Paying Taxes on Presale Crypto Investments: Is It a Must? 

If you are an avid crypto enthusiast, you are probably always on the lookout for new crypto projects to invest in. The cryptocurrency investment sphere is a diverse one, with new opportunities just waiting to be seized—among them, there are very few that are as alluring as crypto presales. 

Since there’s a lot of controversy surrounding the crypto landscape in many areas, some people might not be sure whether they have to pay taxes on their digital currency of choice. Here’s a short breakdown on the subject.

What is a crypto presale?

Crypto presales are a unique opportunity for traders to purchase digital currency before they are released to the public. Investors get to gain exclusive access to tokens or coins, as well as significant discounts they usually come with. 

Good news for individuals who are always on the lookout for the best crypto presales to invest in – there’s a constant influx of new options entering the market. 

At the moment of writing, two rising stars seem to be MoonBag and BlastUp, and they are closely following in Dogecoin’s footsteps, which is a cryptocurrency that has defied all odds. MoonBag is becoming particularly appealing among investors, as it comes with a two-year liquidity plan. Thus, individuals are protected from sudden price drops, and the locked liquidity is there to ensure the project’s founders can’t withdraw large chunks of money, which could lead to instability in the coin’s value. 

Do you have to pay taxes on crypto presale investments?

As a crypto holder, you will have to pay taxes once you sell your asset or receive cash or units of another cryptocurrency. That situation creates a taxable event, as you have realized the gains. Therefore, you don’t have to pay taxes on crypto and crypto presales once you are simply holding the coins, but you will have to pay your dues once you take concrete action. 

You don’t have to hold your coins after a crypto presale until eternity to avoid paying taxes, as there are also a few other things you can do to obtain the maximum profit from your investment in a legal way. 

Use capital gains tax allowances

If your place of living offers capital gains allowances, you can use them to your benefit to decrease the amount of taxes you need to pay. Let’s say you spend funds on a crypto presale and its value soars a few months after that. You don’t have to hold it in your possession forever, as you can utilize your country’s capital gains tax allowance to cash out a certain amount of crypto without having to pay taxes on it. 

If you live in the US, keep in mind that individual filers don’t need to pay any capital gains tax for the 2024 tax year if their total taxable income is $47,025 or less. That provides you with ample space for cashing out your crypto presale investment, provided that everything goes right and you make the right investment call. 

Donate your coins

If you are someone who makes frequent donations to charities that matter to you, then this might be the perfect option to get the most out of your crypto presale investment. An investor doesn’t have to pay any taxes once they donate by using crypto assets. Of course, this only applies in situations where you send the crypto directly to a charity’s wallet, as selling your coins first and getting fiat currency would trigger a taxable event. 

A word of caution here – not every charity will accept crypto donations. Luckily, a growing number of places are understanding the benefits of enabling these types of transfers, and there are already a dozen charities you can donate to through a direct crypto transfer. 

Purchase on Crypto Emporium

As an online marketplace that sells everything from houses to luxury watches, Crypto Emporium is the perfect place to spend your coins. As we have already mentioned, any crypto purchase triggers a taxable event. However, buying something on Crypto Emporium rather than converting your coins to digital currency makes sense as, sometimes, it’s even possible to avoid the capital gains tax altogether. 

We all know that cryptocurrency is very volatile. Thus, let’s say that you buy coins in a crypto presale that are worth $4,000 – a week later, their price might drop to $2,000. In this instance, you won’t have to pay any capital gains tax, as the trade resulted in a loss.