oh how the tables have turned crypto is back on the menu boys um that's from what movie Lord of the Rings thank you uh Mark ker here CPA attorney bestselling author podcaster uh influencer on YouTube helping Main Street America business owners we've got a law firm a Trust Company a network of accounts and CPAs and rolled agents around the country I'm here for you crypto taxation how is your cryptocurrency going to be taxed numbers are up are you harvesting profits what's that mean are there some Tax Strategies you might take advantage of yes there are what are you doing are you just trading away in your uh your accounts and your wallets and thinking oh all is good well it could come back to bite you you got to be careful so I want to talk about some different uh ways you could save taxes with your cryptocurrency trading or investing or Bing or staking nfts all the above or we're going to talk about how you even understand and and I want to cover right out of the gate how crypto uh cryptocurrency and all the related pieces and parts are taxed so we're going to dive into it now excited to be here with you this is your chance to ask questions please put them down in chat I'm going to cover what I can we will be having another crypto tax Summit we've done three two of them already one in Phoenix one in Miami now that crypto is back on the menu things are up it's exciting uh it's becomes an issue and so we're going to be holding at least a virtual crypto tax Summit here in the near future because there's just strategies that are unique to crypto and if you're going to be trading you've got to understand what your plan is your accountant may not even know some good strategies or just be picking up the pieces next year when you tell them what happened so let's get into it all right first number one the IRS is all over this like white on rice they just got $80 billion last year from the federal government to enforce more audits more tracking more collection for business owners and in cryptocurrency they've got task force now that understand the blockchain they can find your transactions oh not on my you know di wallet no they can it's on the blockchain that's what is great about crypto is it's public it's on the blockchain oh but the IRS is not that smart no they are they're that smart so can I just show you the front page of your 1040 tax return okay Jack bring this up this is the 1040 for 2023 okay see this right here I don't know can I write on this I might be able to write on this this let's see nope I can't write okay let's look at here after your name filing status look at the first question right here on your tax return at any time during 2023 did you receive as a reward or award or payment for property or services or did you sell exchange or otherwise dispose of a digital asset or financial interest in a digital asset see instructions okay did did you catch that if you received an nft or any crypto via staking mining reward award payment anything or did you sell any crypto yes or no if you check the box no okay that's cool let's just go down here to oh under penalties of perjury I declare that I have examin this return in company schedules and statements and they are true or correct wow so if you lie on your tax return it's not pretty people can you drop that now Jack please all right so the IRS is on to this you've got to sign your tax return and if you lie you could go to jail all right now some of you are like holy crap taxes are due in four weeks my 1040 I don't even know what I did last year on my wallets or my in my exchange then file an extension people an extension is okay you actually reduce your chances of an audit with an extension some of you are like extension that's a bad thing no it's not now you need to estimate how much you might owe send in a little money if you don't send in any money there might be a little penalty or some interest on that but if you don't file an extension the penalties are 10 times worse and if you file your tax return and it's wrong and you lie then it's real ugly so first point if you sold traded any crypto last year and you think you cannot deal with it on your tax return you're kidding yourself I'm here to warn you now you say well Mark all my money's in crypto I haven't sold anything I've just been trading crypto I don't pay tax until it goes back to US Dollars wrong let me tell you the law there are three ways your crypto taxation your cryptocurrency is taxed you buy cryptocurrency for let's say you bought Bitcoin at 30 grand and now it's worth 72 73 your money doubled you sell it and go back to US dollar you're going to pay tax you bought it for 30 you sold it for 70 you have a $40,000 gain you're going to pay tax on $40,000 and if you only held the crypto less than 12 months you're paying short-term capital gain which could be as high as 39% 37% these are my brackets right here we can look at our brackets we have got to be extra extra careful that we are not going to hit that 37% bracket we might want to hold it 12 months and get capital gain which could be as low as 15% or zero 15 or 20 so number one if you bought crypto and you have sold it in 2023 for any gain and you went back to USD you're paying tax on the difference number two well Mark I had Bitcoin and then I traded it for ethereum I didn't go back to USD I just traded it for ethereum taxable because whether you go to USD or you go buy a bunch of ethereum you got rid of your Bitcoin in that example