home office or
cell phone coverage to be thereand ready for their family as a
board member of their smallbusiness.
So they're going to pay zerotax on that measly $4,000 1099.
(10:37):
But in turn, take that moneyand wisely contribute as a gift
to their grandchildren and fundtheir future college education
through the Coverdell.
And at the same time, mom anddad are funding the Roth IRA for
their kids through compensationfor serving in the business,
legitimately serving in a properrole based on their age, and
(11:00):
funding the Roth IRA.
And then, third, combining allof that income into one LLC to
invest as a family People.
This is not crazy talk.
We help clients do this everyday.
This is real and it works.
Speaker 1 (11:16):
Yeah, and Mark and I have even done this with our
kids yes, working in ourbusinesses, helping them
contribute to kids Roth IRAs,paying them from the business
for legitimate work that they'redoing.
And I remember even working onmy dad's rental properties when
I was a kid.
I wish he knew this strategy.
He would have loved thisstrategy.
I was out there mowing a lot oflawns.
I would have loved a head starton a kid's Roth IRA.
(11:37):
So these are strategies wereally think can take you to the
next level.
These are things that are maybeoutside the box, but you know
what A lot of our business ownerclients, entrepreneurs, love
the outside the box stuff.
That's where they thrive andexcel.
And this is a strategy that hasa ton of upside and potential A
lot of great tax benefits.
You can be focused on thethings that matter, whether it's
(11:58):
sending your kids to college,helping them get a headstart
with the kids Roth IRA whichcould be used for college.
Again, the contributions givesthem a head start on the
investment gains.
They could also use that moneyto start a small business or
even a technical school.
So there's a lot of great perksand reasons this can benefit
you and your family.
Speaker 2 (12:14):
Well, I just want to address some naysayers and give
you a call to action.
Some of you may be saying well,my accountant hasn't talked
like this, my accountant hasn'ttold me about this, so you guys
must be crazy heretics gettingall of your clients audited.
No, we're not.
We are authors of bestsellingbooks.
We are the contributors to twolegitimate podcasts with
(12:36):
millions of downloads.
We are both licensed attorneysin multiple states with a law
firm that's been around for over20 years.
I am a CPA and a member of theAICPA.
We are helping accountantsaround the country get educated
on this with semi-annual eventswhich you can attend as well.
Please check out the Alt AssetSummit being held in just the
(12:57):
next few months.
Get to altassetsummitcom.
It's down in the description.
We are leaders in this industry.
You may need to upgrade yourprofessionals, because if
they're not telling you aboutthis, you've got the wrong
professional, and so, at thevery least, here's my call to
action Get a second opinion.
Down below, you can hit on thelink to our law firm.
Do Google check on it.
(13:18):
Whatever You're going to findout, we've been legitimate and
around for years and yearshelping small business owners
around the country do aconsultation called a
comprehensive tax plan with oneof our tax lawyers A couple
grand, maybe three, depends onhow many moving parts you have.
If we don't save you in taxesthe cost of that consultation,
(13:39):
send me an email.
I'd like to hear how we failedat that.
Because we blow the minds ofour clients.
We save them so much in a planlike this.
Please get a second opinion andreevaluate your strategy for
college savings.
There is a better way.
Speaker 1 (13:53):
Yeah, thank you everyone for listening.
We hope you found this valuable.
Please make sure you'resubscribed to the podcast,
sharing with your friends andfamily.
Give us a five-star review.
We'd really appreciate that.
We'll see you next time.
Until then, stay calm.
Self-direct on.
Speaker 2 (14:07):
And thank you everyone for listening.
A quick disclaimer and reminderthis presentation does not
constitute an attorney or CPAclient relationship and it is
always in your best interest toconsult competent legal and tax
professionals when conductingyour own personal transactions.
Speaker 1 (14:24):
We also want to make sure you know this is not
investment advice or financialadvice.
We're just trying to give youeducation, ideas and strategies
you can take to yourprofessionals or conduct your
own research on.
We'll see you next time.
Welcome everyone to the Directed IRA Podcast.
This is Matt Sorensen, joinedby the incredible Mark J Kohler.
And boy, we've got a specialmessage and a tip for you, a
strategy for you.
Speaker 2 (00:17):
Yeah, no, I am so excited about this.
And if you're clicking on thisas a parent thinking how am I
going to save for my kids'college, I want to know any
possible strategy out there.
And if you're a new listener,thank you for being here.
Matt and I are both tax lawyers.
We've both done our 10,000consultations.
We've got a couple of podcasts,a big presence out there, and
this is a message we talk a lotabout.
