Here's my plan to avoid paying taxes on my crypto gainz:
I will spend all of my crypto on purchasing mining equipment. Then I'll start an LLC dedicated to mining cryptos. At that point, all profits will come from mining, and will be taxed accordingly like a real business.
Only potential drawback is my crypto is stored on Coinbase right now, so the government may potentially know I had a significant amount of money stored away at one point ($200k+), but if it's spent and gone, then who's to say what really happened? I could just say I lost it on the market or something. Thoughts?
You guys sound like paranoid lunatics, the IRS can't be THAT good
Joshua Mitchell
Do you think it's smart to purchase mining equipment right now? It seems like ROI timeframes are getting longer and longer and profit margins getting slimmer.
Also, if you register as a business, how are you going to explain where all of the expensive equipment came from?
David Peterson
Love the name. Hail /TEG/
Landon Morales
my plan: >cash out >run
Alexander Turner
>Also, if you register as a business, how are you going to explain where all of the expensive equipment came from? I doubt anyone would ask.
Noah Turner
If you google "IRS understaffed" you qill find several news stories claiming that only 1% of returns filed get audited
I think we all get nervous anyway, I do as well.
Oliver Moore
What is really to stop you from saying you lost it all?
Although then you can't really use to buy anything but candy bars and chips for the rest of ever.
Lucas Walker
say you lost it in the bitfinex goxing.
Colton Young
Thing is though, they didn't get Al Capone for anything except tax evasion
Andrew Carter
Auditor here... They will most certianly ask. Actually it might even be the first thing they check.
Jacob Robinson
How does the IRS handle crypto that has been washed through Monero?
Josiah Taylor
That's because if they know you owe, they send you a letter saying pay up or else. They don't have to audit you if Coinbase shows you selling $200k worth of crypto and you haven't filed any gains
Chase Thomas
Mining on a large scale is pretty difficult. Lot's of heat, and the machines are unreliable so you need some good software to automate reboots and stuff which all the good stuff is custom because people don't want others to get the upper hand.
Adam Long
OP here
But that's the thing, I'm technically not selling for cash on Coinbase... I'm using Bitcoin to purchase mining equipment. All they'll know is I sent a bunch of BTC to some random address...
The mining equipment will be hosted in a foreign country. Once I've purchased th emining equipment, all I have to do is pay for electricity, and a modest rental fee. The venture is theoretically profitable because of a. the current price in BTC, and b. cheap electricity. Plus I'm buying the equipment at a slight discount. But these are just details.
So basically, I will be getting daily deposits of BTC into my wallet from this mining venture. I was thinking of considering this the be "profit" in terms of taxes for my "mining business". Does the IRS really care where or how I'm getting my BTC from the mining venture? Surely it's all a but too abstract for them at this point?
Levi Hernandez
But really, the profitability is of secondary importance to the main point of this thread. Really, I just want to know if this plan would succeed as a money laundering scheme.
Dominic Harris
Run first you stupid burger, cash out in another country.
Nathan Gonzalez
>keeping his coins on fucking normiebase >thinking about TE
LMAO
you are a stupid fuck
Parker Adams
Not really adding much to the discussion.
Facts are, most people start with crypto, or purchase crypto, through Coinbase, so developing tax evasion strategies for those users would help a lot of people keep their money.
I think my idea has a chance of working because Coinbase, or the IRS, don't really know where the hell my crypto is if its not on their database or held in the Coinbase wallet. For all they know I could have lost it.
Joshua Young
I keep seeing more and more faggots on this board complaining about this. I have an idea on how to launder crypto money. There's 3 problems with it: - my business partner doesn't want to develop this cause he's afraid of jail - it's in a legally gray area in the same way that Obsidian messenger is a gray area "we are legit guys that are building a legit app, but we can't stop pedos and terrorists from using our app"; the problem is that while their solution is decentralized, my idea won't be so I can become a target for whoever investigates this shit. - the more people use it, the more it will be known as "money laundering central" because people can't keep their mouth shut.
Anyway, if there's more interest for this I'll make a thread one of these days explaining it in more detail to gauge biz's opinion on this.
Eli Rodriguez
crypto will create two industries crypto financial detectives and crypto money laundering accountants
people like accountants are definitely going to need to learn how to program now
Justin Russell
just pay your god damn taxes like a good goy
Zachary Long
Will coinbase fees be write offs on my taxes?