I bought it for 30 I sold for 70 I have a $40,000 gain well I just exchanged it for ethereum that's the same as selling it now if you don't hate the player just hate the game this is the game you buy stock you sell it you pay tax well I bought crypto and I left it in crypto exchanges or wallets doesn't matter if you exchange it you pay tax on the difference of what you bought it for and the current US dollar value the day you exchange it for another coin well I did it in my metamask wallet okay don't care you're still paying tax Mark you have no idea I do trades every day yeah so you're going to need software coin Ledger coin Ledger is the number one software out there for individuals to plug in all their different wallets and get the reports on all of your gains and income for last year and they do the defi wallets they don't just do the big exchanges number three you take any crypto of any current of any type of token and you exchange it for services or buy something with oh you bought an nft taxable oh I went and got some money out of an ATM taxable I used to go to a restaurant in San Diego taxable if you use your crypto to buy something that's equivalent to selling it so if you go back to USD you trade for another type of token or coin or you use it to buy an nft or service or product you pay tax I'm sorry I know this is not fun hearing but that's water under the bridge for 2023 and I can't save you taxes for 2023 it's over it's over whatever you bought and sold in 23 is over and if you just bought it in 23 and just sold it now it's over you have to call your Tax Advisor before you sell if you just think say you own a rental property and you want to sell it if you go to closing and sell your rental property and then show up at your accountant's desk and go hey how do I save taxes they're like well before you sell it let's look at a 1031 let's look at a charitable trust let's look at an opportunity Zone let's look at an installment sale let's look at a DST what you already sold it well what the hell can I do you already sold it now we might be able to salvage a little opportunity Zone if you want to go buy some real estate now I've got to figure out how to offset your gain with other Investments we have got so many awesome freaking strategies we'd love you to do your crypto transactions in a Roth IRA and never pay tax again the charitable remainder trust would allow you to sell all your crypto tax-free and create a stream of income we've set up hundreds of charitable reinder trusts for crypto Traders have a consult with a real tax lawyer on Main Street that's affordable our tax lawers are super affordable you can meet with them anywhere in the world on Zoom we'll have a strategy session and see what you need but remember this is part of your bigger equation what are you doing with this money or you buy in real estate do you own your home do you have a revocable trust do you have an S corporation what's your day job what's your side hustle people this is what a tax adviser should be doing for you anyway now I have a certified Tax Advisor Network and any of you that are enrolled agents CPAs accountants tax lawyers financial advisers and you want training on how to be a certified tax adviser and provide advisor Services I have a 12 module training program one entire module is on crypto nfts metaverse staking mining trading capital gains all of that is an a section so if any of you are looking for a certified adviser in my program you go to Mark jer.com and you can find one right now that's taking clients and by the I don't make any money I just give give a the network away I want people to find I'm a matchmaking service and I don't take any money from it I'm tax match.com I want great taxpayers hooked up with tax filers let's get you some help for any of you that are looking to be a common adviser one of 12 modules is just crypto home module on real estate home module on asset protection four modules on tax planning entities the whole nine yards check it out at Mar jer.com all right now let me just hit a couple other points and then we'll I'll take your questions it it's a big topic our crypto tax Summit is a full day a full day at the crypto tax Summit so what I want to show you here is what I call the trifecta the trifecta is where we organize your transactions if you're doing mining or any type of staking that is not custodial staking so staking mining or um I'm going to put some meta Ventures you're going to want to run that through an S corporation because that's ordinary income that's how it works if you don't your taxes are going to be close to 45 45 45 to 50% on the first 100 to 150 Grand that's your tax rate if you're mining staking or doing meta Ventures now if you're holding crypto all right now I'm doing custodial staking I'm Buy and Hold I'm trading that goes on the right side now we might use an LLC for asset protection or we just hold it in our revocable living trust this all comes down to your 1040 and Nets together so people if you're holding crypto we're going to be over on this side and this is where I'm going to put your nfts all of your coins tokens all right so we've got to decide are you doing operations with crypto or are you doing holding with crypto and a lot of Traders are doing both I'm doing crypto mining and I'm going to pay higher tax rates on that but soon as I get my Bitcoin from my mining it comes over here into a bucket so you want to make sure you understand those