Katie Ananina, a Russian expat and former professional sailboat racer is the founder of Plan B Passport. This firm brokers citizenship through investment schemes for tax-haven countries that do not tax capital gains on crypto holdings for rich investors.
Plan B helps in providing passports mainly for European clients each year, according to a CNBC report on July 11. Besides, customers can choose between Saint Kitts and Nevis, Antigua and Barbuda, Dominica, Vanuatu, Grenada, Saint Lucia, and Portugal.
This company sells passports to Americans looking for a tax break on their bitcoin profits https://t.co/IFaCf4K7qv— CNBC (@CNBC) July 11, 2021
Citizenship in safe-haven states is obtained through investments that require six-figure investment funds in local businesses, real estate, or government bonds. Few authorities accept payment in the form of donation, and Ananina figures that most passports cost between $100,000 and $150,000.
Ananina explains her view on paying tax for the government, she added:
“I was intelligent enough to predict that $200 in bitcoin will be worth $100,000 at some point in the future. I don’t believe the government should have 40% of that.”
She figures that it is essentially a donation for the country’s sustainable growth. As a result, clients donate about $100,000 or $150,000, adding to that some diligence fees and government fees. This being not enough she said that $20,000 for legal fees.
Clients To Give-Up US Citizenship
The IRS considers virtual currency, which includes bitcoin and other cryptocurrencies, to be property in the United States. So, the tax for Bitcoin is in the same way as for Stocks or real estate.
Jon Feldhammer, a partner at law firm Baker Botts and a former IRS senior litigator clearly explains the tax payables. He says if the taxpayer is a green card holder or a U.S. citizen, they should pay US tax.
Regardless of where the crypto or the taxpayer is located, they have to pay tax on crypto gains. He added saying that even if they are dual citizens, they must pay US tax if they are US citizens.
That’s why, according to Ananina, most of her American clients plan to give up their US citizenship and some think about doing it later. Citizenship via the investment schemes has recently gone up significantly, following a series of Al Jazeera investigations.
Consequently, it revealed fraudulent activities among the officials supervising the programs in Cyprus and the Caribbean — with some Caribbean states offering diplomatic passports for the right price.
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