Crypto pundit Jake Claver recently drew XRP investors‘ attention to important tax information he believes could help them protect their wealth. Claver also offered a solution, which he indicated could help these investors even as they watch XRP potentially appreciate to as high as $100.
Crypto Pundit Draws XRP Investors’ Attention To Important Tax Information
In an X post, Claver alluded to tax information from his company, Digital Ascension Group (DAG), which he said would become very important for XRP holders to understand. DAG explained how the IRS’s classification of crypto as property in 2014 changed everything for crypto wealth.
The company stated that most people holding six or seven figures in XRP do not understand the implications. DAG noted that, because crypto is classified as property, every wallet is vulnerable to court orders, and that any incident relating to one’s personal life can warrant a judge ordering holders to hand over the keys to their wallets.
However, on the other hand, DAG stated that crypto’s classification as property also unlocked every wealth strategy that real estate families have used for centuries. This creates a step-up basis at death, allowing the heirs of XRP holders to inherit the crypto at its current market value with no capital gains owed. The company stated that this way, investors can buy XRP at $0.50, die when it hits $100, and their heirs get it at $100, with the entire capital gains eliminated.
Meanwhile, DAG revealed that XRP holders can borrow against their holdings without selling their XRP. The company explained that these holders can take a loan at a reasonable interest rate and keep the asset while they avoid the tax bill and still have liquidity. The firm added that this was how Elon Musk bought Twitter with $40 billion borrowed against Tesla. As such, this will be the same playbook, though it is for crypto this time.
Other Ways To Protect One’s XRP Holdings
DAG also proposed the transfer of one’s XRP holdings into a Wyoming LLC as a way to protect their crypto wealth. Investors transfer their coins into an LLC and then gain charging order protection, which means that creditors can’t touch their assets. The company explained that these creditors would have to get in line for distributions that investors never have to make, as the corporate veil protects these investors.
Furthermore, DAG stated that investors could gift up to $13.6 million to family members without a gift tax by filing Form 709. These investors can also move their wealth out of the taxable estate while they are alive. Couples can transfer up to $27.2 million while avoiding the gift tax.
The company also explained that investors would have to put the LLC into a revocable living trust, in which one’s spouse becomes trustee upon death and can skip the headache of probate. This eliminates the 6 to 24 months court delay and the 3% to 7% probate fees, while there won’t be public records showing what crypto assets were owned.
DAG declared that retail investors are still treating crypto like lottery tickets while high-net-worth families are treating it exactly like commercial real estate. They are said to structure it, shield it, borrow against it, and never sell appreciating assets. The company added that property classification is the foundation for generational wealth if one actually understands what it unlocks.
At the time of writing, the XRP price is trading at around $1.98, down over 7% in the last 24 hours, according to data from CoinMarketCap.
Featured image from Getty Images, chart from Tradingview.com
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