183. Top Tax & Structuring Strategies For Crypto Investors with Adrian Forza

This is the thing like tax, don't view it as a penalty. It can be a weapon.

There's probably like a million dollars of volume per week on there that no one is using. They know that there's money in the game. They know there's people that haven't declared. And for them like it's a huge honey pot.

You get essentially a personal balance sheet of like where you are at. Those things get chased down because they have to be accounted for. And just having that is worth so.

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift, alongside me as Bergs, your favorite MBA and CEO of Collective Shift. Join us as we bring you world class crypto research and strategies to help you dominate this crypto bull market as well as behind the scenes review of us getting a fully remote subscription research business here in Australia. And if you like the podcast, we'd love for you to leave a subscribe or follow us on your favorite podcasting app. And just a quick reminder that the podcast today is not financial advice and any information. Information is general in nature because we've got an absolute weapon on the show today. Coming back after probably a couple of years hiatus for my fault, not his. Adrian Forza, my personal crypto tax accountant for the last seven or eight years. He runs a company called Crypto Tax Australia. Originated in 2017, it was actually Australia's first 100% fully crypto specialized accounting firm and they provide firsthand compliance and guidance for support for investors, traders and companies. Force can help you with things like tax advice, business advisory, tax structuring, business structuring, SMSFs, even things like into the tax around DeFi, NFTs, Web3, forensic, crypto reconciliation payments, all sorts of stuff. And yeah, he's, he's been working with myself, Bergs, the Collective Shift team, a lot of our members and clients for a long, long time and we're going to bring him on today to talk more about strategies, how you can optimize your tax hey can save a bit of money and yeah, ultimately try not to give too much to the tax band. So for us, thanks for coming on.

Thank you. It's been good. It's been, I've been excited to come on actually it's been a little while in the making so no, I'm excited, excited. Have a good combo for us.

Did mention to us listeners as he came on that he's listened to a couple of episodes and it's basically just Burgess and I taking the piss out of each other. So hopefully today we can actually get a bit of value.

Look, let's be honest, it's going to be more of the same.

So for us, you obviously come from, like, a, you know, tax background, but also, you know, I know you personally, you're a bit of a. A crypto DJ as well. Like, what. What sort of brought the two together? Were you helping friends and family out? Like, how did you even start doing. How did you become the foot? Because back in 2017, I feel as though everyone was in the mindset of, oh, I'm not going to do tax. No one's going to find it. Little do they know that the blockchain is an immutable ledge that everyone on the planet can see. But anyway, how did you come across launching the first ever crypto tax company?

Yeah, so I was working for traditional firm, very good traditional firm for, like, seven, eight years, and then sort of discovered crypto early on. And then, you know.

Never.

Someone was telling me to buy, you know, this Bitcoin for 100 bucks. But then that never sort of eventuated and obviously the biggest mistake of my life.

And then fast forward 2017, when the ICO start. Boom started happening and everyone was sort of getting involved. And then probably, I think it was about January 2019.

I.

Sort of took the leap of faith and went and started doing it full time. And since then, we've just been growing ever since. You know, we obviously still do all your traditional accounting work, tax returns and structuring and business advisory. But, you know, I would say, like, 95% of our clients would be crypto focus. And, yeah, pretty crazy journey, obviously, with crypto and its cycles and the development in it. But, yeah, it's been a crazy ride, actually.

I remember, like, one of our first conversations, I think, would have been in 2019, when I needed your help with tax to do my, you know, 2017-2019 tax. And you're on the phone with me and you just. You call out an address and it ended in, like, three digits. You're like, oh, yeah, this is this ico. And I was like, whoa, what a dj. He just knows it straight out. And, man, I'm fascinated by your story about how you worked for a firm and you started kind of, you know, wanting to go into crypto and taking that leap of faith that was relatively early on in crypto. And I think, like, what was it that you saw in crypto where you were like, hey, this is an opportunity here. This is going to be a Real thing. I'm going to take that leap of faith and start a business. What really kind of gave you that conviction or you know, to make that.

Like in the early days I used to listen to a lot of like Andreas Antonopoulos, you know and.

You know there was even Bitcoin. Jesus, I forgot his name now. Bitcoin cash guy.

Roger Ver.

Roger Ver and you know like the sort of OGs and the guy from Shapeshift.

Eric Voorhees and stuff, you know and like just like understanding like when and, and once you sort of go down that side of it you go, well hang on a second. This is like here to stay.

But obviously in 2019 we had that major bear market, like I think Eth went down to like 80 bucks or something.

That was brutal.

Yeah, be like a steal now.

And, and I think, you know, it was an opportune time because no one else was doing it as well. You know, there was only a couple of competitors at the time. So the difference between now and back then is, you know, you've got like meme coins, like everyone's about meme coins and making money and you know, and, and hopefully like the saying that.

You come for the money and you stay for the technology still holds true to today. I don't know if it's as much as it was before and people listen to, you know, people like Andreas and whatever else and, but you, you know, you start going down the rabbit hole and think talk about money and gold and how it all works and you become a bit.

Right winged in that way, you know, and, and going you know, f the banks and you know, all that sort of stuff. So.

Oh mate, it's a one way valve. Like once you spent time in it and you spent a significant amount of hours and you understand it, the economic impact, what's actually happening in the world, you can't unsee that. You can't go back to that ignorance and live that life anymore.

