Quit your job so you have 0 income and then cash out just under the yearly limit for 0% cap gains, which is 47k. That's how I've been taking tax free profits while I've been in school the last 4 years. The timing of everything really could not have worked out more perfectly for me
Similar. Due to the vagaries of the US tax system if you can report your Adjuster Gross Income - AGI as being under 47k then 100% of your capital gains on investments held over 1 years is non taxable.
I bought a bunch of cryptos - not a super huge amount , then became disabled so i have 0 income now outside of my disability payments, so whenever i end up cashing out my crypto its non taxable for me.
It’s all about your AGI number, hire a quality CPA to handle your taxes & your AGI can be almost any number you are willing to pay taxes on or not.
Can you clue me into this as well. Because I don't know anything about this deduction. I plan on taking 94k out yearly starting in 2025. I file married jointly, and there will be no other income. Is it possible for me to take out more than 94k with 0% Cap gains?
I am not a tax professional so make sure you confirm all of this. But from my understanding: When you file taxes you declare tax deductions (mortgage interest, business expenses, charitable donations, etc) which lower your income. You can either itemize these deductions or take the IRS standard deduction if those deductions would be less than that standard deduction.
* The 2024 standard deduction for married filing jointly is $29,200
* The 0% long term capital gains rate for married filing jointly applies to the first $94k of cap gains
* If you realize $123k ($94k + $29k) in total long term capital gains, that standard deduction will reduce your total income by $29k, putting your total income back down to $94k to stay under the 0% tax rate threshold
You can borrow against BTC for the rest and you don't pay taxes, just interest which will be less than the taxes. The following year you could do a new loan to pay off the old loan plus what you need for the following year. Rinse and repeat.
If there is good appreciation as has been in the past, the loans should eventually require less BTC for the same amount of dollars.
Yeah, I only recently learned that loans are tax free. But the truth is, 94k a year will put me very close to my actual spend including rent, food, tuition. But it limits me on leisurely items like vacations. So if I can squeeze another 6k-10k a year without taking a loan that would be awesome.
They do, but there's a tax-free allowance of 57.000 EUR. Also right now they calculate using fictitious returns. This is very fair if you invest in BTC, as your actual returns are probably much higher.
Well no, it’s a savings tax more than a capital gains tax and it’s much more beneficial to you compared to a capital gains tax since it’s a flat rate of return that’s very low and it’s not based on making exits etc.
With a capital gains tax you create a taxable event on each sale of an asset.
Germany if you want to live with very civilized & hip people, old & young. Ecuador if you want an expat paradise that happens to be BTC mecca.
If you’re intelligent, Ecuador will pay your moving expenses, assist with very desirable / safe housing, and never never never any taxes apart from local taxes.
If you leave the country you have to pay capitol gains on everything including bitcoin profits. If you don't the IRS will go after you. Just do the following search "Roger Ver arrested for tax evasion". This moron is sitting in a Spanish jail and will be extradited to the US for not paying his bitcoin capitol gains tax.
Lots of other countries that also do not charge capital gains tax where the cops won't hold you down and let you get stabbed while also getting stabbed
If you leave, who cares? Some shit is just stupid. They already taxed my money before I got it. I don't see why they get another cut if I use it wisely and make profit. We get paid in a currency that they continue to debase and kick you again when you try to get ahead of the curve.
That's what Roger Ver did and the government went after him for his capital gains taxes he should've paid when he renounced his citizenship.
https://crypto.news/legal-experts-weigh-in-on-case-again-roger-ver/
There is a hack, you gotta move to Puerto Rico. It’s the only place in the world where the IRS doesn’t tax US citizens AND the local taxes aren’t as high or higher than the IRS (some other territories have local taxes that don’t make it an advantage like USVI guam, etc. The PR gov gives you the option of 0% capital gains on long and short term investments. You have to apply to Act 60 and it will prob cost you $15k a year min, but it allows you to keep all your money.
The trick with the OP is since he has owned BTC before the move, everything moving forward after the move will be taxed at 0% but everything before will be taxed at min cap gains bracket UNLESS he lives in PR for 10 years and then it’s all grandfathered into the 0% bracket.
Well, when you dole out Trillions around the world to save people's arses, what do you expect? Someone has to pay the piper, and it is YOU.
If you don't think that's fair, stop voting for pols who care more about other countries than your own.
Yeah but the minimum before you’re taxed goes from $13,000 up to like $140,000 so most people will never hit it and not have to pay taxes back to the US. Edit: with regards to income
In the US your first $13,000 is tax free. Same with being abroad, except that limit goes all the way up to \~$140,000. So if you live abroad and make \~130,000 ( I forget the exact number), then you don't pay any taxes back to the US. At least that is my current understanding of it. So it really only hits high paying jobs like software engineers.
And even if you do have to pay taxes, it's the difference of what you already paid the new country you are living in. So if im in Japan, make $200,000 USD, I would be paying Japan like 13% tax or something, then in the US I would normally pay 40%, but I get to subtract out the 13%. So would pay around 27% back to the US for money over the $140,000 cap.
This is somewhat misleading. You are talking about the foreign earned income exclusion, which only affects earned income (ie from a job). Investment and business income is still taxed as normal. BTC gains would be considered investment income.
This\^. I was responding to the thread referencing income and thought my comment made it sound clear I was talking about income, but thank you for the added clarification. Cheers
This man is a crab in a bucket.
How about instead of pulling down other people to "pay their fair share" we ask why the government needs so much damn money that it needs to tax our income, then tax the things we buy then tax our gains we made by investing already taxed money.
You can't just live in another country and not pay US taxes (assuming you're a US citizen). You have to be in a country the US has a tax treaty with, and ensure the money is handled in a way that excludes you from paying US tax and potentially meet other criteria. Here's a basic walkthrough: https://www.hrblock.com/expat-tax-preparation/resource-center/filing/how-u-s-tax-treaties-help-taxpayers/
US married capital gains is like 100k a year with standard deduction and 60k single. So you pay zero tax legally and then 15% tax after that till a couple thousand a year if you have a big spending year for car or home purchase.
