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I am considering gifting my bitcoin to an older relative as part of an “upstream gifting” tax strategy by taking advantage of the step-up in basis I will receive when the bitcoin is inherited back. This is a totally legal tax strategy so please don’t go off on any tangents about the legitimacy of the strategy. (This is in the U.S., btw)
I’m wondering if anyone here has done this and what you did to document the gift transfer. I keep my bitcoin on a hardware wallet and I’m wondering if I can just gift the actual hardware device and coins by using a gift letter and then filing a gift tax return to also document the transfer. I’d rather avoid the process of having them open an account on an exchange and then transfer from my wallet to theirs and then transfer them back out to a hardware wallet.
I also understand that once I gift the coins they can do whatever they want with them, but I have 0 concerns of them spending any of it before I inherit them. And I have no issue if they did want/need to spend it. So no point going down that discussion tangent either. 😁
I appreciate any thoughts you all might have.
submitted by /u/BTCTaxQuestionGuy
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