Now is the time to get your Bitcoin and cryptocurrency offshore. Move them out of your local exchange and into an offshore structure before governments shut the door on you. Investors in China have already been locked in and the same will happen in the United States, UK and EU soon enough. Here’s how to get your Bitcoin offshore before it’s too late!
We all know what happened in China. The government first blocked ICOs. Then they closed all the exchanges. The coup de grace was when they restricted the travel of anyone who has been operating an exchange in China… very ominous indeed. See: China Is Shutting Down All of Beijing’s Bitcoin and Cryptocurrency Exchanges.
The United States, UK and EU aren’t far behind. The US IRS has begun taxing Bitcoin as an asset. The Service also targeted US investors with a John Doe Summons, which basically allows the IRS to get a report of all US holding accounts. If you’re trading Bitcoin the the United States, the IRS wants to know about it and make sure you’re paying tax on each and every sale.
While the IRS fired the first shots in the war on Bitcoin, the rest of the 3 letter agencies are coming on fast. For example, the US SEC says that Bitcoin is cash or cash equivalent, and thus claims a right to regulate ICOs as they do IPOs. See: Crowd Sale vs ICO, which is legal in the US?
The bottom line is that the US government is targeting Bitcoin big time. Expect Uncle Sam to continue to regulate and eventually close the doors to moving cryptocurrency out of the United States.
How might the government do this? Sure, you’re free to transfer Bitcoin to any wallet or platform you like. You might think there’s nothing the government can do to stop you or find you… and you’d be wrong.
The US will simply add a rule requiring you to 1) report each and every international transfer, and 2) pay tax on any international transfer as if it were a sale.
Failure to comply will come with 50% penalties and up to 5 years in jail. The US IRS already has these penalties for failing to file an FBAR. They can add Bitcoin and cryptocurrency with a stroke of the pen!
Here’s what you can do today to protect your Bitcoin and get it offshore:
- Form an offshore company for basic asset protection.
- Set up an international trust for maximum protection and estate planning.
- Move your IRA offshore in an international IRA LLC structure.
The most basic form of privacy and protection is an offshore company. You can form an international corporation or Limited Liability Company in a private and zero tax jurisdiction. Then open an international wallet under that structure.
This will protect your coins from seizure and allow you to keep your transactions private. Just like an international bank account, a wallet inside an offshore company provides excellent protection from future civil creditors and privacy in your transactions.
If you’re a large investor, or your coins have increased to over $1 million in value, you’ll want a max protect international trust. A foreign trust is much more secure than a standard company and gives you a number of tax and estate planning benefits.
The most popular jurisdictions in 2017 for foreign trusts are Cook Islands and Belize. However, there are a number of competing trust locals depending on your situation. For an article on Cook Islands, see: Maximum Security with a Cook Islands Asset Protection Trust.
And don’t forget about your retirement account. You can move your IRA out of the United States, take control of the investments, and place a portion (or however much you deem appropriate) in cryptocurrency.
You can accomplish this by forming an offshore IRA LLC and opening an international bank account under that structure. Then your US custodian invests your IRA into that LLC. You’re the manager of the LLC and responsible to manage the money for the benefit of the account.
From here you can set up an international wallet to buy Bitcoin. You can also buy in gold, a foreign rental property, and just about any other investment you wish. The primary rules are that you can’t benefit from the investments and must treat the account as any professional investment advisor would (or should).
For more information on taking your retirement offshore, see: Here’s how to take your IRA offshore in 6 steps. If you’re going to invest your IRA in Bitcoin, there’s no reason to leave that account exposed in the United States.
I hope you’ve found this article on why you should move your Bitcoin offshore as soon as possible to be helpful. As a successful crypto investor, you might also like to know that you can significantly reduce your US taxes on these transactions.
For example, buying and trading Bitcoin in your retirement account defers or eliminates US tax on those transactions. If you’re trading in a ROTH, the transactions are tax free and, if in a traditional account, they are tax deferred.
You can also reduce or eliminate capital gains tax by setting up an international life insurance policy (minimum investment of $2.5 million) or by moving to the US territory of Puerto Rico and qualifying for Act 22.
For more on these tax planning options, see: 3 Ways to Stop Paying Capital Gains Tax.
If you have questions on setting up an international structure, or any of these tax planning suggestions, you can reach me at firstname.lastname@example.org or call us at (619) 550-2743. All consultations are free and confidential. We’ll be happy to help you setup abroad in the most efficient yet legal manner possible
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