Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Bitcoin Forum => Topic started by: BiTCorion on March 15, 2024, 12:00:34 PM
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Hi :)
I would like to ask some specific questions regarding a possible exit strategy from cryptocurrencies (cash out, perhaps not immediately considering the current early bull run) without having to pay the exorbitant taxes that some country asks, namely:
How is it possible to sell, for example, BTC legally without having to declare and/or pay capital gains taxes?
The various ideas that I have had for this problem, also considering the latest news/laws, and the various questions that arise are:
IDEA #1 | Exchange BTC for DAI or PAXG
In this case there should not be any event considered taxable because DAI and PAXG (pax gold) are not strictly related to a fiat currency and therefore it would be like exchanging crypto for crypto which is not taxable (I guess in some country that is the case).
DOUBTS:
- Is DAI reliable as a stable coin? (being algorithmic and the bad experience of UST...)
- Could PAXG be a reason for future discussion for possible taxation? (it is not linked to fiat currency but is still linked to an asset = gold)
- Where to exchange BTC->DAI?
- Can we trade on Binance or another CEX? (the event is not taxable but if the sum of countervalue in BTC is important, with the KYC done, it leaves a good trace...)
- Any safe, reliable and cheap no-KYC exchanges? (however you can't make transfers to your personal bank account so does it make sense?)
- If we do the BTC->DAI exchange in DeFi, which is the best or recommended DEX?
- How to bring BTC safely to the DEX? on which chain? (given the continuous bad news on the various bridges exploited)
- Once we have the DAI, how can we, trivially, spend it? (I suppose that by spending it there is a taxable event given the intrinsic conversion into fiat, right? but in theory they should consider taxation on the last DAI/PAXG->EUR trade or not?)
- Which crypto card do you recommend that can use DAI or PAXG as a payment source? with KYC or even without? (maybe I'm asking too much here but something we can use in Europe with EUR)
IDEA #2 | Exchange BTC for USDT/USDC on Chain
The idea is to trade for USDT/USDC on a DEX (never on a CEX). The event would be taxable but nothing is related to us so who would ever notice?! At least in theory.
DOUBTS:
- Many of the doubts of idea #1 (regarding: on which dex, how to make this exchange and how to safely transfer BTC?)
- How to use/spend the $ tokens once we have them on our cold wallet?
- Is using USDT/USDC anonymously feasible?
- As above, is there a debit card or method that allows this? (without KYC in this case because USDT or USDC would be taxable in this case)
- Could we use the Nexo card by exploiting the loan mechanism with the stables as collateral? But is DAI supported? (in this case we are practically not selling but we are only borrowing then we spend what has been lent, even if I don't understand the mechanism well but then there will also be limits and in any case we must do KYC)
IDEA #3 | Change of residence to a foreign country without taxation
Here we move to the desperation phase with this solution. Definitely the most decisive and perhaps safe ????? With a "right" residence after the right years we could also make bank transfers directly with the cash out.
DOUBTS:
- Drastic solution but is it feasible, in some obscure way, even while physically remaining in the actual country of residence?
- Is it possible to create a foreign account with the related CC where you cash out and use it with that?
- Even by staying close, can we exploit, for example, Switzerland or Germany or Portugal better law structure?
- I wouldn't even know where to start. Practical advice?
There are many questions and perhaps there isn't even a best or definitive solution but if someone has experience and wants to share it they could give me and everyone else who is asking the same questions a significant help.
If there are other related questions and someone wants to post them, a discussion on this topic is welcome.
I always thank everyone right away for their help, always much appreciated :)
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The main problem with ideas 1 and 2 is:
How to really cash out from stable coins to your fiat currency?
Being realistic, you can't buy a lot with USDT (like a car, food, restaurant, airline tickets... )
Also, you may want to expose yourself to different risks, such as a tradicional investment markets (stocks, bonds). You can't do that with USDT.
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The main problem with ideas 1 and 2 is:
How to really cash out from stable coins to your fiat currency?
Being realistic, you can't buy a lot with USDT (like a car, food, restaurant, airline tickets... )
Also, you may want to expose yourself to different risks, such as a tradicional investment markets (stocks, bonds). You can't do that with USDT.
