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Author Topic: How do I avoid tax on crypto  (Read 1089 times)
Paupau29
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January 27, 2018, 12:25:11 PM
 #21

Well if you country does jot legalize bitcoin you might get away paying taxes or you will be arrested by police

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January 27, 2018, 07:03:56 PM
 #22

If I make money on crypto currencies. How do I avoid as much tax as possible?
You can actually avoid tax when it comes to your earning here on cryptocurrency world since its an anonymous thing which tracing out earnings on each individual is not possible and this is one of the reason why government do hate it soo much but these kind of mindset isnt really tolerable on avoiding taxes because if we do think on carefully on whats the actual purpose of tax on our country then we would really able to realize that it is really still an obligation for us to pay taxes.


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darkangel11
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January 27, 2018, 08:00:14 PM
 #23

Never convert to fiat not so tax events triggered  Grin. Just kidding, move to the countries with lax regulations on crypto is the best solution.
Such countries do not exist. All countries of the world take taxes. You can choose to live in country with a low level of taxation. But getting citizenship is always a problem. There's only one way not to pay taxes. It is collect coins and wait when it will be possible to use them as currency. Any exchange of cryptocurrency for Fiat money is tracked by the banks. You will be required to pay the tax.

You have no idea! There's a number of countries that consider cryptocurrency investment to be tax free. The fact that they are taking taxes doesn't mean some assets can be exempt. For example you are obliged to pay taxes when someone gives you a house, right? In such case you need to hire someone to estimate the value of the house and fill in a form. It's completely different if the house belonged to your parents who died and left it to you. In such case you don't owe the country anything.
Here's a list of crypto friendly countries: https://coinsutra.com/tax-free-bitcoin-countries/

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January 27, 2018, 10:30:43 PM
 #24

If I make money on crypto currencies. How do I avoid as much tax as possible?
enjoy your life while you can, don't do unnecessary things like this. If your government wants to tax your income from crypto currency just pay it or else you'll get imprison though there are legal things that could possibly lower the tax you will pay on earnings through cryptovurrencies, this is known as tax avoidance which i can't tell you since there are different laws in every country.
some says here to move country ? WRONG. if you are a citizen of a country that has a tax regulation on cryptocurrency whether you earn it inside or outside the country they still taxable.

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January 28, 2018, 07:27:49 AM
 #25

I think tax in crypto currency world cannot be avoided. But paying taxes here is just nothing to what you have earned here.

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January 28, 2018, 07:30:31 AM
 #26

If I make money on crypto currencies. How do I avoid as much tax as possible?
Only solution to avoid tax on bitcoin is to not exchange or convert it into your country's currency and use it as such . As the bitcoin transactions are not traceable so government can't find anything about bitcoins. And if you do want to convert then my friend you don't just have to but you should pay tax as it is a source of income for you and paying tax is important and even a citizen's duty. You should not run from that.
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January 28, 2018, 08:01:36 AM
 #27

I think it is impossible to tax-free, as long as the banks involved. Unless you are using cash, or other cryptocurrencies to trade,  otherwise there is always a way to tax units found.
Although seemingly not taxable States, but in fact, if you want to tax units, there will be a variety of explanations. For example, in our country, the ordinances that currently make tax returns on Bitcoin transactions are sales tax and one-time transaction tax.

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January 28, 2018, 10:42:18 AM
 #28

The easiest way to defer or eliminate tax on your cryptocurrency investments is to buy inside of an IRA, 401-k, defined benefit, or other retirement plan. If you buy cryptocurrency inside of a traditional IRA, you will defer tax on the gains until you begin to take distributions. If you buy within a ROTH, you pay zero tax on the capital gains earned in the account.
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January 28, 2018, 11:06:47 AM
 #29

I think there is no reason to avoid if it is declared by the government in your country but to submit to this system.

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January 28, 2018, 12:05:04 PM
 #30

If I make money on crypto currencies. How do I avoid as much tax as possible?
luckyly i a country i lived they dont tax crypto, not yet for now, but i believed as crypto gains it popularity over time the government from different nationd will stem up and make regulation, and major countries are doing it right now, if u dont want to be taxed just trade in decentralized exchanges.

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January 28, 2018, 01:40:04 PM
 #31

I'm not advocating that people avoided paying taxes. They are necessary for the functioning of the state. But the control over their spending should be. We ourselves are to blame for allowing the elections to defeat those who do not trust. The task of man to think how to earn more money. They should be enough for your life and payment of taxes.

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January 28, 2018, 02:39:13 PM
 #32

If I make money on crypto currencies. How do I avoid as much tax as possible?

maybe its depend in which country your are now. you ask on how to avoid taxes?, will for me thats not good idea.
you earn money from crypto so you pay tax on it if dont want to get punished by your government.

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January 29, 2018, 02:36:46 AM
 #33

If I make money on crypto currencies. How do I avoid as much tax as possible?

If you are from a country where cryptocurrency is not yet legalized and your government has no rules about it then you have the option to not pay taxes. I am from a country wherein cryptocurrency is openly used but our government didn't give any guidelines yet as to how it should be tax so I am not paying taxes yet. In case there would be regulations about it then I should just do my obligations because I don't want to be penalized. If you are from a place where the government has a regulation to pay your taxes related to crypto then you should just follow it because there is a risk that they would catch you and you will pay more for penalties and worse is you will end up in a jail.