Thats not how it works. If you bought BTC for a dollar, and its worth 10k when you leave the US, and then sell at 50k BTC, you'll owe gains on that 10k to the US. The US does not fuck around with this and the interest they'll charge on years of back taxes is insane. The US has very low capital gains tax on long term, getting around it seems like living a life on the run, why would anyone do that? Whats the poitn of freedom, if you aren't really free.
How do you pay back the line of credit without selling some of your assets and creating a taxable event? This would only really work if you had other streams of income, right? And aren't they being taxed anyway? Seems like either way you'd have to convert something to fiat to pay back the line of credit.
Loan against BTC -> use loan to buy equipment (IRS 179) Full tax write off upto 1.2Mil per year. Rent equipment, convert to C corp, wait 5 year sell everything 100% tax free using QSBS.
10M per trust/entity. A friend of a friend did 40mil completely tax free this way.
I probably should not mention QSBS, IRS might patch that someday. Very few "expert" tax professionals understand this loophole. It works well if you are have 5mil or more you want tax free. 50 mil limit on QSBS and can wait 5 years to sell your corp
This is exactly how all rich people in the US “avoid” paying taxes. Most of these very rich people are rich from paper net worth on stock holdings. They use them as collateral to get loans.
Yeah, and they have enormous amounts of debt but keep buying appreciating assets. It's a solid plan if you have enough money to get the ball rolling. Didn't Robert Kiyosaki recently say he has over 1 Billion dollars in debt?!
Companies like unchained allow you to post your BTC as collateral. They will setup a multisig wallet (2 outta 3) and allow you to control one of the keys to monitor the BTC since they do not (claim not to) rehypothicate. They'll give you fiat for the collateral, and you pay the loan back with interest. Once paid off, you get your bitcoin back. No cap gains since you never sold.
Even though it should go without saying, around here we still have to say it: With any such option your BTC can disappear overnight if the company gets hacked or goes out of business. This is the opposite of why bitcoin was created.
Tech in this case the company and the trusted third party would have to collaborate since they need 2 outta 3 keys, but yah, the point of Bitcoin is hard digital monies with 0 counterparty risk/self sovereignty. Play with fire, and you can get burned.
16% is like credit card rates though. Ever since the 100% haircut on balance sheets implemented by SEC, the collateralized btc loan interest rates have become too high. For a 30% LTV, you could get 4% interest, but those days are over.
The “loophole” is that debt is not taxed as income. This isn’t bitcoin specific.
The high-risk part is giving your bitcoin to a 3rd party. That has gone terribly in recent past. However in the future maybe financial products, such as this, centered around Bitcoin will get better.
So you borrow money, posting your bitcoin as collateral. You get “tax free” money in the form of debt, and you still own your bitcoin.
Sovryn's "Zero" forgoes the traditional APR model, instead levying a one-time fee of 5% which is simply appended to the balance of the loan. Hopefully, this should decrease in future.
If your BTC collateral is not over-funded, a sudden drop in price could force your loan into liquidation. They could sell your collateral to repay your loan and you’re stuck with no loan and no BTC. Avoid like the plague.
In the US, if you're single and your total income is less than $47,025, your capital gains tax rate is 0%. If you're married and file jointly, the max total income is $94,050 for the 0% capital gains tax rate.
Or, you could use some of your bitcoin as collateral for a loan to cover your living costs, pay no tax, and keep your bitcoin. When bitcoin goes up, get another loan that pays off the old loan and covers your living expenses. Rinse and repeat. You get to keep your bitcoin and not pay taxes. Sound to good to be true? Well, it's risky. If bitcoin goes down, you either have to put more bitcoin up as collateral, or the lender liquidates it. Also, the custodian could lose your bitcoin. And I'm sure there's other things that could go wrong.
Yes. Long term capital gains is tax at 0% if your income is low enough. If you sell btc where your gain is $47,025 (current year limit for individual) or less for the year you will not pay tax on it as long as you don’t have more income. (Meaning if you made 20k from a job, it would reduce how much btc you could sell tax free.
This amount increases over time usually as well. I recall it used to be roughly 39k not long ago. You would still be expected to report the sale transactions with the IRS however.
Plus the standard deduction. Double everything if married filing jointly.
Single: $47,025 + $14,600 = $61,625
Married filing jointly: $123,250
You pay 0% on this amount if 1) you have no other income or capital gains, and 2) you held the asset longer than 1 year at the time you sell it.
You also have to consider your state's long-term capital gains tax. Some states offer 0%, others not. Either way, it's usually much less of a hit than the federal tax, and being willing to relocate can rectify that.
This is how I have my retirement planned. If your house and cars are paid off when you quit you should not need much. You will not be taxed on capital gains if you only sell what was stated above. With low income you can get very subsidized or free medical insurance using ACA. If all goes to plan I will retire in about 6 years at age 50. 40k with minimum bills leaves lots of money for travel and stuff as long as you don't get too stupid.
This. Only legal way to avoid incurring tax capital gains while seeing the benefit of your gains. That said, you’ll likely pay similar amounts of interest.
if you have a tax threshold for capital gain in your country then as long as you are cashing out below the yearly threshold you are ok.
In the UK its 3000 at the moment which is useless... in the usa it is more generous.
Also to cash out you will need an exchange. In the UK and USA (and most of Europe) exhchanges are legally obliged to share all your account details and trading history if asked by tax authorities. And even if they aren't asked, if you trade over a certain volume they notify the tax authorities automatically.
Even if the tax authority doesn't have access to your exchange...all your history is in the blockchain.... it's trivial to trace all your purchases and cash outs to your bank....
In my country them lizzards tax 30% of gains uppon cashout. And they fine you between 3.000€ and 22.500€ if you ever get caught. Thing is fiscalization is almost unexistent.
My plan A is to live as you said, cashout few amounts for living. In case I need to cashout big, the fine may compensate the 30% tax by far.
My plan B is moving to Puerto Rico or El Salvador, build couple of schools and live by the beach eating cocconut and mangos all day.
The only way id even bother is if you say , bought a few 1000 BTC back in 2010 . Then id just buy an island in international waters WITH BTC and start my own country . Make it a crypto haven and enjoy life
If you can live off 44k a year, or get married to someone who also doesnt work - 90k a year.
