Topic: Is my plan legal? Managing the account of a dead person (Read 320 times)

Amen.
I'm not against paying taxes, but they need to be set fairly and be reasonable. Charging someone 50% of the profit or charging taxes on unrealised gains is morally wrong and should be avoided as far as possible.


This is where many people get it wrong. It's super easy to hold your bitcoins quietly, without anyone knowing, but eventually you will want to cash out (either by converting to fiat or buying something expensive with bitcoins directly) and that's where they get you.
You need to think ahead, pay taxes on your BTC income if applicable, so when the time comes, you'd be able to explain where did all that wealth come from.

That's what I'm talking about. If you are involved in investments, then you need to study the legislation and communicate with like-minded people in order to understand how to protect your investments and not pay like a obedient sheep 50% of your profits and be proud that you are a conscientious citizen.

I'm just curious and I don't think there is a tax on bitcoin in my country Indonesia but. It is just simple if you buy bitcoin and keep it on your hardware wallet and say you don't have one to the government I mean they don't have evidence if you have the bitcoin right ?

Here in my country as far as I know we get taxed for each we trade and when do withdraw it to fiat in a local Centralized Exchange that has licensed.
and
Well hahahhaha you are actually right it is much safer not to declare our cryptocurrencies only declare the fiat that we have.

In Russia, people say that you can't be half pregnant. You can declare any amount of cryptocurrency and keep most of it secret from everyone, but in the blockchain all transactions are visible.
And if you ever make a mistake, you will pay a lot of fines or get jail time. I prefer to pay taxes on fiat received and not declare cryptocurrencies. It's safer in my country.

I'm just curious and I don't think there is a tax on bitcoin in my country Indonesia but. It is just simple if you buy bitcoin and keep it on your hardware wallet and say you don't have one to the government I mean they don't have evidence if you have the bitcoin right ?

Or you just simply buy ex. 2 Bitcoin and put them in a different wallet one with 0.5 BTC and the other is 1.5 BTC and you just said that you only have 0.5 BTC in this hardware wallet.  . I mean its kinda legal right or I would say in the grey zone you still pay tax for your 0.5 BTC.

This doesn't even make sense. Cashing out may not be a requirement, but I don't understand where's the "added value" here. You're not gaining anything. Will YOU be required to pay tax if e.g. you gave your car to a family member?

I wouldn't rely on any advice you get from any forum and just ask at the source. You must have some tax helpline that you could call anonymously to get a proper explanation.

I asked this on a judicial forum in the taxation segment. I asked if I was allowed to transfer my bitcoin holdings to a non EU family member to avoid heavy taxation. And that at that stage the coins are not withdrawn to a bank account.

She answered "Cashing out is not a requirement to have acquired the added value. Therefore you will have to pay taxes on this added value the moment you transfer the coins"
(...)

I don't think they'll tax holdings that bring you loss. I don't know the us, but here in Europe most countries would consider something like that to be unconstitutional.
They want to know how much you have to make you feel obliged to pay taxes so that they don't have to keep an eye on you the whole time, but I really doubt someone will tax your holdings 30%, not to mention losses.

My 78 year old mother in law is a non EU citizen. We can let her go through KYC, deposit our 3 funds to her BTC address and manage it for her.
The tax hawks in my country will be shown that our accounts are empty. There is nothing for them to rob. I don't think we do anything illegal. We just donated to my mother in law who is outside of their jurisdiction.

Authorities in the country of my mother in law will not expect anything from her because there was never a deposit from any local bank to her BTC address.

I do wonder, if we wish to manage her account and cash out in 2035, if that requires her to be alive at that point (live camera footage, fingerprint..)
Or if we can do that P2P without any problems.

Does this make sense or am I missing something?

For starters, in which European country are you going to be taxed every year without having sold the investment?

Cite those articles because you have misunderstood for sure. I would have to look at the laws specifically, but I would say that tax for unrealized gains is against European law.

Do you have to pay taxes on crypto coins?
Do you own crypto coins without converting them into cash, or do you use crypto for a purchase? Then you don't pay taxes on it in Belgium yet. If you make a profit from your crypto investments, there are 3 options.

Scenario 1: You're an amateur

If you invest in crypto according to the principles of 'good housekeeping', your digital investments are exempt from taxes. The tax authorities consider you an amateur. This is, for example, the case if:

you invest in crypto as a hobby
you make long-term investments – you buy coins and hold them for a long time
you take few risks - for example by spreading your investments and by not taking out loans to invest in crypto
Will your digital coins increase in value over time? Then you do not have to declare those increases in value. And you don't have to pay VAT on crypto transactions.

Please note: do you convert your crypto coins into cash in this scenario? Then you must declare the capital gain (the difference between the purchase price and the sales price) in your tax return in the 'Miscellaneous income' box and you pay 33 percent tax on it.