differences now the last thing I want to point out is nfts are a whole other animal and anybody that's doing crypto gets into nfts pretty quickly it's really the future of so much of our technology in this country the blockchain technology is off the chart nfts there's two types of nfts there's collectibles and then there's utility nfts if you buy and sell a collectible you have to pay collect the tax rate on Collectibles is 28% it's not pretty if you buy and sell a utility token or nft then you can either get shortterm capital gain or long-term capital gain which is going to be a lower rate based on your bracket and long-term capital gain could be 0 to 15 to 20% in all these situations you also have state tax and if you go well Mark I I I I have my um uh you take um I have my U server in Nevada or I set up an LLC in in Tennessee or uh one of my nine taxfree states Washington or Florida or Texas um so I don't pay state tax because that's where my LLC is or my Corporation whoa whoa whoa you live in California you live in New York you live in Illinois you're going to pay tax in California there's no way around it you can't set up a Nevada LLC and think you're going to get around it you won't California is all over this and they have been for years so it takes some planning I am sorry to be the bearer of bad news so get informed get educated because you're going to be more educated than your tax adviser with training at our Summit and any of you tax advisers out there we got to know this now I love coin Ledger I'll say that again coin Ledger is a good resource to start getting the data for 2023 file an extension 4868 get on my network and find an accountant an adviser that can walk you through this when it's time to do your taxes all right well Jack I mean if we have some questions great if not you know I was going to go hit some golf balls or now actually I had work to do okay we got a lot of good questions um let's uh let's start here Richard asks Mark is there a 1031 exchange like tax rule for crypto nope nope you can't do a 1031 exchange on crypto taxation uh on cryptocurrency now the nice thing about cryptocurrency is there's no wash Shale wash sale rule um which with if you have regular stock or NF uh ETFs or mutual funds and you sell one at a loss just to harvest a loss and turn around and buy the stock again drra says uh-uh that loss is suspended because all you did was wash it you just sold it and bought it with crypto that doesn't apply so you can sell crypto that you have at a loss take the loss and then turn around and Reby the the crypto so I I would say that's an exception to the stock trading rules but there's no such thing is a 1031 exchange in the crypto World okay we're getting a lot of different questions about um the best software to calculate taxes for crypto oh well there's so much out there I we've used Tax bit but they've gone all corporate coin ledgers out there hey if any of you have a good software that you're liking put it in chat share it and some of you might go to one of these uh softwares and they don't support the wallet you're using then switch around don't throw guys this is not easy and you're you're going to get a little frustrated but go out and sign up for some of these different software products that do your u crypto taxation reporting and transaction reporting and you may hate coin Ledger and love something else or you might love you know vice versa so let's make sure in chat we're writing those down or everybody share and Jack let's make sure we're writing them down too cool well you're going to love this one it's not a question but Andrew Hall when you were talking about taxable events is saying no it's not it's still invested so if I switch from Bitcoin to ethereum it's still invested so it's not a taxable event what do you have to say Andrew Andrew Andrew bless your heart let me get this straight I have a rental property and I turn around and sell it and buy another rental property I'm still invested I don't pay tax wrong oh but Mark I bought Microsoft stock and I sold it on my meril Lynch account and bought Tesla so I'm still invested I don't pay tax wrong you sold your Apple stock people I don't know where this misinformation comes from maybe you're on a Discord Channel where someone's given tax advice and they don't know what the hell they're doing if you trade or sell crypto for another currency it's taxable period I'm this is clear clear clear tax law anybody that's selling you anything different is a and they don't know what they're doing was that my inside voice I am so sorry and Andrew I am so sorry to share that with you yes it's still invested yes I can still own stock yes I can own mutual funds yes I can own real estate it's still invested but you sold what you owned you pay tax on your basis compared to the sales price next that was great I think you cleared that up did I clear that up oh my gosh Andrew hates me now I'm sorry Andrew okay loyal best says what is the strategy so I can trade crypto in an IRA and be able to live off of it it before I'm 59 and a half years old oh my gosh I love this okay everybody let's go whiteboard there's two now this is where the money's at and this is what a lot of my clients are doing is we're taking our Roth IRA now I love Roth and you guys can open up a Roth right now still for last year and put let's see what's the number for last year okay this is important everybody you can open a crypto Roth right now for 