Large Payout of Intellectual Property. Is there a way to put this into a trust (have llc already) and have it pay out to myself as distribution over time to lower tax liability?
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Congrats on the big IP payout—now let’s talk about keeping Uncle Sam from grabbing the whole thing.
Short answer: You can’t dodge taxes, but you can try to dance around them more gracefully.
A Few Moves to Consider:
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LLC you already have? Cool. But unless it’s taxed as a C-corp (not usually a good idea), you’re still paying taxes personally.
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Trusts? A revocable trust won’t help. An irrevocable one might—if you’re cool with locking things up like a dragon hoard.
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Installment Sale? If you sell your IP over time, you may spread out the tax hit. Tricky, but doable.
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CRTs, Solo 401(k)s, Opportunity Zones? Fancy stuff for serious money and serious planning. Worth a look.
Final Word:
You can massage the timing and structure, but if it sounds too good to be true, the IRS is already watching. Call your CPA before you try to get clever.