Sidestreaming, The New Millionaire’s Tax Tool


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12-03-2010-1

For years, ‘upstreaming’ was the buzz word of tax planning. You could (theoretically) reduce your federal taxes, get more benefits and move income from a high taxed state to a no tax state like Nevada or Wyoming.

But then two things happened to upstreaming:

  1. Nexus rules got more aggressive
  2. The feds legislated ‘economic substance’

I’ll cover these issues and solutions in more detail on our December 14th coaching call. If you’re not yet a member of our Coaching group, here’s a helpful JOIN US link that explains all of our programs.

One of the best new strategies is something called ‘sidestreaming.’ The problem with upstreaming is that you flow income through an operating company that tags it for nexus and then requires to you to provide economic substance on why you would pay another company for a product or service.

Instead you divert the stream of income so that it never touches the operating company. You create or move a sidestream of income that goes to you other entity. You then get all the benefits that you were after with upstreaming: less tax, more benefits, privacy and better asset protection. NOTE: You do need to set the companies up properly, follow corporate formalities and have a real purpose for the sidestream of income. Get some help to make sure you’re following the rules.

In our December 14th coaching call we’re going to look at the accounting and tax issues with moving a stream of income and/or assets. We’ll also go through some exercises to help you develop additional streams of income. The secret is focused diversification. Turn what you know into more dough!



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