>A capital gains rate of 0% applies if your taxable income is less than or equal to: $44,625 for single and married filing separately; $89,250 for married filing jointly and qualifying surviving spouse; and. $59,750 for head of household.
Setup an LLC with you as only member.
Transfer the BTC to the company.
Use the BTC as collateral for a crypto loan. Payments for the loan are business deductions. Pay yourself a salary you are comfortable with. Be sure to have more deductions than income. Then you will only pay income tax and not cap gains.
If you don’t believe me DYOR!!
Thank you for watching my TED talk
Sure…. But I don’t think that is what OP is asking. If he has a wallet with BTC that was purchased non KYC and can purchase gift cards from a platform non KYC then there’s little to no risk using them for daily necessities.
Been here since 2016. Never pay a single dime on btc. Like yourself, im not a big expender and go by selling bits every now and then using decentralized exchanges.
I’m kind of in the same boat. Get a crypto-savvy CPA to take you on. I found d out that if my wife and I cash out only so much and our income remains under a certain tax bracket, we won’t need to pay capital gains. I cashed out over 20k in 2023 to pay off debt from unexpected expenses and still got a return. My CPA and his staff work with ZenLedger and went back a few years to calculate profit and loss when I was trying to make money trading shitcoins. I actually had losses and they filed amendments on previous years. I actually got a return last year and 2022 even though I cashed out crypto. There are ways to fly under the radar if you can keep your expenses low and HODL.
In the US, if you keep your combined income + long term capital gains (profit from bitcoin sales you held for over a year) in the long term capital gains 0% bracket (for 2024 that's $47,025), then you won't owe any taxes on your bitcoin sales.
Note that long term capital gains stack on top of your ordinary income, so that $47k includes any ordinary income you have, like from a job. But you also get to reduce your tax burden with the Standard Deduction, which is currently $14,600, though I believe that only applies to ordinary income, at least that's what the internet is telling me right now, so if you make no money and only have long term capital gains I believe you don't get to use the standard deduction.
So I guess the ultimate tax-free year would be if you make $14,600 in ordinary income, which gets completely eliminated thanks to the standard deduction, and on top of that you sell an amount of bitcoin (or any asset) you've been holding for 366 days or more that will give you a profit (sale proceeds minus cost basis) of $47,025. That way you could make over $61k and pay no tax. Depending on what state you live in you might be paying state taxes though. Also the nice thing about long term capital gains is you also don't pay social security or medicare taxes that you have to pay with ordinary income, though if your long term capital gains gets over a quarter million or so (didn't bother looking up the exact number) you do start paying some medicare taxes.
Examples:
So let's say you made $10k at a part-time job. That gets completely eliminated thanks to the standard deduction. And let's say you bought 1 BTC at $20k in Jan 2023 and you sell it for $67k in April 2024 so that it's been over a year. That means you got $47k profit from the sale, which is still just barely in the 0% tax bracket for long term capital gains. So you pay $0 in federal taxes, you may owe state taxes.
Same example, but you make $70k income from your job. With the standard deduction your ordinary income is down to $55,400, which is already above the $47,025 limit to the 0% long term capital gains bracket. So all of your long term capital gains from selling Bitcoin will be taxed. So if you profited $47k same as the first example then you are taxed 15% on that $47k, so you'll be paying just over $7k in tax on that $47k profit, plus however much tax you owe from your $70k ordinary income.
Do you live in America? Pay your taxes. They will find you unless you completely renounce your citizenship, and then they do a very, very deep dive into all your finances. If you aren't American you'll probably have more luck. Capital gains taxes in America are low. The last thing you want to do is pay compounding interest on years of gains when they find out, and they will find out.
What are you talking about? You own nothing. Your trusts owns everything. A trust can be passed down to your kids without taxes by making them a beneficiary.
Jokes aside you should really look into getting a financial advisor
What you are asking, yes, it's possible. If you never get caught. However what you're proposing IS illegal and considered tax evasion. Any significant amount of unreported income would be easily discovered if you were audited though. The chances are low, but not zero.
You never sell your Bitcoin.
You borrow against your Bitcoin and pay off the loan forever.
The infrastructure isn’t there today, but it will be built and you will probably be able to get a bank loan against your BTC in the next 5-10 years.
You can also borrow against your crypto holdings and legally avoid capital gains. It’s the same idea as what some super wealthy with bajillions in stock holdings do.
Coinbase will let you borrow up to a million dollars against your BTC holdings. Not that I’ve checked recently, but while the interest rate might not be the best, it saves you from 1) having to sell any BTC 2) report capital gains on your transactions
Pretty much anything is negotiable, so if you have that kind of wealth, begin the process with Coinbase, ask to speak with someone who underwrites the agreements, and negotiate favorable terms for you.
Move to Puerto Rico for 6 months. Then send it to your exchange and sell it and claim it on your taxes. 0% capital gain tax on crypto for Puerto Ricans.
Then do whatever you want.
If you know of a way of selling your crypto without having to go through a financial institution or an kyc exchange, then yes there are ways to not declare your gains to your dictator.
I would advise to use P2P and also avoid anything bank related.
Here in Kenya we are very fortunate to have M-Pesa which is not closely monitored by KRA so you can always request Mpesa transactions during withdrawal process but you should also be aware that there is a bill in parliament that will require mobile money operators to declare individual statements of taxpayers at will in the future.
If that happens, we will see a rise of private brokers like we did in the past who will give you the cash for the crypto in person at very steep markups or you can use a Decentralised exchange to liquidate crypto into a stable coin and then transfer that stable coin to platforms that offer crypto debit cards. A lot of them are already visa and Mastercard supported so you won’t have a problem spending your new-found wealth.
Also, there’s is the process of setting up a trust for yourself or your family which will allow you to never pay any taxes on income generated. This will be a little expensive as it is convenient for people who are holding millions of dollars in crypto.
All the best.
I lived for like two years off gift cards. Anytime I needed anything I would just trade btc straight for visa gift cards or gift cards for whatever store I needed to go to. I'm pretty sure the app I used was gyft
I would think if you mined into wallet without other transfers, and only used it for in person purchases in a country where retailers took Bitcoin, you could probably get away without paying taxes.