That's what I call it. Ignorance is bliss. I know it's hard, it's hard to turn your mind off it. It is.

So when it comes to tax fours you pretty much got two options as an investor.

You've got the software route where you go to like a coinly, a crypto tax calculator, coin tracker, those sorts of software and you basically do it yourself, right? You know, you pay your 80 bucks a month or 150amonth or whatever it is and you know, you go and you go and do it yourself. Some people like to do that. Some people don't, including me. I would hate to do that. I want professional advice. I need someone to help me do it. I don't want to know about all the ins and outs. I just need someone to do the work for me and then advise me what I should do and how to optimize it. And that's exactly, you know, what you do for us is like more of a tax advisor.

There's actually an in between one as well, Ben, where people will have a traditional accountant and they'll use some kind of software and give it to them and hope for the best. Yeah, I've seen a few people do that.

Yeah.

Yeah.

And my actual setup is that I've still got my, my main accountant that I've used for a long time because I've got business structures and personal stuff and whatever. What for his team does for me is he would do the report, the, the crypto tax report for me, consult on all of the crypto stuff, give me a report that I give back to my other accountant, and then does all the work. So it works really well. For what, What. Like when you have people come to you, you know, let's say they're first realizing they need to do their tax or maybe they've started with software and they come into you like, what are the common pitfalls or mistakes that people have? I guess when it comes to, you know, just tax in general.

I think, you know, realizing, I mean, there's still the myth around, like, I haven't cashed out any money.

You know, sending money to friends and family, pulled ICOs or doing, you know, trading for other people. That's where it gets, like, really messy. And, you know, I've done a bit of that.

That was a nightmare. Or like, what's this like? Ah, not, not mine. Here's that.

Yeah, yeah, that, that, that's where it starts to get messy and you know, loans and all this sort of thing.

So I think.

You know, people, people. People don't realize, I guess, what they've done sometimes. And, and especially like, you know, there's a lot of people out there that probably haven't declared, like, anything at all.

And some. And one big issue is not being on top of it because obviously throughout the years there's, there's, you know, bull periods and bear periods and, you know, in some years you'll make a lot of money and then you might, you know, lose a lot of. In the next. So the issue is that you could have gains in prior years and then losses in post years. But unfortunately, the post year losses can't offset prior year gains. And then you're sort of stuck to pay that tax. So if you start leaving it too long.

You don't sort of get prepared in terms of, okay, well, shit, I've made all this money, I'm going to have this tax bill, I need to put some aside for it. And then people get caught out. So, you know, the 20, 24 year that just finished a few months ago might be an example where like during, say, January and March, April, when meme coins were going crazy and, you know, bitcoin was going up after the ETF and all that sort of thing, people might have made some good money and then getting an estimate of going, okay, well, how much tax I'm going to have to pay? You know, if it's X amount, then I need to put, you know, some, some money aside and not then just roll that profit into like another meme coin that's going to go to zero, and then I have no money to pay the tax for later on. Like, that happens a lot.

This happened a lot to people in the ICO boom, where you make a 10 or 20x. So let's say you've gone from $1,000 to $20,000, you roll it into another one, you make more. Let's say you get up to 100 each time you transfer that. Generally, it's capital gains eventually when you do those transactions, and then at the end of it, you roll it up into a coin that goes almost to zero and you've lost most of your stack. It's the end of financial year and you owe money on those gains that you had and you don't have enough to pay for it. And a lot of the time, crypto is people's first investing experience and they don't understand the tax side and the implications.

100% correct. 100% correct. Yeah. So, like, staying on top of it is like a big thing that we've seen obviously, throughout the years, because, yeah, it can happen. And like, I hate having those conversations with clients saying, hey, you've got tax to pay. And then the clients say, well, I've got no money. It's like, well, you know, we have to sort of work something out here. And like, sometimes there are strategies that we can do depending on, depending on your volume and that sort of thing. We can go down the trader route to see if we can use market value substitution rules and that sort of thing to get more of a fairer value. But sometimes when it's crossed over from different financial years. It's a little bit harder to implement those strategies as effectively.

Putting your head in the sand and just.

Not. Yeah, yeah. It doesn't, doesn't help the situation.

Yeah. And if you do have a massive tax bill, this happened to you, Ben. You know that you will owe it, but, you know, you can most times work something out with an ato, like a payment plan or something like that.

Yeah.

So it's, it's almost like having like a niggling health issue. It's like, get it sorted out, don't let it fester and get worse and worse and worse because it does, you know, compound and it can get trickier.

Yeah.

And it is scary when you've taken a lot of profits and you know that there's a big tax bill coming up. But I think the worst thing you can do is bury your head in the sand because then you're naive to the problems or the upcoming future problems. And, you know, when I sold a lot of mine three or four years ago to build Collective Shift, like, I basically rolled all of that capital into the business and had pretty much all cash to pay for the tax return. But you can, you can negotiate, you know, payment plans and stuff with the ato. Like, they're relatively okay about it. You've just got to. But, but is it fight for so that you need to be like on top of it? Because if you let it go and you're already like a year behind and now you're trying to negotiate, it's like you're coming from a pretty weak position.

