Give away Bitcoins in order to exonerate crypto-taxes

The US government UU He is worried about getting his taxes from US citizens who have invested in cryptocurrencies.

Last year, the Internal Revenue Service (IRS) began investigating companies that work with digital assets such as the Coinbase exchange. At the moment, the tax agency is looking for individuals and groups that have spent more than USD 20,000 in the exchange.

After this initial investigation, the San Francisco exchange began sending customers the IRS 1099-K tax form. In addition, investors have realized that 1031 tax-free exchanges will not apply to digital currencies, and each transaction is also considered a taxable event.

Although, giving Bitcoin as a gift is a way in which investors can avoid paying taxes on their cryptocurrency earnings. Giving money has to be more aligned with the donation of funds instead of an employee bonus, and there is a fine line between the two financial events.

According to Robert Wood, a tax attorney from San Francisco, an individual can give away up to $ 15,000 without documenting the transaction.

"If you give cryptocurrencies to a friend or relative, ask him how much it is worth.If the gift is worth more than 15,000 USD, it requires you to file a tax return on donations, "explains Wood.

For 2018, USD15,000 is the amount of the so-called "annual exclusion". You can give gifts up to this amount each year to any number of people without the need to submit reports.

Wood states that the gift does not trigger income tax requirements for both the grantor and the recipient. If the recipient calculates profits or losses of the gift in the future, then the funds will be subject to taxes based on the value on the day the gifts occurred.

Wood details that document the gift are useful because donating money is often canceled incorrectly. If the donation exceeds USD 15,000, the law requires residents of the United States. UU file a "gift tax return" By 2018, $ 15,000 is the amount of the so-called 'annual exclusion', details of Wood.

In addition, Wood explains that in 2018 the amount that a person or a married couple can give for life has increased a lot. According to the tax lawyer, a person can give up to 11.2 million dollars tax-free during his life, and married couples can give up to 22.4 million dollars.

If the individual delivers the money to a recognized charity 501 (c) (3), they can obtain a deduction from the income tax for the spot value of the digital asset at the time of filing.

A few years ago, Dorian Nakamoto was accused of being the "real" Satoshi Nakamoto, and received thousands of dollars in Bitcoin.

If Dorian followed the cost basis of all Bitcoin donations, he realized that he could have claimed the contributions as tax-free gifts. However, if you treated gifted funds as ordinary income, your gifts would face significantly higher tax rates for your profits.

Source: news.bitcoin.com