6,500 and turn around and put in 2024's numbers for 7even Grand so you could have right here um 145 uh sorry 13,500 in a Roth IRA tomorrow if you wanted to and some of you have some old IRAs you can roll those in you have an old 401k you can roll those in this is a huge conversation but let me just say the goal is to get to a Roth IRA now you want to do a self-directed Roth now this is important everybody because if you go to maril Lynch or Schwab or Fidelity and go hey I want to buy crypto with my Roth IRA they're going to go okay you can buy this new Black Rock fund um Bitcoin and you know th they're buying Bitcoin suit no no no you're not buying Bitcoin you're buying into a fund that owns crypto that's different you don't want that's not trading crypto so you want to get to a self-directed Roth IRA there's no tax no penalty to do this now where you go let me just give it to you right now directed ira.com so directed ira.com you can literally open up account on your phone in the next 30 minutes it's that easy directed ira.com okay so now let hang with me so let's say you get your Roth IRA maybe you open up a new one you transfer in money I do not care all right you have two options at directed Ira we have the down and dirty streamline version and we have the kickass I want to do defi wallet version so option one is we have a a wonderful relationship with Gemini in fact they just highlighted one of our articles today on their website so Gemini is a custodian that or should say a um exchange so the Gemini exchange we have a contract with them we have over $1.5 billion doar in our directed Ira uh family of money that's been self-directed with clients so the Gemini exchange will set up what we call a crypto Roth and you crypto Roth and you can set this up right now in the next half hour and it's a crypto Roth account now the only problem for some of you that you're going to have with this is I can only ex trade what's on the Gemini Exchange change but right here I have it on an app I have my Roth IRA on an app right now and I can just go Gemini boom there it is and I and on my app I am trading in my Roth IRA on any token or coin on I don't want to hold this up now because someone can see it oh I'm killing it I'm up I'm up 5.44% today in one day I love that okay so that's my crypto Roth IRA and I can do any trading on Gemini exchange and up until April 15th I can put in my 2023 number and I can put in my 2024 number and that's going to be $13,500 if I'm under age 50 or an extra th an extra, 1500 if I'm over 50 or older okay now the second option is and we do this all the time you set up an LLC now this is when our Law Firm comes in you set up a single member LLC that's owned by your Roth and this LL C can open up metamask wallets Voyager account not Voyager it can open up any sort of you know crypto.com whatever so you can open up all sorts of wallets under this Ein and all these wallets are going to get reported inside your Roth IRA by the way when you trade inside a Roth let me just say this no tax ever as in Smalls and Sandlot forever no tax in your Roth IRA holy crap so that's why we're doing trading in a Roth and we want to get there with a crypto Roth or a a solo 401K whatever we want to try to get there as soon as possible in that Roth position next question okay we're getting a lot of questions about losses main thing being what to do if you lost Assets in the Celsius blockfi FTX stuff and if your uh wallet was act what uh what do you do with taxes okay we have H we've help um had multiple podcasts on this in the past and I want to give you our two podcast stations so let me write these up here Main Street business podcast and also the directed Ira podcast now last year when this was hitting we did a full podcast on what to do with my loss on FTX the Voyager bankruptcy all of these things what do I do so you're going to see that in the history it's about a year old we might be able to get the link in the description for you the directed Ira podcast we talk about using the Roth and the 401K to do crypto and Mining we have multiple multiple shows on that too so I just want to say it's a big topic so the the first thing is getting your crypto stolen from me from you or hacked is not a write-off I'm sorry it's as if someone broke into your house and stole your VCR does anybody have a VCR anymore they stole your fax machine they stole your beta Max they stole your Nintendo 64 your Atari I'm dating myself okay little you know throwback so here's the point if someone get breaks into your garage and steals your car you don't get a ride off thefts are not a ride off if someone breaks into your wallet and steals it it's not a write-off now there is a write-off when there's a collapse like FTX or the Voyager bankruptcy there's going to be some writeoffs in those in instances and I go through it in detail in this other podcast on how to deal with it now your accountant should know this and if your accountant does not then you got to upgrade and get over to my network because we have trainings on this in depth in the Main Street bu uh Main Street tax Pro program Mark jer.com go up to the network click on it so uh losses are tricky stolen not a write off a bankruptcy an FTX Scandal like a a Ponzi scheme scenario it's going to be a write-off Jack okay we're getting a ton of questions about the CRT can you just do a quick overview of the CRT and why it's related to crypto you bet we have been doing the charitable