Anthony Myers
Ill gladly pay my taxes so I don't have to look over my shoulder for the government all of the time. Yea, it's capital gains and it sucks.
You know what sucks more than taxes? Prison.
Parker Wright
They are if they target you. It's just the matter of actually getting targeted by them so really most of us don't have anything worry about, but a few will be picked and strung up for the slaughter.
Robert Robinson
Please consult a professional. You plan is fucking retarded You are fucking retarded. Now that we have that out of the way. Where the fuck are you going to say you got the contributed capital for your new LLC? If your this retarded your probably to retarded to start a large scale mining operation. You'd likely see better return by leveraging you capital in the real estate market with a traditional 20% down mortgage. If you have less than 100k just slowly cash out using local Bitcoins. 100k to 4M just pay your fucking taxes and leverage that capital. 4m+ consult a professional.
Cooper Sullivan
The only persons that needs to be in prison is the president of Bittrex and Poloniex.
Nathaniel Sanchez
This. It's bullshit that Americans are taxed out the asshole on crypto but it's better than getting fucked by "Nasty Nate" in prison.
Joseph Gray
Reminder that the purpose of crypto is to challenge the big government. You don't owe them slave dollars and you sure as hell shouldn't sell crypto to pay their bills. Its slavery. It is a moral issue. Don't do it.
Jace Johnson
Bro, the thing is, you are approaching it like it's a traditional business, it's not.
I'm literally generating money out of thin air with this plan. The government has literally no idea how to gauge whether my overheads are realistic or not. This isn't a fucking store or laundromat.
Do really think the IRS knows how much a mining rig costs? Do they know how much electricity costs are? My rigs aren't even going to be in the US. My overheads are absolutely minimal. You are an idiot for making assumptions about my business model.
>IRS here, hey user where did you get the BTC from
>my mining contract which I nought for next to nothing
>Uhh, sounds good, move along citizen..
Josiah Garcia
They are pretty incompetent, but when they come for you, they come hard to make an example.
Colton Ortiz
As long as you don't write off the equipment, it is not their business and they can't do anything about it.
Daniel Murphy
CPA here. You're a retard if you think that will work.
>purchasing mining equipment >start an LLC >dur hurr no trail with this
Fucking brainlet
Samuel Harris
This poster has achieved objective intelligence.
Ethan Clark
What if you just "happened to find" a pile of cash or gold burred in your backyard? Would that be taxable?
Gavin Allen
Home much in gains you got? I'm sitting here compy at 1 mill and I plan to keep holding. But if I cash out I will pay my taxes in Canada instead of off shoring so I can comtinue to receive the CCPC small business deductions from anything I purchase with my gains. I'm looking to get 5 mill in gains then buy a 20 million hotel with 20% down at 10% cap and live off the 2 mill I make each year which will only be taxed at ~ 13% thanks to the small business deductions.
Wyatt Gonzalez
yes, if you want to spend it in any credible amount.
Austin Perez
If you are Americans then why the fuck do you not just move to Puerto Rico?
Isaiah Sullivan
are GPUs so unreliable they actually go off while mining?
Lincoln Cooper
>Start LLC in the Cayman Islands >Start LLC in USA or Europe >Cayman LLS sells licence to US/Europe LLC >Whole profit goes to Cayman LLC >0 % tax on profits
Works well enough for other businesses.
Charles Nguyen
Depends if you want to use that money for anything else. In Canada small business get taxed at a lower rate if they are owned by Canadian corporations.
Brayden Carter
dog at my homework won't fly dude. that's like withdrawing 200k from a bank account and when they ask where did it go? oh, i accidentally flushed it all away, it's gone i swear.
Honest question. If the IRS comes at you for tax evasion, can you just be like "oh shit guys honest misunderstanding, heres the owed taxes"?
Wyatt Brooks
buy Monero. problem solved.
Jayden Anderson
I was hit by a drunk driver last year and got $45k tax free out of it (It came from the attorney general). I used that to invest since june and have tripled it since then. Would I need to declare my holdings??
Caleb Fisher
a tragic boating accident with my laptop
Jace Reyes
Have you been to Puerto Rico? No matter how bad the rest of the United States is, at least it isn't PR.