Well, yeah, it's. I mean, like just yesterday, and this is fairly rare for the ATO to do this. We got what's called a garnishee notice. And a garnishee notice is essentially a notice saying to the client, hey, we've been trying to contact you for like, couple of years. You got this massive tax bill. We're just now going to take the money out of your bank account. And they would take it. They probably would take it out before you even get the letter because they've been constantly chasing this person. They either take the full amount or 50% of whatever balance you've got in there. So if you've got 100 grand, they're just going to take 50 grand out.

They'll just take it out.

They'll just take it out. Yeah, that's worst case scenario. And, and, you know, but that, but it happens.

You know, and like, you know, we've been trying to contact this client and get, get in touch to make a payment plan, like multiple times.

But, you know, he's put his head in the sand and now there's like, there's really nothing that we can do anymore because, you know, we've tried as much as we can to.

All right, this is a really good point. Let's talk about declaring. You need to fucking declare your tax. If there's one message you absolutely need to do that, you won't just sleep well at night. You are not a sovereign individual. In Australia, the government owns everything. They've got access to your bank accounts, they've got access to your property. They can stop your cards. Do not delude yourself and they know who you are. If you've used an exchange, they've got mandatory reporting. ATO can have a. Please explain. They'll have your id, you'll be linked somehow. All those addresses that you're sending to that you think you're safe, they're not, because they're tainted and you can follow it back. It's on a public ledger, mate. We need to talk about declaring and people should be doing this. It's. Otherwise, you're not going to get away with this. You're not smarter than anyone else. You're not smarter than the ato. You might be doing fancy shit on a blockchain, but they have time and they will catch up with you.

So it's an interesting one because I think.

Especially for people that haven't declared one, it's daunting, right? So usually, like, when a client comes to us and they haven't declared, you know, or they've tried to do it themselves.

You know, the first year is always the hardest because sometimes you got to go back depending on how far when they started investing, you know, and obviously sometimes there's exchanges that have closed down. So, you know, you need to try and get that data if you can, or, you know, make some, you know, assumptions and estimates based on the blockchain and movements and all that sort of thing.

And I guess the issue is, is that, you know, people might think, okay, well, I might have, you know, all this tax to pay, but necessarily, it might not be because, you know, even though they might have, you know, rolled in the profits, there might be, like, some of these NFTs or other tokens that have gone to zero. There's no liquidity, so you can't sell them. So some of these you can write off.

But if you've got losses as well, like, I don't. I don't understand why you wouldn't want to declare that? Because then any future profits can be offset against those losses in the future. Like, it just doesn't make sense to me.

But like, in terms of what the ATO is doing, if we had this conversation, say three, four years ago, you know, they're overview wasn't as.

Wasn'T as good. You know, there was still information that was being sent from, you know, mostly Australian exchanges to, to the ato, but with, you know, limitations.

Now I know for a fact that, you know, the IRS themselves actually flew over and this was very recent, probably six months ago.

For a week and did a full training session with the ATO on tracking how to use chainalysis. You know, the questions to ask how to, how to sift through the data.

Because we actually got a client recently and this might be a bit of a long story, but I'll try and cut it short. But.

You know, he, this client actually had some bitcoin back in, you know, 2012, 2013.

And long story short, they lost the password. They got a hacker to sort of hack in and.

Get the bitcoin for them.

That eventuated back in 2021. And there was about 250 Bitcoin in there.

And I think 50 went to the hacker and then 100 went to him and his, and his girlfriend at the time. And.

He then cashed out or he man her cashed out some of, some of that bitcoin on an Australian exchange I think a couple of weeks later. I'm not exactly sure on the timeline, but he actually got his door kicked in for the police and confiscated his computer and phone and all this sort of stuff and had to go to court to explain all this, you know, this unexplained wealth. Where did you get all this wealth from? Because, you know, you weren't working or whatever and now you've cashed out, you know, three, four million dollars into this exchange.

Long story short, he had to go through the court and you know, eventually got the bitcoin back in January.

And.

You know, the court took 30 bitcoin or 40 bitcoin as a.

Fee, for a better word.

And, and you know, he got, he got, he's actually been audited as well because he hasn't lodged the returns. So I spoke to the ATO officer, you know, about a month ago, and I said to him, you know, what's being audited? You know, we want a list of all these exchanges and the wallets and the data and tax returns, etc. I said, oh, do you know sort of the background of what's happened? He said, yeah, yeah, because I looked at his signature and he was from the Fraud and Fraud Crimes and Investigation Unit from the ato. So as soon as I saw that I said, shit, something's not full on here.

And.

He actually, I asked him, so do you know what's actually happened with this client? He said, yeah, we've got all the documents from the court, we've got all the data from the exchanges, we've traced this Bitcoin back all the way back 2012, all the various wallets that we know it's come from Silk Road, you know, so all this sort of thing so.

And so the ATO knows like they're starting to, to really like actually go down on chain, deep dive into these situations. Now it's obviously not going to happen for everyone. But the ATO does do random audits. It's part of their policy. They need to do random audits to random people. Not if they're being flagged, it's just random.

So, you know, they're really catching up on in terms of their tracking. And the big issue with this guy was that, you know, he even got an email like he went overseas, he got an email from the ATO saying, hey, we noticed that you just left the country. Can you please reply back or else we're going to have to issue default assessments. And what he didn't know at the time was the 50 Bitcoin that was sent to the hacker. They were going to assume that that was his because that hacker then cashed it out into New Zealand thinking it was these clients. So he would have had to pay an extra $5 million.

