You HODLed for 30+ years and have a decent sized stack. Then you die.
Now your kids have to sell a portion of your stack to pay off the taxes.
That's a serious problem.
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Discussion
Federations fix this
Sounds like you are saying we should set up a system to allow for overcollateralized loans in the event of inheritance.
The loan gets triggered by the reading of the will.
Most countries don't tax anything held for 4+ years. Not all countries have the same tax laws.
I don't think that's the case for most European countries at least.
I heard something like that is operating in Germany, but I don't think it's most countries at least not most European countries
If you’re married you can gift each child 30k in bitcoin while you’re alive tax free using the gift tax exemption. If you start while theyre young you’ll be setting them up massively later in life. I know your kids are grown but you can still begin gifting to them now.
That might be the play! Great advice.
Why the fiat value?
Also, why not set up cold wallets for them? How on earth would that be taxable, unless returning to fiat?
Because it’s US tax code jabronie. It’s not going to be written in sats 😂
This is our digital 1776. Come and take it.
Or hear me out… us the tax code to your advantage like every other rich person in history. 😂
My heart says "come and take it," but my brain says, "bro they absolutely will take it, and you'll be dead."
Can you imagine the force needed to try and grab millions of private seed phrases? United we have the power.
So you're saying if I use the tax code to gift my kid $30k, or 1 BTC, in 30 years the entire value of the Bitcoin is untaxable? Or just a $30k portion of it?
Trying to understand this.
I'm poor, lol.
If you do $30k a year per kid until you die, you won't have much left to tax, or that smaller amount may not even be eligible for taxing.
So I return to the question, how is that bitcoin gift taxed, especially if "gifted" means they were given access to the keys at a much later date. $30k/year in a trust or bank account seems much more susceptible to tax theft....
Seems to me the only way to tax it is if it's cashed out to fiat, which will be unnecessary in 30 years.... Perhaps....
Talk to an accountant. Ask him about gift tax exemptions.
individuals can gift 16k, or 32k together if you’re married
They would inherent whatever Bitcoin is left over using a step-up in cost basis. So if you bought it at $10k, you died when it was $100k, they inherit the Bitcoin like they bought it at $100k and shouldn’t have to pay any gains until it’s sold above that. Estate planning is key.
https://smartasset.com/retirement/gift-tax-limits
start gifting 17k per year.
the hardest part is proving the gift in a legal way. i recommend just write a document and get it notarized, laminate it and save it in a safe deposit box.
no need to keep track of cost basis as cost resets at time of gift and time stamp is provable by blockchain confirmation date
Per year?
Per year if you’re married
You can gift much more than that. I believe currently it’s about 12 million per person tax free lifetime gifting. The way #[5] is referencing is the annual tax free gift exemption without eating at your lifetime limit. Depending on how much you plan on gifting you may just decide to bypass the annual part and gift it all.
Or you can play the annual game and when you die then gift it all. Depends how much effort you wanna put in.
Shop for the new state in those 30years
Unchained did a webinar about this last week. Fed estate tax kicks in at over $12mil, state depends on the state.
So if you have less than that, putting your assets in a trust will keep your stack from being made public in probate.
More than $12mil, same applies but you want to take extra steps to lower taxes by maybe moving some assets off-shore.
You have to dox your stack to put it in a trust. No thanks.
Capital at rest can be bled off and pilfered by the State. It eventually needs to be put to work and hopefully grown faster than the State’s ability to leech off it.
Only if you are in a cucked jurisdiction. Especially in 30 years
It is a serious problem. There are some estate planning hacks around this and definitely worth a consultation depending on the anticipated stack to inherit. Irrevocable trusts are a big one.
Can't tax me on something they don't know I have.
I think you can do a tax-free if you live in Germany at least at the moment they might change it in the future of course.
Hit take: the US will adopt bitcoin as legal tender by then because they will have to because paper money is crap and the people will demand it (and there will be many of us wealthy bitcoiners by then).