I live in California and make good money, so I'm absolutely getting fucked by taxes when I withdraw...

I live in California and make good money, so I'm absolutely getting fucked by taxes when I withdraw. Any advice on how to avoid/reduce paying taxes on this shit without getting audited/thrown in jail?

hold for 1 year+ lol

Don't cash out. Eventually everywhere will accept Crypto.

Uhuh and what does he keep his money in while bitcoin dies and kills every thing with it in the mean time

Move. This place is literally burning.

>all crypto is bitcoin

Nigga no one is going to accept NEO/GAS as a payment, that's not what it's designed for

Buy Gold with BTC, then take Gold to pawn shop/bullion dealer and sell for cash. Spend cash. If you start regularly depositing large sums of cash to a bank that might raise suspicions.

Might also be able to buy pre paid debit cards with BTC and spend the balance on the debit card. Not sure about that.

Go to mexico and cash out faggot. You're that close to TJ and don't take advantage of it.

I called this accountant in California who said there's ways to shelter my gains from tax using "charitable structures". Apparently I'll have full control of the money still though. He's also going to let me use LIFO / specific identification which reduces my taxes by a lot and he has connections to the best tax attorneys who are fluent with crypto to defend me in court if I get audited. But he says most likely we'll just slip by with all the other tax returns because we just have to report one line on the Schedule D, as long as the formatting is properly done it won't raise any red flags, and the form 8949 is just an electronic attachment that never gets seen by a human unless manually pulled up. And even if a human does pull it up, it's so minimal in information that they won't be able to decipher what's going on.

It's all about finding a good accountant. The first few I called just wanted to FUCK me by forcing me to pay taxes on FIFO The most "conservative method" even though there's no law that says I have to use FIFO. If you get an accountant like that you might as well use turbo tax.

just keep the crypto
if you need some money now just take a little out and don't pay taxes on it
you don't have to pay taxes on every withdrawal
you only have to pay taxes on the portion of it which is profit
and you're not withdrawing enough (as far as anyone knows) to have made a profit

both good choices

Buying gold is a taxable event

some bullion dealers don't report your purchases to the Govt if they're under $10k every 24 hours.

Buy drugs, sell at a profit for cash.

You still have to pay taxes if you're a US citizen dumb fuck

Lmao I made 2k and it was sucked up by student loans, your going to be poor forever taxes enoforce people stay in their social classes,

I still think it's funny when people think crypto is the bubble and the us is all roses

Nigger, start a separate life in tj. It's a blossoming metropolis and full of buisness opportunity.

Im going to do this cuz I'm in accounting 101 and it's funny

No thanks

Then shut the fuck up and pay your taxes.

Thanks I will.

you have to pay taxes on every profitable trade

...

When cashing out your gains will either be treated as Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG). Your coins will be LTCG if you "own" them for one year. LTCG gets taxed at a lower rate, so if you can, make sure you get LTCG. Lots of people are going to run into problems because they often don't record their crypto transactions contemporaneously, and so won't be able to produce a record of whether they "owned" the coins for one year or more.

There are other avoidance strategies available.

The easiest other way would be to "Domicile" yourself in a location that has the lowest income taxes. If you are a US citizen that would probably be Texas or Florida or another state that has no State Income Tax. If you can renounce your US citizenship find a country with no income tax. To change your "Domicile" you basically have to move to the other state you claim your are going to live in. You should probably get a lease in this place and a driver's license, retain copies for your records.

Another thing you can do is attempt to turn some gains into "Qualified Business Income" (QBI). You can't do this till tax year 2017 when the new tax law kicks in. To do this:
>Set up a pass-through entity (PTE), (probably an LLC makes the most sense)
>Transfer all the coins you want to cash out to this entity. When doing this remember you may have to hold the coins within the PTE for a year to access Long-Term Capital Gains
>Have the PTE sell the coins and "pass-through" the income to you personally (meaning you fill out Schedule K-1S and Schedule E)
If done correctly you can get a 20% reduction to your Adjusted Gross Income. You should keep in mind that the to get QBI you have to either fall below the income threshold ($157,500 if you're single or $315,000 if you're married and file jointly) or otherwise be a "Qualified Business."

There are other avoidance strategies, but the most advantageous ones involve passing on property to your heirs.

there are a few dealers will accept (((unknown amounts))) of xmr as payment for gold. Takes a bit of searching but they’re out there

Move to Mexico.

yes but you're only withdrawing a small amount

if you put $1000 into bitcoin
and bitcoin goes up,
and you now have $2000 worth of bitcoin
and then you withdraw $500
you did not profit $500, you only withdrew $500 of your initial $1000
no taxes are paid on that

so here's the thing. I moved to California from Texas last fall. Haven't got a cali license yet. I have an apartment here and my paycheck has a cali address. How possible would it be to file as a Texan with that being the case?

No. Move back to Texas as soon as possible.

I should mention that states are very competitive about domicile. So Texas would probably argue you are still a Texas resident, while California would argue you are now a California resident..

Be non white dont speak English congrats you pay 0 taxes (that's 80% of your state FYI)

you're retarded. The $500 worth of bitcoin would have a cost basis of $250 so you'd pay gains tax on the $250 profit.

do you actually believe this?
the absolute state....

so basically unless you are a whale, the high cost of your rule bending accountants and tax attorneys will wipe out anything you are saving vs. FIFO/8949

i'm in NY and have the same problem. i've managed to build a pretty big stack by jumping on hype trains but now that i'm playing with real money i've moved it all into a couple of blue chips that i'm comfortable holding for 1+ years. if 6 months from now my stack reaches or is approaching 7 figures I will move to another state with no income tax (prob FL) and wait another 6 until I have residency then cash out at the long term cap gains rate.

This is honestly looking real for me now too.

I can establish residence in a no tax state for a lot less than my State tax burden will be.

Fuck I hate that I am in this fucking blue state hell.

Yeah a lot of the stuff we discussed isn't worth it unless you have 500,000+ in gains.

what are you, a couple of dudley do-rights?
as long as you do your taxes eventually the IRS doesn't care
if you get audited after you withdraw (less than your total investment) you're not going to be prosecuted

Holey shit! An actual informative comment on Veeky Forums !!
Screen cap this!