Can any good corporate tax people on this forum tell me how best to handle the following tax scenario?
I am an employee and shareholder of "Widgets Inc" (C corporation), which accepts bitcoin on its sales of widgets. My company has accumulated 10 BTC over the past few years on these sales.
Widgets Inc wants to transfer the value of the BTC to me. It can either sell the BTC and send me regular dollars, or it can send me the bitcoin directly.
Questions:
1. Is there an optimal way to do this that results in the least *combined* amount of tax liability, when considering corporate capital gains tax?
* I say "combined" because I want to take into account both the corporation's tax liability PLUS the my personal tax liability.
2. Is there any way that Widgets Inc can avoid capital gains tax by directly transferring the bitcoin (which is considered "property" by the IRS) to me?
Please take into account that the "transfer" could be salary, a corporate distribution, or any other mechanism you are aware of. I'm open to all solutions.
Why I am asking this:
From what I've read, C corporations actually fare much worse than individuals in terms of capital gains taxes. Individuals receive "favorable treatment", while C corps do not.
From what I have read, since bitcoin is already considered as a property, then there is no evading of tax but you can avoid the payment of high tax by just comparing the two scenerio. But wait, I guess its when you sell for cash that its regarded as capital gains but since they will be transferring then thats when the issue of tax will arise. If you collect dollars, then it would be interpreted that your btc was sold to the corporation and by that you will be liable to pay Capital Gains Tax.
