Okay, we are on number 7 of 8 of the Tax Strategy Framework,
and this one is called the Tax-Exempt Income and Cash Flow.
Tax-Exempt Income and Tax-Exempt Cash Flow,
and, remember, well, on this one I'm going to kind of use the shotgun
approach and give you, it's like 15 or 16 different ideas of ways to
get just examples of tax-exempt income.
I do have all these listed out in that spreadsheet I've mentioned.
It's a they're the actual framework itself,
which is in a spreadsheet where you can download it on the WealthGain Basics
or in the WealthGain Alliance group, or yeah,
send a message over and we can get a copy of it over to
you. So this is seven of eight of the tax strategy framework that we
use in our one-on-one training. So this one,
just remember, this is, this is income.
There's examples of in the last one to give examples of like the worst
types of income, which you're usually hit with like a double tax or multiple
types of tax. And the best type of income is something that's like truly
tax free. And if,
if the goal, which with a lot of people have the goal of living
a tax free life, at least income tax free life,
and I've seen it, I've seen quite a few. People be able to accomplish
that. It takes some planning, takes some hard work and it takes some,
you got to think about it like big picture and longterm.
You got to think about it in the future of how you'll be impacted
by this. But I think these, I think these examples will,
will help. So here we go. I'm going to, I won't dive into a
lot of details on each of these because most of these,
and if I don't have them yet, I will do podcast episodes specifically on
each of these strategies. But,
so I'm going to give you some details on each of them though,
just to generally explain what they are.
So the first one is Muni bonds.
So municipal bonds, that's a type of investment where you can,
you can receive it income tax free.
so it's, kind of like interest income, like the bond income,
kind of like interest income. You're getting paid back by government entity.
But because of that, like they want to incentivize people that put their money
into those, those bonds. because of that,
they give you a tax break on it. So there's, there's certain bonds,
but watch out for there's some that are taxable in certain states,
some that are taxable, like, so just watch, like some,
there's some types of investments where you could be taxed,
they could be tax-free. The federal level, some could be tax-free at the state
level, and then depending on which bond it is,
it could be taxed in different states. So just watch for that.
and, and the second one I'll go over is the capital gains while in
low-tax brackets. So remember that. So remember capital gains,
long-term capital gains. If you're in the 10 or 12% income tax brackets,
the capital gain tax rate is actually 0% while you're still in those brackets.
And then when you get out of it, it goes up to 15%.
But there's, Some really good planning opportunities there.
And then similar to that qualified dividends,
there's some tax-free, well, it is tax-free when you're in those 10 and 12%
tax brackets. And in one of the,
the, these last episodes, it just, I did, I talked about the couple that
wanted to retire, like in the early 40s,
and they were keeping their income under 120,000,
so they're in that 12% bracket or lower. They were able to get capital
gains and qualified dividends. One of the,
1% tax-free. so then this, this next one is loans. It's,
it sounds kind of weird, but if,
if you're, I know a lot of people hate debt,
which leverage can be used.
To your advantage, but of course, watch out with debt and over leveraging yourself.
It can also be your downfall. So you don't want that.
But debt proceeds from loans is tax-free.
So a lot of times, like in the planning, someone's trying to decide if
they want to get cash. Watch out of an investment property to go buy
something else. A lot of times, I'll recommend,
like, just get a loan on it, get a cash out refinance.
Those are tax-free proceeds because if you sold the place,
you'd have to pay, like, gain, like,
tax on that gain. but if you do a refinance and get cash out
from a loan, that's tax-free.
So it's, you still have to pay back the loan, but it's just some,
one of the things we go over in this, section seven of the strategy
framework. And then. And the next one is if you have income
from a private foundation, or if you have a private foundation and you have
investments in that private foundation, this is not 100% tax-free,
but the tax rate on private foundation.
An investment income is, is 1.39%.
So that's one of the strategies we want to talk about if you have
a private foundation. There's a lot that goes into that, but something to think
about. So cash out refinances and cash.
Or this one, if you get a loan from your own
corporation, and this is more of like a C corporation,
you can get loans out, tax-free that way.
But loans in general, tax-free, you just need to pay them back.
and pack. This next one I'll talk about is Real Estate.
So Real Estate Income. As you all know,
as you know, I love Real Estate. One of the main reasons is that
the depreciation expenses can offer.
The cash flow income, they cannot offset your income for the year.
Even if, even if you, your cash Without,
without paying tax on it. And just,
we're adjusting the depreciation and taking that deduction over the year,
or over the years. the next one to talk about is gifts and inheritances.
Most of the time. There are, there are scenarios where they're not deductible,
or they're not, tax-free. But gifts are tax-free.
There's gift-tax limits, like each person can give,
give away, like, what is it, 10, 12,
13, 14? A million dollars in, like,
in their lifetime, tax-free,
or you can give up to, like, 18,000 dollars each year that
you don't even have to report on the gift-tax return.
