Escaping from the lion

[Aanuoluwatofunmi]

I'd also advise against to try to evade taxes. However, I'm also uncomfortable with a government knowing my crypto holdings. Governments can be corrupted, or their databases hacked by criminals.

We may not be able to control or prevent the government from demanding us to pay task, it's normal and common to every country, but as you have said, we have to maintain and know how we could remain secured with our privacy, because we can't afford to allowing third parties knows about our capabilities, we can't even afford to missed out on this because it's part of what guarantees for us to be free indeed, when we are privacy conscious.

[Mrbluntzy]

The exchange where you bought your coins from is centralized which makes your privacy not secured, the exchange can deliver your IP or information to the government and they can still track which ever wallet you are going to be send your coins to. Just as you have sent to bluewallet, they can track your address if they want. If you don't want your coins to be tracked, after you have withdrawn to your blue wallet, you can send it to a different exchange that doesn't ask for KYC and then withdraw back to a different wallet.

[Fivestar4everMVP]

Hello, community! I'm new to Bitcoin self-custody and would like some help to better understand some issues.

I currently use the Bipa app to buy Bitcoin BTC and then transfer it to my personal wallet (BlueWallet), as I believe that "neither your keys nor your coins". However, with the new 17% tax rule on cryptocurrency profits in Brazil, I'm concerned.

My questions are:

Self-custody vs. Taxation: Does keeping BTC BTC in my own wallet really protect me from being tracked by the IRS?

Legal strategies: Are there ways to not declare or structure transactions to reduce impacts, since the government already collects a lot of money and it all goes to politicians' pockets?

Privacy: Should I migrate to wallets like Wasabi or Samourai (CoinJoin) to increase anonymity?

I appreciate any guidance or experience you can share!

When it comes to taxation and how to avoid and keep the government away from tracking you, self custody is the most important choice as a means of keeping your bitcoins safe, you can use other services like mi(s)ers to further increase anonymity of your address, this would help to keep the government away from tracing an address to you.

And when it comes to the time of exchange your coins, you must avoid kyc exchanges, your best shot would be to look for someone over there in your country who is interested in direct p2p, that is, he or she sends your money directly to your bank account, and you send your coins directly to rhe persons self custody wallet through mi(s)ing service.
I believe that putting all of this into practice will surely help you escape from the lion.

[MarjorieZimmermanGinger]

I currently use the Bipa app to buy Bitcoin BTC and then transfer it to my personal wallet (BlueWallet), as I believe that "neither your keys nor your coins". However, with the new 17% tax rule on cryptocurrency profits in Brazil, I'm concerned.

My country recently considered raising taxes on crypto asset ownership, but so far nothing has been implemented. Our country also imposes taxes, but they are limited to trading activities on regulated local exchange platforms. While anonymity is something most people desire, it can sometimes be difficult to avoid due to the restrictive regulations in your country of residence. Some of the advice provided may reflect your wishes, but reporting taxable assets to the government is also a good idea to avoid future complications.

[Muba20]

If you keep your funds in self-custody, that means keep bitcoin in your own wallet, then it is under your own control. Since it is not with any other third party, you can be safe from that point of view. If you keep your assets with others, there is a fear of losing your assets. The issue of taxation is completely different. If you buy Bitcoin from an anonymous source and keep it on a non-KYC platform, it is almost impossible for the government to trace it. But when you are using a KYC-based app, the government can get that information if they wants. No matter how much you transfer your money to any other platform, the government can trace you.

As far as I know, usually you have to pay taxes when you convert the Bitcoin you hold into fiat. If you hold long term you need not to pay tax. But no matter how much security you increase in holding your coins, it will not free you from the law. To remain anonymous, you need to be anonymous from the start. Using a KYC app means you are eligible for tracking.

[davis196]

Hello, community! I'm new to Bitcoin self-custody and would like some help to better understand some issues.

I currently use the Bipa app to buy Bitcoin BTC and then transfer it to my personal wallet (BlueWallet), as I believe that "neither your keys nor your coins". However, with the new 17% tax rule on cryptocurrency profits in Brazil, I'm concerned.

My questions are:

Self-custody vs. Taxation: Does keeping BTC BTC in my own wallet really protect me from being tracked by the IRS?

Legal strategies: Are there ways to not declare or structure transactions to reduce impacts, since the government already collects a lot of money and it all goes to politicians' pockets?

Privacy: Should I migrate to wallets like Wasabi or Samourai (CoinJoin) to increase anonymity?

I appreciate any guidance or experience you can share!

