Enjoy Paying The Government For Your Crypto Fortunes

in LeoFinance2 months ago

Hey Jesstax payers

As the Bitcoin bull run continues to pick up heat and everyone who ever bought Bitcoin before 2021 is now in profit, we're seeing a lot of cocky arseholes showing up bragging about what geniuses they are for being Bitcoin or Ethereum. Wow who would have thought, you must be the next Warren Buffet just look at all those consistent returns.

Honestly, it doesn't take a genius to invest and make money in a bull market, hell Dave Portnoy's stock portfolio is murdering a host of professional investors.

It's one thing to make money, it's another thing to keep it, retained earnings are far more important than paper earnings and it's a lesson many do not learn nor do they understand the implications.

Give to Caeser what belongs to Caesar

As people continue to cash out and take their profits, which they have EVERY right to, don't get me wrong. They also increase their tax burden, depending on the country you live in, this could be capital gains tax or added as income for that financial year.

Either way, you're government is going to want a piece of the action. Do you honestly think that with all the printing happening, governments aren't going to look at ways to generate new forms of revenue to service the debt they'll never payback?

When you move your purchasing power back into fiat, you're making a deal with your government. You're saying I am going to use your medium of exchange and I'm willing to pay a premium to use it.

I am no fan of government but I do think this is a reasonable request if you want the benefits of the payment rails they build you better pay the freight.

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There's nothing wrong with taking profits, if you need it you should take it if you want to take chips off the table you should, if you want to deleverage and invest in something else you should.

However, if you're not looking at ways of minimizing your tax burden you're minimizing your profit-taking and in some cases, you could even reduce any chance of making a profit.

You should be consulting a tax professional and looking at offsetting spending you've made, look at ways you can right of expenses against this profit.

In some cases, You may want to set up a business open an account and run your trading through the business as a business account can come with several benefits.

You could look at securing a position in stable coins, be it algorithmic or backed, you could look at gold-backed crypto, you could look at purchasing precious metals outright with your crypto instead.

You could look at a combination of these methods to help reduce your tax burden, of which I am pretty sure no ones going to do and they're going to take the cash thinking they've made a killing until the tax man comes knocking on the door.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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i think with this crypto pump some new laws and regulations will be under table :P

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The wealthier people become outside the fiat money system, the more power gets taken away from governments so I have no doubt they will be scheming ways to cut us down by the knees and ankles

I think I am through paying the price of my own imprisonment,...

I'd love to stop funding them, but we can only reduce it we can't avoid it entirely lol they'll always find a way

Better to be a bum, iyam.

Lol,we can't even use stable coins here because if you convert one coin for another regardless, it's a taxable event. The one thing we have on our side at the moment is if your gains are below £12,300 in a tax year then you don't have to pay capital gains tax or even submit a form. So that's one way to get around it until that changes.

I'd say unless you really need it in the UK then don't cash anything out. The other bummer is you have to keep track of where all the money moves to with wallets otherwise HMRC consider it as a disposal. So if you're hodling like me, be sure to keep the wallet addresses handy.

Also you will need to pay tax on interest from CeFi, staking returns and take a note of the price of the town every time you receive a new one eg from posting (which could also be subject to income tax too)!

Bit of a mine field at the moment!

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Holy hell, that's more accounting than the average person would be willing to do, we can't all afford to hire KPMG to do our books, that is actually laughable. I don't think I could keep up with all of that drama, it seems more like a play to keep people out of dumping the GBP like the hot shit it is.

I wonder if you stay a stable coin purchase is a taxable event if I needed to cash out, and it's less than I invested how can I be taxed?

Yeah it's totally changed here. There used to be no tax at all when HMRC considered it gambling so it would just be considered as "winnings", which don't get taxed here. Thankfully you don't get taxed on just buying BTC but I've slowed down and probably need to think about all these Hive engine tokens and just getting rid to avoid a shit ton of work and hefty fines, consolidate into BTC and be done with it.

If you are able to buy the stable coin outright (or any crypto straight from fiat) then that itself isn't a taxable event. Only if you dispose of it after you buy it. If you sell at a loss then it will count towards the overall gain of that specific token. Each token is considered separately too.

Fuck me, I have had to study this a lot and I'm still trying to wrap my head around!

So you wanted to get in to crypto...

Lol, You could low key offer your crypto tax services to others and help offset your losses, selling shovels in the gold rush ain't a bad idea.

Lol, well, I'll have to become a chartered accountant and that takes donkeys years. One of my friends is one, maybe there's a business opportunity there 😉

I'm thinking about taking a loan against the crypto and then buying a Lambo that will be in all my YouTube videos as a business expense. That way I don't sell the crypto and can expense the interest!

That's not a bad idea, I wonder if some with major holdings could take a loan against their crypto buy a home, rent out the home and then use that to right off anything they cash out in the future

It's an interesting idea and can bank on the fact that crypto would continue to appreciate.

It is kind of interesting to do the calculator but I'm surprised the loans only go up to 1 year.

https://saltlending.com/loan-calculator

hmmm, yeah that's a bit of a non-starter, guess i'll be sitting on these sats until we get better payment rails and options to leverage the asset. To me the cashing out tax is too high, not worth it, i'd honestly just miss whatever fiat valuation bull run and consolidate my alts into BTC and stable coins and sit on it.

Since here only cash is a taxable event as long as I don't make it government money I'm still good. Guess I won't be enjoying my gains, i;ll just look at the number and smile

That's tough if you don't get to enjoy it some.

In our country, the tax system is not developed yet. Since the government does not allow Crypto, we have not yet paid taxes on the trading of Crypto.
In fact, we want to pay taxes to the government and operate legally.

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So how do you turn crypto into your native currency? is there a way to sell it for dollars and swap the dollars for local currency?

I have a hard to turn Crypto to my native currency. But, By transferring in Crypto Exchange or Wallet, we trade Crypto with my native currency Person to Person directly using online payment.
That, too, can be lost if we meet with a scammer.
In Binance Exchange, we can trade USDT with P2P trading if we verify Identity.

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I sure would like to see how everyone does their taxes in the US. This could be a reason some people don't stay, it's too hard to figure out.

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You make a good point there, especially if it becomes so much more profitable to move, if you're sitting with a few 100k or a few million in crypto, I know i'd grab a flight and get myself a second citizenship somewhere else and enjoy my money, in. that situation it woul be a small price to pay

As the saying goes two things in life are certain, death and taxes 😱

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Sadly so true, there is no getting around it unless you're willing to go into the red, do escape taxes by having debt that fund asset, a luxury not everyone can afford