I've always wondered whether giving away Bitcoin randomly to addresses might be a way some ultra-rich avoid estate taxes, someday.
Let's say Satoshi wanted to avoid the estate tax, set to go back to 45% on all amounts over $6.8 million beginning in 2025. Assuming he is alive, that would be quite the tax bill. Government would be salivating at the prospect.
Is it theoretically possible if you were Satoshi to just give away $17,000 worth of Bitcoin randomly to 4 million addresses, utilizing the legal annual per-person gift tax loophole? Would such an event even be workable if Satoshi (or anyone else) wanted to give away $17k each randomly? Could the choosing of addresses be achieved by a computer program? Would there be any way to know if the incoming .25 Bitcoin per giveaway was legit and not some scam if you saw it waiting for you?
A relative of mine gave away all money to charity above the estate tax limit to avoid the estate tax a few years back when he passed. But with Bitcoin, it seems there would be interesting wrinkles possible as an alternative to formal charities.
I suspect someday a billionaire might try something just like this to avoid the estate tax and spread the money out, instead of paying the government, while keeping some degree of anonymity for the receiver and sender.
Thoughts?
I mean giving away your Bitcoin is not going to make sense at all since it's not going to be your money at all, it's going to be a better move to pay tax since it still going to be a huge amount after paying taxes, even though the taxes are going to be huge as well. I mean a giveaway some of kind or something like airdrops might actually work for sure but it's going to be a lot of work, plus there was for sure some potential of seeing this as a strategy on avoiding tax but it surely might work. We can surely look at charity where it doesn't really take taxes I mean that could easily be a way for sure, It just way too noticeable to see this kind of strategy especially if you're going to transaction millions and billions of dollars worth of Bitcoin. But I guess with that kind of amount of money it is better to pay taxes just to be safe because surely it will be a huge lawsuit and worst you gonna get criminal charges for tax evasion which as a billionaire you don't want to happen because it can easily cause you everything as soon as they find it out.
Personally, with thousands of dollars of transactions so far I didn't get any notice, when I was just a student I had a lot of big income transactions of thousands of dollars which is for sure not going to be achievable for someone who is just a college student, surely is questionable, especially on the banks. But so far I didn't have issues converting my Bitcoin to fiat money. But I have a friend who got his account frozen with a much higher amount in the bank. So I guess it's better to do it on multiple micro-transactions than just cashing out at once since it is going to attract attention for sure.