Tax & Entity Masterclass 

The Tax & Entity Master Class reveals how to flip taxes from your biggest expense into your greatest accelerator.

It teaches you how to build a business structure that protects your income, how to convert real estate into tax-shielded cash flow, and how to use the tax code’s incentive system to legally pay less and keep more.

Rather than reacting at year-end, you’ll learn how to engineer your income flows proactively, stacking deductions, depreciation, trusts, and whole life capital to protect, multiply, and pass on your wealth with precision.

Tax Overview

• The Tax Code is an Incentive System, Learn to Leverage It Instead of Being Punished by It.

• The U.S. tax code isn’t designed to punish wealth, it’s designed to reward behaviors that fuel the economy. Most people get abused by the code because they don’t understand its rules. GG’s goal is to help you play the game intentionally, compress the time it takes to reach your financial “why,” and protect your wealth while you build it.

Top 10 Insights

• The tax code is a game of incentives — not punishment.

• Structure entities early to unlock deductions.

• Move to S-Corp status at $60–70K to save self-employment tax.

• Real estate depreciation is the most powerful paper expense.

• Use short-term rentals for bonus depreciation if high income.

• Build trusts + holding companies for asset protection & dynasty planning.

• Whole life is a tax-advantaged capital reservoir.

• Most CPAs only file — few plan.

• Risk-adjust your deductions (must be ordinary, necessary, documented).

• Taxes are a tool — not a burden — if you design around them.

Key Takeaways

• Wealth is not about how much you make, it’s how much you keep.

• GG teaches clients to treat taxes like a strategic game, not a yearly nuisance.

• By aligning your business structure, real estate, trusts, and insurance, we turn the tax code from an obstacle into a fuel source for your financial freedom.

• Build your business now to escape W-2 constraints, then time your exits (real estate, investments, business sales) to harvest gains at 0% tax — converting years of compounding into spendable wealth without losing a cut to the IRS.

Proper Entity Structure

• Start as an LLC taxed as a sole proprietor (default)

• Once net income reaches ~$60–70K, elect S-Corp taxation (IRS Form 2553)

  • Begin paying yourself a “reasonable salary” + distributions

  • Avoids 15.3% self-employment tax on distributions

• This is the trigger point where structure starts saving thousands annually

• Layer entities:

  • Parent holding company (WY LLC) — asset protection & privacy

  • Operating LLCs (by state or activity) owned by parent

  • Future trusts (see Rockefeller section) own the parent for generational planning

  • Layers don’t make you invincible — they make you too expensive and time-consuming to attack.

Core Tax Code: 162(a) + 199A (QBI)

• IRC §162(a): Ordinary & necessary business expenses are deductible

  • Examples: laptops, marketing, travel, phones, software, client meals, etc.

• Qualified Business Income (QBI) Deduction:

  • Pass-through entities (LLCs, S-Corps) can deduct up to 20% of net income

  • Phases out at higher income for certain professions

• Example: $100K net → $20K deduction → only pay tax on $80K

Real Estate Tax Advantages

Depreciation:

• Residential property depreciated over 27.5 years

• You deduct a portion of property value each year (paper loss)

• Bonus Depreciation: Accelerate 100% of certain components (carpet, appliances, etc.) in year one

Expenses & Deductions:

• Mortgage interest, property taxes, property management, repairs, travel to site, insurance

• Home mortgage interest is deductible (subject to limits)

Passive vs Active:

• Rentals are normally passive (losses limited)

• High-income W-2 earners can do short-term rentals (Airbnb <7 days) which count as active

• After taking 100% bonus depreciation in year one, flip to long-term passive

• If active (and you materially participate), STRs are reported on Schedule C

• If long-term rental or passive, it stays on Schedule E

Personal vs Rental Property:

• Personal = no depreciation, limited deductions (mortgage interest, property tax)

• Rental = full suite of operating deductions + depreciation

• Real Estate Professional Status (REPS): If you or your spouse qualify as a real estate professional (750+ hrs/year and >50% of your work in real estate) — including as a licensed agent — your rental losses are treated as active and can offset W-2 or business income instead of being trapped as passive.

Cost Segregation Studies

• Engineering-based study to break a property into faster-depreciating components (5, 7, 15-year property)

• Unlocks huge bonus depreciation in year one

• Best for properties over ~$250K

• Critical lever for scaling real estate portfolio with minimal taxable income

1031 Exchanges

• Allows selling a property and rolling capital gains into another property tax-deferred

• Requirements:

  • Identify replacement property within 45 days

  • Close within 180 days

  • Essential tool for compounding real estate wealth without losing equity to taxes

Augusta Rule (Section 280A)

• • Rent out your personal residence to your business for up to 14 days/year

  • Business deducts it as rent, and you receive it tax-free

  • Often overlooked, extremely powerful for S-Corp owners

Using Depreciation & Real Estate Write-Offs to Exit Tax-Free

• When you own a rental property, the IRS lets you depreciate the building over 27.5 years (residential) as if it’s wearing out over time.

• This creates a non-cash expense that lowers your taxable income even though no money left your pocket.

• You can also deduct other operating costs like mortgage interest, property taxes, repairs, insurance, and property management.

What Happens With Losses

• If your expenses + depreciation exceed your rental income, you create a tax loss.