Tax on $5 million of cash out profit at the time.

So it's pretty wild.

You know, sort of what's happening in the background. But yeah, the ato, they're not sort of stuffing around anymore. They know that there's money in the game, they know there's people that haven't declared.

And for them, like it's a huge honey pot. You know, you think about all the people that haven't declared or wrongly declared by using different softwares and changing different methods from one method to another method each month or then going from, you know, one software to another software that changes the calculation or changes the transactions. Like there would be so many holes in terms of the tax that the HO isn't getting. But there's also people that obviously are undeclaring, but there's a lot of people that are over declaring There's a lot of clients that come to us saying, hey, I've used the software, or I've used another accountant. And, you know, they're saying I have to pay 100 grand or $200,000. I don't think it's right. And, you know, I've had to pay it. No problem. We'll have a look, we'll amend it, you know, and we'll do our calculations to see what should be the correct amount. And, you know, clients love us after that because they're thinking they're 100 grand in the hole and then it's only like, you know, 40. It's a huge saving.

Exactly right. So something similar happened to me where, you know, I ran some tax off and I thought, oh, here we go. Went to Forza and Mate, it was a lot better. You prepared different reports for me on different classifications and treatments. A lot of things that I was still holding can be written off as unrecoverable. You can carry forward those losses in perpetuity. And it was just amazing to get that other view. And then I'm still in charge, deciding which route we actually take. After you've explained the tax treatment to me, and as things are getting more complicated.

Dying to know, how do you handle this? Like, do you do a lot of manual stuff? Have you built your own tooling around this? How do you stay on top of it and manage to service all these clients?

Yeah, so we've, we.

You know, we sort of started using some software obviously from the beginning, but over time we've developed our own software where it exports all the data from, obviously the exchanges and all the blockchains.

And, you know, it's one thing getting the data and getting an accurate data, but then obviously putting it into a format that you can use to, you know, from a tax point of view. So.

I know, like, specifically, probably.

February of this year, I knew that especially this financial year, we were going to have an issue because of all the new blockchains that have come out, you know, NFTs on Bitcoins, all this stuff on Solana.

You know, the meme coins, all these layer twos everywhere. Like, there's still some layer twos or layer ones that I haven't even heard of. And like, sometimes you have these crazy clients that do like 5,000 transactions on this, this chain you've never even heard of. There's probably like a million dollars of volume per week on there that no one is using.

And we just have to build it to get accurate data.

And I Think that's what's. Obviously what's helped us throughout the process. Because if you're trying to rely on the cryptotech softwares or like trying to download a CSV or something.

You can't do that. Like, it'll just take you forever. So, you know, we just, you know, put. Put time and effort into and money into making sure that we can build our own so we don't have issues. And, like, we're building. We're building them all, you know, every week. Because there's always new things coming out or new things that clients have done.

And I know that's what a lot of people struggle with.

They try and use some of these softwares online, and they don't have an exporter.

Sorry, an importer of that specific chain. Or.

There'S different. And sometimes the pain in the ass also is exchanges. They change their formatting, they change their API, they change how you get the data, how long you can get it for. You know, there's certain exchanges that just delete the data after like a year. You can't get it, you know.

Yeah. And you have to kind of. And the other important thing that tax software doesn't pick up is intent. Like, what are you actually doing? Which hat do you have on in your structuring? That was a very important thing. And, like, while this all sounds daunting and literally it took less than two hours to do the entire thing. For the things that he needed with all of my transactions and everything, it was very straightforward. And then his team goes and handles all of that. And I think one of the best tips I ever got was. Was from you, Adrian, where just writing down that intent. Like, the first time I did my tax with you in kind of, you know, 2019.

If I do a transaction, I'll kind of just record, like, which hat I have on, whether it's individual trust, whatever, just a link to the actual transaction, what I was trying to do. And that just helps unpick everything. Because can you imagine going, oh, hey, remember on this dog chain XYZ 3 years ago when you were doing this thing, what were you actually trying to do?

Yeah, yeah, yeah, it is, it is. It's. It's like we've got sort of short memories, especially when you're sort of degenerating, doing this, that and the other.

It's hard to remember, you know, I mean, me personally, I. I need to do my own reconciliation because I keep saying to some of the guys are going, I've got stuff everywhere on this staking. Egan Eigen layer and, you know, metamorphosis and all this sort of stuff. And I'm like, I don't actually. I need to work out where everything is because I've forgotten and sometimes. And the only way you can do that is actually doing the reconciliation. So there's been so many times where we've said to a client, hey, you know, I think you've still got like this XRP or, you know, Solana or whatever. No, no, I don't, I don't. I said, no, I think you do. I mean, and, and they go back and they, they. They boot up like this old ledger or something or this old Exodus wallet, and bang, there it is. Now, we had one client probably a month ago here, there was like 40,000 XRP on there.

There was another client two months ago that we did the reconciliation for.

And he was sort of going through a divorce with his wife and he needed to get a reconciliation done to see what all the assets were. And I said to him, listen, there's four bitcoin that was sent out from BTC Markets to your wallet, and it's not on any of the records, you know, that you've given us. No, there must be a mistake. There must be a mistake.

