Topic: Give Away Bitcoin To Avoid Estate Tax (Read 315 times)

People are just different. Some are willing to give out to charity which most of the world billionaires are doing. There are ways to avoid tax but some people wouldn't want to cut ways. Besides, there are different tax rules for different countries. While some are strict, some are flexible.

Not many people will like to move from the country of their origins and the source of their wealth, maybe for security reasons.

This is the first time that I heard about this estate tax and it seems that it exists in the UK. I used to live there but I wasn't a citizen, so I couldn't care less about inheritance laws there. I guess it's similar in the US, with the difference that it applies to assets over $13 million, so I wouldn't be subject to this, since I own much less and I don't live in a country where such tax exists.

Anyway, lets speculate. One could divide his wealth between children before death, making sure that none of them exceed the required amount. Even if they do, you have to pay 40% on whatever is above the threshold, so having 14m isn't really a big deal. It starts to get worse when you have over 20m and no children, but in such case you should give the money to whoever you want before you die. Nonoe of us really lives alone and it's better to give it to your distant family, neighbors, whatever, than leave it to the government.

Agree, the super rich have ways to avoid paying tax pay as little tax as they
can manage. They have the wealth to employ specialist accountants with the knowledge
they need. They also are able to purchase high value items as a business liability and with
profits and therefore pay less tax. They would rather change their car every year from
profits rather than pay that tax. Investing and trading in Bitcoin can also be classed as
part of a business activity I'm sure.

The last thing the wealthy do is "give away" wealth other than for charitable donations.

The government can collect taxes on Bitcoin and ceyptocurrencies only if you exchange it to fiat. It's not a great idea to try and avoid paying taxes, but let's be honest, most rich people use all kind of tricks to make sure they pay as low taxes as possible. Therefore, just keep your Bitcoin where it is or spend it directly to buy or invest into something. This way, government cannot claim their taxes since you have not sold any of your Bitcoin and theoretically you have not made any profits.

Though it's true, I don't think a millionaire or a billionaire will be happy to lose its assets by giving out to people just because of tax in future. IMO the billionaires are very smart and they do things smarter ways because that's how they make their money. There is always another alternatives to pass through those state even when you don't want to pay taxes. By the way, given out your wealths to people is not a way to manipulate in a way for you not to pay tax, I believe that there's other ways, besides if you are a billionaire that makes legit money there's is harm in paying tax because he tax you pay today will not stop you from making more money.

If it were me, it would be better to pay taxes to keep the wealth I have safe, rather than having to divide it into random addresses because it doesn't make sense, for example I have a large amount of Bitcoin, the calculation is still clear. This method is very unreasonable and as a citizen, taxes are still a responsibility that must be paid, even though there are ways to avoid this, in the end the disbursement into fiat needs to be done through official channels. So, if the nominal value is not large and to avoid tax, you can still get around this by withdrawing it in stages.

It's true that donating your money to charity foundations will lessen your tax. But you need to donate it to charities, non-profit/non-government organizations, anything that is registered as charity foundations. Your example of satoshi giving away its bitcoin is just giving away, plus only a few countries taxed bitcoin, or i don't think it's necessary to declare all your bitcoin holding to revenue office just to become a law abiding citizen,  you will probably just declare a few just like most of us and businesses.

Random gifting is improbable.
Someone with that much BTC can easily change country to move to Tax heaven, rather than throwing away.
If he really inclined to gift, he would most probably give it to bitcoin active development, puzzles, widespread usage and security projects.

I mean giving away your Bitcoin is not going to make sense at all since it's not going to be your money at all, it's going to be a better move to pay tax since it still going to be a huge amount after paying taxes, even though the taxes are going to be huge as well. I mean a giveaway some of kind or something like airdrops might actually work for sure but it's going to be a lot of work, plus there was for sure some potential of seeing this as a strategy on avoiding tax but it surely might work. We can surely look at charity where it doesn't really take taxes I mean that could easily be a way for sure, It just way too noticeable to see this kind of strategy especially if you're going to transaction millions and billions of dollars worth of Bitcoin. But I guess with that kind of amount of money it is better to pay taxes just to be safe because surely it will be a huge lawsuit and worst you gonna get criminal charges for tax evasion which as a billionaire you don't want to happen because it can easily cause you everything as soon as they find it out.

Personally, with thousands of dollars of transactions so far I didn't get any notice, when I was just a student I had a lot of big income transactions of thousands of dollars which is for sure not going to be achievable for someone who is just a college student, surely is questionable, especially on the banks. But so far I didn't have issues converting my Bitcoin to fiat money. But I have a friend who got his account frozen with a much higher amount in the bank. So I guess it's better to do it on multiple micro-transactions than just cashing out at once since it is going to attract attention for sure.

Sigh, here we go again. There is NO limit on how many people one can give the $17,000 gift to, per year. It is a workaround of the lifetime gift-tax/estate exemption. If I gave away the entire lifetime exclusion today, I can still give away up to $17,000 per year to anyone I choose, any time I want, to as many people as I want.

For a group I am trying to rely on for Bitcoin advice, especially around privacy and government, there is a shocking lack of understanding of how the tax code works.

This is probably why Satoshi decided not to touch the over 1 million bitcoins in his wallet for now.

I'm sure BTC-millionaires will be able to find loopholes and ways to avoid paying inheritance taxes. Do traditional millionaires somehow manage to do this, or do you really believe in their selflessness with their charitable activities?  

