Be wise; please pay your crypto taxes just like the rich do.

Suppose you haven't paid attention to the news lately regarding cryptocurrencies. In that case, it is always about some government implementing their tyrannical tentacles and laws where they go and try to seize your hard earn money that was taxed before and they want to tax again. Don't get me wrong, when governments go against companies like BlockFi is not to protect you in any way or form. It is to ensure those companies sell you out and report you to all government agencies because of tax collection and other law enforcement activities.

The truth is that when it comes to cryptocurrencies, that is the exact place where governments come to die and die-hard, or at least die trying. Governments will try to scare you into reporting whatever cryptos you may have. Still, if you bought your cryptocurrencies in a decentralized manner, you don't have to say anything to anyone, including all government agencies. Now don't be stupid and go and try to avoid paying taxes. Pay your taxes always. Make sure you pay your taxes as any other billionaire will do. Bezos has paid his taxes, so you should too, and you should do it the same way he did, paying as little as possible whenever possible. Suppose you bought your cryptocurrencies using centralized exchanges. In that case, you're screwed because that exchange has records of you and your data, when and how much you bought, and at what price, so if you purchased using exchanges like Coinbase and Gemini, you better pay your taxes.

Now, suppose you hold less than $600 in your crypto wallets. In that case, you shouldn't worry about it because it is not much money for institutions to go after you, but if you bought those same $600 using a centralized exchange. The value goes up, let's say to $6000, and you cash out, you will have to pay your due taxes no matter what, especially if you decide to get the whole $6000 in a single shot. Suppose you brought those same $600 by mining with your regular computer and didn't buy any special equipment, or you purchased it using a peer-to-peer exchange. In that case, you don't have to declare anything as long as no one else knows about your stash. And if you $600 got to $6000 and you sell it by using decentralized options, you don't have to report anything either. But if your coins touch some address your KYC exchange knows about, you will be better off just declaring it. But a good citizen reports to have peace of mind and to avoid possible jail sentences in the future once you get caught lying to the IRS in case of a US citizen.

When it comes to paying taxes in crypto, it all depends on how you got your coins and how you use your cash now. The final solution to not paying taxes is not to sell ever, at least that is the case in the United States. I can legally avoid paying taxes on my crypto holdings by not selling or using any of my satoshis. And if I find a service that can lend me against my cryptos, I will avoid paying taxes forever.

I will write this: you must have nothing and be happy if you don't want to pay taxes. After all, the government can't tax what you don't have; if you have something the government can tax, don't ever sell that asset. Borrow against it better. You see, if you hold your purchases in your private keys, you control your money, and no one can't confiscate your money, but you must also have control over your assets by making sure you never sell your investments.

In the United States, you must pay capital gain taxes in all your crypto holdings, but you only pay that tax when you sell. If you borrow against your cryptos is because you will have a better asset and not just because you want to blow up your wealth on useless shit. And that is good. Suppose you must restrict yourself from selling and only borrow to get even another asset. In that case, you will never be poor again, but if you sell your cryptos to buy useless things, you will have to pay taxes and ruin yourself by wasting your money.

If a government decides to confiscate cryptos for whatever reason and you leave your funds with third parties, they will immediately sell you to the government. Having control of your private keys is not just about custody of your funds. It is also about knowing exactly when you must exchange, sell or borrow your assets.

When buying cryptos, it is better to use decentralized exchanges that way, you can do whatever you may like in the future, and it is also good in case your local government goes tyrannical and tries to seize your wealth. After all, if you have nothing, they can grab anything. If you are an investor that will buy less than $5000 a year, you will have more privacy if you use decentralized exchanges. Still, you will also have to pay a premium for it, and if you cash out a large amount in the future, you will have to pay taxes to make it even more complicated at the end of the day.

So the best way to not pay taxes on your cryptos is to do what the ultra-rich do: use loopholes in the tax code to pay as little as possible. Even if you only hold 1 Bitcoin Cash, you should be worried about taxes because if tomorrow Bitcoin Cash hits $1m, you will have a clear idea of what to do. This way, borrowing against your cryptos to buy something else is not tax-avoiding. It is just another way the government provides so that if you have wealth already, you continue being wealthy and contributing to society by providing investment opportunities and jobs for everyone else.

Imagen, if tomorrow Bitcoin Cash is worth $100,000.00 and you hold one Bitcoin Cash and the house you always dreamed of is just worth $50,000.00, the seller is willing to sell it for Bitcoin Cash since you bought using decentralized exchanges. You may think you shouldn't report to your government, wrong because now you hold an asset that can be confiscated and that the government knows about it. Now the government is asking you how you bought that property, and probably you will be in more trouble once the government realizes that you were trying to hide your transaction from the start.

Now, if you borrow against your BCH to buy a house, the government will know you have 1 Bitcoin Cash but won't be able to tax it because you are borrowing against it, and once you pay off your debt, the coin will go back to you, but you didn't sell your satoshis, so no taxes whatsoever are owned. And if the house you are trying to buy is not worth you getting into debt, it is probably not worth selling your satoshis.

If you think that getting into debt for the house of your dreams is not worth it, it won't be worth it to sell your satoshis either, and you will probably regret selling them later. It is better to borrow against your assets than to pay capital gains taxes, at least in the US, especially if CG taxes go beyond 15%.