While it’s impossible to completely avoid taxes when selling Bitcoin, there are several smart strategies to help minimize your capital gains liability and retain more of your investment returns. One such strategy is using a Deferred Sales Trust (DST), which allows you to defer taxes by selling your BTC to a third-party trust instead of directly on the market. In return, you receive a promissory note and are taxed only on the installment payments you receive over time. To further reduce your tax burden, consider charitable contributions. Donating appreciated Bitcoin directly to a qualified nonprofit allows you to avoid capital gains taxes altogether and potentially deduct the full market value of your donation. Another method is tax-loss harvesting, which involves selling underperforming assets to offset gains from highly appreciated ones. For instance, if you realize a $50,000 gain on BTC, selling another crypto asset like ETH at a $50,000 loss could effectively eliminate your tax obligation for the year. Together, these strategies—deferral, donation, and offsetting—can help you manage your crypto tax exposure more efficiently while maximizing your overall financial benefit.
source: https://capitalgainstaxsolutions.com/navigating-the-challenges-of-selling-large-bitcoin-holdings/
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