zero chance bitcoin is legal tender in the US anytime soon. And I'm not really overthinking anything here. I've been a business owner for many years, I have a CPA that I trust, and I've been legally minimizing my taxes for a long time.

I'm simply giving a pro tip to bitcoin hodlers. At lot of whom have never owned assets before and have no idea what capital gains taxes are about, what the rates are, the brackets, and how it all works.

It's worth looking into. It will save you bigtime in taxes going forward if you understand the system and use it to your advantage instead of stumbling blindly into the future with a stack of bitcoin on your Ledger

0% is for long term capital gains below 44k. Normal income has nothing to do with it.

i do appreciate your concern. But what I'm outlining is not something I cooked up out of nowhere. I've been at this for many years now and I'm very well educated on the US tax system. I own a business, I have a CPA I trust, and I've been legally minimizing my taxes for years.

Harvesting long term capital gains has nothing to do with your short term gain or your normal income.

It's kind of a rich dad poor dad situation with respect to Bitcoin holding. Young people who've never really had any wealth that would even qualify them for a long term capital gain tax are probably quite unaware of how it all works. But how it works, at least the part of it I'm suggesting people look into, is that you can realize 44 grand of long term bitcoin holding at 0% tax which will adjust your cost basis on that 44 grand of bitcoin to current market price.

Let me just give you the most simple example:

Next year you want to liquidate $88,000 worth of bitcoin you've been holding for over a year (qualifying it for long term capital). You want to put your kid through college or buy a small house for your aging mother, whatever, you want to actually turn 88 grand of bitcoin into something that improves the lives of those you love.

If you simply wait until next year and then sell 88k of bitcoin your tax would be (assuming you are either single or married filing separately.. if you are married filing jointly then you can actually realize twice as much gain per year, even better)

If you wait, next you you sell 88k of bitcoin. The tax on that is going to be 44k at 0% then 44k at 15% (second tax bracket for long term gains). You tax liability is $6600.

If you instead sell 44k on december 31st this year you pay 0% tax, you buy back your bitcoin immediately. The next day you sell 44k worth of bitcoin on Jan 1 2025 you own 0% on that too.

You just saved yourself $6600. Doesn't sound like much but that's 1 year's taxes at 15% If you do this every year you say yourself $66,000...

This is a stripped down and simplified version. And it's not tax advice, it's a suggestion that people look into how capital gains work because they are ways to use it to your advantage instead of just holdling a stack for a decade.

it's not quite as simple as that. For starters the interest rate on a bitcoin loan is not favorable at all. Maybe someday in the years to come that changes, but right now it's quite expensive. Add to that the fact that you need to post a considerable amount of capital to get the kind of loan you would need to buy a house. We're not talking about taking a loan for 2% of your net worth to live on so you don't get cap gains taxes. We're talking about a considerable outflow of money to by a property.

to give you an example, a $300,000 home loan (which is what my post described) requires almost 8.0 bitcoin as collateral. And the annual percentage rate is 16.21%. That's an extremely expensive loan.