And here's the trick thissecret is really a combination
(00:42):
of several strategies.
It's not just a 529 plan.
No, we use a concert of severalstrategies together.
We're going to talk about the529 a little bit, but it's
really about the Coverdell IRA,the Roth IRA and an investment
strategy where you look at, howcan I get the biggest return to
(01:04):
build my college savings accountfor my kids?
And it can be completely taxdeductible too, which is weird.
So we're excited to share thiswith you, Matt.
I mean, that's the way I kindof bring it together.
What's your?
How would you say it in anutshell?
Speaker 1 (01:17):
I would say I would say the secret sauce and I don't
want to bury the lead here isyou're going to self-direct it
and invest that account, thesetax advantage accounts, the
Coverdell account, the Roth IRAand assets you know and believe
in that are going to do betterthan the target fund you have to
do with the 529 or the mutualfund or stock you were thinking
about with the Coverdell.
It's about investing these taxadvantage accounts that you can
(01:40):
use for your kid's college intoassets you believe in that can
grow, and we've seen clients dothis at our company Directed IRA
.
I've seen the expense paymentsgo out to Ivy League schools
where the parent invested aCoverdell for their kids into
real estate transactions hadphenomenal returns on them.
They put them in incredibledeals and then that got the gain
(02:01):
back.
No tax.
The money went out totallytax-free to pay for their kids'
college education.
So awesome strategy.
Here we're going to unpack someof the pieces to it, but that's
what we're talking about here.
Speaker 2 (02:11):
I love the way you said that, matt, because you got
it right on the table at theget-go.
We're going to combine thisself-directing strategy and some
of you have maybe never heardof that and self-directing means
investing in alternative assetsor the businesses and assets
that you understand, that youknow are going to get you a
better return than a Wall Streetproduct and combining that with
(02:31):
the Coverdell IRA, which, yeah,it has a terrible contribution
amount, but that's okay.
A little acorn can turn into abig tree, and so we want to be
using that Coverdellstrategically with this
self-directing strategy.
Speaker 1 (02:45):
Yeah.
So now, keep in mind, with thisCoverdell, you can put in
$2,000 a year and that's whereyou're probably like well,
$2,000 a year, how am I going toget that right for it?
How can I?
You know?
How's that going to cover mykid's college?
Well, it's the investment gainsand returns we're talking about
and how we want to build this,and we have clients using
Coverdell's, like I said, forreal estate investments.
We've had clients useCoverdell's for crypto.
You could do a crypto CoverdellIRA.
(03:07):
We're going to get to kids RothIRAs here in a second another
pretty cool strategy but theseunique type of accounts are
accounts you can use to sell.
Now I want you to know, most ofour clients are buying real
estate private funds, startups,small business, crypto with
their IRAs, trying to build forretirement, and it's a very
popular strategy.
We have over two and a halfbillion assets.
(03:28):
We're opening up sometimes 30,40 new accounts a day of clients
doing that, but it's not justabout your IRA and retirement.
This is a way you can fund yourkid's college, yeah, and I was
just talking to a newacquaintance this last week.
Speaker 2 (03:40):
That was like I'm buying and selling water shares.
Two weeks ago I met with aclient down in Oklahoma that was
buying and selling mineralrights for oil rigs that were
moving into their area.
And it could be any realproperty interest, it could be
personal property, it could be astartup.
So if any of you out there arelike holy crap, I didn't know I
could do that, yeah, it wasfunny.
(04:00):
I was around a campfire and Iwas telling someone yeah, well,
hold on, I can only put $7,000in my Roth every year.
Yeah, that's when you pass, goon the Monopoly board.
But holy crap, you can land onboardwalk or park place and hit
it big and you can do it withoutpenalty and without taxes.
(04:22):
So the Coverdell IRA you get toput in $2,000 per child and
then you can take that IRA andput it into an LLC with your IRA
or your solo 401k or an old401k and now you've got an
investment entity that you caninvest out of as the manager of
that LLC and go invest in whatyou know best.
(04:45):
The Coverdell is just a smallpart of a bigger concept where
you're getting 10, 20% returnsor more investing in what you
know.
Now we'll get into the nuts andbolts, but I think that concept
and that process is so powerfulonce it resonates with people.
Speaker 1 (05:02):
Yeah, and I think, whether you're starting a new
Coverdell, you might have aCoverdell already.
Maybe you've got a Coverdell atthe broker dealer or something
you've been doing for your kids.
Those could be transferred overand this is a qualifying
account.
So when we're talking aboutthese Roth IRAs or this
Coverdell, this is the sameaccount you could do at a TD
Ameritrade or a Charles Schwabor Fidelity.