There is a simpler solution: if you are a BTC-millionaire and don't want to pay taxes on it, then simply don't cash out bitcoin (don't convert it into traditional money) and pass it on as an inheritance in the form of bitcoin.

In my opinion, the nature of bitcoin so far allows to avoid any taxes (no tax on ownership of bitcoin and inheritance).

I think this all depends on a jurisdiction and on enforcement of laws. In my country, there's no tax-free gift loophole, but there are tax-free (very small) sums and closest relatives can also be tax-exempt. That being said, taxation isn't taken seriously in my country, so unless you're a public official or something, nobody cares whether you pay your gift taxes or not. I don't know Satoshi's jurisdiction, but I don't think Satoshi wanted to avoid taxation or whatever, or that it would best be done via such a distribution.

The estate tax is not capital gains tax.
You have a limit on how much you can send in gifts before the gift tax gets triggered, that's around 12 million, and you're planning on gifting 68 billion.
You make a lot of assumptions on what can and what would be tax but Satoshi won't even need to send those transactions, there is no need for it since nobody knows and nobody can prove x or y own those coins. Also, ok he sends those coins as gifts, how does he explain the extra millions he and his heirs will end up with?


If that ever happens it will be the biggest blow to Bitcoin that it could ever receive!

I would sure wish my address is one of the lucky ones to receive such free BTC as gift because its owner wants to evade paying tax.
The idea of cryptocurrencies didn't include taxing the government at first until now where it is a mandatory action to be adhered to by those who own cryptocurrencies.

Am sure if such a rich man has a hardware wallet, the government wouldn't even know it belongs to them because he can just transfer or deposit in a hot wallet before use and it may not even be up to $10k to be flagged.
With the advent of the ETF am sure the taxing system cannot be avoided because it is simply like buying shares  on the exchange market and as an asset that is centralized and trackable to the owner.
 One common way that one can use to avoid tax is to close out trade positions that have recorded losses, and also keep positions that have made profits, all more than one year. This strategy will ensure that the profit will receive long-term capital gains treatment, lowering ones tax liability.

The person giving the money will still be at a loss (unless they are really in on charity). If you send the amount equivalent of the tax to different wallet and then you want to take out what you have left, you still have to pay tax (even if it’s been reduced). So at the end of the day, you gave out the money you would have paid in tax and still paid tax for what was left. But like I said, if the person is in on charity then it isn’t a big deal because they’ll gladly share the money and pay for the reduced tax regardless.

I don't see why I have to give away $17k worth of bitcoin to random addresses, when your bitcoin is in your cold storage. How would government know that you have bitcoin if you did not keep it in a centralized exchange. The best thing is to give your bitcoin to your heir when you want to pass on.

You do this by teaching them how bitcoin work, and even open noncustodial wallet for them, and put little amount of bitcoin for them to understand how to transfer bitcoin from one address to the other. Are you buying an estate or a yatch, that you will convert a huge amount of bitcoin to fiat which will bring people attention or the government, to the extend that they will tell you to pay tax.

When using bitcoin for payment of whatever you are purchasing, if you are lucky, you can pay with your bitcoin, to the trader if he accepts, and nobody would know what happened. If I want to give away, I will give it to charity and not some random bitcoin addresses that I don't know if it bongs to a scammer or the government. Some charity organizations accepts donations in bitcoin. It is only fiat that can be done that way. After all your relation used fiat and not bitcoin.

You are so focused on Satoshi's bag and the tax, but not about the country he lives in, as if this tax thing is generally affecting all countries, where I am from we don't pay taxes, unless we start a big business on the government lands, schools, casinos and others.

Having Bitcoin is my business, I risk my money on something that may swim everything away some day, why the hell will the government want me to pay tax on only of this? I will gladly leave such a country and move to another.

Now, as per what you said in your post, who will be stupid enough to give out all their money so that they can evade tax payments? They will lose the whole money and thats dumb, why not use part of the money to settle the tax and keep the rest?

Nakamoto might not be an American citizen.

Even if he is, he will remain unknown till the end of time.

But something deep inside me believes that Nakamoto is far from being an American.

You know? Im having the same question as yours, and one more thing, why should we avoid tax if we have a lot of money to hold? Let's just pay correctly, at least that way we can say that the money we receive here in the cryptoworld really went through the legal process. What sane person would give away bitcoin to avoid paying proper taxes? because no matter where we look, you will be taxed no matter what amount you have, it's much better not to give it away and just pay the right tax.

I think it all sums up when Bitcoin was already sold and converted into fiat. As long as it is not yet in fiat then there is no obligation yet to pay for taxes.

And the term usually used for Bitcoin profits is "income tax" and that is why whether you give away your bitcoins or not, the measurement and basis will be on how much the profit you have made from holding to selling.

If the state doesn't know that you've got bitcoin and the family that will be left behind by that amount of money won't declare it and they're smart enough to not spend it all at once or even be extravagant about it then they're probably not going to pay any tax on it.

That's a stupid statement and I don't think you even know how tax works, tax if used correctly and not being pocketed by corrupt politicians, it easily makes public transportation and any other public stuff that you can think of that needs building and has a need for funding, it's definitely going to be improved and your way of life would be more convenient, without taxes, there's a lot of things that's operated by the government would collapse, like their workforce as a major one that would definitely be the most affected. As much as you want to sound like an anarchist by not paying your taxes but you're actually damaging more people in the bigger picture when that's how you want the things to go.