We’ve discussed upstreaming strategies (and how they’ve become a risky tax strategy) over the past few days. Today, we’re going to talk about a new strategy that DOES work. You’re only going to hear about it here, unless someone has copied our material. That’s because we were the first to come up with this new strategy.
In a nutshell, here’s how it works.
Upstreaming: You pay money from your home state company to a new company. It’s an expense on your home state books and income on the new company.
Sidestreaming: You divert a stream of income that may be going to your home state now or create a new stream of income. This new stream of income then flows to the new company.
Many of our clients have created sidestreaming income by using one of the ‘soft’ assets of their business. A hard asset is something that shows up on your Balance Sheet. A soft asset is something that does not, but is an asset to you and your business, nonetheless. So, an example of a hard asset is machinery used in your business. An example of a soft asset would be your rolodex of vendors for your business.
A soft asset could be an untapped knowledge, resource or technical resource that you have. It could be the things you know, the things your people know or the people you know.
With all the state and federal government clamp downs on upstreaming, sidestreaming is becoming a new, exciting way to create income from new sources AND get great tax breaks as well.
We’re featuring it this week as a special. Learn MORE.