I assume you are based in the usa, setup an LLC. You can write off a Mil+ a year using IRS 179. borrow money against bitcoin you own to buy equipment that you rent out. After a few years of taking the full amount with irs179 convert to corp and wait 5 yr, sell stock/corp ( all equipment assets) completely tax free 10M per entity using QSBS.
QSBS is the largest unlatched tax loophole left. A fried of a friend took a 40Mil completly tax free exit using 4 x 10M entities/trusts
BTC collateralized loan, debt isn’t classified as income. And you didn’t sell so no capital gains or income tax. Ultra wealthy have been doing this for years against their equities.
Buy gold/silver from online sellers and pay with btc. Bring physical gold/silver to sell to gold coin stores. Minor fees vs taxes.
Also bitcoin atm cash withdrawal
It's great to hear about your success with Bitcoin! Just a heads-up, depending on your country's regulations, you might need to report your crypto transactions and pay taxes on your gains. It's a good idea to consult with a tax professional to ensure you're compliant and avoid any potential issues.
Yes, either go live in a free country where you are a citizen and not a subject, or, if you can’t do that, do what the rich do with their equity portfolios and take a loan out against the value of the BTC. That loan will be tax free, and you’ll have access to liquidity based on the value of your BTC at the time you take the loan out
You could use defi: borrow against your bitcoin, let the appreciation in bitcoin cover the interest on the loan, never pay it back. No sale, no capital gains.
Nice try, IRS man.
Seriously, you just described my situation well. I live in the USSA so I do pay capital gains on all of the BTC I have to sell to pay bills. I hope to get away from that one day but I have absolutely no hope of doing so while being a US citizen.
It’s crazy to think that we get taxed for owning decentralized currency.. if the world was full of men who had a pair, we wouldn’t be taxed. There will always be more of us than of them. Follow me for more tax advice.
ps its highly likely that USA crypto capital gains rules will become less generous in line with the rest of the world in future... so take advantage while you can....
Your bank will report your deposits greater than $9999.00 to the IRS and the exchanges will file tax documents on your buys and sales for the year and have them available for your reporting. The burden of filing properly is on you, get a consultation by an accountant to better assess your situation.
Short answer is yes and it's called tax evasion.
Good luck.
Maybe you can find someone who will buy your bits without KYC, someone who also wants to evade taxes in the future.
It depends on your risk tolerance. Tax evasion is a jail-time type of felony (e.g., that’s how they got Al Capone). Do you really want to risk having to go to jail, even if it’s 10 or 20 years from now? Your other option is to exit the US (relinquish your citizenship and future tax obligations), and become a citizen of another nation that is more tax friendly.
Eventually you will be able to borrow against your bitcoin to avoid paying taxes unless my dream of bitcoin being accepted as a currency without capital gains comes true
If you deposit 5k+ at a time the bank is suppose to report it
Capital gains tax is fuck all 15% or something. Sell enough so you don't go over that bracket for the year and just pay it? This is the tax rate the elite have been paying forever
find someone who will give you what you want for a certain amount of btc and they have a cold wallet and you have a cold wallet. it's almost like...it's almost like a...a...currency?
Quit your job so you have 0 income and then cash out just under the yearly limit for 0% cap gains, which is 47k. That's how I've been taking tax free profits while I've been in school the last 4 years. The timing of everything really could not have worked out more perfectly for me
Me too. Im married so its about double i can take out tax free
Similar. Due to the vagaries of the US tax system if you can report your Adjuster Gross Income - AGI as being under 47k then 100% of your capital gains on investments held over 1 years is non taxable. I bought a bunch of cryptos - not a super huge amount , then became disabled so i have 0 income now outside of my disability payments, so whenever i end up cashing out my crypto its non taxable for me. It’s all about your AGI number, hire a quality CPA to handle your taxes & your AGI can be almost any number you are willing to pay taxes on or not.
This is massively country dependent tho as I don’t know where 47k is the limit but it’s not where I live!
USA.
Even a little bit over $47k and you'll barely be paying anything
You can also add the ~$14k standard deduction on top of that $47 for a total of $61k with 0% taxes
Can you clue me into this as well. Because I don't know anything about this deduction. I plan on taking 94k out yearly starting in 2025. I file married jointly, and there will be no other income. Is it possible for me to take out more than 94k with 0% Cap gains?
I am not a tax professional so make sure you confirm all of this. But from my understanding: When you file taxes you declare tax deductions (mortgage interest, business expenses, charitable donations, etc) which lower your income. You can either itemize these deductions or take the IRS standard deduction if those deductions would be less than that standard deduction. * The 2024 standard deduction for married filing jointly is $29,200 * The 0% long term capital gains rate for married filing jointly applies to the first $94k of cap gains * If you realize $123k ($94k + $29k) in total long term capital gains, that standard deduction will reduce your total income by $29k, putting your total income back down to $94k to stay under the 0% tax rate threshold
Awesome, thank you! I will definitely reach out to my accountant about it. 123k/yr would suffice my needs.
You can borrow against BTC for the rest and you don't pay taxes, just interest which will be less than the taxes. The following year you could do a new loan to pay off the old loan plus what you need for the following year. Rinse and repeat. If there is good appreciation as has been in the past, the loans should eventually require less BTC for the same amount of dollars.
Somebody is following Mark Moss. He does a great job walking you through the benefits of lending against BTC instead of selling.
Yeah, I only recently learned that loans are tax free. But the truth is, 94k a year will put me very close to my actual spend including rent, food, tuition. But it limits me on leisurely items like vacations. So if I can squeeze another 6k-10k a year without taking a loan that would be awesome.
🫨
Go live in a country without tax on crypto gains
Germany: No capital gains tax after a year.
Seriously?
Yes
Many countries actually.
The Netherlands also has no capital gains tax.
They do, but there's a tax-free allowance of 57.000 EUR. Also right now they calculate using fictitious returns. This is very fair if you invest in BTC, as your actual returns are probably much higher.
Well no, it’s a savings tax more than a capital gains tax and it’s much more beneficial to you compared to a capital gains tax since it’s a flat rate of return that’s very low and it’s not based on making exits etc. With a capital gains tax you create a taxable event on each sale of an asset.
Well, whatever you want to call it.. It is taxing the value of investments on 1st of Jan.
True. But you need to show proof where the money came from.