The difference is we don'trestrict your investment options
(05:25):
.
We'll let your Coverdell oryour kid's Roth IRA invest in
crypto.
We'll let it invest in astartup.
We'll let it buy a real estatedeal, the water rights, the oil
and gas, whatever it might be.
These are assets that theseaccounts can own.
You just can't do it at abroker dealer IRA.
So that's what we're doing atDirected IRA with many different
account types, including, ofcourse, the Coverdell.
Now let me hit the kids Roth.
Can I get into that one yet?
Speaker 2 (05:46):
Well, matt let me just at least talk about your
contribution procedure.
If you're a high income earnerNow the current rule is you can
put this two grand in.
But some of you are alreadysmart enough to go.
Well, if you make more than ahundred grand single or 200
grand joint, I can't put themoney in, ah, but grandma and
grandpa can.
So very similar to the backdoorRoth strategy.
(06:07):
And, oh my gosh, if you haven'theard of that, please Google
Sorensen and Mark Kohler onbackdoor Roths.
But just like you can't putmoney directly into the
Coverdale, if you make too muchmoney you can gift the money to
grandpa and grandma, who can putthat money into your kid's
Coverdale at the same locationhere directed IRA and create
(06:27):
that self-directed account andthen combine it into that LLC.
So do not be misled by youraccountant who may go you make
too much money to do a Coverdell.
Hey, your accountant is notgetting the real story that you
can gift money and go in througha backdoor method, just like
you can with a Roth IRA.
Some people are like well, Imake too much money to do a Roth
(06:49):
.
No, you don't.
Anybody can have a Roth andthat's called the backdoor Roth
strategy.
So just know the Coverdale isavailable to you.
You can invest with it.
And then Matt no-transcript.
Speaker 1 (07:04):
Kid Roth both cool, don't pick one or the other.
This is not a competition, theycan both be cool.
The kid's Roth IRA Now thething on the kid's Roth IRA is
they have to have earned income,all right.
So if you're business owners,you own a rental property, you
should be paying your kids.
Get them involved in thebusiness.
If they can make seven grand ayear, by the way, you're
expensing that in your businessanyways, taking the deduction
(07:25):
for it.
Your kid's picking it up andnot even having to file a tax
return because they're understandard deduction.
It's not even taxable income tothem and they're dropping it
right into a Roth IRA.
Now they could also be workinga summer job or something and
spending all that money onthings that kids spend money on,
but you're still throwing inthe 7K because they had that
much money in their income.
So that's the one caveat onthis kid's Roth.
(07:46):
They must have the earnedincome.
But you can establish thataccount for them, you can help
them with it.
You can have the responsibilityon the account until they hit
the age of 18 or the age ofmajority in your state.
But the nice thing about thekid's Roth IRA there's a number
of things about it is one we cango invest it in all these
things we're talking about withthe Coverdell and self-directed
IRAs in general.
(08:06):
Your kid's Roth IRA could beinvesting in those types of
investments, helping them grow,teaching them about what it's
investing in.
But one thing about the RothIRA you're probably like well,
matt, that doesn't sound great.
How has this helped my kid incollege?
This video said college.
Well, the investment gains andreturns in a Roth IRA you have
to wait until you're 59 and ahalf.
But the seven grand a year youpop in there.
(08:27):
Let's say you've done this forfive years for your kid.
They're 13 and they're startingto work in your business and
they do it for five years untilthey're age 18.
They've got 35,000 ofcontributions in there.
Maybe the account's worth 70.
Let's say it's doubled overthat time.
Well, that 35,000 ofcontributions you can pull out
whenever you want, no penalty,no tax Contributions to a Roth
(08:49):
IRA can always come out and thenlet those gains be something
left in there that they cancontinue to invest and grow and
have a head start with the RothIRA.
That part they're going to waituntil they're 59 and a half.
On you get an incredible headstart.
Meanwhile, this money they'vebeen putting aside the seven
grand they're able to pull outfor college or other education.
Frankly, to start a smallbusiness, there's lots of other
(09:09):
qualifying things.
It doesn't have to bequalifying frankly, they can do
whatever the heck they want withit.
But let's help them dosomething smart with it, like
college startup business,something like that.
Speaker 2 (09:17):
You know, and I love the way you framed that, matt,
because you got my mind racinghere and I'm like okay, I want
to emphasize two points that youmade that I really like.
The first one is that you wantto create a tax-deductible
method to somehow fund the RothIRA and the same method could be
(09:38):
used for the Coverdell.
Grandpa and grandma may begreat board members for your S
corporation or small businessthat you own.