Josiah Barnes
keep in mind that exchanges are only required to report investments >$20,000 so most of us are in the clear
Carter Myers
No, you are the retard. There is no paper trial. I'm sending my crypto to some random Russian bitcoin wallet, what the fuck is the IRS going to know about it? Think outside of the box, people.
Noah Bennett
Good plan, OP.
You can also use crypto cards like TenX to pay for stuff from crypto and then act all dumb. "Hurr, but I wasn't converting it, I thought McDonalds accepts Bitcoin now, what u mean I have to pay tax for my burgers??"
In regards to keeping fiat on exchanges: >"Hurr, but that was not real fiat, did you not read tether story? It is fake dollar, they can take it anytime, they are all scams anyway and can steal anytime, I can't even withdraw my money, it is all a bubble hurr durr, exchanges get hacked and take ur moni, it not real"
Then buy BTC back on the exchange, transfer that BTC to your hardware wallet (you can claim you lost it at this point), then use that BTC to buy mining equipment (transfer from another wallet) and have that be an investment in your business.
Basically, there are several ways to do this.
Connor Sullivan
user, impressive gains, you've already made it, congratulations. I'm sitting on ~$300k profit from crypto. Was thinking of putting ~$100k into the mining operation.
Joshua Robinson
no, by that point you will owe penalties or possibly much worse depending on how much.
they may actually let people self report for past years on gains that they didn't report without much punishment, but that hasn't been announced yet though.
Ethan Torres
Uhh, if you have "profit" from "mining venture" you still have to pay taxes at this point, so wtf is the reason for this convoluted scheme? Unless your original coins are tainted? In which case just launder them via monero.
Really, and what happens when Bitcoin price crashes and your mining farm can't compete and goes out business? What will you do with all those graphics cards?
William Baker
See, kids, this is how a high inhibition beta cuck looks like.
Can't take the heat, milky boy?
Brayden Brooks
WTF? Your plan is to "make 5 million"? So you think Bitcoin will magically keep going up because reasons?
I'm in the same shoes, but I'm not that naive. I know this is a fucking bubble and I have cashed out enough not to feel like a loser when it bursts.
If you plan on mining saving your ass just know that you will get outcompeted and once the difficulty drops or rises you might just be out of the game. It is extremely competitive.
Gavin Moore
I've already bought dollars on Cuckbase multiple times, short term capital gains tax is ~35%. I'd like to avoid taking that hit on my ~$300k profit.
Surely small business taxes are smaller? Actual legitimate question... I assumed it would be less than 35%, but you are right about the scheme being pointless if this is not the case.
I already calculated to see if the scheme would be profitable, trust me, I've taken multiple scenarios into consideration.
Now, for the sake of clarity. All the BTC for this venture is going to a Russian BTC wallet. All of the miners will be in Russia. Only costs to me as owner of the miners is for rental space and electricity (very affordable prices). All profit is going to my BTC wallet. Only thing that needs to be taken care of is taxes on these profits. Since they are not capital gains, I'm not sure how to treat them, but I thought maybe treating them as business profits may be a good start. Perhaps there are better methodologies that can be adopted.
Michael Allen
Nigger, BTC could easily make 10x gains at this point, it's not outside the realm of possibility, and we aren't even considering gainz made from holding other cryptos.
Zachary Perry
Why don't you just do what Roger Ver did and denounce US citizenship and go to St Kitts, buy property there and then cash out with 0% taxes? There are plenty offshore jurisdictions with 0% or 5% low tax rates, why are you thinking of a way too convoluted method for no reason at all, just taking additional risk?
Just buy the BTC back with those smelly dollars and say you mad a mistake or something and thought those were tethers, then sell BTC via localbitcoins and get real cash on your hands or just sell BTC to your friends or something.
There are a lot of ways to turn it into cash without converting it via bank accounts.
Chase Martinez
>Nigger, BTC could easily make 10x gains at this point, it's not outside the realm of possibility, and we aren't even considering gainz made from holding other cryptos.
It could also crash to 95%. Did you not see the post about ultra normie Insta models buying BTC packages? What more confirmation do you need that this is euphoria bubble reaching top?
Jacob Wilson
capital gains are taxed at ordinary rates until you've been there 10 years.
Thomas Bailey
>Falling for biz fud
Bro, people have been posting shit like that for months, and will likely continue to in order to convince you to cuck yuorself and sell your BTC.
