Industrial Real Estate Is a Weird Game (and expensive) 

And also the fish. Lol

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My favorite tax dodging scheme has a great name, it's called the "Double Irish with a Dutch Sandwich". Basically you set up a shell company in Bermuda which has a 0% tax rate, then merge it with an Irish shell company. Ireland has a law that if an Irish company is owned by a foreign company, the Irish company's profits can just be counted as the foreign company's profits and taxed at their tax rate (in this example, 0%). Then you merge with a Dutch shell company that owns the IP to something you need your actual company to use, because the Netherlands has a law that revenue from IP is taxed at a super low rate. So let's say your company makes a million dollars in profit, you then have the Dutch shell company charge a million dollars in licensing fees for the IP. The Dutch Company pays the taxes (let's say 1% so $100,000), then transfers the remaining $900,000 to the Irish shell company and then onto the Bermudan shell company. Since Ireland doesn't charge any taxes in the middle and Bermuda doesn't charge any taxes, you now have $900,000 left over instead of the ~$650,000 you would have had paying the full taxes in the US. EDIT: Replace $100,000 with $10,000 and $900,000 with $990,000.

So what you're saying is we need to pass laws that tax foreign country held entity companies that do business in the US at 50% of their global income so they stop pulling this BS and actually pay their fair share in taxes here in the US.

@@kaleria608 tbh that scheme is used mainly by US companies so that they don't have to pay taxes here in Europe

@@fakjbf3129 math doesn't check out. It is worse (or better if the owners) as 1% of a million is $10,000. Transfer the $990,000.

Found the secretary. . . . . . . I'm so sorry this just sounded funny as a reply, I don't actually mean to simplify that way

Co-sign a former Executive assistant. Don’t hire us if you’re not going to listen. My job is to organize your life and make the trains run on time. If you’re not going to listen you’re wasting your money and my time.

@@Taaneria I agree but, having had an executive assistant, their value becomes apparent very quickly. Once you’ve experienced The benefits of an executive assistant, you start listening to them

💯

This sounds a lot like the debate between registered nurses bs nurse practitioners.

Doug needs a professional domme.

I like it!

I agree that would be a great name

I know there is already a Schell Games, so I imagine there would be room for confusion.

Except that industrial lathes can last over 50-80 easily, so once depreciation is at 0 and it is still going strong, you have to decide what to do with it: You can either sell it and be taxed on the full sale price since its value is 0, or keep it and all repairs will be 100% deductible so running the machine is now "free". Right?

@@AlainPilon when I wrote “let’s say it will last for 10 years”, it is important to keep in mind that this is just an example, and not an actual figure or claim as to how long a lathe should last. My intent here is to explain the logic behind why depreciation can be used to make a deduction from a company’s profit, and not to provide a fully qualified and practical example of exactly how a corporate entity goes about calculating depreciation. In reality, your relevant tax agency will have documentation on the method to calculate the depreciation (straight line vs declining balance) effective life of the asset and the diminishing value rate of any asset. The effective life is length of time that you can use to deduct for depreciation on the asset, and the diminishing value rate is the percentage of the current value that you can deduct each year. With the way the numbers work out, you cannot depreciate an asset’s value to zero, there is always a residual (or salvage) value. The reality is that you can’t actually depreciate an asset to 0%, as there is always a residual (or salvage) value. For example, if we use straight line depreciation on an asset that has an effective life of 10 years and a diminishing value rate of 10%, then it will have a residual value of 5% of the original value. So as far as your question goes, I would have to reject it on account of the premise that you can depreciate something to 0%. The reality is that you would probably sell the asset for its salvage value and buy a new one so that you can use its depreciation to increase cash flow and decrease profit. But this can depend on a lot of factors.

@@QuantumMechanic343 Thanks for the clarification, I was aware of the general account working, but not the finer details.

This kills me. Depreciation is not that hard.

I assume that last one would be just for the property. Those ruins would probably need to be demolished and rebuilt from scratch.

@@MustNotContainSpaces but even the property can have cleanup liabilities.

​@@Kulric Mhm. Doug is probably a good guy and doesn't want his workers getting ill and diseased from whatever pollutants the previous owners may have contaminated the property with. At the very least since he also works there he isn't going to want to expose himself to that stuff either. So a good environmental assessment to know what needs cleaning and how much that'll cost definitely needs to be part of the process.

and also explains so so so much about how the world works

Something they didn't mention is that by having the property owned by a separate LLC. If Wyrmwood went thru a bankruptcy or was sued and lost, the property wouldn't be an asset that would be counted towards the company's worth. So, whatever equity they have in their property is separate and protected.

@@ethankriegel4614 yeah the protection is a great asset and also the liquidity on a piece of property is much higher and by extension an LLC that owns property. Right now if one of the Wyrm owners wanted to take a personal loan on the value of their shares it would be much more difficult. 1/12 of a business that owns 18 million fmv of real estate and $360 in cf is much easier to get a loan against

We understand

Yeah, it's unfortunate that you NEED those hoops so that you don't end up losing your shirt because of some regulatory nonsense.

That way it has (at first sight) no obvious connection to Wyrmwood. I second this!

@White House Down wow! do you think you can give me some advice on how to invest in a healthy way as you are doing? please

@White House Down I just looked her up on google and researched her accreditation with SEC. She seem very proficient and have great records to her name. will write her an email soon

No, they aren't loopholes. These are codified rules. They built the game themselves, and are playing perfectly within the rules they designed.

Yes and no. Other posters have some insightful stuff to say about it but the summary is that buying a building isn't just an upfront cost. It needs maintenance, repair, and eventually replacement that you have to plan for. And that much seems sound logically to me. Setting aside some of the profit a business makes in a year so that they can maintain the things they need to function. The whole spin off an LLC to buy it and rent the building from it though is probably needlessly complicated and may well be hiding tax loopholes. Especially when you start claiming these spin offs are based in other districts with lower tax rates.

Any company of any size, and frankly any individual in business for themselves, has access to every business based tax rule that is available that applies to them, their cash flow, their expenses, their assets, etc. Any business has a right to exercise any rule that applies to them.

If my understanding is correct, the LLC will basically get their money back on the building over the course of X years through depreciation and some jibber-jabber over being in debt. The LLC also gets the rent money, which the actual company using the building gets to write off, cause it's not part of the profit. The way I see it, cause a company in my country is classified as a "person" (judicial entity, if the translation works), I'm loaning my mother some money to buy herself a house, and then I move into that house and pay her rent, and we're both avoiding a hefty amount of tax. I don't think this is right, but... People here find other ways to steal/avoid tax anyway so I don't really know what's worse.

Hit me up if you want a bomb chief of staff tho

And you don't wanna pay twice as much for a dice tray, so there we go... They pay more than enough taxes already, anyway, especially considered the way government wastes money/use it against us.

@@staceygram5555 I agree, but theese loopholes tecnicaly shouldn't even exist, therefore shouldn't be so weird. And ofcourse double the tax is ridiculous