If only the cryptocurrency profits are taxed, just declare losses instead of profits. Maybe you should talk to a Brazilian accountant, who has deep understanding over the Brazilian tax system. I'm sure that many accountants around the world know how to use loopholes in the local tax legislation in order to help their clients pay less taxes in a legal way. There aren't many accountants in this forum, so you won't get any expert opinion. I don't think that moving your crypto from one wallet to another would help you that much.

[Outhue]

The only way to be ahead of your government is to stay away from centralised exchnages, if you want to buy and sell Bitcoin find way to avoid centralised exchanges. Find real P2P platform that will never ask for your KYC verification and also make sure you sell through P2P platform too.

I was able to beat the tracks in 2019 when Bitcoin was banned in my country, no banks involvement and no verification of identity or similar, until the ban was lifted then I started using Binance P2P which of course requires KYC verification. Taxing crypto profit is suicide, I will have to find a way to evade this if ever it's compulsory in my country, some people just have no mercy on their citizens, they want their citizens to always be far away from anything freedom related.

[melinoe]

If only the cryptocurrency profits are taxed, just declare losses instead of profits. Maybe you should talk to a Brazilian accountant, who has deep understanding over the Brazilian tax system. I'm sure that many accountants around the world know how to use loopholes in the local tax legislation in order to help their clients pay less taxes in a legal way. There aren't many accountants in this forum, so you won't get any expert opinion. I don't think that moving your crypto from one wallet to another would help you that much.

I too think that wouldn't be a solution.

And, anyways, if an accountant is good, then his cost for the help and clear path to go around taxes would be much better in long-term than to try to fool the system by yourself

[Free Market Capitalist]

I usually visit this section, but for some reason I had missed this thread. Apart from everything that has been said, if the OP believes that his bitcoins have already been KYC'd in one way or another, one way to optimize taxes is not to sell but to borrow against them. But this strategy is not generally suitable for retailers with little capital. If you have 10 bitcoins, use 1 to borrow against it. That will mean sending that bitcoin to a centralized entity that offers this type of lending. But you will continue to have custody of 9 bitcoins.

Someone may ask, why would I want to borrow against 1 bitcoin instead of selling it? For starters, you won't pay capital gains tax, and if bitcoin price continues to rise, you can refinance upwards, and if it falls, you can contribute more.

However, as I said, this strategy is not suitable for many people, such as impulsive people, people who don't control their finances, gamblers, or people with little capital.

I don't know if these services are available in the OP's country, but I just wanted to comment on the idea.

[zasad@]

The exchange where you bought your coins from is centralized which makes your privacy not secured, the exchange can deliver your IP or information to the government and they can still track which ever wallet you are going to be send your coins to. Just as you have sent to bluewallet, they can track your address if they want. If you don't want your coins to be tracked, after you have withdrawn to your blue wallet, you can send it to a different exchange that doesn't ask for KYC and then withdraw back to a different wallet.

Similarly, we can say that the forum administration can transfer IP addresses to my government and data about my wallets But no one will do this, because there are laws and procedures for obtaining information. Personal data is protected by laws and is not transferred at other countries government requests.
A more likely option is that the personal data of the exchange client will be stolen by fraudsters and then used for criminal purposes.

[Odusko]

I currently use the Bipa app to buy Bitcoin BTC and then transfer it to my personal wallet (BlueWallet), as I believe that "neither your keys nor your coins". However, with the new 17% tax rule on cryptocurrency profits in Brazil, I'm concerned.

My country recently considered raising taxes on crypto asset ownership, but so far nothing has been implemented. Our country also imposes taxes, but they are limited to trading activities on regulated local exchange platforms. While anonymity is something most people desire, it can sometimes be difficult to avoid due to the restrictive regulations in your country of residence. Some of the advice provided may reflect your wishes, but reporting taxable assets to the government is also a good idea to avoid future complications.

What i have realized is that, bitcoin have made taxation very difficult in the sense that with bitcoin one can avoid tax for as long as possible as far as that bitcoin holder make use of decentralized bitcoin network to carry out their transactions, since you only get taxed when you have contacts qith centralized financial institutions like cex exchange and bank's.

[zasad@]

I currently use the Bipa app to buy Bitcoin BTC and then transfer it to my personal wallet (BlueWallet), as I believe that "neither your keys nor your coins". However, with the new 17% tax rule on cryptocurrency profits in Brazil, I'm concerned.

My country recently considered raising taxes on crypto asset ownership, but so far nothing has been implemented. Our country also imposes taxes, but they are limited to trading activities on regulated local exchange platforms. While anonymity is something most people desire, it can sometimes be difficult to avoid due to the restrictive regulations in your country of residence. Some of the advice provided may reflect your wishes, but reporting taxable assets to the government is also a good idea to avoid future complications.

