Now that you are close to becoming an expert on crypto currency structuring choices to achieve your financial goals which hopefully include minimizing taxes, you probably already know how to connect the dots and create a Crypto Sweet Spot. This spot is for those who intend to generate profits from Crypto buying, holding and selling AND Crypto Mining. In case you haven't connected the dots, this video will help you do that.
This is Kelly Coughlin, CPA and CEO of EverydayCPA. Hopefully you have watched the previous three videos that cover the Rule of 3...in part 1, 3 types of crypto income; in part 2 the three types of accounts; in part 3, the three types of legal entities. And now in part 4, the sweet spot for all of these.The sweet spot for long-term crypto investing is in my mind a Roth IRA, if you can get it adequately funded. Note, you can't just dump a bunch of money into a Roth IRA, there are limits to, and rules around that, which I do not want to cover here. I will do that in the fifth and final session. If the assumption or belief is that Crypto is going to experience huge increases, then you want to be in a position to access those huge increases in a tax efficient way. There is a debate about whether to do crypto in a pre-tax account, like a 401k or traditional IRA. Well in my mind, there is no debate, if you make these two assumptions: 1) you have the ability to fund a Roth IRA, and 2) you believe Crypto is going to potentially deliver you a 3X plus return. If you can’t get enough funds in the Roth or you don't have confidence in the return potential of Crypto, then the Roth IRA is not necessarily a sweet spot.