And I said, okay, I'll have a look again. So we went through the wreck. I went through all the records again. I said, I went through the blockchain, said, no, they're still there. They're unspent on the bitcoin blockchain. They haven't moved. They don't match anything else that you've got. I reckon they're still there now. I must have lost them. I said, okay, let's, let's. And he was being legit. I don't think he was trying to, like, he wasn't trying to, you know. Yeah, pretend. So anyway, I said, listen, let's jump on a video call and we'll go through the. I think it was a Trezor he had and go through the list of items and. And we went on there. We tried to add new accounts to see if it was an old account. Da, da, da. Nothing sort of came up.

And then he had a look. Then we jumped off the call. I said, oh, maybe check if you've got like the hidden. Because there's, like, hidden accounts on Trezor.

I don't think so. I'll have a look. Anyway. Anyway, that night he emailed me back. Now I couldn't find anything. Okay, fine. The next morning I got an email saying, hey, Adrian, I went through this old one and I found it.

So there was the four bitcoin that he completely forgot about and that we were going to write off that he'd found this other wallet that he completely forgot about and that he was just going to say, well, you know, it's gone now for Bitcoin, that's 100k. Yeah. Almost 400 grand. Yeah.

This happens more often than not, even when you're mucking about. You can get a random airdrop, but you're not on that project anymore. You don't know that you're getting it. And one of the huge benefits of doing your tax with someone like Adrian is you understand your financial position. You get essentially a personal balance sheet of like, where you are at. Those things get chased down because they have to be accounted for. And just having that is worth so much.

It wasn't quite 400k, but Forza helped me find 7 ETH. I just found it. I found a Tweet on the July 6th last year. Found 7.7B. Same story. It wasn't quite 400 grand. I'm like, Nah, fours is gone, mate. What are you talking about? Nah, nah. Found the ledger, logged in like, oh, fuck, I got 17th.

17Th in your sock drawer, mate.

In my sock drawer.

Nice.

I do remember.

In terms of like, you know, we mentioned it, you know, timing, like, it doesn't take. I think that was one of the other things. Like, I think a lot of people think it's going to take a lot of time. I don't know where anything is, but back to that reconciliation point. I remember when I was doing mine, because you've got this software, you basically, you can track things and you know, what's missing at what time frame and usually even what exchange or what wallet. So Forza would even come back to me and go, ben, we're missing, you know, an OkX, you know, report here. You move some stuff to finance. Can you grab me and export there. And also you use that other, you know, Exodus wallet, you know, in September last year, you can export that like, oh, fuck. Completely forgot about that. So it's just a cool way, that reconciliation, it doesn't take a lot of time to put it all together. It's just like sitting down and just knocking out a couple of hours. I think you.

Yeah, I mean, it might not even be a couple hours depending on. I mean, like I said, the first time you're doing it, if you have them to go back a few years, yeah, it does take a couple hours. Because as long as you've got the logins to the exchanges still, we've got procedure documents on how you get all the data. Download this, download that, click here. So it's pretty easy even now just sharing.

I don't have to do that. I just share my API key so you can view it and it's like three clicks instead of me having to download all this stuff. It's brilliant.

Yes. Yep, yep, yep. So yeah, it doesn't take long. And then like year after year again it does. You know, we've got, we've got your addresses on file, we've got the APIs on file. You know, we just keep using that and then if there's anything new or they need, they're expired, then we just, you know, ask for it.

For a lot of our platinum clients especially are starting to take loans against their, their Bitcoin either through something like Block Earner or Version Field. I know it's been a pretty hot topic around just the taxation of that. When you're moving assets to someone like Block Earner to take out a loan against your Bitcoin, could you just walk us through how that's currently viewed upon as, in terms of a tax perspective?

Yeah, yeah. Block Owner, I'm not familiar with.

You're essentially moving crypto to their exchange. They have like a bitcoin, they're like a crypto exchange into the wallet and then you, then you move that bitcoin into as like collateral for a over collateralized loan.

Yep, yep, yep, yep, yep. I can see them here now.

But you don't get it on, you don't see it on chain.

Yeah. Okay. So it all comes back to, and this is a very hot topic in crypto at the moment and tax, it all comes back to who's the beneficial owner. Has the asset actually been transferred or the ownership been transferred.

And I remember talking to the Veild Guides early on about this specific issue. I don't know how Block Earner works, but I know Veild has a, I guess a unique way of.

How the loan is structured where you actually, they actually have a specific address attached to for you know, that loan and you can, it's, it's not like pulled all together in, in like a, a cold wallet. With all other Bitcoin it's actually, there's a specific address and then when the, when you give that bitcoin it goes to that specific address and when you repay the loan you get back the exact same Bitcoin. Because there's a lot of contention around, well hang on am I getting the same bitcoin or a different bitcoin? I mean, I don't know if it really matters, you know, common sense and this is, I guess the issue in tax and law and crypto at the moment is sometimes like this, common sense is going out the window whether you get the exact same bitcoin or not. I don't think it really matters.

Because, you know, they're all fungible in the same, in the same way. Yes, they've got different history, but I think the way that veild is structuring and I think they're getting some advice around that.

You know, in my eyes, I don't think it's going to be a taxable event because you're not really giving up. And the way that the contract's structured, again, I'm not a lawyer, but I know they're having discussions with.

With, with lawyers to, to make, to make it probably as clear cut as possible, but it's definitely a good strategy. I mean, I've got another client that's going, doing it through.

