Today I spent a couple of hours with our business accountant verifying some important documents and the topic of crypto taxes came up. I was the one who raised the topic because I would like to know what everyone is doing more out of curiosity. If anyone would know surely an accountant would. Their job after all is to keep you paying the least amount of tax possible whilst remaining legal.
The simple answer is nothing because everyone is keeping quiet declaring absolutely nothing. The discussion around crypto is just never discussed because everyone is thinking no one knows. I must admit I am not at all shocked on hearing this even though the accountant mentioned that the walls are slowly closing in and people won't be able to hide their earnings that much longer. Most people have a trail they have let behind going in and out of crypto, but I do not. This was an important part of my thinking more out of chance than planned.
I am in a fortunate position because I am in sort of no mans land when it comes to taxes because mine are paid in the UK and why most things I do are cash related. The business is different however and not wanting a tax number here I am weighing up my options. The family can get paid and I can just be a consultant so that par is still being worked out. In the past all my earnings have been declared in the UK and that has suited my needs.
My crypto portfolio is different to the majority however because back in January of 2018 I invested R10K which bought me 0.1 Bitcoin which interestingly enough would be worth R140K today. That is a 14x return if someone just held. My investment was hacked so that was my only time I have used FIAT buying crypto. There are no other footprints from an onramp and that I can thank HIVE for because there has been no need. This was not the plan because I had no idea what HIVE was when I signed up and what was possible.
The important part what HIVE has offered besides the rewards is I am fairly invisible on the inside of the crypto eco system because there is nothing to trace on the outside. At some point in the future that will change when I cash out into FIAT only if I have to. The hope is there will be crypto cards that will suit my needs and moving back into FIAT is not required.
This is why MiCA and the EU crypto regulation is so important because this is due to start at the end of this year for crypto assets and stablecoins following 6 months later. The on and off ramps is what is a big part of this providing investor security. Up till now the banking world has been very quiet not making any positive crypto moves and they have less than 8 moths to be compliant offering a service for crypto investors needs. My thoughts is that November is going to be a hectic month with the majority of banks leaving this to the very last minute. It is looking more like a wait and see game seeing who breaks cover first and what they will be offering.
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The fiat world is shrinking.
While the crypto world is growing.
If you're in the right part of the world, you can live entirely off of crypto.
Mining, staking, donations, community funds, it's all done transparently here, and it's such a better way.
I think people leave a lot more of a trail than they think they do. Moves in and out of fiat should definitely be reported because they usually happen through a CEX.
I think you'd probably get away with subsidising your living costs from crypto here in the UK, possibly to the extend of thousands of pounds a month if you're careful. Where you're likely to come up with issues is on larger scale purchases like for example buying property where there is legal requirement for you to declare the source of your funds. In those cases, you're either going to need to 'wash' the money or just declare it as taxable income.
Yes large purchases would be scrutinized and have no problem with that. The everyday living expenses would be the smart way to use it using a crypto card. Also depends where you live because you could withdraw into another tax jurisdiction and then move it.
Always been a hush-hush topic here on Hive.