Giving Thanks for Tax-free Crypto profits

2개월 전

To start off, a quick update on another major holiday here in the US. Yesterday was the first Thanksgiving holiday I've spent with all 3 of my sisters in over a decade. I made candied yams (yum) and a broccoli and aged cheddar puree. All the food was awesome.

It was great to get to all be together, though I hate it when people start telling tales of childhood. Amazing as it may sound, my family still doesn't quite get that I had an unhappy childhood, and that I don't like being reminded of it.

Weird, huh? You'd think they would remember it the same way, but we each experienced that same period of time differently, even living in the same place.


Today I finally showed the executors of my will and trust how to access most of my crypto. Some of it is so complicated I decided to just let it go. Hopefully it will all be simpler by the time I die. Or I will have consolidated more.

One thing I'm particularly happy about is having set up a tax protected retirement account for some of by bitcoin. That way it can grow tax-free. Even gains I get from sites like Blockfi will be untaxed, since I did a Roth.

It took almost a month to set it up, but that was perfect timing for the dip in BTC price last week. (Thank you, Universe!)

I still find the process a bit complex, but you basically need to get an LLC, a retirement account custodian, and a checking account for the LLC, then pay monthly to the custodian. (In my case, $15/m)

Did I mention the tax-free growth of your bitcoin after that?

If you're under 50, you can only put in up to $6k/year if doing a Roth IRA. If over 50, $7,000/yr. You can also rollover an existing Roth account. The process takes a bit longer if you do that, because your custodian has to get the funds from wherever they are now and wait for them to be sent, but still very much worth it.

You don't have to only buy crypto in your self-directed retirement account. You could also buy precious metals, real estate, lots of things that can't be bought from Vanguard, etc.

You just have to be careful that you don't buy anything that effectively results in your doing business within that LLC, not just investing with it. I forget the details, but you lose the tax-free situation, because there is now income tax to be paid. That may apply to the entire account, not just the funds that came from the business functions. You should talk to professionals about the details before deciding what to do.

For me it is simply a matter of selling some of the crypto I have outside any retirement account then using the proceeds to buy some on behalf of the retirement account, so that taxes I've already paid at today's lower prices (and likely also tax rates) are all I'll ever owe on at least some of my crypto portfolio.

Any crypto I intend to hold for at least 5 years, I could do this with. And keep in mind, I can move between different crypto along the way. I just can't take out the money, put it in my personal bank account, and start spending it from there (whether on other investments or anything else).

Well, that's what I've been up to.

What's your favorite new crypto tip you've come across recently?
If you're in the US, how was your Thanksgiving?

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Woah! Is there someplace we can find out more about a crypto Roth setup, because that's awesome! Crypto and taxes is so damn complicated here it's ridiculous.


See my above to Phoenix.

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I can message you some info on discord. I’m IndigoOcean#0384.

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Greetings dear friend @indigoocean.

I think you made a smart decision when setting up your Bitcoin Roth IRA. Just undertaking an IRA is already a wise decision, but doing so with BTC has additional advantages.
Mainly because the Roth IRA taxes the contributions to the account but not the distributions, that is, you would be paying taxes in advance each time you contribute, so any profit you get over the years will not be taxed when you start taking distributions. of the account in retirement.

My knowledge is basic in this type of procedure, but I have a question about it: Since we are talking about a long-term investment, there would be no possibility that some policies may change over the years and we may have obstacles when We want to dispose of our assets in the future?

All best, Piotr.


Once the funds are in your IRA, you can invest them in anything you want that is classified as capital gains not business income. So if BTC starts looking like a bad choice, sell and buy something else. Just make sure you’re doing it all between LLC accounts, not any of your personal accounts.

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My Thanksgiving was filled with family, food and some great conversation. I couldn't have asked for a better day. Thanks for the info as you seem to have all of this ish figured out.
As far as a crypto tip, I recently purchased some Tierion (TNT), Ripio (RNC), Loki (LOKI), and Solve (SOLVE). All are doing very good and I'm looking to add some more as the price pulls back.
Nice to hear from you again @indigoocean

Hi @indigoocean!

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Hi @indigoocean

Thanks for your upvote on project.hope(just got it a minutes ago ).

I've noticed that you've been posting sometimes about crypto, blcokchain and technology. I love those topics as well.
If you would ever publish anything related to technology, economy, marketing, psychology or steemit etc - then send me link in memo. I'm trying to support quality content and I have 2-3 upvotes daily to spare from @project.hope (over 200k SP) + my own account. I will gladly support your publications (as long as they represent solid quality :)

Yours, Piotr