How to avoid crypto tax because I purchased some coins for a family member

d_pipa

Because my family member gave me cash for cryptocurrency, I made a purchase in my name so I am holding the coin for that person. The problem is, it will affect my crypto tax when I decide to withdraw into cash. Is there any way I can transfer the person's coin if I create an account in his name and not affect my crypto tax? Any better ways for this? Or is it too late?

Thanks!  

masonic

Presumably you are referring to Capital Gains Tax. You can get the family member to open their own wallet and transfer the crypto-currency to them, or set up a private wallet, move the crypto into it and hand it over to them. Why did they give you money to do it for them in the first place?

d_pipa

That's correct, the CGT. I assumed that would be the case, I just wanted someone to confirm that for me. They didn't know how to use it, which I will explain to them later so they can control their own wallet. Thanks. 

Malthusian

masonic said:

Presumably you are referring to Capital Gains Tax. You can get the family member to open their own wallet and transfer the crypto-currency to them, or set up a private wallet, move the crypto into it and hand it over to them. Why did they give you money to do it for them in the first place?

That is probably the sensible option but the OP should be aware that if the crypto currently belongs to them, CGT would apply on the transfer (I'm assuming the family member isn't a spouse). On the other hand if they treat it as a bare trust investment on the family member's behalf, no CGT arises on transferring it into their direct ownership.