SHIBA INU TOKEN HOLDERS: HOW TO AVOID CRYPTO TAXES: CASHING OUT AT $0.01!
What will happen when we cash out and how much will uncle sam be taking from us so before i dive in? I do want to mention guys that i am not a financial advisor, nor am i an accountant. Rather, i always try to put you guys on the place that im in so take everything. I say for a grain of salt, but i crunch the numbers i did the research you guys can decide whether or not this is applicable to you and your family situation. So, first and foremost, if we look at the price action for shiba inu uh, we saw a really nice bike on saturday went from 710 to 760 satoshi units kind of assault off a little bit since, but overall the price action has been pretty steady awaiting those Catalysts to come because we know theres a lot of excitement around the crypto space, especially for shiba inus ecosystem, so the potential is great, but between now and that one price target that a lot of us have. I want to talk about what thats going to look like when were all cashing out, especially when were invested now in 2021.. So a few definitions that i want everybody to know are capital gains, so capital gains is a tax due only after an investment is sold. So youll never pay capital gains on any assets that you dont sell so for those diamond hands and the ones that have been holding for a really long time, their bitcoin ethereum.
The only thing, the only time you have to pay back taxes on those assets is when you sell for a gain keyword gain there, because there are capital losses which you can actually um use as a tax deduction or write off. But now were going to talk about the gains: capital gains, uh, capital gains. Taxes applies only to capital assets which include stocks, bonds, jewelry coin collections and real estate. But cryptocurrency is also under this. For most taxpayers long term capital gains are taxed at a lower rate than short term gains. Okay. Last but not least – and this is all from investopedia – capital gains can be offset by capital losses. Some investors sell losing investments to lower their capital gains tax that they owe. So if you bought a crypto asset, say that you didnt really like that ended up failing, you could sell it for a loss and write that loss off. So we can give many examples, but for now we just want to talk about those things in particular, so were going to dive into the spreadsheet. On what its going to look like when we cash out for shiba inu before i do that, i do want to mention the link in the description below for weibo. So if you click the link in the description, you get two free stocks, valued up to two thousand three hundred dollars: the ability to trade, chiba edu for zero fees and all of that just by click of a button and depositing one penny.
One cent into your. We will brokerage account so take advantage folks take advantage of these times and do not let these opportunities pass. You up now lets go ahead and talk about crypto taxes, so make sure you guys are paying attention and again, if you want to pause rewind, do what you got to do to make sure you are understanding what all of this means. Now, what are the assumptions that we are making from the time of the recording of this video? So shiba inu were assuming that you have a 10 million shiba inu token investment. Most of us, i know, have 100 million, like myself have 500 million some a billion, and what were going to assume is you bought in with a dollar cost average of zero zero, 0.0000, seven, four or seven hundred and forty satoshi units for a total cost of 74 us dollars all right. Those are the assumptions were going to make now lets talk about short term capital gains short term. Capital gains is, if you sell your shiba inu position for us dollars or whatever dollar, equivalent and youre, actually cashing out so thats. The biggest caveat today im going to talk about one of the ways that we can actually mitigate this, so tax filing single thats, the other assumption we have everybody that is watching this video ive assumed that youre single. I know most like myself. I am married, which puts you in a different bracket but were going to talk about single individuals.
Now lets say you sell within a within the first year of investing in chiba inu. It goes back to its all time, high to 3 600 satoshi units. You get very excited or 3555 and then you make you see the gains and youre like wow. My 74 investment went to 355 dollars and 20 cents im excited. So what that means is you made a total gain of 281 dollars and 20 cents? Now, if you have 100 million ship, of course, you can have 10 times that if you have a billion ship, youre gon na have 100 times that all right now, based off the laws and the rules of capital gains if youre a single individual in 2021. And you made a total of 281 dollars in gains thats that puts you in a 10 tax bracket. That means from the total investment you owe uncle sam 28 dollars and 12 cents. Now, how did i come up with that calculation? You take the total amount of gains that youve made subtracted by the total initial investment, because youre not taxed on the money you initially put in only the gains. So you take these two numbers: the gains minus the initial multiplied by the percentage taxed and thats. Your total amount that you have to pay uncle sam. The rest, of course, is for you to keep now long term capital gains say you bought shiba inu and after year, one. It goes back to its all time.
