Crypto cash out and invest long term

[sksksk12]

Hi,

So back in 2015, my mother (MEX) and me (US) purchased some bitcoin with savings money. it wasn't much back then, but it is now (4-5 mill USD currently). We both purchased and haven't touched that coin since then. just sitting in an address. We use my coinbase account in the US to purchase it, so we have proof for that. the question is what is the best way to cash out? She has a much larger holding than me, so we were assuming that it will be ok for her to claim the entirety of the holdings as hers. Is it possible for her to then open an account/trust/company/setup or whatever is required in a nation that doesn't charge capital gains tax (or charges less), seed it with the property (bitcoin) , have the fund/trust/company to sell it for fiat and invest on other stable stuff, buy gold, index, etc, etc. and then have her as a beneficiary (or me and her), and pay taxes in MEX (or US) every time she withdraws or receives distribution from that entity? I understand that taxes will be paid eventually, but i rather defer it as much as possible so it can be invested somewhere else. Also, I know that a lot of banks don't even want to deal with US customers, but what is the most tax optimized way possible for a US citizen to optimize this burden as much as possible?

 

[troubled soul]

Following your thread looking for same solution

 

[Gediminas]

sksksk12 said:
Hi,

So back in 2015, my mother (MEX) and me (US) purchased some bitcoin with savings money. it wasn't much back then, but it is now (4-5 mill USD currently). We both purchased and haven't touched that coin since then. just sitting in an address. We use my coinbase account in the US to purchase it, so we have proof for that. the question is what is the best way to cash out? She has a much larger holding than me, so we were assuming that it will be ok for her to claim the entirety of the holdings as hers. Is it possible for her to then open an account/trust/company/setup or whatever is required in a nation that doesn't charge capital gains tax (or charges less), seed it with the property (bitcoin) , have the fund/trust/company to sell it for fiat and invest on other stable stuff, buy gold, index, etc, etc. and then have her as a beneficiary (or me and her), and pay taxes in MEX (or US) every time she withdraws or receives distribution from that entity? I understand that taxes will be paid eventually, but i rather defer it as much as possible so it can be invested somewhere else. Also, I know that a lot of banks don't even want to deal with US customers, but what is the most tax optimized way possible for a US citizen to optimize this burden as much as possible?
Click to expand...

Just find who will offer the best exchange rates for you (crypto to fiat) and then cashout it to the crypto-friendly financial institution. 😉 Since your volume is high, I wouldn't be checking just public prices.

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[troubled soul]

Can you provide some crypto-friendly financial institution ???

 

[Gediminas]

hirenshukla2017 said:
Can you provide some crypto-friendly financial institution ???
Click to expand...

yes

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[sksksk12]

Gediminas said:
Just find who will offer the best exchange rates for you (crypto to fiat) and then cashout it to the crypto-friendly financial institution. 😉 Since your volume is high, I wouldn't be checking just public prices.
Click to expand...

My concern is not so much that i wouldn't be able to cash out. im more interested in tax optimization. specially for the crypto -> fiat part.

Last edited: Jan 12, 2021

 

[Sols]

sksksk12 said:
So back in 2015, my mother (MEX) and me (US) purchased some bitcoin with savings money. it wasn't much back then, but it is now (4-5 mill USD currently). We both purchased and haven't touched that coin since then. just sitting in an address. We use my coinbase account in the US to purchase it, so we have proof for that. the question is what is the best way to cash out? She has a much larger holding than me, so we were assuming that it will be ok for her to claim the entirety of the holdings as hers.
Click to expand...

You have two separate problems to solve: your mother's coins and your own coins. They are probably separate assets, legally speaking, even if they're on the same address.

I hope your relationship is rock solid or that, in case of a dispute, you have the necessary documentation to prove your ownership of the share.

If your mother assumes control of the bitcoins, the transfer of your coins to her might be considered a gift be subject to gift tax. That is if anyone finds out, and if gift tax applies at all. You can choose to take the risk of hoping the IRS never learns about that transaction.

sksksk12 said:
Is it possible for her to then open an account/trust/company/setup or whatever is required in a nation that doesn't charge capital gains tax (or charges less), seed it with the property (bitcoin) , have the fund/trust/company to sell it for fiat and invest on other stable stuff, buy gold, index, etc, etc. and then have her as a beneficiary (or me and her), and pay taxes in MEX (or US) every time she withdraws or receives distribution from that entity?
Click to expand...

This is far too detailed to answer in a meaningful way without having looked at every detail. There are mountains of details that need to be considered. In general terms, though, what you describe is doable. You're on the right path.

