How Can I Avoid Paying Taxes On Bitcoin And Crypto [100% Legal]

come it's Dino in this video I will explain how you can avoid paying taxes on your crypto investments and crypto trading activities and I will show you all of the legal ways that I found that are really good and of course I will show you some illegal ways as well so you know what to avoid as well and this video is good for people in the United States and also outside of the United States some of the strategies that I share before are not eligible in the United States so I have something special for you guys in this video as well so if you think this is interesting hit the like button and subscribe to this channel if you like this kind of content and of course let's get started so when do you actually have to pay taxes and what are taxable events so if you buy an old crypto you never have to pay any taxes I don't know any country that has a tax for just holding crypto so if you just buy Bitcoin and hold it for 10 years you don't have to pay any taxes for that as far as I know but when you sell cryptos that's taxable event so if you sell it at a profit or if you sell it at a loss that's a taxable event that you should mark down on your taxes and when you do crypto to crypto swaps or you want to sell like aetherium to Bitcoin or Bitcoin to Bitcoin cash or whatever it depends on your country so in some countries crypto to crypto swaps are actually taxable events so you have to make sure in your country what is a taxable event and in the United States I think this is not a taxable event as far as I know but in many countries in Europe and other places this this is a taxable event so make sure in your country that you check what it is applicable in your country and when you transfer money let's say you transfer money from a wallet to an exchange again that may be a taxable event depending on your country so make sure to check this one as well because in some countries the only time you have to pay taxes from your crypto is when you sell crypto to Fiat that's a taxable event and every other thing you do with your crypto is not a taxable when you trade or when you are invest or swap the coins and then if you use Kryptos that's a taxable event so let's say you want to buy a gift card that is a taxable event so even if you don't convert it to fiat that's usually considered like a capital gain tax and when you earn crypto that is typically a taxable event as well so let's say you mine bitcoin you have to pay income tax from that or if you earn money from Rey browser which I made a review before that's a taxable event and if you an interest from staking or from lending and borrowing and those are taxable events as well every time you do a swap usually so make sure you check that in your country as well and when you donate money again that's a taxable event and when you lose money you can deduct your losses from taxes and the thing with this is that it gets really messy after a while especially when you are doing like a lot of these different passive income strategies where you earn money almost every day from different places and you swap coins all the time it requires like a dream ears skills to keep track of all of the stuff that you are doing so that's why it's really good to automate most of the tax events and to keep track of what you're doing and of course in this video I'll show you everything that you need to know about that and what about if what if you just want to report your taxes what will happen well I saw a comment about this on reddit so one guy showed posted this picture and it says here that our records indicate that you have previously disposed of cryptocurrency so you have sold cryptocurrency so the tax department had in Austria had noticed that the user has actually used cryptocurrencies so they require him to file the the or Australian taxes so he was required to file his taxes on crypto after receiving this email but if you've never received this email then of course it's up to you if you want to report your taxes or not it's a little bit on the illegal side or actually it's super high on the illegal side but many people I know they don't report the taxes at all and they just wait for this letter to come to their door and then they will report the taxes so what will happen if you want report taxes that's a crime of course but usually many governments are quite lenient on that so if you just don't report it and when they sort of catch you you're like okay I will report my taxes from now on but again that's pretty illegal so if you are a law abiding citizen then you should report your taxes whenever you make a gain or loss so you have never any problems with the authorities especially if you're in the United States and they are being or the tax evasions are being tracked down all the time so what what so the real question here is how do you avoid paying taxes legally of course and let's just get started with this so there's at least six ways that you can avoid paying taxes on so the first is of course you have to keep count of your taxes and this is not really a tax avoiding trick but you have to keep count because if you keep count then you can of course deduct your losses and two places I would recommend is coin tracker that IO and crypto rate trader that tax and I will show these both platforms later on this video so you will know how they work but these typically just connect your exchange or your wallet and they transfer all the data inside to the platform and it will count your taxes for you so you don't have to keep track of everything so you don't have to have these G new skills here so that's why number one is to just keep count on what's happening and then what you want to do is harvest your losses so you want to harvest your losses from every year before the tax year is done so if you are at all in one trade and they are the tax season is about to end you should flash sell your losses and by the investment back immediately because when you do that that's a taxable event so you can basically secure your losses on the taxes and deduct those losses before you buy back into the asset so that's a way how you can save money on your taxes it's just to quickly sell it to Fiat and then get it back to the back into the trade so you lose a little bit money on the transaction fees but if you can deduct like $1,000 or $2,000 on your taxes just by this gimmick that's super good and then another tip to harvest your losses is to deduct everything because when you're trading or investing in the crypto of course you have to have a computer right and you have to have internet and you have to have maybe a little bit office space so if you are like moving any significant amounts of crypto you should deduct everything like if you buy a new MacBook or a new PC you should deduct that in your taxes as well so deduct everything that could be involved in investing or trading purposes you can deduct it those in your in your taxes at least in most countries and then another trick is just to hold huddle