2025 Bitcoin Safe Harbor Rule - Optimized 3-Wallet Design.

You want to spend your Bitcoin right?! Use this (or tell me why I’m wrong):

1. HODL Wallet (On-Chain)

• Purpose: Long-term storage for investment and tax-optimized gains.

• Accounting Method: HIFO (Highest-In, First-Out) to minimize gains when selling.

• Use Case: Store Bitcoin securely; avoid frequent withdrawals.

2. Lightning Buffer Wallet

• Purpose: Acts as a staging area for replenishing the Spending Wallet.

• Accounting Method: LIFO (Last-In, First-Out) to minimize short-term taxable gains.

• Use Case: Transfer BTC from the HODL Wallet in larger batches to reduce fees, then fund the Spending Wallet as needed.

3. Spending Wallet (Lightning)

• Purpose: Daily transactions for everyday spending.

• Accounting Method: FIFO (First-In, First-Out) for simplicity and compliance.

• Use Case: Use for small, frequent payments via the Lightning Network.