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January 29, 2018, 02:55:53 AM
 #34

If I make money on crypto currencies. How do I avoid as much tax as possible?

On top of any crypto-specific guidance given by tax authorities i would recommend having a look at the general tax regime and legislation. How does it apply to capital gains of assets? Do you have to pay tax on unrealized gains on foreign currencies? Even if no specific rule has been widely distributed concerning bitcoin or crypto-assets in general any gains may still be captured by prevailing tax laws, and you do no want to put yourself in a position where a tax authority comes calling for a large bill you were not expecting. Remember everything on the block chain is public information, if they know your wallet address they know every transaction you have made/received.

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January 29, 2018, 04:47:13 AM
 #35

You sir.. why you looks like really want to avoid a taxes, actually a taxes is important for the country where we live, and that's for the sake of progress+the welfare of the country as well.
I think being a selfish self is not good as a citizen, if the country has legalized bitcoin.. I think it's better to pay taxes and not avoid it as can as possible.
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January 29, 2018, 11:28:47 PM
 #36

I see a lot of replies but few answers to your actual question & a lot of blatant misinformation. If you want to cash out a significant amount of money, there are a few countries with no capital gains taxes like Singapore or Malaysia and a few others. Denmark has introduced tax exeption laws for Bitcoin. In Germany if you hold Bitcoin for over a year and sell it, you pay no tax. I recall Slovenia being a Bitcoin-friendly country in tax terms, but don't exactly remember what the exact deal is there. Hope this helps.
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January 30, 2018, 12:30:34 AM
 #37

The best way to avoid paying the most tax is to hold the crypto for over a year. If you hold for less than a year, this is qualified as a short-term swing or day trade. This qualifies for around a 40% tax rate (or something along those lines). If you hold for greater than a year, this is a long-term investment and is taxed at 10-15%, which is much lower. So my advice is, hold cryptos for over a year to avoid paying the greatest amount of taxes.

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January 30, 2018, 01:41:18 AM
 #38

You might still have to pay tax but this is one method to alleviate |

Setup self-directed Bitcoin IRA
setup LLC
setup bank account with said LLC
buy bitcoin
!HODL!

Self-directed IRA seems suuuuuuper iffy. You have any support for that being an acceptable position for someone to take without realizing the potential risks of getting audited? To my knowledge, the IRS does not agree with you that Bitcoins can be deposited into an IRA or purchased with an IRA. Not saying its disallowed, but if so provide proof please.

LLC = make sure not to use this model if you plan on mining. S-corp. allows you to avoid self-employment tax that would be unavoidable for LLC mining business (because mining is a service and partnerships must pay self-employment tax on service income). Also, an S-Corp might be better, if a little bit more complicated. I prefer the S-Corp model but do your own research. S-Corp provides the main benefit of the LLC in that you're entitled to flow-through profits and losses.

For a better idea of the issues, talk to a lawyer who specializes in the field. Otherwise, pay your tax. You don't want to be wrong on this one because the penalties are going to be draconian if you fail to report / underreport and get caught. Playing the audit lottery is unwise.

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January 30, 2018, 01:43:50 AM
 #39

Bitcoin currently is taxed only by the South Korean govt. at a rate of around 23%. But tax can be collected merely on amount which you withdraw in exchanges. So the simple rule to save tax on all your crypto earnings is to store the bitcoins in a private key wallet where you don't need to do any KYC compliance. So you are anonymous just with your wallet address. But the problem is that you won't be able to get a fiat conversion of your bitcoins until you bring them to exchanges.

That is not correct, at the very least the US IRS has already released documents which clearly state that mining and trading BTC are taxable actions, the former incurring income tax and the latter incurring capital gains tax.
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January 30, 2018, 01:48:26 AM
 #40

The best way to avoid paying the most tax is to hold the crypto for over a year. If you hold for less than a year, this is qualified as a short-term swing or day trade. This qualifies for around a 40% tax rate (or something along those lines). If you hold for greater than a year, this is a long-term investment and is taxed at 10-15%, which is much lower. So my advice is, hold cryptos for over a year to avoid paying the greatest amount of taxes.

This is true for the most part. Capital gains is normally 20% (although it can scale down based on your personal income levels; certain exceptions may exist). Ordinary income rates are used instead of 40% but the highest ordinary income rate is 37% under the most recent tax bill.

Keep in mind, however, that if you are MINING the coins in a business, you are not entitled to long-term capital gain rates because the mined coins will be treated like inventory and inventory is a special asset class for purposes of US tax law. You can do some fancy footwork to get around this, but it involves multiple related entities and is complicated enough to deserve professional consulting to find the most efficient chain or link of entities.  

Furthermore, if cryptocurrencies (or just Bitcoin) is ever classified formally as a COMMODITY instead of a SECURITY, no coins will be entitled to long-term capital gain treatment because commodities, like inventory, have their own set of weird rules which also disallows capital gain treatment for the purposes of US tax law.

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