I mean you can do it through Nexo. And again, it's all about reading the terms of the contract. Now unfortunately, and this is where.

You run into issues is.

I'm not even, I'm not equipped to understand the terms and conditions of, you know, certain contracts in terms of conditions of an exchange. Right. You know, do we have to do, are we going to get to a stage where we have to, you know.

Ask a lawyer.

That is that knows crypto to read every single term and condition for every single client before they use that exchange? Like, it's just, it's just, it just doesn't make sense. So this whole common sense of, you know, even, even the issue around, well, when you put it on an exchange, is that exchange really your, is that crypto still yours? You know, you got to read the terms, condition of all these exchanges like coin spot or SwiftX or Binance Gate IO or whatever it is. No one's going to do that. And it's getting frustrating because.

You know, if the ATO says every time you transfer to a crypto exchange, it's not yours. Well.

It'S, and I feel like there obviously is an attack on crypto.

You know, all around.

You know, the, obviously the governments around the world and the ATO in trying to.

You know, incur extra tax on people when they haven't had any realized material value. Like if you, if you've never, if you never actually realized some value, if you're just transferring from one exchange to another, you're not realizing any value. Why would you pay, why should you pay tax on that?

So you know, you've got, you've bought Bitcoin at 10 grand and then, you know, you've transferred it over to an exchange at 90 grand. Now you've got a $80,000 capital gain. But hang on, I've never sold it. Like I haven't done anything with it. Like it just doesn't make sense. And hopefully there's people that are, you know, there are, there are like a lot of lawyers out there that are trying to back this and saying, well, hang on, we got to like tame it back a bit here because we're getting way too technical and it's hurting investors.

Exactly right. And this is a great jumping off point for structuring. So feel free to take this in any direction you want. Adrian, because you do this for a living, mate. You know, it inside out. Among my mates that are probably, you know, my age, early 40s, late 30s, have a family, the one thing generally decent income earners, the one thing they get wrong is structuring. They don't understand it. And there's many things you can do in structuring, you know, personally or with trusts or self managed super funds. And generally it's around, you know, tax efficiency and asset protection. And what are the kind of things that you are seeing where people, and especially like Ben, if you know, you're a company director, you know, potentially your personal assets are on offer, right. So you want to be able to protect those. So what are some general things you would say to clients or things that you've seen where structuring can really, really benefit them?

Yeah, so the, the structuring side is all, you know, individual base, right. It's gonna, it's gonna be depending on what your circumstances. Are you single? Have you got another business? What do you do for a living? Have you got family? How old are you? All those sorts of things come into play on what would be if a structure is going to be right for you or if it's not going to be right and which one.

So, you know, typically a lot of the times what we see is clients don't future plan.

And then they only think about it when they need to. I. E. At the top, top of the bull market. So hey, I've just made a million dollars on this meme coin or you know, I've made 2 million bucks on my portfolio and I just want to cash it out to a better structure. Well, sorry mate, you Know what I mean? Like, I can't do anything really about it. I mean there's, there's certain things you can do depending on if you're a business and rollovers and that sort of thing. But if you're just an investor, you know, you got to have these things set up before, have it in the trust or have it in the company or the super fund before, you know, you make the profits. Because you know, nine times out of 10 or four times out of five, you know, you can't, you can't do much at that point in time. Like you can't just fix it. So you know, if you're into the investing for longevity and you're investing in crypto, you might have some shares or whatever else, or gold, you know, you got a family, you're working, your wife's not or partner, whatever it might be.

You know, something like a trust structure would help because you can sort of distribute the funds around in the family and the family wins. Right? It's all about the family generating the wealth. It's, you know, so but if you're, if you know, an avid trader and yield gen and degen and you know, maybe a company might be better or a combination of a company and a trust depending on, if you've got, also got a family and you know, what you're doing for work and that sort of thing. And you know, if you're, if you're, you know, getting to 40, 50, 60, super fund, you know, maybe the super fund might be self managed, super fund might be.

You know, best structure for you depending on when you want to take it out and you know, your tax considerations and all that sort of thing. So I think really the biggest.

Issue is people leaving it too late.

You know, and again, it all depends on the timing of the market. I mean the best, the best time to have set up a structure was probably yesterday. Waiting until such a time when you've got these huge gains, there's not much you can do about it because again, things like a trust, if you hold the assets over a 12 month period, you still get the 50% discount. You have the ability to distribute to your family, you and your family members who may be on lower income rates.

If something happens to you, the trust is still in existence, the assets don't need to get sold.

Companies 25% flat rate if they, you're trading crypto, you know, if you're on 180,000 already and you're paying 45% tax and you're doing all this DJ and stuff. There's like, there's really no point putting it in to your personal name and super funds, you know, flat rate of 15% when you retire, it's, it's tax free. So it all just depends on your life cycle, where you are in life, what your family's like, et cetera, et cetera. But we help clients structure things all the time.

New clients that come in or existing clients where their situation might change or thinking about a future.

Because these sort of structures you hold on for life. And even if you set up something and you make a loss in the first year, you can still use those losses against the profits in the future as well. They don't just disappear.

And then. But sometimes there might be an issue where you know, a structure doesn't suit you. You know, like if you came to me and said I've been holding everything for 12 months and I'm going to cash out in two months time, well you probably just leave it in your own personal name and cash out and you know, pay the tax on 50%. There's no point trying to stuff around.

