How to optimise paying taxes when cashing BTC ?

[lichig]

Hi,

Another newbie question...
I'm considering cashing some BTC (just to buy more later after the bull run)...
What are some strategies to minimize / "optimise" paying taxes for the USD received into my bank account for selling BTC.

Edit: Adding some context: I'm based on Spain and I am not using Coinbase.

Thank you!

[1715231143]

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[1715231143]

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[1715231143]

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[1715231143]

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[1715231143]

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[Oshosondy]

There is nothing you can do, probably you are from from United States, just kbey the rules of your governments, and pay your tax so far you are using US exchange like coinbase. To make tax transaction easy for you,you can read this link:

https://cointelegraph.com/news/coinbase-users-can-now-report-their-crypto-taxes-using-cointracker

This can also be helpful
https://www.zenledger.io/?utm_source=Paid&utm_medium=Google_ads&utm_campaign=homepage&utm_campaign=12006194810&utm_source=google&utm_medium=cpc&utm_content=491840552632&utm_term=cryptocurrency%20tax&adgroupid=116491510512&gclid=EAIaIQobChMIqNjPzq-q7gIVRaSWCh3jdA0bEAAYASAAEgJfTPD_BwE

[GeorgeJohn]

Hi,

Another newbie question...
I'm considering cashing some BTC (just to buy more later after the bull run)...
What are some strategies to minimize / "optimise" paying taxes for the USD received into my bank account for selling BTC.

Edit: Adding some context: I'm based on Spain and I am not using Coinbase.

I really like these topic, because the amount of changes involves in transactions these period in bitcoin transactions is very expensive, so if with these the amount will reduced , I think everyone who are into cryptocurrency network will be glad, because my previous transactions the charge was much.

[hulla]

Doing something against the authority could get you into trouble and the last time I check Spain resident are taxed between 19% and 23% but if you want to minimize your tax payment I will advise you not to sell all the BTC for fiat currency i.e sell 45% for Euro while you hold 55% in stablecoin which you'll keep in your personal wallet till when you are ready to invest again.

[lichig]

Doing something against the authority could get you into trouble and the last time I check Spain resident are taxed between 19% and 23% but if you want to minimize your tax payment I will advise you not to sell all the BTC for fiat currency i.e sell 45% for Euro while you hold 55% in stablecoin which you'll keep in your personal wallet till when you are ready to invest again.

This is great. Thank you.

So, If the idea is to sell in order to buy more after the bull run, It has not sense to cash anything to fiat. It is way better to withdraw to stablecoins.

What I am missing here?

[hugeblack]

You should differentiate between real profit and accounting profit in order not to be surprised about taxes:

 - Do not buy until there is a collapse/crash in the exchange rate, which represents the ratio of 40% to 80%, which occurs once every four years or every two years.
 - Buy in US dollars.
 - Wait until you've made profit + capital refund + tax paid.
 - Withdraw the money and leave what is left for several years in the future.

[LeGaulois]

...

In my country, it's also one of the strategies since the stablecoins aren't taxed but to be honest I'm surprised they don't tax it like any other trading activity, whatever it's about crypto or not.

Look what I mean:

Traditional traders making money, while trading for example USD/EUR, are taxed. Traders making money with cryptocurrencies are taxed. But when it's about stablecoins you are not taxed. Yet a stablecoin is a currency by nature too.
I can't explain why, is it because they haven't yet taken the time to expand the laws to include the stablecoins, or because they don't know about stablecoins, which is impossible nowadays. But I find it really contradictory.

In any case, using the stablecoins to optimize the taxes is only a short-term solution. Because the time will come sooner or later when it will be considered like any crypto. They're not that crazy.
And the day it happens, those who have chosen the stablecoin solution could find themselves in a delicate situation.

Nowadays, when we talk about tax optimization, it often comes down to changing country.
That's what many companies like Amazon, Google, and the other giants are doing.

...

What the hell are you talking about? The original poster is talking about the taxes and you come up talking about the transaction fees.

[Mauser]

In my country bitcoins fall under the general investment taxes and would have to be reported by myself at the annual tax returns. There is no real way around it if you want to stay legal. The tax rate is 25% which is quite hefty. But you can apply deductions. First step I would take is look at all your other investments and see if you have any big losses. For example if you hold some stocks for years now which are deep in the red you could realise that loss by selling them and offset your bitcoin winnings.