What i have realized is that, bitcoin have made taxation very difficult in the sense that with bitcoin one can avoid tax for as long as possible as far as that bitcoin holder make use of decentralized bitcoin network to carry out their transactions, since you only get taxed when you have contacts qith centralized financial institutions like cex exchange and bank's.

Bitcoin helps avoid taxes, but if the user wants to buy real estate, open a business or make a large expenditure, the bank will ask for a source of funding for this operation. The user will still have to legalize his money or live his whole life renting what he needs. In the long term, the state will not be the losing side in this fight, and many crypto users will be forced to pay taxes.

[Free Market Capitalist]

Bitcoin helps avoid taxes, but if the user wants to buy real estate, open a business or make a large expenditure, the bank will ask for a source of funding for this operation. The user will still have to legalize his money or live his whole life renting what he needs. In the long term, the state will not be the losing side in this fight, and many crypto users will be forced to pay taxes.

Yes, but anyone who keeps their bitcoin in cold storage will always have an advantage in that regard. If you have a good net worth in real estate and they hit you with a big tax increase, you're screwed because even if you wanted to sell it to move to another country with lower taxes, that increase will already affect the sale price and it will take you a while to sell it, whereas if they hit you with that same increase on your bitcoin earnings, you can move to another country that very same day if you want to.

This also applies to political risk scenarios, or war. If you see that your country is going to be invaded, or that a civil war is going to break out, with bitcoin you can leave the country, period. If you have real estate or a lot of shares in the bank, all that gets complicated.

[zasad@]

Bitcoin helps avoid taxes, but if the user wants to buy real estate, open a business or make a large expenditure, the bank will ask for a source of funding for this operation. The user will still have to legalize his money or live his whole life renting what he needs. In the long term, the state will not be the losing side in this fight, and many crypto users will be forced to pay taxes.

Yes, but anyone who keeps their bitcoin in cold storage will always have an advantage in that regard. If you have a good net worth in real estate and they hit you with a big tax increase, you're screwed because even if you wanted to sell it to move to another country with lower taxes, that increase will already affect the sale price and it will take you a while to sell it, whereas if they hit you with that same increase on your bitcoin earnings, you can move to another country that very same day if you want to.

This also applies to political risk scenarios, or war. If you see that your country is going to be invaded, or that a civil war is going to break out, with bitcoin you can leave the country, period. If you have real estate or a lot of shares in the bank, all that gets complicated.

In my opinion, this issue should be discussed from a specific situation.
For example, to get a non-tourist visa in another country, then almost everywhere you need to confirm the source of funding. If you sell real estate and pay taxes, then you will have it.

For example, all European countries require that a person's money be legal and this be confirmed by documents. Therefore, if you are preparing to move to safer countries like Europe or America, then you should show the necessary legal income to get a visa.

[Free Market Capitalist]

In my opinion, this issue should be discussed from a specific situation.
For example, to get a non-tourist visa in another country, then almost everywhere you need to confirm the source of funding. If you sell real estate and pay taxes, then you will have it.

For example, all European countries require that a person's money be legal and this be confirmed by documents. Therefore, if you are preparing to move to safer countries like Europe or America, then you should show the necessary legal income to get a visa.

Well, I think you're looking at it from the perspective of a non-European who wants to go to Europe. I look at it the other way around, from the perspective of a European who wants to go to another continent. There are several countries that wouldn't give you any trouble, plus you can get a tourist visa and then see what you do. The thing is, if you have bitcoin, it's much easier to hide and transport, and much harder to confiscate. It's also much more liquid, compared to having your wealth in real estate, for example.

[zasad@]

In my opinion, this issue should be discussed from a specific situation.
For example, to get a non-tourist visa in another country, then almost everywhere you need to confirm the source of funding. If you sell real estate and pay taxes, then you will have it.

For example, all European countries require that a person's money be legal and this be confirmed by documents. Therefore, if you are preparing to move to safer countries like Europe or America, then you should show the necessary legal income to get a visa.

Well, I think you're looking at it from the perspective of a non-European who wants to go to Europe. I look at it the other way around, from the perspective of a European who wants to go to another continent. There are several countries that wouldn't give you any trouble, plus you can get a tourist visa and then see what you do. The thing is, if you have bitcoin, it's much easier to hide and transport, and much harder to confiscate. It's also much more liquid, compared to having your wealth in real estate, for example.

That's why I wrote above that such cases should be considered individually.
If a European has a passive income of 2-5 thousand, then he will live well in Asia, but there are nuances, as always. If you are white, then you are rich, which means that for you the prices are 2... 5 times higher for everything, including medicine.
I've already heard many stories about white people running from Asia as if they were running from a lion.