Did you know that the lowest rate for long-term capital gains is actually 0%? If you earn under $47k as single filer or $94k as a married couple, your gain on bitcoin held over one year might be ZERO! Tax Tip of the Day.

I'll be reaching out soon. Thnx for the reminder.

Please keep these coming 🙏

What do you do when you can’t determine or prove the cost basis of a UTXO? Take the L and use $0 or will the IRS accept an educated estimate?

Hard to say what position the IRS would take. I'm not aware of any active cases to reference. I would say it doesn't have to tie back to an individual UTXO, but ideally some record of activity either from a wallet or exchange.

Gotcha

Following up on yesterday's tax tip... You might have heard about tax lost harvesting. Selling bitcoin and then buying it right to recognize a loss for a given tax year. But would you ever want to harvest a tax gain? Maybe if your gains are taxed at zero percent. Let's walk through an example. You are retired/didn't have any income for the year. You have 1 bitcoin purchased over a year ago at $60k. Bitcoin goes up to 100k. You could potentially sell, buy it right back. Realize the $40k gain taxes at zero %. And your new cost based goes from $60k to $100k

“You all are paying taxes?”