Scenario 2: you are a private trader

To the government you are considered a private trader if you:

take risks with your crypto investments
regularly buy and sell and respond to heavy price fluctuations
want to see a return on your investments in the short term.
In those cases, the government considers you as a private trader. You must then declare the crypto profits in your tax return as 'Miscellaneous income'. You pay 33 percent of that to the tax authorities.

Scenario 3: you are a professional trader

Is trading cryptocurrencies your (main) job? Then you must follow the rules that a sole proprietorship follows: you declare your crypto income in your personal income tax. The usual progressive tax rates apply to your annual net income, which fluctuate between 25 and 50 percent. A few examples:

For an income that is less than 12,990 euros per year: you give up 25 percent.
For an income from 39,660 euros per year: you give up half.
Please note: as a professional trader you must also meet the other obligations of a self-employed person: for example, joining a social insurance fund and paying social contributions.

What is the good housewife principle?
Anyone who invests in crypto coins is investing. When it comes to investments and taxes, it is important to first understand the good housewife principle.

The good housewife principle is a basic principle that applies to investments and investing in Belgium. This principle means that an investor must always exercise due care when making investment decisions.

The due diligence principle is unfortunately a vague concept and the Federal Public Service Finance will therefore look at all circumstances and facts to decide whether an investment has been made in accordance with the principle or not. The bottom line is that you need to prove that your investments are relatively risk-free. A typical strategy that fits within the principle is "buy and hold". You purchase digital coins and keep them in your possession for at least 1 year to make them profitable in the long term. In addition, the frequency, the number of transactions and the percentage of private assets that you have invested are also important. On average, 25% of your assets is taken as the limit. Finally, the tax authorities will also look at your professional activity.

Could be, but OP mentioned he's from an EU country, and I imagine most of those would have crypto-related tax laws somewhat clarified by now. It could be easier if he just said which country is he from.


There was a thread about this somewhere, and the historical data shows that holding just BTC for a long time yielded much better results than diversifying over the top 5 or top 10 coins. Of course there's no guarantee this will be true forever. I'm in favour of holding some ETH just in case of the "flippening", but holding too many coins is probably riskier than holding BTC only.
Anyhow, OP said he would be managing the funds even if they were in the formal custody of his mother in law, so he'd be able to take actions when/if weird things start happening.

Could be, but OP mentioned he's from an EU country, and I imagine most of those would have crypto-related tax laws somewhat clarified by now. It could be easier if he just said which country is he from.
--snip--

I think that the first problem is that in many countries the tax legislation for cryptocurrencies has not yet been formed and may change, so declaring cryptocurrencies has its own risks.

There is a risk that Bitcoin will cease to be the main coin and will give way to Ethereum.
Investing in only one coin for 10 years is also very risky. I would make an investment portfolio of 5-7 coins

First of all, make sure you understand crypto tax laws in your country, maybe you're panicking for no good reason. I'm not aware of any EU country demanding tax on unrealised crypto holdings (somebody please correct me if I'm wrong).
So if you want to buy BTC with your lawfully earned money, then you have nothing to worry about, other than paying tax on capital gains when you sell with profits. Some banks may cause troubles when sending such large amounts to an exchange, but if it's not illegal, you should be able to do so upon jumping few hurdles.

So unless your country taxes unrealised gains, moving btc to your mother in law is not necessary. Also, you need to consider how will you cash it out? Will your mother in law officially give the btc back to you (provided she's still alive in 2035)? Will she be able to explain where did she get that from? It could be worth millions by then and it could trigger much more scrutinous investigation with a risk of whole amount getting seized.

No it doesn't. Sorry.
First of all, the paranoia is too high in this equation, as Stompix has already mentioned.

Sigh.. Paranoia

At this point only for realized profits, but I read articles about holdings too. Imagine being taxed 33% for holding BTC at 47k, and it goes down to 17k the year after that. It makes no sense but this is their strategy.

So my plan is like this:

5k in my name (this is only 7% of my portfolio)
5k in my wife's name (I transfer 5k to her)
5k in my fathers name (I pay him)

...

I do wonder, if we wish to manage her account and cash out in 2035...

Well, after reading all these legal plans to avoid taxes legally, I feel happy that I live in a country where Bitcoin is not subject to any regulatory law (knowing that Bitcoin is illegal in my country), here in my country we do not have any law to regulate Bitcoin or impose taxes on Bitcoin holders.

I don't know much about taxes in Europe, but if this is really true, then this is the stupidity of governments. How do they impose exorbitant taxes, which makes citizens in these countries think of a thousand ways to avoid paying these disgusting taxes in any way? There are even lawyers specializing in finding legal loopholes for this problem. This is ridiculous.

Yeah, stop reading stupid articles for once and read the fiscal code in your country, this is just going full lunatic.
How the hell is a visit from your IRS (btw, where the hell in Europe does the IRS does home visits for personal finances),  detrimental to your job? Get real and stop the fear mongering.

