Royalties
Tuesday/August/19 20:57 Filed in:
corporate strategyBob is a prolific writer of business success books and has written over 20 books
in his 15 year writing career.
Bob is a prolific writer of business success books and has written over 20 books
in his 15 year writing career. Bob lives in Newport Beach, California and is
married with three kids still at home. Bob’s success in writing has been a mixed
blessing. He has made over $500,000 per year for the past three years which
has put him in the position of having to pay over $200,000 per year in taxes to
the IRS and the state of California.
Bob decided to work smarter and not harder so he formed a Nevada C-
Corporation with an Office package and used Nevada Management Services to
ensure his financial privacy. Bob transferred his royalty rights to all of his books
to his NV Corporation. Bobs publishers now pay their monthly checks directly to
Bob’s NV Corporation (all $500,000). Bob has also formed a Nevada LLC that is
foreign filed in California that is paid to write on behalf of his NV Corporation
($300,000). Bob draws his salary and benefits from his LLC and has decreased
his tax burden in California by $20,000 per year based on a 10% state income
tax rate and Bob leaving $200,000 in his Nevada C-Corporation. Bob can use
this $200K in his Nevada Corp for investments, business expansion, business
travel, etc. Tags: tax strategy, royalties, intellectual property