So when you have your annualboard meeting, grandpa and
grandma are participating inthat meeting, giving sage wisdom
and advice, which parents loveto do, and you're getting.
Oh, can I compensate you $4,000for being on my board this year
(10:01):
and would you be willing toaccept that and you may choose
to fund my child's Coverdalewith that payment?
Speaker 1 (10:10):
Now Grandpa and Grandma will get a 1099.
Speaker 2 (10:15):
Mom and Dad get a 1099 for $4,000 for serving on
the board.
Drop it on a Schedule C and I'msure they're going to be able
to find a proper deduction fortravel, dining, home office or
cell phone coverage to be thereand ready for their family as a
board member of their smallbusiness.
So they're going to pay zerotax on that measly $4,000 1099.
(10:37):
But in turn, take that moneyand wisely contribute as a gift
to their grandchildren and fundtheir future college education
through the Coverdell.
And at the same time, mom anddad are funding the Roth IRA for
their kids through compensationfor serving in the business,
legitimately serving in a properrole based on their age, and
(11:00):
funding the Roth IRA.
And then, third, combining allof that income into one LLC to
invest as a family People.
This is not crazy talk.
We help clients do this everyday.
This is real and it works.
Speaker 1 (11:16):
Yeah, and Mark and I have even done this with our
kids yes, working in ourbusinesses, helping them
contribute to kids Roth IRAs,paying them from the business
for legitimate work that they'redoing.
And I remember even working onmy dad's rental properties when
I was a kid.
I wish he knew this strategy.
He would have loved thisstrategy.
I was out there mowing a lot oflawns.
I would have loved a head starton a kid's Roth IRA.
(11:37):
So these are strategies wereally think can take you to the
next level.
These are things that are maybeoutside the box, but you know
what A lot of our business ownerclients, entrepreneurs, love
the outside the box stuff.
That's where they thrive andexcel.
And this is a strategy that hasa ton of upside and potential A
lot of great tax benefits.
You can be focused on thethings that matter, whether it's
(11:58):
sending your kids to college,helping them get a headstart
with the kids Roth IRA whichcould be used for college.
Again, the contributions givesthem a head start on the
investment gains.
They could also use that moneyto start a small business or
even a technical school.
So there's a lot of great perksand reasons this can benefit
you and your family.
Speaker 2 (12:14):
Well, I just want to address some naysayers and give
you a call to action.
Some of you may be saying well,my accountant hasn't talked
like this, my accountant hasn'ttold me about this, so you guys
must be crazy heretics gettingall of your clients audited.
No, we're not.
We are authors of bestsellingbooks.
We are the contributors to twolegitimate podcasts with
(12:36):
millions of downloads.
We are both licensed attorneysin multiple states with a law
firm that's been around for over20 years.
I am a CPA and a member of theAICPA.
We are helping accountantsaround the country get educated
on this with semi-annual eventswhich you can attend as well.
Please check out the Alt AssetSummit being held in just the
(12:57):
next few months.
Get to altassetsummitcom.
It's down in the description.
We are leaders in this industry.
You may need to upgrade yourprofessionals, because if
they're not telling you aboutthis, you've got the wrong
professional, and so, at thevery least, here's my call to
action Get a second opinion.
Down below, you can hit on thelink to our law firm.
Do Google check on it.
(13:18):
Whatever You're going to findout, we've been legitimate and
around for years and yearshelping small business owners
around the country do aconsultation called a
comprehensive tax plan with oneof our tax lawyers A couple
grand, maybe three, depends onhow many moving parts you have.
If we don't save you in taxesthe cost of that consultation,
(13:39):
send me an email.
I'd like to hear how we failedat that.
Because we blow the minds ofour clients.
We save them so much in a planlike this.
Please get a second opinion andreevaluate your strategy for
college savings.
There is a better way.
Speaker 1 (13:53):
Yeah, thank you everyone for listening.
We hope you found this valuable.
Please make sure you'resubscribed to the podcast,
sharing with your friends andfamily.
Give us a five-star review.
We'd really appreciate that.
We'll see you next time.
Until then, stay calm.
Self-direct on.
Speaker 2 (14:07):
And thank you everyone for listening.
A quick disclaimer and reminderthis presentation does not
constitute an attorney or CPAclient relationship and it is
always in your best interest toconsult competent legal and tax
professionals when conductingyour own personal transactions.
Speaker 1 (14:24):
We also want to make sure you know this is not
investment advice or financialadvice.
We're just trying to give youeducation, ideas and strategies
you can take to yourprofessionals or conduct your
own research on.
We'll see you next time.
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