Dr. H. E. and Spouse, both dentists with separate dental practices. 46 and 42 respectively

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Concerns:

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1. Joined total taxable income of $906,000 After all expenses, deductions and credits
2. Two minor children
3. Main house
4. No retirement accounts
5. No life insurance
6. Both practices are S-corporations
7. Paid $523,487 in taxes in 2023
8. Averages over $440,000 in taxes the last 15 years
9. Would like to retire at some point, maybe at age 70
10. Invest in real estate
11. Want a bigger house at a much nicer neighborhood
12. Want to vacation more
13. A Vacation home

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Strategies:

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1. Protected both dentists from taxation by separating the doctors from their current business structure -the S-corporation
   • Revert existing entity from S-corporation to C-corporation
     • Dentists become employees, chairholders and officers of their C-corporation and receive fringe benefits that will not negatively affect their W2.
   • Implement a particular tax code that ALLOWS dentists to access cash from C-corporation without triggering DOUBLE TAXATION.
   • Implemented other advanced codes to reduce the C-corporation’s taxable income, given the dentists a greater peace of mind that the taxes they were saving on their personal side was not then paid to the IRS by their corporation.
   • Created the right number of additional entities
     • Management company
     • Insurance company
     • Real Estate company
   • Invested 4,000,000 worth of real estate in short-term rentals
     • Maximized Cost Segregation
     • Bonus depreciation
     • Materially participated in 100 hours
     • And tenants averaged less than 7 nights per stay.
   • Created Buy-Sell Agreement between the doctors, even though they are NOT each other’s partner
2. Implemented the Augusta Rule
   • Dentists rented their primary home to their practice for 14 days
3. Advanced Vacation Strategy
   • Dentists were able to LEGALY and ETHICALLY take multiple vacations of 13 days or less at All-Inclusive 4-5 stars resorts paid for by the IRS.
4. Hire their minor children
   • Their children were able to get reasonable compensated and get education support at zero taxes and further reducing the tax liabilities of the dentists.
5. Created an Administrative (Headquarters) Office strategy to help the dentists further reduce taxes from the moment they leave home to their respective clinics and when they drive back home

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RESULTS:

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• Dentists protected 100% of their taxable profits for 2024 and beyond.
• Purchased a much larger home in the Beverly Hills area
• Also purchase a beachfront vacation condo in Mexico
• Purchased 3 short-term rental
• Paid $110,000 dollars in student loans they still owed
• Created a 10-year retirement plan and will increase their standard of living
• Were able to set aside $19,850 per child for college, 100% tax deductible to the practice
• Will discuss living trusts and wills later.

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