What strategies are available to minimize my tax exposure on my digital asset investments?

The most important tax saving strategy is to use registered accounts as investment vehicles first. If you’re in Canada, this means using your TFSA, and if the U.S, to use a Roth IRA, to buy our recommended Bitcoin ETFs and stocks.

For other crypto assets, we recommend having a corporation. Our coaches have a legitimate business trading and mining crypto, where they can transfer and/or hold their crypto assets. That is the strategy we recommend you to consider if it fits your purposes.

This is a strategy from the accountant of co-founder of Ethereum in Toronto: “..for active traders of digital assets and cryptocurrency, a corporation may be a viable strategy to carry out this business activity. For positions held personally, we can transfer the assets to a corporation without triggering a capital gain through a special election and tax mechanism known as a section 85 rollover. In addition, another strategy we help with is lowering the capital gains tax on accrued capital gains on bitcoin or other cryptocurrency holdings from ~26% to ~13%. This is also done through a corporation.  Through the use of corporations and holding companies, our clients can diversify into other asset classes tax efficiently, without triggering any personal tax and using more after tax dollars to work for them."

This is not personal tax advice. You will need to hire an accountant to incorporate or use your current corporation for your needs. 

If you’re in Canada, we also recommend this resource and tax lawyer: Canada-Tax-Strategies.pdf

To find other crypto tax expert, we recommend this directory website:  https://cryptocpa.tax/crypto-cpas/locations/ca/