Bro, I've seriously considered it, but giving up my citizenship is out of the question at this point. Also, selling for cash peer2peer or through a BTC ATM/TENX card is impractical with my level of profits. I'm not going to go to sleep with $300,000 cash under my bed, lol. I want that money in my bank account...
Elijah Cox
...
Adrian Jackson
No you have it all wrong. 1.Cash out 2.FUCKING RUN 3.Buy land in siberia 4.Build mining rigs in siberia, with no need to pay cooling bills because -20 degrees F. 5.Become so rich that you can buy off the IRS 6.Move back to the U.S.
Nolan Peterson
>Also, selling for cash peer2peer or through a BTC ATM/TENX card is impractical with my level of profits. I'm not going to go to sleep with $300,000 cash under my bed, lol. I want that money in my bank account...
Right, you want to use "safe bank", but don't want to pay the price for using it aka taxes? Here is something else you might want to consider - buy index funds (stock ETFs) with crypto. How? This is how: Transfer crypto to Mona.co, Tenx and similar cards. Then find a stock broker who accepts card deposits (they exist), then transfer the sums to this stock broker, you will end up paying about 5% in credit card fees and spread if the card company has any (TenX does not, not sure about others). Ok, but now you can buy stocks with). Buy a shit load of index funds and don't look back.
The time, effort and risk spent on your mining operation to "save on taxes" which might not even be that low for income from Butt mining.
>Bro, people have been posting shit like that for months, and will likely continue to in order to convince you to cuck yuorself and sell your BTC.
Yes, and it is becoming more and more apparent. And it is a good sell signal. Remember that old saying of shoeshine boy giving stock tips? Well, taxi and uber drives now are giving crypto tips. Even dumb sluts are buying crypto now. Normies are retarded and will dumb at first Wall Street orchestrated crash. If you don't know when to take your profits and when to click that "SELL" button you just end up a loser with a garage full of beanie babies. In this case - a Trezor full of cryptobutts.
Aaron Ward
We don't need shit from you and your faggot friend. Its easy, get a credit card like Moneco or Netteller. Pay everything in life with crypto. Easy
Angel Sullivan
Good luck getting your assed rammed for money laundering you fucking idiot. Pay your taxes or fucking move somewhere you don't have to.
Christian Turner
Mona.co cards are not yet available.
First time hearing of Netteller. Do they provide crypto cards?
Daniel Cooper
Yeah, what he does sounds like going from "tax evasion" crime to "money laundering" crime for no reason, basically increasing your risk 10x.
Elijah Murphy
I was going to do this, probably a dumb method but was just going to throw my holds into my offline wallet and sell XMR on LocalMonero.
You don't have to pay taxes if you make under 30k, and that shouldn't be hard to fake if you keep enough off exchanges most of the time. But I'm definitely moving to a decentralized exchange ASAP.
Owen Robinson
TAXATION IS THEFT
Mason Cook
>Why don't you just do what Roger Ver did and denounce US citizenship and go to St Kitts, buy property there and then cash out with 0% taxes? Giving up your US citizenship requires you to prove that you've paid all of your taxes. (including taxes on money earned outside of the US)
Logan Russell
I don't even know how I'm supposed to pay my taxes legitimately, considering bittrex, whihc is one of the many exchanges i've used, hasn't even kept a complete record of all of my transactions (checked one of the .csv files today)...
But really, fuck paying taxes. Taxation is literally theft, those faggots in the government did nothing to produce my wealth, or the wealth of the entire cryptosphere. They can eat a dick for all I care.
Isaiah Russell
I agree it is a moral issue, it's fucking robbery. Look, I have no issue paying some taxes even though it's robbery. But I have never cashed out anything to myself, only made hunderds of taxable trades. So you're telling me I'm gonna cash out for the first time, to pay the government for risks I took, and good trades I made, that I haven't actualized on at all?
FUK THAT
pisses me off so much and i gotta pay tax on the money i cash out to pay tax with, fuuuuuu
Luis Anderson
Really? I've heard so many numbers put forth for the level under which you don't have to pay taxes, from 11k to 80k
Nolan Adams
Any place accept crypto for gold?