But like there's been some clients that like one in particular this year he was an NFT creator and you know, doing it in his own personal name and he was doing a lot of NFTs and a lot of.

Trading and yield farming and selling and buying NFTs and we sort of rolled him from his personal name to a company and I think he made 200 grand in the first year and then it was like 1.2 million after we rolled it in. So like the saving in tax, you know, 47 to 25%, that's 22% tax saving. Like it's 200 grand there, that's huge.

You offer anyone a 20 plus percent even return and they'll love you for life.

That's why you could think about it that way actually.

Yeah, I really, I look at this like insurance where you want to talk about it and have it before you need it. Like the day to have that structuring conversation if you're thinking about it is now, like get some advice and set it up because it'll save you so much money in the coming years.

Yeah.

Or give you the flexibility or asset protection or peace of mind. There's many, many benefits depending on what you're after.

Yeah.

Four in terms of just like any thing that you would give to our listeners or members or just audience in general when it comes to tax. Like I don't know if there's any sort of final Words of wisdom. I feel as though we've done some good stuff around structuring and just getting over that mental barrier. But even people that are doing their tax or different, you know, is there things that we can do as investors to help when it comes to tax time or just. Yeah, any. Any sort of final.

Yeah. I think obviously something that Berg's touched on before was, you know, keeping a note of, like, what you're doing as well. That's a big one. You know, you don't have to write down every single transaction, but, you know, where there's something that's a bit left field.

And then you go back a year later going, oh, where did I send this? What was this for? You know, it becomes really helpful.

And I think, I think a lot of people.

Get caught up on.

You know, the tax as well, in general, like paying tax. And it can, it can catch you out, because I know everyone does. Everyone hates paying tax, right? No one likes paying tax. But it's all also about the market conditions. So as an example, like, let's say that you bought.

You bought in.

Maybe some people can think, okay, let's say you bought right now. Okay, let's say you bought Bitcoin at 60,000 U.S.

And then for whatever reason, in the next three, four months, let's say that interest rates go to zero. You know, there's no war. You know, Trump gets elected, whatever it is, let's go. So bullish, you know.

You know.

I don't know, all the banks say they're going to add, you know, 5% of their value to Bitcoin. And, you know, bitcoin goes ballistic, Right. Let's just say it just goes straight to like 250,000.

And then all of a sudden.

A nuclear war breaks out or whatever it is, right?

So I think the mistake people would make in. And obviously that's like a very wild, you know.

Scenario, but.

I think the people, the mistake that people make is, oh, but I want to hold for 12 months. So I get the discount right now, if you've gone from, say, let's say 50,000 to 250,000, there's $200,000 gain there.

And you haven't held for 12 months, then you're going to pay 100 grand in tax, right.

If you're on the top marginal rate now, if the war breaks out and whatever, and then bitcoin just slams down to 150.

Yeah. You're still only going to make. You're going to make 100 grand and you're going to pay 50 grand in tax. So you're still. Your net cash position is 50,000 versus 100,000 after you paid the tax on the big profit. So you don't want. You want to have tax in the back of your mind, but you also want to make sure that the money you have after paying the tax is still more, even if you get the discount later on down the track. And that's what people sort of did in 17, 18, 20, 21, where, you know, they might have bought it, you know, at a high or just before the high. And then they waited, waited, waited, and then by the time 12 months rolled along, that, that coin was down like 50 to 70%. So there's no. There was. You should have sold it at that high, paid the tax, copped it. The net cash in injection into your pocket would have been a lot more money.

Yeah, you'd be aware of it, but not. Let it be the reason not to sell.

Yeah, correct.

This is the thing. Like tax is not. Don't view it as a penalty. It can be a weapon. Like, you need to understand how it works with the help from someone like Adrian. And then you can make much better decisions. Like the example he just gave then. Yeah, because a lot of people will just, you know, have. I find this a lot with. They'll have basic heuristics in their mind of I don't want to do this, or this is how tax operates. The classic one, which shits me, is where people go up just over a tax bracket and they're like, I don't want to go over that tax bracket. I don't want the pay rise because then I have to pay way more tax. It's like, no, it's only on every marginal doll. Like these weird things that people have in their minds and it doesn't work that way.

Yeah, yeah.

Oh, amazing. Now, Adrian, mate, you and I, we've had a few conversations in Melbourne about the future of crypto and we'll probably end on this one, mate, you took a big leap of faith. You opened your crypto business, you're expanding now, you're offering more and more services. Where do you see crypto going for. For the future, mate. And you can go as far as you want, whether it's the next couple of years, five years or 10 years. What are we going to see? Where do you think crypto is headed?

I think Obviously with the ETFs now, it's really cemented that crypto's not going anywhere. Right. Especially for Bitcoin and ethereum.

Those guys are in it. They're not in it for the next six months, they're in it for the next 10 years when they, when they, when they put products like this on the board. So I think definitely.

I mean, I'm not a world economic expert in terms of what's going on, but I think obviously as time sort of goes on and people realize the benefit or the benefits of bitcoin in particular.

And probably Ethereum and that decentralized sort of finance, you know, forget meme coins for a moment. Right? That's just. But like real world use case. I think we'll definitely be seeing more things on Ethereum or EVM blockchains.