remainder trust uh strategy for crypto for now three two three years and it's just phenomenal so here's how the strategy works so let's say you have a $1 million wallet and you maybe you have a $100,000 basis now this is assuming you haven't paid taxes along the way trading and da d da da da this is you bought it for 100k it's now worth a million so this is a what we call a buil in gain built in gain sorry my handwriting is terrible here so with a built-in gain that you haven't traded at all and you haven't paid tax yet you're going to get k killed with 900 Grand of income now with Obamacare federal capital gains and state capital gain you could be well over 30% in taxes so you're going to owe 300 Grand in taxes in generally not pretty so the step of a CRT is you're going to take this $1 million um crypto and I'll do this quickly step one is you form a cred we there's about 30 variations we like the charitable remainder unit trust we explain this in our consultations you're going to donate so number one is create it number two is you're going to transfer or donate not sell if you sell it you jack it up you're going to donate the crypto to this qualified charity which is a trust and guess who the trustee is you so you get to be the trustee and continue you to trade crypto but now it's tax-free trading so you're going to donate it you are the trustee and this is a qualified charity when it's set up properly okay so that's step one step two step three is you're going to sell you want to unlock that gain and start buying and selling and trading so you're going to sell the crypto and it's going to be taxfree you're not going to pay any tax on that sale now you're sitting on one million in that c cryp in that charity so step four guess what you get a tax deduction because you donated crypto to a charity now in the long run step five when you die when you die or 20 years whichever is longer this will actually get distributed to a real charity so this is going to be a real 501c3 it could be a college a church your own nonprofit but when you die that's where it's going to go so you get a tax reduction of about 10% because that's the present value of what's going to go to charity when you die so based on your age and gender we're going to figure out what your tax reduction is well Mark what happens to that million dollars while it's there now number six step six is you get cash flow for the rest of your life distributed this is asset protected no one can touch it in a lawsuit so what if you're going to if you're 50 years old it could be around 10% 40 it could be 9% 30 8% if you're age 30 it could be 8% so the point is the younger you are the less the payouts going to be every year but let's say it's 9% so you're going to get 9% of $1 million every year the rest of your life well what happens if you go out and trade it and you turn it into $2 million tax-free now you get 180 Grand you get 9% of whatever the value of the crud is on January 1st every year now this cash flow this unitrust payment is taxable so you will get taxed on the payment but the beauty of the CRT is that you don't pay any tax on the initial sale you're able to trade taxfree and build it tax-free then your unit trust payment comes out so the Crut is a amazing if you want an appointment on this just to give you a full disclosure we charge 5K they're 5 grand we've been doing them for years 10K five or 10 or is it 8K somewhere between five and 10K depends on the the amount of work involved 5 to 10K you're going to want to meet with the attorney in my office max Merritt he's phenomenal this is kkos lawyers and you go to kkos lawyers.com and and you can pay for a 1-hour consult meet with Max talk about your options and if you move forward he applies to consult to the fee and there you go and so get a console it could save you thousands if not millions in the long run okay Jack unreal okay Alina asked a follow-up question to that do charitable remainder trusts have clawbacks oh my hell okay there's some guy out on the web that is freaking out all the people trying to learn about this talking about a clawback and that Mark kler is crazy now he likes I'm not even going to say who this is they like to go to the crat the annuity trust where I talk about a higher tax deduction well with an annuity trust you do get a higher tax deduction but you get lower payouts and you can't control the value I like the Crut number two this clawback is this unique weird situation that if you're that that if some change occurs in your life like oh I'm not going to give it to charity or I'm I'm not going to the charity that I was going to give it to is now gone or I set up a charity for myself and now it's not me if there's some problem with the charity the IRS could claw it back and go hey we want our tax deduction back and we want to pay who's going to do that no one we build the CRT so it always goes to charity do not worry about a clawback and the the unit trust the charitable remainder unit trust is far superior to the crat and get a get a second or third opinion if you don't believe me do a consult with Max Mar another licensed attorney here in Arizona Helping clients Nationwide and then get a third opinion from someone and about the crud but just be careful of someone on this clawback crap it's it's not going to affect you okay tank asks can my 18-year-old son open a crypto Ira yes I had kids can open up a crypto Ira as soon as they have earned income I my grandson