Jump to content

Question about holding coins for family/friends


Recommended Posts

So long time xrp hodler. 

I have some coins in my stash that a friend gave me money to buy for him. He’s computer illiterate. I can’t be the only one who has done this. 

So when he cashes out I will have to pay my 20% capitol gains and he will have to pay tax when he receives the funds. How does a person avoid paying double tax in a situation like this? If I help him create a wallet can I send him his xrp and then I am free and clear of it? Thanks. 

Link to post
Share on other sites
58 minutes ago, Slik said:

So long time xrp hodler. 

I have some coins in my stash that a friend gave me money to buy for him. He’s computer illiterate. I can’t be the only one who has done this. 

So when he cashes out I will have to pay my 20% capitol gains and he will have to pay tax when he receives the funds. How does a person avoid paying double tax in a situation like this? If I help him create a wallet can I send him his xrp and then I am free and clear of it? Thanks. 

I am by no means professional in this, but I would suggest you keep the crypto on a separate wallet/exchange account, make a clear agreement with him if the crypto/funds are lost who is responsible..

also all the bank transfers... maybe include a message that states clear whos money it is and what is it used for

So when it's proven that it indeed is his money and everything else is clear, it should be ok that he pays his own taxes and you don't have to pay taxes for things not yours. Works differently in different cases and between countries. Good luck.

One more thing... It is risky doing to friends/family because if something goes wrongly (exchange gets hacked, someone ***** up with private keys..) .. its going to be brutal. Make clear agreements of different scenarios and tell him the risks involved.

Link to post
Share on other sites
31 minutes ago, Skippy said:

I am by no means professional in this, but I would suggest you keep the crypto on a separate wallet/exchange account, make a clear agreement with him if the crypto/funds are lost who is responsible..

also all the bank transfers... maybe include a message that states clear whos money it is and what is it used for

So when it's proven that it indeed is his money and everything else is clear, it should be ok that he pays his own taxes and you don't have to pay taxes for things not yours. Works differently in different cases and between countries. Good luck.

One more thing... It is risky doing to friends/family because if something goes wrongly (exchange gets hacked, someone ***** up with private keys..) .. its going to be brutal. Make clear agreements of different scenarios and tell him the risks involved.

^ This.

For my friends, I sat down with them and helped create their exchange accounts, and even helped them with their cold storage wallet setup and transfer. Basically held their hands, but also kept myself out of the responsibility loop of them losing their keys, exchange hacks, so on. Took longer than buying it for them myself, but in the future, I won't have to deal with the headache.

Edited by PickleRick
Link to post
Share on other sites

If ripple were to fail and all of my XRP is on a nano it always has been. He and I both know exactly how many coins he has. That’s not an issue between us.All of my  xRP is on a nano it always has been. That’s not an issue between us. I also told him that he should just assume he’s throwing his money away and will never get it back but on the flipside something wonderful could happen. If ripple were to fail  or something devastating happened and we lost all of our coins he knows that I am not responsible he’s taking the risk just as I am. But we were talking today all we were concerned about is the capital gains. Let’s say long in the future from now I cash out my coins I pay my 20% capital gains and I have my money. But when I pull his quoins out the government or whoever overseas these crypto transactions will see that I had a capital gain and I am responsible to pay. Then when I give him his money he’s going to have to report that income and have to pay again. So basically he would be paying 40%  or more to cover my capital gains or what appeared to be my capital gains and the taxes on the money he just received from me. That’s all I was saying.

hell I’ll just tell him to order a Nano if his own while xrp is cheap and I can help him with it. 

Link to post
Share on other sites
20 minutes ago, sharpn said:

Just send the xrp to a exchange and get the money cashed out into there account.

That would be easiest. So I would owe no taxes on it? It’s just like me giving him a gift or something? Am I missing something here or just making things too complicated and over thinking it?

Edited by Slik
Link to post
Share on other sites
1 hour ago, Slik said:

That would be easiest. So I would owe no taxes on it? It’s just like me giving him a gift or something? Am I missing something here or just making things too complicated and over thinking it?

If he's computer illiterate, have him download Uphold to his mobile phone. Send a test deposit to it. Once confirmed you can send the remainder. It's free for him to deposit XRP. At that point he has full control of his assets and you have no obligation to him and you will not have to pay taxes because you did not spend them or convert them to another asset. You can also send a separate email or letter or print out a simple statements that you both sign affirming that you were holding the XRP on his behalf and that they have been transferred back to his custody without conversion to fiat. Therefore there's no taxable event. Honestly though, just sending him his XRP should be sufficient.

Link to post
Share on other sites
10 hours ago, cmbartley said:

If he's computer illiterate, have him download Uphold to his mobile phone. Send a test deposit to it. Once confirmed you can send the remainder. It's free for him to deposit XRP. At that point he has full control of his assets and you have no obligation to him and you will not have to pay taxes because you did not spend them or convert them to another asset. You can also send a separate email or letter or print out a simple statements that you both sign affirming that you were holding the XRP on his behalf and that they have been transferred back to his custody without conversion to fiat. Therefore there's no taxable event. Honestly though, just sending him his XRP should be sufficient.

I second Uphold. It will also be easy for him to buy XRP himself using fiat in the future without dealing with the exchanges. They also have many different currencies and commodities. The cryptocurrency selection is a bit limited. According to their website, they also say that they hold 100% reserves of member funds, and they don't loan out your money the way traditional banks do. These days we gotta be real careful, so as always, DYOR ?

https://uphold.com/en/how-it-works/holding-money

Link to post
Share on other sites
7 hours ago, stdyrm said:

I second Uphold. It will also be easy for him to buy XRP himself using fiat in the future without dealing with the exchanges. They also have many different currencies and commodities. The cryptocurrency selection is a bit limited. According to their website, they also say that they hold 100% reserves of member funds, and they don't loan out your money the way traditional banks do. These days we gotta be real careful, so as always, DYOR ?

https://uphold.com/en/how-it-works/holding-money

Yep, and they routinely undergo external audits. https://uphold.com/en/transparency

Gregg Kidd also invested to grow their XRP-based offerings and provide loss assurance https://uphold.com/en/blog/57-5-million-partnership-announcement

Link to post
Share on other sites

I did this for someone, I believe the proper way to do it is to purchase the XRP off the exchange and record the purchase as a trade that you personally made. Then withdraw it from the exchange to a new wallet... then transfer control of the wallet to the person you purchased it for and record the sale as an XRP/USD trade... Unfortunately if you're using FIFO for your records and already owned XRP this will create a taxable event and you'll likely owe taxes.

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.