Deferring Capital Gains Taxes with Your Private Crypto Trust
Protect, Grow, and Pass on Wealth Without Unnecessary Tax
When you hold appreciated assets like crypto, gold, or real estate, selling them outright can trigger crushing capital gains taxes. With an Irrevocable Non-Grantor Private Crypto Trust, you gain the power to defer taxes, access liquidity, and pass wealth tax-free to future generations. This is not theory—it’s a lawful, repeatable process that puts you in control.
Step-by-Step Guide
1
Assign Assets Privately to Your Trust
You transfer assets—crypto, gold, property, or stocks—into your trust with a private Declaration of Assignment. The trust becomes the legal owner under its EIN, while you retain control through trust law. Because you didn’t receive taxable proceeds, no capital gains are triggered.
2
Receive a Demand or Promissory Note
Instead of cash, the trust issues you a Demand Note (funds available when you choose) or a Promissory Note (scheduled repayments with interest). Since you only hold a note of obligation, there is no immediate taxable event, deferring capital gains until repayment.
3
Trust Sells, Holds, or Reinvests Assets
Once assets are in the trust, it may sell them, reinvest in new opportunities, or continue holding and growing them. Because gains stay inside the trust and are not distributed to you personally, you still avoid triggering taxes.
4
Optional Donation to a 508(c)(1)(A) Organization
You may choose to donate proceeds or even the note itself to your faith-based 508(c)(1)(A) ministry. These associations are tax-exempt, private, and constitutionally protected, allowing you to redirect wealth to spiritual or charitable missions while eliminating taxable exposure.
5
Reinvest in Whole Life Insurance
The trust then places proceeds into a high early cash value whole life insurance policy. This provides:
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Tax-deferred growth inside the policy.
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Tax-free loans for liquidity.
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Tax-free death benefits passed to heirs via the trust.
This transforms the trust into a permanent family banking system.
6
Access Liquidity Through Policy Loans
The trust borrows against the insurance policy to reinvest, cover expenses, or repay the note. Because loans are not income, they remain tax-free while keeping your capital compounding inside the policy.
Control the Timing of Repayments
With demand or promissory notes, you decide when to trigger taxable events. You can take smaller annual payments, delay repayment, or even donate the note entirely. This flexibility allows you to control when—and if—taxes are recognized.
Example in Action
Imagine you hold $1M in assets:
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$300K Bitcoin (basis $50K)
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$200K gold (basis $100K)
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$500K property (basis $200K)
You assign them to your trust and receive a $1M demand note. The trust sells assets under its EIN, donates $150K to your ministry, and invests $850K into whole life insurance. The trust then borrows $300K to pay you $100K/year. You’ve deferred taxes, preserved growth, and passed on a tax-free legacy.
Compliance Checklist
A Blueprint for Generational Wealth
This strategy empowers you to:
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Defer or eliminate capital gains.
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Access tax-free liquidity.
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Support faith or family missions.
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Pass on wealth outside probate, courts, and taxes.
Once you learn it, you own it for life—and so will your heirs.
