As the election results showed Republican Karen Handel soundly beating her opponent Jon Ossoff in the special election in Georgia, CNN analysts appeared disappointed by the results before anchor Anderson Cooper cut to a break.
‘Sad CNN’ Meme Storms the Internet as Karen Handel Wins Georgia Special Election
As the election results showed Republican Karen Handel soundly beating her opponent Jon Ossoff in the special election in Georgia, CNN analysts appeared disappointed by the results before anchor Anderson Cooper cut to a break.
‘Affluenza’ Mom’s Bond Could Be Revoked after Allegedly Consuming Alcohol
Prosecutors allege that “affluenza” mom Tonya Couch violated the terms of her bond last weekend by consuming alcoholic beverages. They want to re-arrest her and rewrite the conditions for her freedom while she awaits trial on felony charges of money l…
Algerian Man Dangles Baby from 15th Floor Demanding Facebook ‘Likes’
A court in Algeria sentenced a man to two years in prison after he posted a photo where he dangled a baby from a high-rise balcony. He threatened to drop the toddler from the 15th story balcony if he didn’t receive 1,000 Facebook likes.
Kobach – Refugees and Terrorism: A Massive Vulnerability in Our Immigration System
The left-leaning Ninth Circuit U.S. Court of Appeals recently ruled against the Trump Administration’s “travel ban” and kept in place the preliminary injunction that prevents President Trump’s executive order from going into effect. In a classic case of judicial activism, the three Clinton-appointed judges declared that the president’s order “does not offer a sufficient justification” to satisfy them. Never mind that the relevant statute does not require the president to satisfy federal judges (or anyone else, for that matter) that his decision is a good one.
Texas Satanic Cult Day Care Couple Found Innocent 25 Years after Convicted
Two years after the State threw out the sexual and satanic ritual abuse case against former Texas child day care owners Dan and Fran Keller, the Travis County District Attorney declared them “actually innocent” and dropped all existing charges, finally exonerating the couple who maintained their innocence since their 1992 convictions.
The Three American Hostages Still in North Korea Following Release, Death of Otto Warmbier
Americans are mourning the death of 22-year-old Otto Warmbier, a college student who was arrested and sentenced to 15 years of hard labor for allegedly stealing a poster in a hotel where he was staying.
Road Rage: Elderly Texan in Prius Opens Fire after Someone Flips Him Off
Police in central Texas arrested the driver of a Toyota Prius after he allegedly fired shots at another vehicle. The road rage incident occurred after the other driver reportedly flipped off the Prius driver.
Campbell: Trump Should Break Up Google’s Media Monopoly
When President Trump was still on the campaign trail, he noted that Amazon is using the Washington Post (owned by Amazon) as a political instrument to avoid prosecution for its “huge antitrust problem.” President Trump is right to be concerned about Silicon Valley’s unprecedented corporate power and influence over the nation’s media, and he’s right that “we can’t let [them] get away with it.” But the greatest threat to our constitutional republic isn’t Amazon. It’s Google.
How Cryptocurrency Holders Can Diversify While Deferring Taxes
With the historic rally in Bitcoin and Ethereum, there are more investors than ever seeking to diversify their newly expanded cryptocurrency holdings. Whether this diversification involves exchanging cryptocurrency for fiat, other cryptocurrencies or a mix of both, the downside can be capital gains tax exposure.
Capital gains (if the underlying property has been held for over a year) are taxed at 15 percent, 18.8 percent or 23.8 percent, dependent upon the amount of income received during the year. One common method of tax reduction is to spread sales/exchanges over multiple years, in order to “soak up” the maximum amount of income into the 15 percent and 18.8 percent brackets.
If you’re seeking to diversify, it’s really only practical to spread sales over a few years at most. But what if there were a way to sell immediately while still deferring this capital gains income over a much longer period, such as 20 years or even a lifetime? And what if this method were able to also provide some benefit to charity, with a corresponding charitable deduction?
Enter the Charitable Remainder Trust
This can actually be done with a quasi-charitable trust, namely a charitable remainder trust. With a charitable remainder trust, you contribute some amount of your cryptocurrency to a trust before selling. The trust then sells the cryptocurrency (or otherwise diversifies) on a completely tax-free basis. The proceeds of sale stay within the trust, where they can be reinvested in stocks, bonds, mutual funds, other cryptocurrency or almost any other investment asset.
In exchange for your contribution of cryptocurrency, the trust makes a payment to you each year for so long as you are alive. (You can alternatively choose to have the payment made for the joint lives of you and your spouse, or some shorter fixed term of years.) You choose the amount of this annual payment at the time you create the trust.
The whole process is sort of like receiving an annuity in exchange for your cryptocurrency. This payment can be a fixed amount, or it can be expressed as a fluctuating percentage of trust assets each year. When you pass away, whatever is left passes to a charity of your choice.
There are numerous tax benefits:
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The sale or exchange of cryptocurrency is completely tax-free.
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You personally only pay tax each year on the annual payment you receive from the trust. So if you use a charitable remainder trust to sell $5M of Bitcoin in 2017, but your annual payment for the rest of your life is $250,000 per year, then you only pay tax on $250,000 in 2017. This payment would be taxed at favorable capital gains rates. Depending on the amount of your other annual income, this strategy will likely keep you in the lower capital gains brackets.
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In the year of trust creation, you receive an income tax deduction equal to the actuarial value of the charity’s projected gift. This actuarial value is a calculation done by your attorney-CPA. The smaller the payment you select, the larger the charitable deduction. Assuming you choose an appropriate charity, the deduction can be used to reduce up to 30 percent of your income in a given year, and any unusable amount carries forward for up to five future years. For example, if a 42-year-old man were to contribute $2.5M of cryptocurrency to a charitable remainder trust in 2017 and selected an annual payment equal to 5 percent of trust assets, he would receive a charitable deduction of approximately $480,000 (at current IRS rates). That deduction could be used against his taxable income in 2017, 2018, 2019, 2020 and 2021.
You can even reserve the right to serve as trustee of the trust and to change the charitable remainder beneficiary whenever you please.
There are of course many technical caveats that need to be complied with. Most important, the IRS requires that the actuarial value of the charity’s share must be at least 10 percent of the assets contributed to the trust. Be sure to consult with appropriate counsel to ensure you meet the 10 percent rule and other technical requirements.
If you are looking to reduce and defer income taxes while keeping a guaranteed income for life and doing some good in the process, a charitable remainder trust can be the way to go.
This article is a guest post by Jeff Vandrew Jr. It does not necessarily reflect the views of BTC Media or Bitcoin Magazine and is for general information purposes only; it should not be taken as investment advice. Investors should conduct their own due diligence and consult with a qualified tax/investment professional before attempting anything described in this article.
The post How Cryptocurrency Holders Can Diversify While Deferring Taxes appeared first on Bitcoin Magazine.