who is uh underage two has a Roth IRA for $500 in it and we can put crypto in it because he earned income as a model on stage in one of my workshops it was very powerful he came out on stage and he's like hey everybody I'm so excited to be here I'm Mark's grandson and I help invest and I'm here showing you how this tax strategy works that's what he said with his cute little face but anyway the point is you could start paying your kids as young as they validly earn income and you're not going to be crazy and paying kids under age 10 has got to be very strategic but teenagers earning money and opening up a crypto Roth we do it right now you can open up a crypto Roth IRA for your 16-year-old at directed ira.com right now and buy crypto love it okay loyal asks can I only invest 14,000 in an IRA or can I use a mega back door and invest more well okay first name again loyal loyal is uh pushing the envelope here he's trying to get me to go more technical loyal I love you uh and the answer is yes people you can actually do a backdoor Roth IRA and put over6 $9,000 in it this year or more depending on your age you could also have an old 401k from an old job that we could convert into a Roth IRA and buy crypto you can also put into your own Roth IRA money and still have a 401k at work there are so many options here to based on your income and what you're trying to accomplish so so many people think that you're restricted to six or seven Grand in a Roth IRA I can do more I've got hate mail all over Tik Tok right now because I told people you could open open a Roth and put 20 grand in it that's because it's a solo 401K Roth on top of your regular WTH if if you're 50 or older just with your solo 401K Roth and your um personal Roth you could put in 30 30 $38,500 right there and that's easy that's easy so this is how the rich get richer people you've got to be learning these strategies and building these Roth IAS with crypto they're incredible Jack okay this we'll go last question and then last thoughts on crypto taxes um Casey asks is there any advantage to moving money from my IRA into my 401k solo 401K um okay so let's whiteboard this this is this is a great question and there can be some advantages you might have an old IRA and you're going to go to and you have a solo 401K now for anybody that has a solo 401K you may even have a day job 401K over here you can have both okay so let's just keep that in mind but a solo 401K is going to be for someone that has an LLC side hustle or ES Corp and they're sponsoring their own solo 401K now what I like to do and this is where you build this Mega Roth is because it's a combination of pieces and I've got YouTube videos and all this but you could fund your own WTH which I always like to do first so first and foremost fund your own WTH then you can go over to the solo 401k and you can put more WTH in it see this is where I was saying if you're 50 year older I can do 30,500 this year and plus another 8,000 over here crazy now the question is can I take this old Roth IRA and put it into the solo I if you're going to go Roth in the long run you have to put it in the solo then convert to Roth don't convert to Roth first because you cannot go from Roth to solo 401K it's not allowed but I can go traditional old Ira into the solo 401K then convert to Roth so that's the way to do that um the reason why I put the old Ira in the solo is because it can be more efficient too you're the Trustee of your own 401k and so the solo 401K could open an LLC as well and now you're pooling all your money into this LLC up here you also get better asset protection with a solo 401K than you do get with a Roth just a little um when you meet with one of my uh tax attorneys they're going to help you organize your portfolio to figure out which LLC structure escort L uh solo Roth kids married single how much money are you making all these factors play into it hopefully your big takeaway today big takeaway crypto is awesome I love nfts the metaverse crypto exchanges I love it I think it's a lot of fun I is 100% of my Assets in crypto hell no would I recommend anybody to put 100% of their Assets in crypto no 100% of their assets in real estate no be Diversified but the second point is you have to understand that it's going to get taxed when you're trading them around in these wallets and there's strategies that you might want to employ like the CRT get a consult with one of my tax lawyers at kqs lawyers please consume the podcast I'm going to be here every week I have been for years I've got bestselling books on this I've got a workshop in June in Salt Lake another in Phoenix in December we're going to be holding a virtual crypto tax Summit sign up for my newsletter it's free whenever I go live you're going to get a ping Captain your own ship don't rely on your accountant or some Discord or Google Chat to tell you Tax Strategies if they're not signing your tax return it's someone you give him free advice and you know what free advice is worth so please get educated on this you're going to love it there's so many freaking awesome opportunities thank you for being here please subscribe follow give me five stars and for any of you tax advisors out there or want to be tax advisors CPAs enrolled agents advis accountants bookkeepers please check out my taxpro network at Mar jer.com get a demo for free see what it's about super affordable tax deductible continuing education and real Tax Strategies see you guys
