All Forum Posts by: Ken Sanders

Despite the volatility, I’ve averaged about a 200% annualized return on my Bitcoin over the last 9 years, so I definitely don’t want to trade it for another asset AND be taxed on it. With interest rates [still] so low, and inflation being what it is, I’m looking to pile on the cheap debt wherever I can find it!

Interesting that you said it WOULD be counted as an asset. I actually wasn’t expecting that.

I’m a long-term Bitcoin investor looking to purchase a new primary residence. Since I have no demonstrable income, and don’t want to liquidate my holdings due to tax implications, I was planning on getting a Bitcoin-backed loan and paying cash for the house. Ideally, though, regardless of buying with cash or not, I’d like to finance the home through more traditional methods — buying with a mortgage, paying cash and then mortgaging, paying cash and then getting a home equity loan, etc.

My question is, do I stand a chance financing the house with no verifiable income? Would a bank allow my Bitcoin holdings to be counted as an asset for personal net worth purposes?

Any insight would be appreciated.

I’m interested in this, as well. I’m hoping someone with firsthand knowledge can chime in.

This has been the big question for me, Jay. I'm afraid of the liability, as well as any potential derogatory personal reporting. I just transferred the lot into a new LLC (for an extra degree of separation) and the plan is to let it go to tax sale. Any pitfalls with doing so?

VERY long story short....

The lot was the site of an iron ore test mine 100 or so years ago. Mining operation were abandoned and the Township used the 65’ pit as the town dump for a few years until neighboring communities complained about the odor. The Township then filled everything in with uncontrolled, uncompacted fill. Years later, in the 1960s, an entire community of houseswere built on and around the site. Guess which lot is the only one affected in the entire neighborhood 😕

Due diligence was done before the purchase, but the Township intentionally deceived me. I’ve spoken to attorneys that say I don’t have a case because the Township will outspend me with taxpayer money.

I’ve already had charities deny the donation. 

Anyone want it? It’s yours for a dollar. I’ll even Seller-finance😜

Believe me when I say that I have exhausted every possible way of getting rid of the property or putting it to some form of use.

A few years ago I purchased a vacant residential lot in my personal name. I won’t post too many details, because I don’t want to obscure the true issue at hand. All I’ll say is that the property is worthless. Completely worthless. A potentially large liability, even.

I was thinking I’d just stop paying the taxes on the property and let it go to tax sale, but I want to be smart about it and make sure it’s as beneficial to me as possible — legally, as well as financially.

I was thinking I'd Quit Claim it to an LLC that I would create for this sole purpose and then stop paying the taxes. I figure this would keep the tax sale foreclosure and any liens out of my name and off of my credit reports. My only hesitation is that I'm afraid it may be considered a fraudulent conveyance. I'm also unsure whether or not I'd be able to write it off as a capital loss.

Would this be my best bet, or is there another option I’m missing?

I'm not sure what you're talking about here, Brent.

I can keep the land in my name, let it go to tax sale, and take a long term loss. That I know I can do. If I put the land in an LLC (a disregarded entity), I'm fairly certain I could still let it go to tax sale and take a long term loss, but without any liens or negative effects on my personal credit report. If I'm able to do this, why WOULDN'T I?

The "selling it to the LLC for $1" was an idea to see if I could control WHEN I can take the loss. The County Tax Sale could be next year, or it could be three years from now -- I have no control over when. I want to make sure that I take a loss in a year that I have the long term gains to offset.

I apologize if I wasn't clear in my original post, but then again, IRS rules are anything but clear.

@Ned Carey & @Brent Coombs

I wanted to put it into an LLC (or another entity that would work for a tax loss) to keep liens and the foreclosure off of my personal credit reports and just generally away from my name, personally.

I purchased a worthless vacant residential lot over a year ago with the intent to flip or develop it that I now can't get rid of. The property was purchased and remains in my personal name. I was thinking of transferring the property into an LLC, stop paying the taxes on it, let it go to the County tax sale, and then, [hopefully] take a tax loss on it.

My question is, would I be able to count this as a long term capital loss on my federal income taxes? If so, when does my loss for tax purposes become official? When I sell it to an LLC for $1? When it's sold at the County tax sale? I should note that I own the lot clear & free.

Any potential pitfalls with this plan? I've exhausted all other options.