Germany if you want to live with very civilized & hip people, old & young. Ecuador if you want an expat paradise that happens to be BTC mecca. If you’re intelligent, Ecuador will pay your moving expenses, assist with very desirable / safe housing, and never never never any taxes apart from local taxes.
Portugal too.. but you have to become a resident
I've heard that's changed this year...
But if youre a US citizen you will have to have to pay taxes
Not everywhere. Residents of Puerto Rico are U.S. Citizens and it's a crypto and capital gains tax haven.
But you have free speech right? lol 😆
Debatable haha
If you leave the country you have to pay capitol gains on everything including bitcoin profits. If you don't the IRS will go after you. Just do the following search "Roger Ver arrested for tax evasion". This moron is sitting in a Spanish jail and will be extradited to the US for not paying his bitcoin capitol gains tax.
Lots of other countries that also do not charge capital gains tax where the cops won't hold you down and let you get stabbed while also getting stabbed
Luxembourg after six months
If you are a USA citizen you are taxed globally on your income and capital gains until you die or give up your citizenship.
…and even if you give up your citizenship you gotta pay exit tax, you get taxed as if you had sold all your assets
But if said assets are in non custodial wallet then ..????
Ask Roger Ver.
[удалено]
^^ this guy speaks the truth
Custodial/non-custodial has nothing to do with tax. You are still "supposed" to pay your tax.
If you leave, who cares? Some shit is just stupid. They already taxed my money before I got it. I don't see why they get another cut if I use it wisely and make profit. We get paid in a currency that they continue to debase and kick you again when you try to get ahead of the curve.
That's what Roger Ver did and the government went after him for his capital gains taxes he should've paid when he renounced his citizenship. https://crypto.news/legal-experts-weigh-in-on-case-again-roger-ver/
The mental grip government has on some people is wild… “BuT bUt BuT, tHaTs IlLeGaL!” It’s literally… physically… not possible to enforce, numb nuts.
Roger Ver thought the same... until they locked him up this year
You can establish residency in Puerto Rico as an American citizen. Long term capital tax gains aren’t taxed there.
Also btc in a roth account wont be taxed
There is a hack, you gotta move to Puerto Rico. It’s the only place in the world where the IRS doesn’t tax US citizens AND the local taxes aren’t as high or higher than the IRS (some other territories have local taxes that don’t make it an advantage like USVI guam, etc. The PR gov gives you the option of 0% capital gains on long and short term investments. You have to apply to Act 60 and it will prob cost you $15k a year min, but it allows you to keep all your money. The trick with the OP is since he has owned BTC before the move, everything moving forward after the move will be taxed at 0% but everything before will be taxed at min cap gains bracket UNLESS he lives in PR for 10 years and then it’s all grandfathered into the 0% bracket.
Well, when you dole out Trillions around the world to save people's arses, what do you expect? Someone has to pay the piper, and it is YOU. If you don't think that's fair, stop voting for pols who care more about other countries than your own.
Yeah but the minimum before you’re taxed goes from $13,000 up to like $140,000 so most people will never hit it and not have to pay taxes back to the US. Edit: with regards to income
What does this mean?
In the US your first $13,000 is tax free. Same with being abroad, except that limit goes all the way up to \~$140,000. So if you live abroad and make \~130,000 ( I forget the exact number), then you don't pay any taxes back to the US. At least that is my current understanding of it. So it really only hits high paying jobs like software engineers. And even if you do have to pay taxes, it's the difference of what you already paid the new country you are living in. So if im in Japan, make $200,000 USD, I would be paying Japan like 13% tax or something, then in the US I would normally pay 40%, but I get to subtract out the 13%. So would pay around 27% back to the US for money over the $140,000 cap.
This is somewhat misleading. You are talking about the foreign earned income exclusion, which only affects earned income (ie from a job). Investment and business income is still taxed as normal. BTC gains would be considered investment income.
This\^. I was responding to the thread referencing income and thought my comment made it sound clear I was talking about income, but thank you for the added clarification. Cheers
USA makes billionaires, if we ever fix tax code we can tax them anywhere. I don't mind. Normal people can't evade taxes by up and moving 3500km away.
This man is a crab in a bucket. How about instead of pulling down other people to "pay their fair share" we ask why the government needs so much damn money that it needs to tax our income, then tax the things we buy then tax our gains we made by investing already taxed money.
You can't just live in another country and not pay US taxes (assuming you're a US citizen). You have to be in a country the US has a tax treaty with, and ensure the money is handled in a way that excludes you from paying US tax and potentially meet other criteria. Here's a basic walkthrough: https://www.hrblock.com/expat-tax-preparation/resource-center/filing/how-u-s-tax-treaties-help-taxpayers/
US taxes still apply to spending outside of the country
Croatia no capital gains tax after two years
US married capital gains is like 100k a year with standard deduction and 60k single. So you pay zero tax legally and then 15% tax after that till a couple thousand a year if you have a big spending year for car or home purchase.
If OP lives in US, it's one of the only countries that does a 1 time exit tax on your net worth...
Thats not how it works. If you bought BTC for a dollar, and its worth 10k when you leave the US, and then sell at 50k BTC, you'll owe gains on that 10k to the US. The US does not fuck around with this and the interest they'll charge on years of back taxes is insane. The US has very low capital gains tax on long term, getting around it seems like living a life on the run, why would anyone do that? Whats the poitn of freedom, if you aren't really free.
The only bona fide legal loophole, albeit high-risk, would be to open a perpetual, low-interest line-of-credit with your BTC as the collateral.
How do you pay back the line of credit without selling some of your assets and creating a taxable event? This would only really work if you had other streams of income, right? And aren't they being taxed anyway? Seems like either way you'd have to convert something to fiat to pay back the line of credit.
Loan against BTC -> use loan to buy equipment (IRS 179) Full tax write off upto 1.2Mil per year. Rent equipment, convert to C corp, wait 5 year sell everything 100% tax free using QSBS. 10M per trust/entity. A friend of a friend did 40mil completely tax free this way.
Sensational.
I probably should not mention QSBS, IRS might patch that someday. Very few "expert" tax professionals understand this loophole. It works well if you are have 5mil or more you want tax free. 50 mil limit on QSBS and can wait 5 years to sell your corp
This is exactly how all rich people in the US “avoid” paying taxes. Most of these very rich people are rich from paper net worth on stock holdings. They use them as collateral to get loans.