However, the exact structure is something you would be wise to discuss with an adviser/fiduciary who can sit down with your mother (and you) and make all the necessary arrangements to be compliant with Mexican law (assuming she lives there, otherwise US law).

sksksk12 said:
I understand that taxes will be paid eventually, but i rather defer it as much as possible so it can be invested somewhere else. Also, I know that a lot of banks don't even want to deal with US customers, but what is the most tax optimized way possible for a US citizen to optimize this burden as much as possible?
Click to expand...

You'll want to receive the funds in a way that qualifies as capital gains. There might be creative ways of making it tax free, but again, that requires looking at details not available here and best discussed one to one with a fiduciary.

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This is the probably the answer to your question.

 

[sksksk12]

Sols said:
If your mother assumes control of the bitcoins, the transfer of your coins to her might be considered a gift be subject to gift tax. That is if anyone finds out, and if gift tax applies at all. You can choose to take the risk of hoping the IRS never learns about that transaction.
Click to expand...

I think the lifetime cap for gifting without paying any tax is 11 million. so im ok handling those to her as a gift. even today. As for the rest, can anyone recommend someone i can talk to regarding this? i think thats the objective, we are not planning on doing this for ourselves

 

[CaptK]

The benefit you have is that your mother is Mexican the issue now stands on where does she live. If in the US then and or has a green card then it's going to be difficult.

If she has no ties to America then she can definitely utilise a structure.
Any of the Carribbean Islands would suffice for set up but

Biggest question is who's name is on the Coinbase account it was bought with?

 

[sksksk12]

CaptK said:
The benefit you have is that your mother is Mexican the issue now stands on where does she live. If in the US then and or has a green card then it's going to be difficult.

If she has no ties to America then she can definitely utilise a structure.
Any of the Carribbean Islands would suffice for set up but

Biggest question is who's name is on the Coinbase account it was bought with?
Click to expand...

the purchase was done under my name, she transfered money to my account, because back then in mexico there were no exchanges to buy bitcoin. she lives in mexico, has no green card. Even if she cant claim those bitcoin, i see no problem gifting them to her. as said before there is a 11-17 million USD lifetime allowance for gifting. what leads me to my next point. so far i have read that giving property to trust funds is a type of gifting. why would it be a problem to gift the bitcoin as US citizen to a foreign trust? the concept should still be the same. As i said, i have no problem paying taxes once i withdraw to an american or mexican account. i just want to avoid initial conversion to more stable investments

Last edited: Jan 13, 2021

 

[CaptK]

Then a foreign structure will work.

 

[Spinat]

It isn't that difficult to setup a simple EU or UK company and sort this out. Using Bankera, AdvCash or even some of the Swiss banks would be well possible depending on how many coins you own.

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[sksksk12]

blueweb said:
It isn't that difficult to setup a simple EU or UK company and sort this out. Using Bankera, AdvCash or even some of the Swiss banks would be well possible depending on how many coins you own.
Click to expand...

Thanks. so the company would sell the assets and then do biz with the bank? as i said, part of our interest would be to also diversify into metals, stocks, and indexes, plus anything more stable. would a swiss bank provide all of that? would it be ok for a EU or UK company to do biz directly with a bank located there?

 

[CaptK]

Yes, due to the your mother being Mexican I can confirm with experience that she will be able to open an account in Switzerland and the bank will accept the funds.

 

[sksksk12]

CaptK said:
Yes, due to the your mother being Mexican I can confirm with experience that she will be able to open an account in Switzerland and the bank will accept the funds.
Click to expand...

Great, any recommendations for some company to help me with the process? If anyone in here does that dm' me.

 

[fortunespeculator]

sksksk12 said:
Hi,

So back in 2015, my mother (MEX) and me (US) purchased some bitcoin with savings money. it wasn't much back then, but it is now (4-5 mill USD currently). We both purchased and haven't touched that coin since then. just sitting in an address. We use my coinbase account in the US to purchase it, so we have proof for that. the question is what is the best way to cash out? She has a much larger holding than me, so we were assuming that it will be ok for her to claim the entirety of the holdings as hers. Is it possible for her to then open an account/trust/company/setup or whatever is required in a nation that doesn't charge capital gains tax (or charges less), seed it with the property (bitcoin) , have the fund/trust/company to sell it for fiat and invest on other stable stuff, buy gold, index, etc, etc. and then have her as a beneficiary (or me and her), and pay taxes in MEX (or US) every time she withdraws or receives distribution from that entity? I understand that taxes will be paid eventually, but i rather defer it as much as possible so it can be invested somewhere else. Also, I know that a lot of banks don't even want to deal with US customers, but what is the most tax optimized way possible for a US citizen to optimize this burden as much as possible?
Click to expand...

Can help.If interested dm me.