Layer twos. I think people will realize the beauty of bitcoin. Yes, bitcoin, slow, all that sort of thing. But it's really about the security, right? The security of bitcoin. No one can take it away from you. You know, if, if the government wants to come take your bitcoin, well, they gotta find it, right? They can't just issue a garnishee notice and take the money out of your bank account. You know, it's similar to gold. I, I think that people will realize and, and I've noticed especially over the last six months that, you know, even, even some of my uncles of mine, you know, they always laughed about, you know, Bitcoin back in 2018, 20, 21, but now they're like, oh, you know, actually I bought some, I bought some bitcoin in my super fund, you know, so the older generation, and I'm saying, because older than me.

Are now recognizing, hey, maybe I should put a little bit in because I think, and I've, I've said this for years, that I think not having bitcoin in your portfolio is more of a risk than having it in.

And I think crypto's still got a long way to go. I mean, obviously we'll still have some frenzies around.

Meme coins and whatever else, but obviously there's, you know, there's gaming now, there's defi. I think, you know, in the future, maybe five, 10 years, it'll probably be a bit more.

Concise in terms of what people use. I mean, now it's like experimenting, trying this and trying that, and I think that will always be there. But, you know, one thing that sort of dropped off that I think will definitely come back is things like security tokens. Like that was a big thing back in 20, 19, 20, and it sort of didn't really get off the ground. I think maybe that might be part of the next wave because you imagine, you know, like Ben, imagine you putting tokens on the blockchain for collective shift, and people can own part of collective shift. You know, they just freely trade that. You can pay dividend out, you know, that sort of thing. I reckon.

Being able to put everyday companies, obviously there's risk and regulation, all that sort of thing, but everyday companies, that would mean, like nearly every single business would be able to get bootstrapped with funding.

Better ico, it's just like, yeah, that's.

An amazing way to do capital formation and it's just so efficient.

It's just purely regulation, I think for us. I totally agree. You know, I think it's 100% tokenizing the world.

It's just the people gave up because it was too risky and it was too hard and the penalties are astronomical. You go to jail.

Yeah, yeah, but I agree.

No, but there are still companies. I mean, IMs have been one a few years ago.

And, you know, they just got $10 million worth of funding. I saw an email, you know, come through last week and that's what they're doing, security tokens. So it's still happening in the background. It's just.

It'S just that little one step further. You know, then there was like ICOs and then there was Defi, and then there was the etf. And then it's just like, you know, it's sort of like legalizing.

Marijuana eventually. You know, it's sort of like, okay, we'll do it for medical. And now you got to get a prescription. And then, you know, now next it's going to be for something and then eventually, you know, they'll have that legalization like.

America did. I think in certain states, you know, it's just like slowly it'll happen over time. And I think, I think some people.

There'S obviously so many big companies that are in the space now realizing the potential. Sony.

You know, I think, I can't remember if Samsung's in there now realizing, hey, well, this is, this is the future. You know, it's not going to be everything. Everything's not going to be on the blockchain. But I think definitely. And it just starts with one. So like gaming, for instance, like, imagine something like Ubisoft or Blizzard started to do something. Crypto blockchain.

Yeah.

That would then mean it forces everyone else's hand to join in because then they're losing out.

Yeah. They can capture that market share. Similar like Microstrategy and Now he's basically written a playbook on how to make your company better and solve a Treasury problem.

There you go. Yeah.

Epic fours. Thank you so much, man. That was an absolute masterclass of tax.

Where if people are just wanting to have a chat to you or just figure out even if it's a viable option to, to come across and work with you guys, what's the best way for people to go about it? I think people can get a free 15 minute consultation. What's sort of the process there?

Yeah, so you can give us a call, 038-609-1269 or you can just visit our website, cryptotaxaus, which is aus.com.

There'S a book consult button on there or you can send us an email.

You know, or we've got our email on there or got the contact form. You know, sometimes people are working 9 to 5, so we do after hours discussions. If, if that's, if that's easier. Yeah, book consult email, give us a call. Yeah. And we can sort of take it from there.

And I do Ben and I highly recommend Adrian as well. We've used him for years and I wouldn't recommend someone that I didn't have an amazing experience with. Yeah.

And just to be clear, this is, this is the absolute opposite of a paid shield. This is completely like we, we, we love fors, we love his services. This is not a paid promotion. This is just generally because we, we recommend him. And as a collective shift listener, member, Bennenberg's listener, you, you also get a bit of a discount over with fours. And yeah, just, we just know how much money it can save you by doing this. Right. So you want to speak to the best in the business.

It's probably. And it's also more like not hanging over your head too. Yeah, that's a big one. There's a lot of people, like after we do this, I said, oh, I'm so relieved. Thank you for doing it. You know, now I have to think about it anymore because it's sort of like just been daunting them for, you know, years.

Yeah, bro. I sleep so well at night now. Like I was holding off for so long. I'm like, I feel good. It's eating my brain. And now it's like sleep like a log, mate.

That's great now, thank you so much force for coming on, man. I know you're super busy, dude. And yeah, if you have any questions, send it over to Adrian. And if you've got any other crypto friends or family colleagues that maybe need some tax advice send on this episode, get them to download and make sure they don't, you know, stuff it up and get some right advice. So, mate, thank you so much again and we'll see everyone on the next episode.

Thanks, guys. Thank you.