Besides, even if they would plan on doing this impossible taxation then you would simply need to sell the coins before that is announced to your mother and that's it, if she's not a resident of the EU and she is not a tax resident. And furthermore, how do you plan on cashing those out if the evil government is watching you and avoid taxation when you do? You do realize you will have to eventually pay up the same sum in the end, right?
At one point you make the govemermnt these control freaks that try to control everything, that monitor everything, and at the next step you envision them as some stupid braindead idiots who will just believe your 40 years inheritance story and out of pity they will simply not tax a dime!


You see this is what all this mumbo jumbo lead you to:
- you believe the government is doing everything to kill bitcoin and it will left no stone untouched to tax you and at the same time
- you believe their are stupid enough so that because you have 5k instead of 15k they will ignore you
See how illogical your thoughts are?


You should be more afraid of ending with paranoia taking over and losing your coins while trying to hide them form virtual enemies.

Does this make sense or am I missing something?

Making a substantial BTC investment (I am aiming for 15k-20k) will immediately flag me to the local IRS. I will get a guaranteed visit from a tax agent, which is also detrimental for my normal job.
~
At this point only for realized profits, but I read articles about holdings too. Imagine being taxed 33% for holding BTC at 47k, and it goes down to 17k the year after that. It makes no sense but this is their strategy.

This decreases the odds of tax agents going after me/us.
Does this make sense or am I missing something?

Honestly I don't know what I'm most afraid of.
I'm afraid of missing out. I'm afraid of getting taxed like shit and being treated like a criminal too.

Honestly I don't know what I'm most afraid of.
I'm afraid of missing out. I'm afraid of getting taxed like shit and being treated like a criminal too.

The idea of only being able to invest in BTC on the condition that the government does not know, doesn't work for me. They will flag me as soon as this kind of money leaves my account. I also don't think that mass adoption is possible when governments attack with these huge taxes and penalties.

I think I'm just gonna risk it. I can report my wallet (ledger) as stolen. Most likely I will. The goal is to hodl anyway, and never withdraw to any bank at all.
Or when they go after me, I can donate the coins to one of my non EU citizen friends. I make the wallet for them but I manage the keys. This is also insurance, in case they ever wish to claim the coins.

I considered using Bitvavo but knowing that they are in the EU, I have a very bad feeling about that. They will instantly cooperate with the authorities.
I trust Binance a bit more. My first deposit was denied, but meanwhile I read that they have a license via Poland. I estimate the odds of Binance protecting my privacy larger than any EU regulated exchange.

For countries with strong enforcement against cryptocurrency traders, how likely is it to stay anonymous holding altcoins in wallets and trading them only on decentralized exchanges?

Well first, you sound like you got everything all planned out pretty good, but what if there's a loophole in your plan and at some point things go bazaar and then you end up either being flagged or even worse. I don't know about your country but in certain countries of the world tax evasion is considered criminal, regardless the technique you adopt, that's why it's always advisable to involve a professional or an expert in matters like this.

So me and most of my family are EU citizens.
Banks and governments are going after crypto holders like a hungry dog goes after a hamburger.

Making a substantial BTC investment (I am aiming for 15k-20k) will immediately flag me to the local IRS. I will get a guaranteed visit from a tax agent, which is also detrimental for my normal job. He will demand to verify all my crypto holdings, and tax me accordingly. At this point only for realized profits, but I read articles about holdings too. Imagine being taxed 33% for holding BTC at 47k, and it goes down to 17k the year after that. It makes no sense but this is their strategy.

So my plan is like this:

5k in my name (this is only 7% of my portfolio)
5k in my wife's name (I transfer 5k to her)
5k in my fathers name (I pay him)

This decreases the odds of tax agents going after me/us.

My 78 year old mother in law is a non EU citizen. We can let her go through KYC, deposit our 3 funds to her BTC address and manage it for her.
The tax hawks in my country will be shown that our accounts are empty. There is nothing for them to rob. I don't think we do anything illegal. We just donated to my mother in law who is outside of their jurisdiction.

Authorities in the country of my mother in law will not expect anything from her because there was never a deposit from any local bank to her BTC address.

I do wonder, if we wish to manage her account and cash out in 2035, if that requires her to be alive at that point (live camera footage, fingerprint..)
Or if we can do that P2P without any problems.

Does this make sense or am I missing something?

Look at this service to see what payment services are available in Europe and buy Bitcoin through them to your wallet. Make 10-xx wallets of several thousand dollars so as not to attract attention.
https://www.bestchange.com/

Check out this list and buy bitcoins without KYC
https://archive.ph/CpS0W

If you don't trust your government, then don't use KYC. It's time to decide for yourself what you are most afraid of. Sitting on two chairs is very difficult.