It's possible to make $500,000
a million dollars
or even $10 million with crypto
And pay ZERO capital gains tax.
Do you believe me?
Probably not.
Should you believe me?
Yes, because this is actually very doable,
and it's really not that difficult.
In fact, you can use the same exact method
for stocks or for businesses,
anything that you want to save capital gains tax on.
So let's break this down step by step
on how you can set up your assets
in a very particular way
to both save you money
and benefit society while you're at it.
Even if you don't have a lot of money right now
you should probably watch this video
for when you do have a lot of money
and your future self will thank you
for this ten minute investment.
Also, for every new subscriber
I get on this video,
I will personally
Donate $0.10
To charity.
And you'll see why later on in this video.
If you're already subscribed, unfortunately,
hitting unsubscribe and resubscribe
won't do anything this time around.
So let's go ahead and get into it.
This plan works especially well
if you've bought something that has dramatically
increased in value, and if you decide
to sell or diversify out of that thing,
it means a huge tax bill.
So let's say you invested $5,000 into Bitcoin years ago
now it's worth $505,000,
a gain of 500 grand.
First off, Congratulations.
That's quite the feat.
But if you want to sell or diversify, you have a
whole lot of taxes to pay.
The good news is you've been holding
longer than one year, so that means
no short term capital gains.
But bad news is you still have
long term capital gains, and that can add up.
If you were to sell that $505,000 in Bitcoin,
you would pay a long term federal capital gains
of around 20%.
And of course, States need to get their cut of the action,
and that can be anywhere between 0% and 13.3%,
depending on your state.
The average is 5% capital gains tax for States.
So for this example, we're going to do
25% total capital gains tax.
At 25%, your $500,000 in profit
would have $125,000 in taxes
taken right off the top.
And there is nothing you can do about it
or can you?
Yes, of course.
That is why I'm making this video.
One option is to move to Puerto Rico
and become a member of act 60,
wait ten years, and then you only pay 5% capital gains tax.
But that might not be an option for you.
And frankly, we have a better option.
Also, it's very important to note that you
only have options before you sell.
If you've already sold, your options are
basically gone.
Double also, I am not a financial advisor.
Consult all of this with a tax professional
before doing anything crazy.
Okay, so how do we save that $125,000 in tax?
We're going to do this through a charitable
remainder trust,
aka, a legal way to save a boatload of tax,
do good for society,
and still leave money for your kids
or your cat or whoever you want to leave money to.
If that sounds good, you'll want to watch the rest of this video.
You'll also want to grab one of the remaining 20 spots
for my Patreon, where I have
even more private money making content.
Grab one of those before it sells out yet again.
So, the most simple way
to describe a charitable remainder trust
is it's basically a fund that you set up that says,
after I die, I want this money
to go to a charity of my choosing.
And you might be thinking, well,
you know, charity is great and all, but I wanna
actually use the money that I made
in my investment.
And to that I say, Hold your horses, we're not done yet.
We haven't gotten to the best part yet.
So let's backtrack a bit.
We have $125,000
in an expected tax bill if we sell.
So first we reach out to a lawyer and we have them
form a CRT for us.
Then you need to choose a charity that you're going to
donate your money to.
That charity needs to be a 501(c)(3)
legitimate charity.
And then you set yourself as a lifetime beneficiary
of the Charitable Remainder Trust.
Now that it's set up, you're going to donate
your $505,000 in crypto or stocks or other assets
to your CRT.
So your CRT is actually going to have its
own crypto wallet that you send that crypto to.
It's a completely separate entity from yourself.
Now, what's interesting here
is your CRT is actually
a charitable entity in and of itself.
So by transferring the funds,
you get a tax deduction
right away because you're
putting it into a charitable entity
for donating money to your own charitable trust.
It's like it's your very own kind of like make a wish,
except your wish is to pay less tax,
and then you got your wish.
So you get an instant tax deduction.
However, it's important to note that you don't get
a 100% deduction
on your donation because you aren't
actually donating it to a 501(c)(3)
until you die,
which is hopefully a long time from now.
So there's this present value calculation
that is done on your money.
This is because money 40 years from now is worth
less than money today.
So instead of deducting 100%,
you could deduct around 30% to 40%
from your taxes.
