How do you cash out your earnings and avoid taxes?

Discussion in 'Bitcoin and Cryptocurrency' started by Evom1, Nov 15, 2017.

  1. Evom1

    Evom1 Member

    I'm curious on this. Say with bitcoin, litecoin, ethereum etc you make thousands, or a hundred thousand. How do you access that money in the real world without paying taxes?

    Hypothetical situation. You bought btc years ago, you now have 80k worth. I don't see you transferring that into your bank account and having no one be like uhhh what's going on here?
     
  2. PaulHeyman

    PaulHeyman Member

    Have someone buy your coins directly from you at a below market price
     
  3. Evom1

    Evom1 Member

    That would work if it wasn't a substantial amount
     
  4. tenpoundsleft

    tenpoundsleft Member

    Sell it to someone overseas, get paid in cash, buy gold, bring that back.
     
  5. DrinkFlintWater

    DrinkFlintWater Member AnabolicLab.com Supporter

    @Evom1 there are a few (debatable) ways to go about this....
    Have you checked any bitcoin forums? Bitcointalk(dot)org is a good place to start....
    I obviously dont have 80k in but i do profit, which is transferred into a btc card which i usually just spend anyplace that takes visa...long term tho...idk...i wonder what the guys who make millions off crypto do? You think their letting uncle Sam have a piece of that? Lol....NO
     
  6. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    Use an offshore exchange? Bet many offshore exchanges do not do any sort of reporting to the IRS or any other country's tax authority but that may change soon.
     
  7. Deisel26

    Deisel26 Member

    Make your bank transfers in amounts less than 10k that’s what I would do and that’s what I’m gonna do when I get ready to cash out some of my alt coins
     
  8. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    Yes definitely do keep bank transfers under 10K and also space them out enough so as not to arouse suspicions by your bank or the IRS. I'd say make several 3K transfers spread out over several months. Obviously there's going to be hefty fees charged by the offshore exchange and the bank for doing this.
     
  9. Deisel26

    Deisel26 Member

    Smart people have more than one bank also. Never keep all your eggs in one basket. I wish I could transfer the money back to my credit cards but I won’t let me do that
     
  10. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    Once you get the money you can then pay the credit cards. Also definitely is a good idea to use different banks and I have 2 checking accounts at different banks.
     
  11. flenser

    flenser Member AnabolicLab.com Supporter

    Why cash out at all? BTC is becoming more liquid every day. You can make purchases with BTC, and pay only the taxes on the purchase. You can use it to pay for vacations, to purchase property outside the US, etc. By cashing out, you will be "avoiding" capital gains tax the IRS WILL be interested in.

    Also, banks have MUCH more strict reporting requirements than ever before. Just keeping withdraws under $10K isn't enough anymore. They look for patterns, like $9K per month, or $30K over 4 months. They will be using AI and deep learning tools soon, if they aren't already.
     
    Rockclimber and MindlessWork like this.
  12. Deisel26

    Deisel26 Member

    What if you are already have an established pattern such as what u just described?
     
  13. Rockclimber

    Rockclimber Member

    I used to work at a bank and @flenser is 110% correct. The odds of getting caught today are very very high.

    Here is something I have never admitted on here before... kinda embarrassing. I am still in finance... Way way back in the day I used to own 400+ coin, it was a stupid investment because it never gained value it always fluctuated up then down then up then down. Eventually Bitcoin got to $100 and I sold it all, it soon crashed again and i thought I was a fucking genius. That was years and years ago and now I look at the price and absolutely shake my head. Un fucking believable. Nearly $2,800,000 now. So depressing.
     
    penche and flenser like this.
  14. Evom1

    Evom1 Member

    What if you wanted to use the money for something like the purchase of a house or car?
     
  15. Rockclimber

    Rockclimber Member

    Then sell a couple thousand dollars worth every month. It will take months and months to get it all out though. Or you can take it all out at once and pay the capital gains.
    If you have other Investments and they are trading at a loss you can sell them to offset your capital gains.
     
  16. Rockclimber

    Rockclimber Member

    Look up tax-loss harvesting in Google
     
  17. flenser

    flenser Member AnabolicLab.com Supporter

    I'm no expert, but my understanding is it's all a game of chance. Even if you are reported, the odds of someone taking an interest in you are low. But if they do, they can make your life difficult for years. A pattern that fits money laundering, for example, can result in asset seizure without due process. Then you have to sue to hopefully get it back.
     
  18. flenser

    flenser Member AnabolicLab.com Supporter

    Get a loan, and take out enough to make payments. The interest is still lower than the capital gains tax.
     
  19. Millard Baker

    Millard Baker Member

    Foreign Account Tax Compliance Act (FATCA)
     
    flenser likes this.
  20. MindlessWork

    MindlessWork Member AnabolicLab.com Supporter

    Oh forgot about that. I bet foreign bitcoin transaction will fall under that tax rule.