Quote from: WeThePe0ple on July 16, 2025, 08:39:21 PM

So in my country (EU) if you own a significant amount of crypto and sell it on a CEX as a person, it gets added to your gross annual income. It is likely to put you in the highest tax bracket and taxes can run up to more than 50% on realized profits. It is a part of progressive income tax scheme that covers social security for the entire nation. It basically makes life impossible for investors. They take a huge part of your earnings in 2025 but do not compensate you for losses in 2026 "because that is a different tax year".

There is an option for citizens to launch a company (not expensive nowadays) and buy/sell bitcoin on your company balance sheet. I think that this is what Michael Saylor does too. If your company has realized profits by selling, no matter if this is from revenue or from bitcoin, these realized profits are taxed at a 20% rate. Which is not low tax, but not as disastrous as the 50% income tax for the normal working class.

At this point I am in doubt whether I should set up a company and register all my crypto holdings with the IRS, or keep DeFi away from CeFi and never convert crypto to fiat. Converting to other coins, like stablecoins, is also a taxable event. But at least there are ways to keep stablecoins in a hardware wallet out of reach from tax authorities.

Taxing crypto transactions is like putting a 20% conversion fee between euro and dollar. I do not find it fair, but I can live with it if I have to.

I do have a different concern. Registering all my crypto holdings with tax authorities is like voluntarily giving them an opportunity to tax the hell out of me in the future just for owning crypto. There is a neighbouring country that taxes citizens for unrealized gains in crypto.
Both of our countries have also launched an exit tax for citizens who become tax residents in other countries. Governments will look at your entire balance sheet and tax you on unrealized gains when you leave. In my opinion that is outright theft.

The concept "not your keys, not your crypto" does not apply in my opinion when you hold the keys but the government knows about all transactions and can even tax you just for owning something. It's not your digital property if they are free to tax you for the amount they want.

Would you register all your crypto assets with the IRS, or trade to stablecoins and keep them away from them?
I just think it's sad that not giving up your privacy is considered a criminal offense.

It’s frustrating watching governments treat crypto like an easy target while ignoring the risk and volatility we carry alone. Setting up a company can help. I’ve done it myself for part of my holdings because at least the tax is clear and you have a structure to plan around. But once you declare it, you stay on their radar for life.

If you want total privacy you can keep it in stablecoins and never touch fiat. But that only works if you never plan to exit big. In the end it comes down to what lets you sleep at night. For me, it’s been about balance. I stay compliant with what I plan to convert and keep a chunk off the grid in cold storage. No perfect solution but at least you stay in control of part of it.