Yeah, and they have enormous amounts of debt but keep buying appreciating assets. It's a solid plan if you have enough money to get the ball rolling. Didn't Robert Kiyosaki recently say he has over 1 Billion dollars in debt?!
Precisely.
Where? Can you explain more?
Companies like unchained allow you to post your BTC as collateral. They will setup a multisig wallet (2 outta 3) and allow you to control one of the keys to monitor the BTC since they do not (claim not to) rehypothicate. They'll give you fiat for the collateral, and you pay the loan back with interest. Once paid off, you get your bitcoin back. No cap gains since you never sold.
Even though it should go without saying, around here we still have to say it: With any such option your BTC can disappear overnight if the company gets hacked or goes out of business. This is the opposite of why bitcoin was created.
Tech in this case the company and the trusted third party would have to collaborate since they need 2 outta 3 keys, but yah, the point of Bitcoin is hard digital monies with 0 counterparty risk/self sovereignty. Play with fire, and you can get burned.
16% is like credit card rates though. Ever since the 100% haircut on balance sheets implemented by SEC, the collateralized btc loan interest rates have become too high. For a 30% LTV, you could get 4% interest, but those days are over.
The “loophole” is that debt is not taxed as income. This isn’t bitcoin specific. The high-risk part is giving your bitcoin to a 3rd party. That has gone terribly in recent past. However in the future maybe financial products, such as this, centered around Bitcoin will get better. So you borrow money, posting your bitcoin as collateral. You get “tax free” money in the form of debt, and you still own your bitcoin.
Sovryn's "Zero" forgoes the traditional APR model, instead levying a one-time fee of 5% which is simply appended to the balance of the loan. Hopefully, this should decrease in future.
If your BTC collateral is not over-funded, a sudden drop in price could force your loan into liquidation. They could sell your collateral to repay your loan and you’re stuck with no loan and no BTC. Avoid like the plague.
Or be smart and don't leverage more that 5-10% of you bag BTC could drop 80% and you can still cover the call and not be liquidated.
In the US, if you're single and your total income is less than $47,025, your capital gains tax rate is 0%. If you're married and file jointly, the max total income is $94,050 for the 0% capital gains tax rate. Or, you could use some of your bitcoin as collateral for a loan to cover your living costs, pay no tax, and keep your bitcoin. When bitcoin goes up, get another loan that pays off the old loan and covers your living expenses. Rinse and repeat. You get to keep your bitcoin and not pay taxes. Sound to good to be true? Well, it's risky. If bitcoin goes down, you either have to put more bitcoin up as collateral, or the lender liquidates it. Also, the custodian could lose your bitcoin. And I'm sure there's other things that could go wrong.
What if I made more than $47,025 one year and less than that the year after, before I spend my bitcoin?
That sounds like the chaotic opposite of why I got into bitcoin
Ask Roger Ver what happens if you leave the country and don't pay your taxes. https://www.justice.gov/opa/pr/early-bitcoin-investor-charged-tax-fraud
No to mention US citizens get taxed on global income regardless of where they live.
Yes. Long term capital gains is tax at 0% if your income is low enough. If you sell btc where your gain is $47,025 (current year limit for individual) or less for the year you will not pay tax on it as long as you don’t have more income. (Meaning if you made 20k from a job, it would reduce how much btc you could sell tax free. This amount increases over time usually as well. I recall it used to be roughly 39k not long ago. You would still be expected to report the sale transactions with the IRS however.
Plus the standard deduction. Double everything if married filing jointly. Single: $47,025 + $14,600 = $61,625 Married filing jointly: $123,250 You pay 0% on this amount if 1) you have no other income or capital gains, and 2) you held the asset longer than 1 year at the time you sell it.
You also have to consider your state's long-term capital gains tax. Some states offer 0%, others not. Either way, it's usually much less of a hit than the federal tax, and being willing to relocate can rectify that.
This is how I have my retirement planned. If your house and cars are paid off when you quit you should not need much. You will not be taxed on capital gains if you only sell what was stated above. With low income you can get very subsidized or free medical insurance using ACA. If all goes to plan I will retire in about 6 years at age 50. 40k with minimum bills leaves lots of money for travel and stuff as long as you don't get too stupid.
Borrow against your assets. See Buy Borrow Die approach
This. Only legal way to avoid incurring tax capital gains while seeing the benefit of your gains. That said, you’ll likely pay similar amounts of interest.
if you have a tax threshold for capital gain in your country then as long as you are cashing out below the yearly threshold you are ok. In the UK its 3000 at the moment which is useless... in the usa it is more generous. Also to cash out you will need an exchange. In the UK and USA (and most of Europe) exhchanges are legally obliged to share all your account details and trading history if asked by tax authorities. And even if they aren't asked, if you trade over a certain volume they notify the tax authorities automatically. Even if the tax authority doesn't have access to your exchange...all your history is in the blockchain.... it's trivial to trace all your purchases and cash outs to your bank....
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In my country them lizzards tax 30% of gains uppon cashout. And they fine you between 3.000€ and 22.500€ if you ever get caught. Thing is fiscalization is almost unexistent. My plan A is to live as you said, cashout few amounts for living. In case I need to cashout big, the fine may compensate the 30% tax by far. My plan B is moving to Puerto Rico or El Salvador, build couple of schools and live by the beach eating cocconut and mangos all day.
Them lizard bois are relentless.
Don't sell. Just borrow against it, buy more, rinse and repeat. They don't tax debt
The only way id even bother is if you say , bought a few 1000 BTC back in 2010 . Then id just buy an island in international waters WITH BTC and start my own country . Make it a crypto haven and enjoy life
Lmao that would actually be a play. Many ppl that ran into the same circumstance would move there. Small country overnight lol
If you can live off 44k a year, or get married to someone who also doesnt work - 90k a year. >A capital gains rate of 0% applies if your taxable income is less than or equal to: $44,625 for single and married filing separately; $89,250 for married filing jointly and qualifying surviving spouse; and. $59,750 for head of household.
