Question: How do you avoid paying taxes with Bitcoin?
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Monero off-ramp
Don’t sell, borrow against, live somewhere where’s no capital gains, go on the run
This is not financial advice 😂
Liquid BTC + Liquid Tether (obfuscated transactions).
Jam (Privacy focused CoinJoin)
Move off shore
I was setting up Jam on my Start9 but haven't used it yet. I'm actually yet to use a CoinJoin
This requires a distinction for legal or illegal methods unless you don't care.
I recently tested a Strike loan product. I also have a note on how I use an HSA and credit card, but that's indirect since I only have the sats in cold storage as a reserve to avoid true debt.
By true debt I mean debt that I can't immediately pay off from the moment I take it on until it's paid off.
Must be careful with the loan terms at least where I live. If do not remain in custody of the collateral during the loan, it's the same as if you sold the coins when taking the loan (cap gains) and buying it back when the contract ends. Ironically, not your keys not your coins.
Care should always be taken in such matters. No one way will fit everyone.
No one is going to give you a loan while letting you control the collateral, so that seems obvious. Of course it's a tradeoff to consider.
And that would mean cap gains taxes when you get the loan plus interest to the lender
There are no capital gain taxes on fiat loans where I live. There would be if the Bitcoin was sold to pay any part of it back, on the Bitcoin that was sold.
Again, every person must consider the implications where they are. This works for me, right now, in my current location.
Obviously, you need income to repay the loan. Otherwise you still pay taxes and only benefit from NGU over time, assuming Bitcoin beats the loan terms. That is really a speculation that may not happen, which is why I write Bitcoin off when I use it this way. Discipline is required.
Endure german weather and HODL for >1 year
Any idea how this would work for a foreigner who has hodled for >1y?
Buy without KYC. Learn to use Bisq and/or Robosats. This way all bitcoin is bought outside of any jurisdiction of a state and now you are not in any contract. However, if you buy your bitcoin with KYC, you are in contract with the state via the company's KYC policies and you need to pay your tax.
One common strategy is to avoid taxable events.
Don’t Sell
Sell or use as money in limited amounts
Sell or leverage in other jurisdictions.
Using the bitcoin isn’t the problem it’s using/ converting / buying fiat currencies that creates issues
Buy without kyc. Spend with crypto cards, registered with ID from tax free jurisdiction- Panama, Paraguay, Georgia etc
Loans
Live in Paraguay haha
Very underrated question.
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