Ian Cox
Honestly, why can't I start a sole prop, say my crypto gains are buisness sole prop income, buy mining equipment with the gains, then depreciate it all in the same tax year using the exclusion rule?
I read the IRS publication and this is 100% legal since you can intertwine sole prop income and expense.
Any thoughts?
Hunter Turner
No but I'm not American so can't get residence permit there Otherwise I would move tomorrow.
Dominic Taylor
>normiebase
I'm guilty of this - and new - what are good recommendations? lets say I want to buy iota, ripple or dogecoin - how can I go about doing that?
Logan Brooks
And thats when they start investigating. By paying them you wave a huge crypto flag above you
Jordan Edwards
Can someone refute this?
I work at a large bank in accounting and none of my coworkers who have CPAs can find fault with this
Landon Ramirez
jmbullion but theres a paper trail, mailing address etc..
Nathan Foster
Did you that often rape has statues of limitations that vary by state? Murder has no statue of limitations. Neither does tax evasion.
John Hughes
I've been holding since 2011. >This is a bubble No shit. It will pop like the rest and Bitcoin will come back stronger.
Thank you, but 1 mill isn't making it. Making it is making enough a year that you can live like a king and have enough surplus left to reinvest each year. I'm only 21 years old so I can tolerate much more risk than someone older. I'm blessed in that I've also started making money outside of Bitcoin. Last year my dad and I purchased a commercial building and this year flipped it for a net profit of 250K.
Matthew Lee
Holy hell that's cheeky
Matthew Gutierrez
All deposits over 9999$ are reported to feds. So if you are playing with this kind of money with no paper trail, you will indeed get caught at some point.
Now I don't think getting caught is actually a big deal. Radio ads all the time for people who haven't paid back taxes. These ads characterize the IRS as just constantly bothering you to pay.
They don't come to your door and arrest you like these stupid millennials think on biz
Christian Reyes
If you made trades and profited in FMV you owe capital gains no matter what you do with the money.
Jose Foster
Not true if the sole prop earned the income. The mining equipment would then be fully depreciated in the current year, iffseting the income
Ian Ross
>Now I don't think getting caught is actually a big deal. Radio ads all the time for people who haven't paid back taxes. These ads characterize the IRS as just constantly bothering you to pay. >They don't come to your door and arrest you like these stupid millennials think on biz
I wouldn't recommend listening to this advice - the gov wants its cut and it can only get bad (more money lost in fines) to worse (loose even more money and jailtime)
Oliver Torres
Look it up yourself, it's on the IRS website.
Or take a random internet strangers advice: If you make under 30k a year (crypto gains included), you don't have to pay any taxes. I had meetings set up for LocalMonero until I learned this. I was going full tinfoil.
Brody Kelly
t. Millennial
The problem is widespread enough that it's a regular ad on multiple am fm radio stations.
Colton Bailey
Well it ain't income tho, it's capital gains from trading. What do you do when they eventually get their hands on Coinbase, Polo, and bittrex trade records and see unreported trades? You're going to have to fraud to say you earned the money in some other way.
Henry Hill
ok, whatever you say - have fun
Carson Brooks
The sole prop's buisness is trading crypto and mining. Since it's a sole member sole prop, I should be able to claim this as buisness income.
This is definitely gray. I would need to clearly define the sole props business as this.
Kevin Rogers
what does that mean? like if you've made more than $20,000 in gains? if you invested $20,000 at first? i put in $400 like two years ago and my coins are worth like $24k. would i get reported?
Andrew Sanders
That's not true at all. Short term gains are taxed at the same rate as income tax. Long term gains are taxed at 0% for the 10 and 15% tax bracket, which is where I think you're getting this from but if you traded your coins even once before 1 year they're not eligible any more for long term capital gains.
Connor Cooper
You'd have to go back in time and establish your sole prop before you made any trades.
Cameron Morris
Sole props don't need paperworked filed to become established on the federal level.
Depends on the state for state income tax.
Adam Jackson
Apparently it's extremely difficult to be classified as a Trader in the eyes of the IRS instead of an investor.
I guess you could say holding the crypto properties is required for your buisness to hedge risk.
It's not really the same as securities trading as crypto is treated as poperty by the IRS, not securities.
Gray indeed, but I'm still not finding anything egregiously illegal with this plan. The CPAs at work and our Deloitte auditors agree, although they do warn I would be a prime audit target.