i’d like to set my parents up with mining and have it go directly to their roth ira so they can retire a bit easier and not have to give up 30-40% in taxes.
are there any good guides out there? has anyone here done this?
Look up Mark J. Kohler on Youtube, he’s got multiple videos on the topic. Great resource.
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There is no way to mine crypto into a IRA or ROTH IRA directly and not have to pay for income taxes on it. If you mine directly into an account like this it generated unrelated business income and is subject to unrelated business income tax and this is 37% without being able to deduct any of the expenses.
There is a way to reduce the amount of taxes and have most of the income after taxes go into the retirement account. Then any gains or losses on the coin would not be subject to capital gains. There are many rules that have to be followed to accomplish this.
The issue with Mark J. Kohler stuff is he does not explain everything that you really need to know to do it yourself correctly. His goal is to generate fees for setting up the structure and for using a company that he owns to earn a yearly fee as the custodian for your accounts. I am not sure if he tries to charge you fees for his company doing your book keeping and tax return work that will be required for the structure to being able to mine and keep the coins and in a retirement account.
There will be a new product out before the end of the year that will be a turnkey solution that takes care address all the issues for people that want to mine and have the profits go to their retirement account.
The product will set up the structure, custodian, banks accounts, set up a exchange, pool, sell you a miner, host for you and do the bookkeeping and tax returns. It will require a little of your time to get all of this set up because only you can provide the KYC information for the exchange and bank accounts.
I would really suggest having a company that specializes in this help you. A mistake in this process could lead to the account becoming disqualified and having the entire value, be taxable and subject to penalties.
Absolutely, best to consult with a local tax attorney to make sure everything is done correctly.
damn i didnt know you cant mine directly into Roth right now.
also what new product are you referring to? through compass? something else?
sounds promising at least
The one from Compass would not work. I mean it does work, it just would not be tax free like they claimed. I am not sure they are still offering it right now. Plus it was only for their current clients.
The product is coming from a new company and there is nothing on the market like it, because it is one stop shopping for everything that is needed.