• These losses are usually considered passive losses and can:

• Offset other passive income now, or

• Be carried forward indefinitely as “suspended losses”

How This Sets Up a Tax-Free Sale

• Over time, your property appreciates in value while you stockpile suspended passive losses.

  • When you eventually sell the property, the IRS lets you:

  • Apply those carryforward losses against the gain on the sale

  • This can wipe out or greatly reduce your capital gains tax

• Bonus: you can also 1031 exchange into a new property to defer any remaining gains.

The Big Beautiful Bill (Tax Cuts and Jobs Act of 2017)

• Created QBI 20% deduction

• Expanded 100% bonus depreciation

• Increased Section 179 expensing limits for equipment/vehicles

• Lowered corporate tax rates

• Allowed cost segregation studies to accelerate depreciation

• GG Client Advantage: stack bonus depreciation, cost seg, and QBI to erase paper profits while building equity.

Capital Gains Tax Strategy

• Turn Asset Sales Into Tax-Free Income by Controlling When & How You Realize Gains

How Capital Gains Work

• When you sell an asset (stock, property, business, crypto, etc.) for more than you paid, the profit is a capital gain. (Rates change) 

• Short-term gains (held <12 months): taxed at ordinary income rates (up to 37%)

• Long-term gains (held >12 months): taxed at preferential rates

  • 0% if your taxable income is $47,025 or less (single) / $94,050 (married)

  • 15% if income is above that range

  • 20% at the highest income levels

Why W-2 Income Creates Problems

• W-2 income stacks on top of your capital gains and pushes you into higher brackets

• A high-earning W-2 job makes it nearly impossible to qualify for the 0% long-term capital gains rate

High W-2  Short Term Rental Solution 

• High-income W-2 earners normally can’t use passive rental losses to offset W-2 income

• Buy a short-term rental (≤7 days) and materially participate to make it active

• Do a cost segregation study and take 100% bonus depreciation in year one

• Use the loss to offset W-2 income, then switch property to long-term (passive) for future years

• Passive income is perfectly fine, this is just one strategic workaround to unlock tax benefits during high W-2 years.

Strategic Planning with a Business

• Having your own business (LLC taxed as S-Corp) gives you flexible control over your income timing and amount

• You can:

  • Reduce W-2-style salary and take more distributions

  • Deduct legitimate expenses to lower taxable income

  • Plan when to sell assets during a low-income year

• The GG system helps clients gradually transition from W-2 to business income and eventually to capital-based income

The Tax-Free Harvest Strategy

• Once you’ve left W-2 work (or taken a year with intentionally low income), you can:

  • Sell appreciated assets (stocks, properties, businesses)

  • Keep your taxable income under the 0% capital gains threshold

  • Pay no federal capital gains tax on those sales

• This creates a powerful “capital harvest year” — cashing out growth at zero tax while reinvesting into new ventures

Proper Tracking & Documentation

• Use QuickBooks, Wave, or Xero to track income, expenses, and mileage automatically

• Save receipts and invoices — keep digital copies organized by category

• Document the who, what, where, when, and why for all meals, travel, and client expenses

• Reconcile accounts monthly to catch errors early and stay audit-ready

• Keep a separate business bank account + credit card to cleanly separate business and personal spending

Common Top Deductions (GG Clients)

• Home office & dedicated workspace

• Internet, phone, software, laptop

• Vehicle mileage or actual costs

• Travel (with business purpose)

• Meals (50% deductible, 100% if provided at company event)

• Kids on payroll (up to $14K/yr tax-free for them; deductible for you)

• Health insurance premiums (if S-Corp owner)

• Retirement contributions (Solo 401k, SEP IRA)

Common Misconceptions

• “Write-offs are free money” — No. They reduce taxable income, they aren’t credits.

• “CPAs handle planning” — Most only do filing; planning must be proactive.

• “Buying stuff lowers taxes” — Only if it’s ordinary, necessary, and strategic.

• “W-2 income can be written off” — Not unless you also have a business entity.

• “Real estate is always passive” — Short-term rentals can be active and unlock bonus depreciation.

Filing CPA vs Planning CPA

• Filing CPA: Prepares returns accurately & defensively (compliance)

• Planning CPA: Proactively creates strategies to minimize future taxes

• You need both — one to save you money, one to protect you if audited.

The Rockefeller Method (Trust Strategy)

• Use a revocable living trust for estate planning during your life

• Convert to an irrevocable trust for long-term asset protection and privacy

• Place trust as the owner of your WY holding company

That holding company owns:

• Real estate LLCs (by property or state)

• Operating businesses

• Whole life policies (private family bank)

• Creates a dynastic, judgment-proof wealth structure — trust owns everything, you control it via trustees.

Whole Life Insurance Tax Benefits

• Cash value grows tax-deferred

• Access via tax-free policy loans

• No capital gains on growth

• Income tax-free death benefit to heirs

• Creditor protection in many states

• When owned inside a trust + LLC structure, becomes a private banking system that never shuts down.

Strategic Lifestyle Utilization

• Kids on payroll — pay for real work; shift income to 0% bracket

• Travel — must have business purpose; combine business + personal days

• Meals — 50% deductible when with business purpose, 100% for company events

• Document with who, what, where, when, why

• This is legal — just needs intent + documentation.

Warren Buffett’s 2 Rules

• Don’t lose money

• Don’t forget rule #1

• Taxes are one of the largest leaks on wealth-building.

• GG’s system exists to minimize erosion, protect principal, and maximize compounding.