Tag Archives: ecommerce business tax planning

Cloud Continues to Disrupt Business – 1,000s of Robots Laid Off

International tax planning compares last century's tax laws to this century's business. Then , it exploits the differences.

International tax planning compares last Century’s tax laws to this Century’s business. Then, it exploits the differences.

This innovative tax planning blogger wants your business to survive.  Using your knowledge of the past to help you in the 21st Century not only causes you to pay more in taxes, it can put you out of business.

You have to compete with the future. Blockbuster’s demise is old news from the beginning of this century.   Just ten years later, the killer of Blockbuster is dying.  In 2014, Redbox closed (laid off) 1,000 of it robotic DVD rental kiosks.

 In 2015, it closed all of its DVD rental kiosks in Canada.   Netflix and other video streamers are slaying the king of the DVD rental kiosks. Redbox’s $1 a night became too expensive. Netflix is $10 a month, and you can watch as many hours as you want with 50,000 choices.

American international tax laws were written and were designed for a 1930 economy.

Offshore tax planning compares the out of date concepts in our tax laws to 21st Century business. Then, it exploits the differences.  Your tax planner must forget last century’s tax planning and learn this century’s.

Great tax planning sees the trends and changes.

For example, if the computer streaming of music was located in the Cayman Islands, the income is foreign source income and not U.S. source regardless of the location of the customer.  On the other hand, if you sell the mp3 file or ship the DVD, the income is U.S. source.

Look at banking.  Do you need an office in California to have California customers?      Are ATM’s the next to be laid off?  Do you want to deposit your checks like this,  in the dark watching over your shoulder?

Internet businesses can decide who is going to tax them just by using the cloud.

Internet businesses can decide who is going to tax them just by using the cloud.

Or like this- At home with a smartphone app where it is safe. By changing your business, you not only survive, but you can also completely shift your tax profile.

For example, if you distribute a product, spend some time learning about 3D printing or using a fulfillment center.   If you have an e-commerce business,  consider streaming your product versus providing a mp3 file or a pdf file.  Internet tax planning starts with shifting the source of the income.

For some, it is merely a move to Nevada or Texas to escape California or New York taxation.  For others, it is outside of the U.S., such as Canada (yes, it is an internet tax haven) or Ireland.  By the way, California tax planning and New York tax planning just became more important.  State income taxes are no longer deductible. 

If you want to brainstorm your idea and dream about your future, then call me, Brian Dooley, CPA, MBT, at 949-939-3414 for a free one-hour consultation.  

Selling a Small Business Tax Planning and Saving Taxes with the Open Transaction Doctrine

tax planning, avoid taxes, small tax business,

President John Kennedy (Democrat) is the most respected president of last century. The President and Supreme Court Justice Hand agreed that patriotism does not mean paying more than your legal share.
Supreme Court Justice Holmes said tax planning means you get as close to that legal line as possible

The money you get from selling short on a stock is not taxed.  Yep…  no tax, at all.  A short sale is an open transaction.  When you “close” the transaction by purchasing the stock sold short, you report the gain or loss.   

A sale of a business is an open transaction if the total sales price is not known.  This is called a “contingent” sale price.   

For example, I have a client that creates eCommerce businesses.  He gets the website establish, does a fantastic job optimizing the site on Google and Amazon.   Once the business is making money, my client sells it.  The sales price is dependent in the businesses gross income for the next five years.  
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IRS Helps U.S. Headquarters Earn Tax Free Internet Income and E-commerce Income

Domestication of a foreign trust

Applying for an IRS ruling on your international tax planning will save you taxes in the long run.

The Department of the Treasury is keen on getting more business in the United States.  It knows e-commerce, cloud-based businesses are producing most of the world’s new income.  From Netflix to Ebay to Apple music, the world is seeing a change in business.

It is here that the Treasury and IRS foresight into the future pays off.  Before I give you the blueprint, I want to emphasize the skill that our Government used in drafting this tax law in 1972 with a concept that works almost a half century later.

So, let’s pretend that I am starting a business to compete with Netflix.  Of course, I am an American, so all of the controlled foreign corporation laws apply to me.  My capital source as my long time banking associates.  Like so many ‘I” (internet) businesses, I have decided that Ireland is the best location.  
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