how to avoid cryptocurrency tax like a boss income tax on bitcoin and crypto currency let's go so we are going to cover three things in this lesson is how cryptocurrency bitcoin ethereum or doge coin are being taxed uh what triggers bitcoin or cryptocurrency taxable event and how to avoid crypto currency tax or bitcoin tax like a boss here's the thing something can be taxable if it is considered as an asset in the form of bitcoin or cryptocurrency so when i say it is taxable it means that the government the tax man is looking at this cryptocurrency of bitcoin just like your stocks your bonds and your real estate property as an asset class now the thing is really cryptocurrency is just like another currency malaysian ringgit uh the pounds or even usd so it is a bit ironic when they say that you need to see that as an asset class which is taxable because on the fundamental core bitcoin or cryptocurrency is just another digital currency that in my opinion is just a medium a form of exchange although it isn't very stable form of exchange which is why it is not widely adopted yet as a form of exchange which is ironic because bitcoin and cryptocurrency is supposed to be a decentralized currency free from the control of any government or central bank but yet it is taxable that is like you using ringgit to convert to us dollar at the exchange rate of 3 ringgit versus one us dollar and then you hold on to your us dollar for a couple of years where the exchange now is one us dollar equivalent to let's say five ringgit and they want to tax you for the two ringgit just because malaysian ringgit actually weakens make sense or not now i'll give you an example just imagine in 2016 you bought one bitcoin for 500 and then in 2021 you actually sold that value bitcoin at 55500 because it has go to the moon is 55 000 of pure profit capital gain as an investor it might not make sense but for a government or tax man standpoint it doesn't make sense it's because if you have gained a lot like thousand over a percent any tax authority or any government will find that kind of gain or profit too delicious not to tax you how can any government or tax authority let you get away with having one thousand or ten thousand percent of return so for sure they want to tax you now in a lot of country whether you are taxable for this bitcoin currency capital gain or not depends whether you have a short one or a long one i mean short term or long term okay back to fifty five thousand profit now that is just a very handsome amount right so you might be thinking look how much do i owe the government now that question can only be answered based on this question i have for you it depends on your tax residency in us united states there is this thing called long-term and short-term capital gain tax now the rates might change from time to time but you could see what are the rates in the description below in malaysia it might seem very straightforward very simple but it depends i will explain at the end of this video so stay on up until the end now if you are a good taxpayer and you don't want to get into trouble with the tax authority if you already make good money from your bitcoin or cryptocurrency investment and or you'll be holding for long and just one month ago you just shoot up to the moon you might be wondering should i pay tax today or you might be wondering should i pay tax end of this month or should i actually pay tax only at the end of the year or should i just pretend like it did not exist which brings us to the second part of this video what triggers a cryptocurrency taxable event and what's the taxable event a taxable even refers to any event or transaction that results in a tax consequence for the party who executes that transaction now let me give you a real practical example for bitcoin or cryptocurrency the first type of taxable event is when the profit is being realized which means that you sold your bitcoin or cryptocurrency at a profit or a loss the second type of taxable event is conversion to fiat currency after your cryptocurrency like bitcoin and ethereum are being sold so in the first in the first time you just sell it but it's still in your crypto wallet and whatnot the second type of event is basically you convert that back to ringgit back to us dollar or british pound and the third type of taxable event is mining cryptocurrency so that is like you generating income right it's like printing money when you make any income or you even like so-called print money then of course there's no question about it for sure 100 percent that will be taxable now the fourth type of taxable event is when you are converting from one cryptocurrency to another let's say if you're converting from bitcoin to ethereum now in order for you to actually convert that you have to sell your bitcoin first right well because you trade your bitcoin for ethereum or vice versa or any other type of crypto currency now that is also a taxable event now what is not taxable just by you holding after you bought any cryptocurrency then it is not taxable what we say is unrealized profit the second type of non-taxable event when it comes to bitcoin and cryptocurrency is transferring your bitcoin or cryptocurrency between crypto exchange or wallets example you could have your account in both tokenize and luno you actually transfer your cryptocurrency bitcoin and not from tokenized to luna or from luno to tokenize that that is not a taxable event by the way this if you're in malaysia this is the only regulated cryptocurrency exchanges at the time of this recording any other than that you're at the risk of losing your entire capital or all of whatever you have in the wallet because that means that it's not regulated the exchange are not regulated and it could actually go bust any time and you could lose money so when there is a taxable event number one you need to track the cost of your cryptocurrency when you are purchasing or investing that in fiat currency maybe you're using a certain uh malaysian ringgit or us dollar or british pound to actually convert that into cryptocurrency you know what is the your cost of ringgit or us dollar and after that you also need to track what is the market value of that cryptocurrency during any taxable event in its fiat currency equivalent so you have to really track this on your own now you could actually go to google and just you know do a quick search like btc to myr or myr to btc at the point when there is a taxable event that occur and the third thing you need to track is the profit and loss of course for number one step one and step two in its fiat currency equivalent which brings us to now the third part of this lesson how to avoid cryptocurrency tax like a boss now the first method to actually avoid is straightforward but not so simple now still using the same example i have over here imagine this the exact same scenario you are profiting 55 000 of capital gains now if you are located in the united states whereby you are currently paying tax in united states then you know that there is this cost short-term and long-term capital gain tax so no matter what you will be taxed for your capital gain or profit made from any of this taxable event that happens for your cryptocurrency or bitcoin investment the simple way is to actually move to a country where capital gain from investment is not taxable like when i base malaysia okay where there is a zero capital gain tax actually there is more than meets the eyes because there are actually nine things that you want to do or not do more like a checklist so that you can be 100% sure you can keep every profit that you make from your bitcoin or cryptocurrency capital gain without the need to pay a single cent of tax to any government that you have to really make sure you comply to these nine things so that when the tax man actually checks you they will let you go because they also can confirm them that you are not taxable for your cryptocurrency or bitcoin profit not sure if there is enough interest for you to learn the nine things like a checklist so in order for you not to get taxed off from your crypto currency or bitcoin capital gain in malaysia if you have any interest to actually learn more other 9 things click on the like button and leave your comments below so at least i know it worth my time to actually do another video covering these nine things because the medium of exchanger it should be relatively stable one if i would take this example you could um normally ah you know sugar baby they want to get paid for any dates or every meeting pay per meet or something like that and let's say like this sugar baby they accept bitcoin okay bitcoin they only said i only accept allowance bitcoin right sugar daddy pay one thousand allowance every week using bitcoin convert that and whatnot but then one week later that what happened okay the price of a bitcoin is a medium of exchange drop 90 or 90 percent appreciation so if you use 1000 ringgit to pay a sugar baby it's only 0
1 bitcoin and then the sugar babies say NOT ENOUGH we agree right every week my allowance is one bitcoin then what suddenly you have to use what uh not one thousand that you have to use ten thousand ten thousand because of the fluctuation in bitcoin foreign
