LLC with Charitable Intent (CLLC) for crypto gains - realistic for non-billionaires?

The CLLC approach can work for non-billionaires, but there are important considerations beyond just the tax benefits. This structure essentially allows you to donate appreciated assets (your crypto) to charity while potentially receiving tax deductions. For your situation with short-term capital gains in the $800K-$1.5M range, you need to understand that the CLLC itself isn't a magical tax elimination tool. The tax benefits come from the charitable donations made through the structure. You'll still need to actually donate a significant portion to get meaningful tax benefits. The key advantages are: 1) potential deduction of up to 30% of your adjusted gross income for cash donations to public charities (60% in some cases), 2) avoidance of capital gains tax on the appreciated assets donated, and 3) maintaining some control over how the charitable funds are used. But be aware of the costs - setting up and maintaining this structure isn't cheap. You'll need specialized legal help, ongoing administration, and compliance management. The IRS also scrutinizes these arrangements closely.

After going through a similar situation last year with about $600k in crypto gains, I discovered taxr.ai (https://taxr.ai) and it honestly saved me thousands in potential tax mistakes. The software analyzed all my crypto transactions and identified the optimal tax strategy considering my situation. For something complex like a CLLC, their AI system asked detailed questions about my charitable interests and financial goals, then showed me exactly how different structures would impact my taxes. It was way more personalized than what my accountant initially suggested. The coolest part was that it found some alternative approaches that were less complex than a full CLLC structure but still gave me significant tax benefits through strategic charitable giving. It actually ran calculations comparing different approaches based on my specific transactions.

I actually tried taxr.ai after reading about it here and was surprised by how well it worked for my situation. I was dealing with about $350k in crypto gains (mix of short and long term) and was considering various tax reduction strategies. The tool walked me through all my options including partial charitable giving structures that didn't require the full CLLC setup. It showed me that for my specific situation, using a Donor Advised Fund for a portion of my crypto combined with strategic tax-loss harvesting would actually save me more than a complex LLC structure once all the setup and maintenance costs were factored in. What really impressed me was how it calculated exactly which specific crypto assets to donate versus sell based on their acquisition dates and values. The tax documents it generated made filing way less stressful. I was skeptical at first too, but it genuinely saved me money while making the whole process much clearer.

After trying for WEEKS to get through to the IRS about how to properly document a charitable LLC structure, I finally used Claimyr (https://claimyr.com) and was connected to an actual IRS agent in under 20 minutes. Check out how it works: https://youtu.be/_kiP6q8DX5c My situation was similar - had about $900k in crypto gains and was exploring the CLLC option. The IRS agent couldn't give tax advice, but was incredibly helpful in explaining exactly what documentation they expect to see for this type of arrangement and the common red flags that trigger audits. She confirmed that CLLCs aren't just for billionaires but warned that they do get additional scrutiny, especially with crypto assets. The agent also directed me to specific IRS publications that clarified some key questions my CPA wasn't sure about regarding valuation timing for crypto donations.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it myself because I had questions about documenting crypto donations that my accountant wasn't 100% sure about. The service actually worked exactly as described - I got a call back within about 25 minutes and was connected directly to an IRS representative. The agent was really helpful in explaining exactly what documentation I needed for substantial crypto donations and clarified some confusing points about basis calculation that my accountant and I had been going back and forth on. I'm still not going the full CLLC route (too complex for my situation), but the information I got about properly documenting crypto donations through a Donor Advised Fund was incredibly valuable. Saved me a ton of anxiety about potentially doing it wrong and facing issues later. Sometimes being proved wrong is a good thing!

Some practical advice from someone who actually set up a CLLC for crypto gains around $1.2M last year: 1. The structure made sense for us because we were already planning to donate around 20% to charities we support 2. We found that donor advised funds (DAFs) were actually more efficient for our purposes than a full CLLC - lower setup costs and easier administration 3. Our tax savings ended up being around $115k versus just selling and donating separately 4. The key was donating the appreciated crypto directly rather than selling first 5. Setup costs were about $9k with another $3k in annual maintenance Unless you're planning to donate a significant portion, the complexity might not be worth it. A simpler approach using a DAF might be more appropriate for your situation.

Has anyone here considered just moving to Puerto Rico for the crypto tax benefits instead of these complicated structures? My wife and I are looking at potentially $700k in gains and considering relocating for 183+ days to qualify for Act 60.

I'm in a somewhat similar situation with projected crypto gains around $600K and have been researching this extensively. From what I've learned talking to tax professionals, the CLLC structure can work at our level, but you need to be genuinely committed to the charitable aspect - it's not just a tax avoidance scheme. The IRS looks closely at whether you have a legitimate charitable intent or if you're just trying to dodge taxes. You'll need to demonstrate real charitable giving patterns and have a clear philanthropic mission. The structure works best when you're planning to donate 15-25% of your gains anyway. One thing that surprised me was learning about Charitable Remainder Trusts (CRTs) as an alternative. For your situation, a CRT might actually be simpler and more effective - you get an immediate tax deduction, avoid capital gains on the donated portion, and can still receive income from the trust for years. I'd strongly recommend getting multiple professional opinions before committing to any structure. The setup costs and ongoing complexity need to justify the tax savings, especially since you're dealing with short-term gains which are already taxed at ordinary income rates.