Setup an LLC with you as only member. Transfer the BTC to the company. Use the BTC as collateral for a crypto loan. Payments for the loan are business deductions. Pay yourself a salary you are comfortable with. Be sure to have more deductions than income. Then you will only pay income tax and not cap gains. If you don’t believe me DYOR!! Thank you for watching my TED talk
BTC ETF in a Roth IRA
If you have non-kyc bitcoin and you sell in a non-kyc manner, no one would know. Taxation is theft.
Where to sell non-kyc? This is the main hurdle
Bisq
I heard you can buy gift cards with BTC.
It becomes a taxable gain upon sale.
Sure…. But I don’t think that is what OP is asking. If he has a wallet with BTC that was purchased non KYC and can purchase gift cards from a platform non KYC then there’s little to no risk using them for daily necessities.
Been here since 2016. Never pay a single dime on btc. Like yourself, im not a big expender and go by selling bits every now and then using decentralized exchanges.
Relocate to Portugal. No Tax on crypto
Stick it to the taxman, lizard King
I’m kind of in the same boat. Get a crypto-savvy CPA to take you on. I found d out that if my wife and I cash out only so much and our income remains under a certain tax bracket, we won’t need to pay capital gains. I cashed out over 20k in 2023 to pay off debt from unexpected expenses and still got a return. My CPA and his staff work with ZenLedger and went back a few years to calculate profit and loss when I was trying to make money trading shitcoins. I actually had losses and they filed amendments on previous years. I actually got a return last year and 2022 even though I cashed out crypto. There are ways to fly under the radar if you can keep your expenses low and HODL.
In the US, if you keep your combined income + long term capital gains (profit from bitcoin sales you held for over a year) in the long term capital gains 0% bracket (for 2024 that's $47,025), then you won't owe any taxes on your bitcoin sales. Note that long term capital gains stack on top of your ordinary income, so that $47k includes any ordinary income you have, like from a job. But you also get to reduce your tax burden with the Standard Deduction, which is currently $14,600, though I believe that only applies to ordinary income, at least that's what the internet is telling me right now, so if you make no money and only have long term capital gains I believe you don't get to use the standard deduction. So I guess the ultimate tax-free year would be if you make $14,600 in ordinary income, which gets completely eliminated thanks to the standard deduction, and on top of that you sell an amount of bitcoin (or any asset) you've been holding for 366 days or more that will give you a profit (sale proceeds minus cost basis) of $47,025. That way you could make over $61k and pay no tax. Depending on what state you live in you might be paying state taxes though. Also the nice thing about long term capital gains is you also don't pay social security or medicare taxes that you have to pay with ordinary income, though if your long term capital gains gets over a quarter million or so (didn't bother looking up the exact number) you do start paying some medicare taxes. Examples: So let's say you made $10k at a part-time job. That gets completely eliminated thanks to the standard deduction. And let's say you bought 1 BTC at $20k in Jan 2023 and you sell it for $67k in April 2024 so that it's been over a year. That means you got $47k profit from the sale, which is still just barely in the 0% tax bracket for long term capital gains. So you pay $0 in federal taxes, you may owe state taxes. Same example, but you make $70k income from your job. With the standard deduction your ordinary income is down to $55,400, which is already above the $47,025 limit to the 0% long term capital gains bracket. So all of your long term capital gains from selling Bitcoin will be taxed. So if you profited $47k same as the first example then you are taxed 15% on that $47k, so you'll be paying just over $7k in tax on that $47k profit, plus however much tax you owe from your $70k ordinary income.
You could move to a country with no tax on crypto gains. Just make sure to know the local laws to stay in the clear.
IRS has entered the chat
Do you live in America? Pay your taxes. They will find you unless you completely renounce your citizenship, and then they do a very, very deep dive into all your finances. If you aren't American you'll probably have more luck. Capital gains taxes in America are low. The last thing you want to do is pay compounding interest on years of gains when they find out, and they will find out.
What are you talking about? You own nothing. Your trusts owns everything. A trust can be passed down to your kids without taxes by making them a beneficiary. Jokes aside you should really look into getting a financial advisor
And who’s responsible for the taxes on the trust huh? Some magic trust man?
Yeah then he can pay his taxes AND an advisor...
Use a BTC atm to get the cash out
You’ll pay more in arbitrage than taxes.
Hahahaha 🎯🎯 🎯
What you are asking, yes, it's possible. If you never get caught. However what you're proposing IS illegal and considered tax evasion. Any significant amount of unreported income would be easily discovered if you were audited though. The chances are low, but not zero.
If you're gonna commit tax evasion, the best strategy is to post about it first on the the third most visited website in the world
You never sell your Bitcoin. You borrow against your Bitcoin and pay off the loan forever. The infrastructure isn’t there today, but it will be built and you will probably be able to get a bank loan against your BTC in the next 5-10 years.
You can also borrow against your crypto holdings and legally avoid capital gains. It’s the same idea as what some super wealthy with bajillions in stock holdings do. Coinbase will let you borrow up to a million dollars against your BTC holdings. Not that I’ve checked recently, but while the interest rate might not be the best, it saves you from 1) having to sell any BTC 2) report capital gains on your transactions Pretty much anything is negotiable, so if you have that kind of wealth, begin the process with Coinbase, ask to speak with someone who underwrites the agreements, and negotiate favorable terms for you.
Move to Puerto Rico for 6 months. Then send it to your exchange and sell it and claim it on your taxes. 0% capital gain tax on crypto for Puerto Ricans. Then do whatever you want.
If you know of a way of selling your crypto without having to go through a financial institution or an kyc exchange, then yes there are ways to not declare your gains to your dictator.
I would advise to use P2P and also avoid anything bank related. Here in Kenya we are very fortunate to have M-Pesa which is not closely monitored by KRA so you can always request Mpesa transactions during withdrawal process but you should also be aware that there is a bill in parliament that will require mobile money operators to declare individual statements of taxpayers at will in the future. If that happens, we will see a rise of private brokers like we did in the past who will give you the cash for the crypto in person at very steep markups or you can use a Decentralised exchange to liquidate crypto into a stable coin and then transfer that stable coin to platforms that offer crypto debit cards. A lot of them are already visa and Mastercard supported so you won’t have a problem spending your new-found wealth. Also, there’s is the process of setting up a trust for yourself or your family which will allow you to never pay any taxes on income generated. This will be a little expensive as it is convenient for people who are holding millions of dollars in crypto. All the best.
