Serenity：Got DMs about tax structuring for high net worth users due to large market returns from $IREN o…

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这条推文含有财经/市场相关信息或标的符号，核心内容是：Got DMs about tax structuring for high net worth users due to large market returns from $IREN or $AMD. This is not advice, just things I've overheard to save you a LOT of money (like millions over time). These are 7 LEGAL ways to go about it: 1. C-Corp tradin…

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Got DMs about tax structuring for high net worth users due to large market returns from $IREN or $AMD. This is not advice, just things I've overheard to save you a LOT of money (like millions over time). These are 7 LEGAL ways to go about it: 1. C-Corp trading (21% federal tax + 0%-> ? state tax). This compounds a lot easier if you do short term options, covered calls, etc. -> Lot of hassle with paperwork, CPA, but if you have $7-8+ figure net worth it might be worth the time. -> Take out personal loans against your company's equity 4.5% when need be. -> Can buy stuff with it like property, etc. Franchise tax, accountants, etc. low thousands a year in maintenance but you save a lot if you make a lot. You will get doubled taxed if you try and take out money so the money should stay in there at all times. The compound of 21% vs 40%+ every year, then one long term capital gain from equity sale is a lot higher over a few years if you get taxed at the highest end of the tax bracket. How you liquidate it personally is extremely challenging, there's many ways but talk to a tax advisor (eg. selling company without liquidating assets, etc..) This is probably the most complicated one for ultra high net worth individuals. 2. Long term capital gains tax 0-20% + 3.8% + state. (this is what most people do), and is the most recommended. -> Just hold for a year and you get taxed less when you sell. 3. Active trader status without Mark-to-Market election. (you want to tax harvest so keep MTM most of the time unless you're doing some equity transfer then MTM, which is complicated) -> If you trade a lot, you can deduct from trading expenses from income. I mean almost every day type trade. eg. subtracting margin interest from now taxable income or if you trade a lot on a $1000 iphone you can deduct that from income. So for example $500k profit. Instead of getting taxed on $500k, maybe you used margin, you can subtract -40K off that and then your taxable income is now $460k but you're still in the same tax bracket. It saves a lot of money. (eg. all the little execution fees, or maybe a laptop you use for trading, subscriptions) 4. Create LLC/S-Corp pass through, you can deduct business expenses from taxable income, even if you don't trade every single day and qualify from active trader status. It's saves you the hassle of tens of thousands of trades. But you need to do something company related on top but have investments on the side and it's low hundred-thousands to maintain, but subtracting business expenses is worth it. You kinda want an LLC anyway to limit personal liabilities if you own houses, etc. 5. Move states -> California is BS. As some people on X are complaining about, capital gains tax goes ~54%. The extra 14% or so compounds a lot over time. 6. Never sell and borrow against equity (on your personal account), this is what Elon Musk and others do to never realize gains. Just take out loans and the loan rate is probably less than what the equity or SPY compounds. 7. Just pay taxes on personal and have a peace of mind but obviously lower compound. Some people pay a lot but don't mind much because they think it's going to a good cause. Obviously I've seen more sketchy ways to do it like creating non-profit foundations but stay legal! On top of these 7 strategies are many other ways to lower or defer capital gains/income within each one, but this is probably the overview. Talk to a tax advisor (especially for C-Corp trading)! If anyone else has any other strategies feel free to share.