High, the three thousand six hundred satoshi units, you made a total of three hundred, fifty five dollars and twenty cents or yeah three thousand five hundred 355 and 20 cents. Your total gain is the same as the short term, 281 dollars and 20 cents. Guess what? Because you held and you diamond handed for a whole year, one of your rewards is, if you cash out to us dollars and put in your bank account. You owe zero dollars to uncle sam because again the amount that youve made puts you in the tax bracket of that zero percent. So again, thats the benefit of diamond handing or holding for the long term. So make sure you guys understand those terms and understand those numbers and all these charts can be found on investopedia, so ill put the link in the description below. If you want to go and crunch your own numbers based off your single or married status, head of household, it all depends on your filing status. Okay lets keep it going now lets say you diamond handed chiba inu. All the catalysts played themselves out just like weve weve, been anticipating. We get listed on coinbase on robin hood. Im talking shiba world comes out absolute game change. The overall crypto market, skyrockets in the next five years, say or, however long lets just were going to assume both short and long term. The next year, shiman inu goes to one cent in the next five years.
Shiba inu goes to one cent short versus long term. Short term filing single, with a price of 0.01 or 1 cent. That means youve made your 10 million shiba inu tokens. Investment went from 74 dollars to a hundred thousand dollars holy smokes. That would be amazing, wouldnt. It hey but im a believer, so your total gains would be 99 926 thats how much money youve made in net profit, so that puts you into 24 capital gains tax bracket, meaning that you owe uncle sam. You owe uncle sam 23, 000, 982 and 23, 982 and 24 cents wow 24 tax bracket because again youre doing it in the short term and youd be in the bracket that made um anywhere between, i think its about 70 or 80 000 up to 120. So because you found that bracket, you owe 24 tax on your capital gains, but remember the only time you pay. This back is, if you cash out so say: shiba inu goes to one cent and you keep holding for years down the line from your initial investment of seventy four dollars. It goes up to a hundred thousand. You made a total um youve made a total gain of 99 926 instead of 24 tax bracket youre going to owe 15 percent only 15 from 24, so you save 9 in taxes, meaning that the total payout free uh for uncle sam. How much you owe the government, its fourteen thousand nine hundred eighty eight dollars and ninety cents? How, though, eight thousand nine hundred and ninety three dollars and thirty four cents saved, because you held on for more than 365 calendar days or a full calendar year? So thats the exciting thing with taxes is you could you can actually figure out ways you know diamond hand or hold positions for the long term to avoid paying those big taxes? Now, a really good question someone might ask in the comment section below is what if shiba inu goes to one cent and because of this one cent price target that people know they want to sell at, we see a huge sell off, and people sell out of Their positions and shiba inu drops, you know significantly after aha.
How can we mitigate that? The power of stable tokens, folks tether and my other favorite is usdc. These two are stable tokens. If you look at the all time chart for these tokens, they always hover right around one dollar right around a dollar for usdc, same thing right around a dollar: yes, theres, some volatility, but regardless its stable token, regardless of market conditions, it stays at one us dollar. So one big thing you can do: is you take your crypto? You, you see your gains, you get to the price target that you have for yourself. Everyone has their own respective price targets and then you swap you, take your crypto assets right and you swap them for a stable token. So say: youve been investing for six months, so youre still in the short term, capital gain tax bracket, but you want to wait or even if youre at month, 10 say you have two more months to wait, but the price target you are going for is met Instead of selling out for us dollars immediately and paying a lot of taxes out, instead swap it for a stable token, because the only time you get taxes, not when you swap tokens, is when you sell tokens and cash out into the bank, so wait. Those other couple months say get to that 12 month mark and then go ahead and withdraw your gains if youd like to and thats when you cash out and again guys.
The only reason i do this is because its not because you know were trying to not pay taxes. I think you know, regardless as investors, there are strategies we can do that are 100 legal holding on to our gains and not having to pay out as much as we we will pay. We are going to give our fair share, but the fact is is with long term capital gains. You can save yourself a lot of money thats all i have for you guys today. I hope this ship army appreciates this video.