220: Cryptocurrency Tax Hacks with Chris Kotarba

 

This episode kicks off with Johnny telling of the journey to make it out of Ukraine safely. This sparked a conversation on the importance of bitcoin and other cryptocurrencies in times of war and failing fiat currencies. Then the show jumps to longtime ILAB listener and tax professional Chris Kotarba (Chris K) who explains ways, for U.S. citizens in particular, to hack the system and legally save on taxes. Legislation rules in place for other investments do not necessarily apply to crypto, so he explains how you can potentially save a lot on your taxes if you are holding crypto. Then Sam and Johnny circle back to share thoughts on the complicated tax situation around crypto and tease an upcoming 101 episode on more broader tax hacks. 

Chris Kotarba (“Chris K”) is a Managing Director with Alvarez & Marsal Taxand, LLC in San Jose. He specializes in international tax and his primary areas of concentration are planning, structuring, and transfer pricing, both outbound and inbound, for multinational companies of all sizes. Mr. Kotarba has worked with clients across various industries, including retail, technology (both software and hardware), pharma, medical devices, and financial services. He has specialized expertise in transactions involving cryptocurrencies, NFTs, and other digital assets, including ICOs, forks and token swaps.

Prior to joining A&M, Mr. Kotarba spent eight years as an attorney with DLA Piper in Palo Alto. He led more than a dozen global expansions and other corporate restructuring projects, developed a focus for US companies with Asian operations and closed a high-profile joint venture in China. Mr. Kotarba also helped companies onshore their IP to the US, both permanently and temporarily. He was briefly seconded to DLA Piper’s Hong Kong office, where he worked with Asian companies expanding to the US.

Mr. Kotarba earned a JD from Columbia Law School and a LLM in taxation from NYU School of Law. He is admitted to practice law in California, New York, and Massachusetts. Mr. Kotarba is the current President of the San Francisco Foreign Tax Club. 

  

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Time Stamp:

  • 10:13 – Can you tell me about your career background?
  • 12:28 – What kind of income does cryptocurrency fall in?
  • 17:47 – Do you get tax credit if your crypto value reduces?
  • 18:53 – Can you use capital losses in future years like a rollover?
  • 20:18 – Are all cryptocurrencies taxed the same way?
  • 21:39 – How does someone report this to their tax professional?
  • 25:37 – Is there a minimum to be reported?
  • 26:16 – What is the penalty for not reporting?
  • 29:13 – Is there a statue of limitation?
  • 31:10 – What happens if you sell your crypto after moving to another “tax friendly” location?
  • 36:33 – Would you suggest selling anytime you think a crash is coming?
  • 45:42 – Johnny and Sam Review

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