And of course, this can vary a little bit.
If you were, for example, to donate to a
private institution like a College or your
very own charity, that percent deduction
would be a little bit lower than 30 or 40%.
But we'll assume for this example, that
you're donating to a public eligible institution,
and then we're gonna estimate on the low end with a
30% deduction against your taxes.
This means on our $500,000
we just got a tax deduction of $150,000.
Now you don't get that all on year one, though.
How it works is you get to deduct
60% of this balance against your income,
every year for five years.
So year one, you get to deduct $90,000
Year two, $36,000
Year three, $14,400
Year four, $5,760
then finally, Year five you deduct the remaining $3,840.
Okay, so we get this nice little benefit
on our income tax for the next five years.
But it doesn't stop here.
So far we've just transferred our Bitcoin
to the Charitable Remainder Trust.
There is a whole lot more goodness coming.
So we haven't sold it yet.
The next step is to sell it.
Now, when you sell, you're selling capital gains tax free,
because it's not actually you selling it.
It's a charity selling it.
And say it with me,
Charities don't pay taxes.
But we're not done yet.
Here's how you really benefit.
Now that you've sold, you have options.
You can leave the trust as cash, which you
probably don't want to do.
Or you could buy other assets within the trust.
You could buy real estate, you could buy a business,
you could buy even more crypto.
You can really buy any kind of asset.
And then you set up an annuity.
This can either be percent based
or a flat amount every single year.
This will be paid out to you
from the charitable trust
until you die.
And if you go with the percent,
it has to be at least 5%.
For this example, we're just going to go with 7% paid annually.
So now you get 7% paid
of your $500,000 every single year,
$35,000 every year until you die.
Give or take a little bit depending on the portfolio's performance
and a charity will benefit in the end.
Now, it's important to point out
that you do pay tax on the annuity payments
every year at your regular income tax rate.
But remember, you do have that nice little
tax deduction for the first five years,
thanks to your initial donation
of $500,000.
Now, a side benefit here is the money within this trust
is totally protected from personal liability.
I mean, you could go and crash your car
into a preschool and be fine.
I'm not saying you should.
That's definitely not financial advice.
You shouldn't do that.
But if you did, your charitable trust cannot be touched.
Now you might be thinking,
you know this sounds great and all,
the trust part,
not the running into a pre-school,
and crashing into pre-school part.
But I wanna give my- [Laughs] sorry.
But I wanna give my money to my kids when I die.
Not necessarily everything to a charity.
So this won't work for me,
and you would be wrong.
You can still do this as well.
So in order to do this,
you need to call up your lawyer and have them set up
an irrevocable life insurance trust.
This is a life insurance policy
that you'll set on yourself
for $500,000
And how do you pay for it?
With your annuity payments.
You can pay this policy little by little over something like
20 years if you want, or you can just
overpay it for the first five years
when you're getting those nice, juicy tax write offs,
and then you can never pay it again,
leaving that same $500,000
to your loved ones after you die.
This is when money gets fun.
But of course, there are a lot of variations
on how this can be set up.
So consult with a tax professional.
I called a few law offices to
check out pricing for the sake of this video,
and you're looking at between $3000 and $8,000
to set this up depending on who you go through.
And I also found that some charities
will even help set this up for you
if you plan on donating to them after you die.
So there may be even cheaper options there.
Now, let's briefly talk about some of the cons with this.
First, you generally need quite a bit of assets
for this to work.
It seems to me like you need at least
about $100,000 in gains for it to start making sense.
Second, charitable trusts are
unchangeable by design
for tax reasons.
So you can't easily decide later
to remove assets or change the beneficiary.
A lot of it is set in stone
after you go ahead and sign the paperwork.
And then third, you lose legal control
of the assets inside the trust,
even though you still benefit from it.
That's why if you crash into a preschool, you're fine,
because it's not you, it's a separate entity.
- Remain calm. I have trained for this.
So in summary, you made $500,000.
You paid no capital gains tax.
You get a nice tax write off.
You get paid for life.
You get a benefit of charity
and your family is still taken care of.
So remember to subscribe and I'll donate to a charity.
Join my Patreon link below if you're looking for
even more additional content.
And as always, have a profitable day.