How to not pay your taxes legally, apparently

Summary

Business owners have the most flexibility of everyone to not pay their taxes. I personally think these things are questionable but its what I have seen others do over the last few years and what has been recommended to me by every top accounting firm in New York. It is incredibly simple to spin up an LLC or C corp and expense all kinds of things. Employees don’t get this benefit. Peter Thiel famously bought his Paypal shares (which were valued at a few cents when he founded the company) into his Roth IRA account. When he turned 65, he was able to access the billions that the Paypal equity was worth with 0 tax on it. But what if you want the money sooner? Are there other methods? Of course there is. The first one is QSBS Tax which many startup founders still don’t seem to know about. This is the Qualified Small Business Stock Tax Exclusion. Basically as long as you wait 5 years before selling the business, you won’t be taxed on the first $10 million dollars. This isn’t some loophole, this is exactly what it was intended for so that people are encouraged to take risks. Let’s say your company is hot and you can sell it within 2 years though. Is there a loophole? Of course there is. When you get acquired you simply sell yourself extended options which you don’t activate until the 5 years have passed. Let’s say you are going to make more than $10 million dollars though. Let’s say you sell for $100 million. How do you avoid that pesky tax on the other 90? It’s called Trust Stacking. QSBS let’s you exclude up to $10 million in taxes “per person.” So you simply create a trust for everyone else you know and fill it with what you think will become about $10 million worth when you exit. If you have a wife and kids for a long time you can just make one for each. Super easy. If you are single, you can create one for future relatives and kids with a placeholder beneficiary. That would likely be someone like your current or future spouse. If you end up never having kids, you can s...