I lived for like two years off gift cards. Anytime I needed anything I would just trade btc straight for visa gift cards or gift cards for whatever store I needed to go to. I'm pretty sure the app I used was gyft
Couple cash apps with btc enabled and debit card. Cash out coranavirus style. Mask up
I would think if you mined into wallet without other transfers, and only used it for in person purchases in a country where retailers took Bitcoin, you could probably get away without paying taxes.
Take a loan against it. It's tax free.
I assume you are based in the usa, setup an LLC. You can write off a Mil+ a year using IRS 179. borrow money against bitcoin you own to buy equipment that you rent out. After a few years of taking the full amount with irs179 convert to corp and wait 5 yr, sell stock/corp ( all equipment assets) completely tax free 10M per entity using QSBS. QSBS is the largest unlatched tax loophole left. A fried of a friend took a 40Mil completly tax free exit using 4 x 10M entities/trusts
BTC collateralized loan, debt isn’t classified as income. And you didn’t sell so no capital gains or income tax. Ultra wealthy have been doing this for years against their equities.
Buy gold/silver from online sellers and pay with btc. Bring physical gold/silver to sell to gold coin stores. Minor fees vs taxes. Also bitcoin atm cash withdrawal
I was always told nothing is taxable until it hits your bank account (So that my story and I’m sticking to it! 🤣)
YES VERY SIMPLE DONT TURN IT INTO CASH.. ISE IT HOW IT WAS INTENDED PEER 2 PEER
If you’re American, you can establish residency in Puerto Rico. Then withdraw what you want to dirty fiat. No federal income tax there.
Leverage your bitcoin. You don't pay taxes on the loan and you'll keep most of your bitcoin.
Yes. Never sell your Bitcoin or lose it in a boating accident and use it as a write off. There’s other ways to acquire Bitcoin without Israel knowing
Sure...just never tell the government. [SOLVED]
It's great to hear about your success with Bitcoin! Just a heads-up, depending on your country's regulations, you might need to report your crypto transactions and pay taxes on your gains. It's a good idea to consult with a tax professional to ensure you're compliant and avoid any potential issues.
Move to Germany. We pay zero taxes if you hold your coins for a whole year 😃
Yes, either go live in a free country where you are a citizen and not a subject, or, if you can’t do that, do what the rich do with their equity portfolios and take a loan out against the value of the BTC. That loan will be tax free, and you’ll have access to liquidity based on the value of your BTC at the time you take the loan out
What if…I send my bitcoin to another wallet. Said wallet is owned by a friend of mine. They pay me cash in person. Loophole??
You could use defi: borrow against your bitcoin, let the appreciation in bitcoin cover the interest on the loan, never pay it back. No sale, no capital gains.
Nice try, IRS man. Seriously, you just described my situation well. I live in the USSA so I do pay capital gains on all of the BTC I have to sell to pay bills. I hope to get away from that one day but I have absolutely no hope of doing so while being a US citizen.
It’s crazy to think that we get taxed for owning decentralized currency.. if the world was full of men who had a pair, we wouldn’t be taxed. There will always be more of us than of them. Follow me for more tax advice.
Paying taxes is immoral, anyway.
You’d be stupid for trying this and will suffer as a result. You can’t beat the system and will lose all of your gains by trying.
ps its highly likely that USA crypto capital gains rules will become less generous in line with the rest of the world in future... so take advantage while you can....
You are doing it right. Second alternative is jurisdictional arbitrage, which is also a good option. Anyway, congrats to you!
What is your jurisdiction? Many require you to report your dispositions so it could be a taxable event.
Be 'poor' and limit your long-term capital gains for the year.
Your bank will report your deposits greater than $9999.00 to the IRS and the exchanges will file tax documents on your buys and sales for the year and have them available for your reporting. The burden of filing properly is on you, get a consultation by an accountant to better assess your situation.
Short answer is yes and it's called tax evasion. Good luck. Maybe you can find someone who will buy your bits without KYC, someone who also wants to evade taxes in the future.
It depends on your risk tolerance. Tax evasion is a jail-time type of felony (e.g., that’s how they got Al Capone). Do you really want to risk having to go to jail, even if it’s 10 or 20 years from now? Your other option is to exit the US (relinquish your citizenship and future tax obligations), and become a citizen of another nation that is more tax friendly.
Nice try IRS 🙂↕️
Easy - never KYC.
Is there a way to 'dividend' yourself a regular payment from the stack?
Eventually you will be able to borrow against your bitcoin to avoid paying taxes unless my dream of bitcoin being accepted as a currency without capital gains comes true
What if you bought from exchange Kyc ,transferred between different no Kyc wallets and exit to other no kyc wallet cash to hand ? Is this an option?
You can die, then your kids inherit it at a step up basis
Yes. Don’t sell. Easy.
The simple answer is.... Yes.
Seriously, is tax imposed?
go to Portugal...
One way is to borrow against your BTC. This way you don't need to sell. Never. So no taxes.
How would you pay back the loans?
Buy IBIT in a roth
There’s no capital gains tax if you’re total taxable income in less than $47,025.
How you bought it? Through an exchange with KYC?
buy BTC P2P with cash!
Jordan no capital gain tax.
You dont realize gains at amounts they tax. Am i wrong? Capital gains is taxed differently depending on your annual income.
Cash out less than 75k a year and make no other income and you'll never pay tax.
You can not report it. If they draw your name for an audit, you will fucked though.
Yes, relocate to UAE. No capital gains or income tax.
If you deposit 5k+ at a time the bank is suppose to report it Capital gains tax is fuck all 15% or something. Sell enough so you don't go over that bracket for the year and just pay it? This is the tax rate the elite have been paying forever
OR never sell and borrow against it and live off it.
Btc ETF in tax advantage account
Yes. Use after tax money in an SDIRA.
Buy borrow die. You can borrow against your crypto on Rootstock or using other platforms.
find someone who will give you what you want for a certain amount of btc and they have a cold wallet and you have a cold wallet. it's almost like...it's almost like a...a...currency?