[Wysi]

It depends on where you are based and in USA you may not be able to minimise the tax of get away from it wherein it's easier to dodge the tax on crypto. I would rather suggest you to plan something to recover the tax amount either by focusing more on trading by maximizing profits so that you don't feel the pinch looking at tax amount. You should consider tax as a green signal that Bitcoin and crypto will not be illegal.

[Terrell]

If you've owned or used bitcoin, you may owe taxes — no matter how you acquired or used it. Bitcoin and other cryptocurrencies that you buy, sell, mine or use to pay for things can be taxable. Also, if your employer or client pays you in bitcoin or other cryptocurrency, that money is taxable income.

[francois-cooper]

the best way to avoid taxes is to move to Portugal
https://medium.com/@patriciacasaburi/why-portugal-should-be-the-first-choice-for-bitcoin-and-other-cryptocurrency-traders-c03670ab80e2

[adzino]

Hi,

Another newbie question...
I'm considering cashing some BTC (just to buy more later after the bull run)...
What are some strategies to minimize / "optimise" paying taxes for the USD received into my bank account for selling BTC.

Edit: Adding some context: I'm based on Spain and I am not using Coinbase.

Thank you!

If it is a huge amount of coins, then I would suggesting getting a tax accountant. If you aren't comfortable with a tax accountant, you can get a tax lawyer who are specialized in crypto currencies. Trying to cut down taxes on your own might be a bad idea. You may end up under reporting your tax and you will have to pay hefty fines, which wouldn't be worth at all. Remember, in some countries laws varies a lot from state to state. In some cases federal laws might conflict with state laws.
Even if you do it on your own, make sure you do proper research and keep hold of all supporting documents. Remember, you can never escape taxes.

[hulla]

Doing something against the authority could get you into trouble and the last time I check Spain resident are taxed between 19% and 23% but if you want to minimize your tax payment I will advise you not to sell all the BTC for fiat currency i.e sell 45% for Euro while you hold 55% in stablecoin which you'll keep in your personal wallet till when you are ready to invest again.

This is great. Thank you.

So, If the idea is to sell in order to buy more after the bull run, It has not sense to cash anything to fiat. It is way better to withdraw to stablecoins.

What I am missing here?

You absolutely don't miss anything. I gave you the advice of converting some of your holdings to fiat footing your question consider minimize tax payment for the USD remit you received for selling BTC when the Spain tax agency always taxed crypto exchange back to fiat.

...

In my country, it's also one of the strategies since the stablecoins aren't taxed but to be honest I'm surprised they don't tax it like any other trading activity, whatever it's about crypto or not.

Look what I mean:

Traditional traders making money, while trading for example USD/EUR, are taxed. Traders making money with cryptocurrencies are taxed. But when it's about stablecoins you are not taxed. Yet a stablecoin is a currency by nature too.

Yes but understand that they are not naive about what you explained.
having said that, what I believe is that the Europe Central Bank doesn't want stablecoins cause they see it as development which may affect their exercise and mandate. That's why they are against Libra once they study its roadmap

I can't explain why, is it because they haven't yet taken the time to expand the laws to include the stablecoins, or because they don't know about stablecoins, which is impossible nowadays.

Your country Central Bank stance about stablecoin explain the reason why stablecoin are not tax and you can use this site to have more insight about crypto tax in your country and the rest of the world.

[redsun114]

You can save all the tax if you just cash your Bitcoins through a local buyer who can pay you in cash but its not like I am recommending you to do that, I am just telling you how people save tax and avoid being tracked from legal authorities of how much money they own.

If you've owned or used bitcoin, you may owe taxes — no matter how you acquired or used it. Bitcoin and other cryptocurrencies that you buy, sell, mine or use to pay for things can be taxable. Also, if your employer or client pays you in bitcoin or other cryptocurrency, that money is taxable income.

You sound more like a lawyer to me but yeah the points you mentioned are spot on. In fact there is tax even when you trade the coins into other coins and make profit. I am not entirely sure how the taxation works in Spain but if the amounts involved are big then you might want to consult a local accountant and he might guide you how to save the maximum possible tax by legal means.