so you don't do anything with your money that's that's one way to avoid taxes so if you are not a confident trader just huddle and you don't have to worry about you to have to file anything so that's one tip of course then now we're getting to the interesting parts so you can become a tax resident in a txt friendly country and in most countries or in most legislations you have to stay in that country for six months at least to become a tax resident and you can apply to become a tax resident in after you have lived there for a while and after you have lived there for a while then it's a little bit easier on you so here are just a few countries that are quite tax friendly as far as I know and if you of course it's not free so whenever you come to a country like this they're still payments that you have to pay all the time but if your back is significant enough it may be profitable to become a tax resident in one of these countries then of course you can do pension plans or insurance systems especially and now if you are in United States this is especially applicable for you so your 401ks or IRAs you can actually put a shell around your crypto trading and the place to do it is I trust capital com so what you can do with I trust capital is you open up basically um it's I think it's like a pension a lot of fund but like a pension account and inside this account if you buy and sell your Kryptos you can do that completely tax-free and that's pretty nice because if you do those trades in inside their platform you don't have to pay any taxes and you only pay taxes when you actually retire and you can of course withdraw your money before you could go on your retirement but then there's an additional fee to do that but this is one way to 100% do it legally is to do your crypto investing inside this shell of an insurance or a pension plan and then and of course this can be applicable in other countries as well but this is mostly for the United States people because that's at least what I was able to research it's mainly applicable there and then another is to set up a company so in some countries it is more beneficial to set up a company and in that company do the investing so the taxes are a little bit lower and in some countries like Estonia you can actually reinvest your money back into investments so if you have a company and you make a profit you can reinvest that profit without paying any taxes only when you take the money out of your company you have to face on taxes and one way to do it is you I owe and is super cheap and super easy to set up a company in Estonia with so low that I owe and I will show that also in the later on this video I will also show the I trust capital so do you want to set up a company in your own country or a tax flint friendlier country that's also a question so these are these countries mainly here for the individual taxation but there are other countries as well where you can set up your company and it's completely completely legal and there's no problem with any authorities then of course there's the illegal stuff that you can you can also think about to avoid of course to avoid of course and what you can do is set up an offshore bank and basically not report your taxes anywhere and this is of course highly illegal and you can what you can do with your crypto also is just to not report everything so let's say you have a wallet and suddenly money appears in that wallet are you going to report that because they the wallet doesn't do any like no your customer like identification so it's really hard to track who is the owner of that wallet if nobody knows the name of the owner of that wallet and how you can exit that if by buying gift cards and again this is highly illegal so you you just have to think about what you want to do because this is a very very very illegal and what I saw some people do also is they do only peer-to-peer transfers so there are many platforms that you can do this and it's super super sketchy and when you do this when you only transact peer-to-peer then you of course don't have to do any kyc you don't have to submit your identification only to the party that you are transferring your money to on getting the Fiat the USD or euro or something like that and some people I know that haven't reported those which is highly illegal and of course I don't I don't endorse anyone to do anything like that so were sketchy and there's a lot of scams going on in this space as well a lot of money laundering as well so be very very careful if you want to even try to do anything like that super highly illegal so be careful with that and of course you can exploit a lot of loopholes in your country through taxation this is a what I like avoiding taxes is quite normal right like almost 100 percent of the companies always try to avoid taxes so it's not as big of an issue to avoid paying taxes like many many especially smart investors who have high net worth like they have people who they pay money to to avoid paying taxes and it's completely legal to do that and to find these loopholes the best way to do it I would say is to contact a tax advisor in your country and talk to them about this because there are many loopholes that you can use like this harvesting losses and flash shelling your losses and then buying it back and that you can exploit in your country as well so that's why I put them here that's actually not on the gray area as long as you do it in the legal boundaries of your country then it's completely ok to do it but I put it here anyway because it's a little bit sketchy anyway so this is highly illegal stuff which of course I have never done and I do too not to do as well but now let's go to a showcase so I'll show you how you can actually do all of this or some of this so ok let's just show the high-rez capital first so I trust capital this is for the US citizens only so you can make trading inside your IRA completely tax-free and you can schedule a call and you can just sign up using this link here and like learn how it works from there but it's quite popular and I trust capital is one of the cheapest ones that I was looking at so it costs $30 per month and setting up an account is free and you have to pay a little bit extra whenever you do the trades so just consider that as well but you can set this up for some of your capital and the minimum amount that you can set it up is $1,000 but then you are exposed to crypto and you don't have to pay taxes for it so some amount of your capital may be a good idea to put into this one and here are the coins that they currently support and I was talking with their representative and he said that he's trying to also get staking inside the in their in their idris capital in the in the future as well so currently they just allow you to hold and buy and sell these different cryptos inside the inside this basically a shell but it's a good program as well and if you want to get signed up you can use my link I got it from them and when you do that you get the first month free so it's a $30 bonus if you think this is a good idea okay the second one is coin tracker so coin tracker this is now let's go back to this one so let's go here so contractor is for keeping count of your taxes and also to harvest your losses so when you do this as you can see here I've connected to my crypto comm exchange and to another wallet that I've used in my previous videos and here you can see the different holdings that I hold on the cryptid comm exchange you can connect it to your crypto that come up also and to many other places like finance I will show all of this later but what it doesn't count here currently is the CRO that you have staked so that's not shown here for some reason so but you can connect it and it will do most of your tax counting for you so that's really nice and when you go to the new wallet section you can see set here like ledger you can put minus here crypto comm this here of course like almost everything atomic wallet that I've previously counted you have meta mask here a lot of different things are in coin tracker at i/o so if you want to get tap started with contractor that I oh of course I have a link to that one as and it was a $10 discount and you can get for this and when you look at the prices for a coin tracker it's quite expensive so for the free plan then you can just set it up and set it up with your current wallets I highly suggest you do that so you're at least keeping count of all the taxes you can connect up to five wallets or exchanges and 1000 transactions in a lifetime then it's 14 dollars per month so this is pretty good this is most probably the most popular one that I know of and it's applicable for most countries and you can set up your country in this one also so it tries to make it as personal as it can and then you have crypto trader the tax and this is also a pretty good one and you can connect it to a lot of different places as well crypto economist aerosol that I've previously covered finance coinbase couldn't be any nicer coinbase change lis cool coin all of these different places are here and if you go inside they're up here and again it's free to set up the account and you can simply connect all the different exchanges that you want to connect it to and then it will connect them Connect connect connect to them automatically and it will pull the information and the only problem with this one is that it's only applicable for United States and Australia and then you can choose to choose the method how you want to calculate the so is it first in first out or last in first out or what is this I don't even know what this is I you can typically use one of these so this is a crypto trader that tax and if you use that one the prices are here so the first plan for up to 100 trades it's about 4.1 dollars per month the second one is 1,500 trades that's $8 per month and then up to 5,000 that 16.6 parts per month so for you guys when in u.s. I think this is a better choice again it doesn't have as many choices so if you want to put your atomic wallet taxes in the system I group the trader that tax doesn't have that one and then of course you have to unlimited one so which is $300 or $25 per month so these are your choices choices for that and then if you want to set up your account company with solo you simply go to solo that IO and sign up for free and then you have the free account and when you have the free account you can actually start invoicing customers so if you do any kind of freelance work or anything like that you can invoice your money on solo that IO and they will take a 5% fee from the payers and if you make more than like $2,000 or something like that then these plants become more profitable because then the only thing you pay is this amount and it's a fixed price as well and then you can have the company trans revised account or company PayPal account and stuff like that personal accountant and everything super cheap quite nice and you can set up a pretty call with them as well if you want to and on the FAQ if you have the Gazzola account you can see here that it is completely legal to have this company in Estonia and invest the spare resources to cryptocurrencies so when you do that it's completely legal but if they notice that buying and selling cryptocurrencies becomes your core business then they will basically cancel your account but before they will do that they will of course give you access to move those funds elsewhere and when you are inside Estonia you can again do the what I told you that you can reinvest the profits back into the business and basically do the transactions transferee or tax-free but when you take the money out of here then it becomes your personal tax in the country that you are resident off so it's really nice to have the company in Estonian like invoice some of your salary to Estonia through a company like this one invested in the inside to go solo tax-free and then when you want to take the money out then you can do that as well and when you take the money out the money that is in Ming's Ola is in euros then you may want to have a transfer vice account for that so you can set up a multi currency account and it's completely free to set up anywhere in the world and then you can have account for euro you can have an account for USD you can have an account for British Pound you can have an account for Hong Kong dollar or is it the dollar Hong Kong yeah it's a dollar Hong Kong dollar or Singaporean dollar and have these accounts and transfer money everywhere in the world as well so this is a hot showcase what what things you can do here and of course I'm not a text adviser I'm not a professional I'm just some dude on the internet who is researching this so what I would suggest if you are interesting in Seoul is set up an appointment with them if you are interested in I trust capital you can sign up with the link of coursing at the discount and set up a call and all these different services well they are super helpful of course they want to have their customers understand what they are doing as well and maybe they can save you some money in taxes as well all right I think that's it for everything what it showed show in this video again if you go to do any of this I've never done any of that and I highly suggest you don't touch any of the illegal stuff but the other ones here are completely legal and that those are the illegal I mean those are the little ways that I found that how you can save on your taxes and if you have more ideas I would HIGHLY appreciate if you can put those in your comments if I said something wrong come comment that as well in the in the comment section below and if you liked this video I appreciate if you put the like put the thumbs up subscribe to the channel as well and I will see you on the next video

Channel: denome

Views: 104,266

Keywords: cryptocurrency, bitcoin, crypto, ethereum, investing, btc, eth, trading, blockchain, taxes, avoid taxes, accounting, bookkeeping

Id: P3Q7mMNOs1o

Length: 24min 10sec (1450 seconds)

Published: Sat Jul 04 2020