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I'm about to buy a house (US) and considered that very issue. I asked an accountant and the answer was that, yes, I'd need to pay capital gains tax on the gains
by moduspol 9y ago
I'm about to buy a house (US) and considered that very issue. I asked an accountant and the answer was that, yes, I'd need to pay capital gains tax on the gains.
On one hand it makes sense, but on the other hand, it could be seen as a diversification into real estate. If instead of personally buying the Bitcoin and house, I bought shares of "moduspol mutual fund", and then that mutual fund bought the Bitcoin and diversified into part of my house, I presumably wouldn't be taxed until I sold my shares in "moduspol mutual fund."
But it's a good problem to have, and probably not worth (legal) avoidance at smaller (< $1 million) values.
- kirkland 9y agoIn that example, presumably "moduspol mutual fund" would need to pay capital gains taxes.
- moduspol 9y agoWouldn't its profits be coming from the fees it charges me, and not from the investments themselves? Do normal mutual funds pay capital gains taxes as the things they invest other people's money in are changed?
- phil21 9y ago> Do normal mutual funds pay capital gains taxes as the things they invest other people's money in are changed? Yep! Tax efficiency of a mutual fund is quite an important factor to look at for your overall expenses as well. It's a large reason actively managed funds don't do as well as simple market-wide ETFs.
- moduspol 9y agoWow. TIL. Thanks!