Rich People's Tax Credit Scheme, Harvard's Healthy Finances & My9

**Shaan Puri** (0:00)
So you put down, let's say, 150K, you put down 150K of cash, and you get a million dollar deduction.

**Sam Parr** (0:06)
Oh my gosh.

**Shaan Puri** (0:06)
So let's say you're in California, a million dollar deduction is saving you $400,000 of taxes.

**Sam Parr** (0:21)
All right, we're live, what's going on?

**Shaan Puri** (0:23)
Can I tell you about a cool rich people tax credit scheme I discovered?

**Sam Parr** (0:27)
Yeah.

**Shaan Puri** (0:28)
So actually a mutual friend of ours is the one who put me on to this, but I won't say his name because, you know, never talk about another man's taxes.
So when we sold the Milk Road, I was like, oh man, how do you, you know, reduce taxes in a situation like this? Is there anything I could do? And I think we sold in October. So it was like, you know, you get this windfall of profits in October. Is there anything between October and December I could do to lower taxes? And I looked into what are the different options? What are the legal, clear, buy the book options that I could do?
And when most people try to generate large, you know, deductions or write-offs, they typically think of what?

**Sam Parr** (1:11)
A car.

**Shaan Puri** (1:11)
Car, even bigger. Let's say you need millions of dollars of depreciation.

**Sam Parr** (1:15)
Real estate.

**Shaan Puri** (1:16)
You'll go for real estate. So, real estate is typically the one, but your boy is lazy and your boy doesn't like to go and own things and have to like, you know, manage properties or anything like that. You can always put your money with somebody else and try to do it that way.
But this is pretty interesting.

**Sam Parr** (1:34)
But you still gotta research all of them and yeah, it's still a little bit of a pain.

**Shaan Puri** (1:39)
Exactly. And you have to buy size. So like, how do you get, you know, let's say you buy a property, you know, you're only gonna be able to write off like a portion of it, right? So you'll get the sort of the depreciation that you can get the bonus or accelerated depreciation if you maybe do cost sag or something, you'll get 20 or 30% of the value of the property to write off. But let's say you needed, I don't know, pick a number, right? Let's say you needed a $10 million. Let's say you had 10 million of taxable income.
You would need to buy like a $30 million property or so just to be even close to deducting like enough to make it significant. That's a big deal, especially for somebody who's not in real estate. So I was like, okay, I don't want to do that.
And our friend put me onto this thing. He's like, you know, there's this other form of depreciation in the form of financing movies. Have you heard about this?

**Sam Parr** (2:25)
No, but tell me about this.

**Shaan Puri** (2:29)
So here's, by the way, I-

**Sam Parr** (2:31)
This sounds like a horrible idea.

**Shaan Puri** (2:32)
No, it's a great idea, I think.
I think it's a great idea. So basically there's this thing called film production tax credits.
And what ends up happening is the following. Movie needs to get made. Let's just use some numbers. And by the way, I'm not an expert at this, but I get the broad strokes. So forgive me if I get some of the ratios and percentages wrong for it.

**Sam Parr** (2:54)
Instead of bro science, this is bro tax.

**Shaan Puri** (2:56)
Yeah, exactly, right?
Numbers, numbers and words aren't my thing. I'm a body language guy.
So let's just pretend you have a filmmaker wants to make a movie for a million dollars. So in order to make a film for a million dollars, they need to raise that money from somewhere. And what happened was there was always these, there was always these kind of like depreciation incentives. But when Obama came into power, he added to them. So what Obama did was he changed the rules, I believe during his time to say, you can write off 100% of a film's cost before they even make the film, before the money spent on that film, just on the budget. So let's say it's a million dollar movie. If you buy that movie, you can write off a million dollars right then and there. Nobody, like, you don't have to wait for the whole thing to be shot. Before, you had to wait for certain days of production in order to write off those costs. Now you can just write it off from day one as an incentive to get people to fund more movies and fund more art and culture and this sort of thing. Because movies aren't really the best money makers. So you needed a little bit of an additional incentive if we want wealthy people to do this. So now what happens? You put down, let's say, 150K.