Dr Reality - Dave Champion

Ep 1224 – The Truth About Crypto and Income Tax. You Don’t Owe Any!

5 snips
Jun 21, 2025
Discover the surprising truth about cryptocurrency and income tax: you may not owe anything on your gains! Dive into the illegal practices of crypto exchanges that create misconceptions about tax obligations. Explore the nuances of U.S. tax law that primarily targets foreign entities while American citizens often escape these duties. Gain valuable insights to navigate the world of crypto investment and legal tax compliance!
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INSIGHT

Crypto Gains Aren't Taxed

  • Income tax does not apply to American citizens investing in crypto for personal gain.
  • Federal income tax law imposes tax only on foreign persons with U.S. source income.
INSIGHT

Income Tax Applies Only To Foreigners

  • U.S. income tax is imposed only on two classes: non-resident aliens and foreign corporations with U.S. source income.
  • The thousands of pages of tax law boil down to taxing only these classes.
INSIGHT

Withholding Means Foreign Income

  • Withholding agents withhold taxes only when paying U.S. source income to foreign persons.
  • Withholding implies the payer believes the recipient is a foreign person subject to such tax.
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