Yeah that's right. This is the reason I'm asking if there is a feasible solution 😉
Maybe just use a credit crypto card with the stables (dai or usdt or usdc) for all the little daily expenses. But how to do it safely?
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The main problem with ideas 1 and 2 is:
How to really cash out from stable coins to your fiat currency?
Being realistic, you can't buy a lot with USDT (like a car, food, restaurant, airline tickets... )
Also, you may want to expose yourself to different risks, such as a tradicional investment markets (stocks, bonds). You can't do that with USDT.
Yeah that's right. This is the reason I'm asking if there is a feasible solution 😉
Maybe just use a credit crypto card with the stables (dai or usdt or usdc) for all the little daily expenses. But how to do it safely?
For small amounts you could use gifts cards like bitrefil , or maybe even some p2p...
Bit refill is a very good option
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For small amounts you could use gifts cards like bitrefil , or maybe even some p2p...
Bit refill is a very good option
Yeah someone else also rooted for this option and I think is nice, as you said, for small amounts.
Btw I would also need some other more technical advice on how to manage these ideas and solutions in practice. For example:
- Where to exchange BTC->DAI?
- Any safe, reliable and cheap no-KYC exchanges?
- If we do the BTC->DAI exchange in DeFi, which is the best or recommended DEX?
- How to bring BTC safely to the DEX? on which chain or Layer 2?
- Which crypto card do you recommend that can use DAI or PAXG as a payment source? (or even other cryptos, I mean the best that could use EUR in Europe)
Any experts who can show us the correct steps to, as mentioned, bring BTC to another chain and therefore to a DEX? ;)
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- Where to exchange BTC->DAI?
- Any safe, reliable and cheap no-KYC exchanges?
- If we do the BTC->DAI exchange in DeFi, which is the best or recommended DEX?
I think https://exch.cx is the best service for this.
This is not a dex, but there is no kyc.
I use them every week or so, they are very good.
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I think https://exch.cx is the best service for this.
This is not a dex, but there is no kyc.
I use them every week or so, they are very good.
That's a good suggestion, what do you think about this https://sideshift.ai/btc/dai as I used this site for few times but the amount I used it for was a little like 50 or 100 dollars. So, I won't stand for this site for big amounts. But till now I did not face any issues. I checked the fee for both sites, sideshift is providing a lesser fee.
But at the moment I will suggest OP to go for exch as they have huge reserves and they are transparent to the users but till now I haven't used it so. Besides this there are many other shifting sites to exist I have 2 more bookmarked.
PS: just wanted to say we don't have to pay taxes on crypto so don't have much idea how taxes are implemented in your countries?
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I think https://exch.cx is the best service for this.
This is not a dex, but there is no kyc.
I use them every week or so, they are very good.
That's a good suggestion, what do you think about this https://sideshift.ai/btc/dai as I used this site for few times but the amount I used it for was a little like 50 or 100 dollars. So, I won't stand for this site for big amounts. But till now I did not face any issues. I checked the fee for both sites, sideshift is providing a lesser fee.
Sideshift is also an amazing option
It is the service that aqua wallet uses
https://jan3.zendesk.com/hc/en-us/articles/22600605854747-Understanding-Tron-and-Ethereum-USDt-fees-in-AQUA
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How is it possible to sell, for example, BTC legally without having to declare and/or pay capital gains taxes?
Everything is possible and it's really simple, just trade using P2P, I don't think you'll be subject to exorbitant taxes,
I'm grateful that in my country there is a crypto tax but it's still friendly for exchange,
just my opinion with my situation , which doesn't make things complicated with the ideas you make it
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Everything is possible and it's really simple, just trade using P2P, I don't think you'll be subject to exorbitant taxes,
I'm grateful that in my country there is a crypto tax but it's still friendly for exchange,
just my opinion with my situation , which doesn't make things complicated with the ideas you make it
Unfortunately, not all countries have P2P facilities, so as the OP said, he incurs quite high taxes to withdraw his cryptocurrency assets, you might be lucky to have a country that has quite good policies for those who use cryptocurrency.