But gifts are tax-free.
Until you start getting over that $14 million,
like, limit in your lifetime, which a lot of people don't hit.
But if you do, that's a 40% tax rate.
But if you're under that, gifts and heritances are typically tax-free.
And there's a whole- Whole episode on that. Inheritances can get pretty complicated,
but I would definitely listen to the episode on that. HSA withdrawals are,
like, remember, you put the money into your HSA,
you got a deduction. This is a health savings account.
When you withdraw You can pay for health costs. It's tax-free.
And some, like, you can accumulate quite a bit of money in there,
get the deductions that's going in. for some people,
that's part of their retirement plan. Like, paying for all their health-related- costs
out of their HSA that they've accumulated over the years.
life insurance proceeds is another tat way to get tax-free cash.
HRA, MacMelt, health medical reimbursements.
And HRA is, those types of plans.
And whether it's your own, so whether you work for someone or corporation,
and they're reimbursing you, that is tax-free,
or if it's your own corporation, you can get reimbursements to yourself tax-free.
and kind of allowing the same lines, like if you're working for yourself,
you can get money out of your corporation,
your S-corp, your partnership, for paying yourself to rent your own house,
called the Augusta Rule, or you can rent your house to any- anyone,
like anyone, any third party, or yourself, or your own company,
for up to 14 days a year, completely tax-free.
That cash that you receive for renting your house,
you don't have to report it anywhere. It's just really his tax-free income.
Called the Augusta- the guest room. Because of the, the golf championships there,
the golf tour, where Augusta people can rent their house for 14 days a
year, and not even have to report the tax. er, not even have to
report the income, but whether you live in, say,
like a ski town. Unlike Park City or popular vacation areas you can leave
and get tax-free income. if you sell your house,
this is the next one, if you sell your house, there is a personal
home sale gain exclusion.
It's up to $250,000 per person,
so if you're married, it's a $500,000 gain exclusion.
That's actual gain, and it's 100% tax-free.
If you are in retirement, this is the next one, and you're withdrawing.
From your Roth IRA, Roths,
remember, Roth grew, you didn't get the deduction when it went in,
but it can grow tax-free, then when you pull it out,
100% tax-free. All the gains,
all the growth there, 100% tax-free.
Then this next one is a little more unique.
There's some, some strategy with this, is if you take money out of your
typical retirements, like a regular 401k or a traditional 401k,
which would normally be taxable,
but if you're in those low tax brackets or say you have losses that
year from other sources, there's some planning where you can pull money out of
those, which would typically be taxable. But if you're in like the,
if you're under the standard, you don't. Like, $30,000 of income,
you can pull out $30,000 completely tax-free if you have no other income or
if you have other losses that you can use. That's why,
like, that worksheet, the income tax projection worksheet.
I really want people to go through that. Every year,
just maintain it, just so you know where you're falling with tax brackets.
And if you have some, some cushion to pull money out,
complete tax-free, I would do it. And you,
and there's some strategies there where you can pull money out of your typical,
401ks or traditional IRAs,
and then you can roll it over. They,
or you can convert it into a Roth.
So like you pull it out, it's technically taxable,
but you're not really paying tax because you have other losses or personal deductions.
You convert. And then from that point on,
it's growing tax-free. So then in retirement,
you actually do pull it out tax-free. So it's like a double tax-free transaction.
It's pretty cool. And then that last but not least,
this is one of my favorite, but the. The opportunity zone investments.
One of my favorites, and I'm excited about it because they were renewed in
July of, July of 2025.
They were renewed in opportunity zones.
Investments will go on. But one of the cool.
One of most things about these is if you hold that investment for 10
years, like a lot of times when people in real estate that are there
a long time, they've gotten deductions over the years and they've gotten cash flow
over the years, but when they want to exit and sell it,
you have to. Tippa. Typically, you have to roll it over into another property
to not pay tax on it. You've got to do a 10-3rd of an
exchange to not pay tax on it,
but in an opportunity zone,
if you've held it for at least 10 years and you sell it after
the 10 years, think. Again, from when you bought it over the 10 years,
complete tax-free, 100% tax-free,
which is pretty awesome. So that's, this is number seven of eight of the,
the strategy framework. There's a lot of opportunities for tax-free plan.
tax-free income, a tax-free cash flow. It's usually not just something that's just going
to fall on your lap. So you've got to be aware of these different
things and plan for them and move in that direction to get this
tax-free income. but remember, so I,
I know I list out at a bunch, but this spreadsheet,
the whole framework is available on the Wealth Game I.O.
in the basics and the alliance portal.
And it's all covered.
Yeah, we've just got one more. I'll cover that here soon.
So talk to you later. Later.
